Category: Think Pieces

Right now, everyone’s eyes are glued to the war, and the most obvious gauge of global panic is the price of oil.

When the Strait of Hormuz is impacted, the market’s fight-or-flight response kicks in instantly. We saw it play out perfectly this week: oil prices shot up roughly 27% in a week and then shot down 10% in a single day, and the Asian economic engines, namely Korea, Japan, and India, immediately bled out.

A mini rollercoaster in the span of a week
Source: Bloomberg

I think most of us have seen the headlines by now: 20 million barrels per day, representing 25% of the global seaborne oil trade, passes through the Strait. The vast majority of those flows are destined directly for Asian markets.

Currently, those Asian markets have bounced back with some countries like South Korea aggressively responded by tapping into their strategic oil reserves. But let’s be honest: was that double digit price shake-ups necessary? Is this as structural as people say?

The big question on everyone’s mind right now is: Where will the oil price go, and how high? The truth is, unless you are God, no one knows. Anyone giving you a definitive price target is guessing.

Just look at the Ukraine and Russia conflict. When it started, the market priced in a swift resolution. Here we are, entering its fifth year, and the war is still grinding on. The lesson is simple: uncertainty is the only certainty, and these geopolitical shocks can stretch out far longer than the market’s attention span allows.

The New Oil Map: The Urals Premium

While the West fixates on the Middle East, the actual flow of global energy has already fundamentally rewired itself.

Take a look at the outcome we’ve seen with India. India’s sanctions on buying Russian oil were temporarily lifted. This naturally leads to the question: what if Russian oil were to go back public on the open market?

Source: Trading Economics

Historically, Russian Urals traded at a heavy discount to the Brent benchmark. That era is over. Today, India is actually buying Urals close to a premium to the current Brent market. This has nothing to do with crude quality and everything to do with security.

With the Middle East essentially blocked off and the Strait of Hormuz compromised, Russian oil is the only “guaranteed” energy source that doesn’t have to float through an active war zone to reach Asia. India is happily paying a premium for that peace of mind. Urals are no longer a distressed asset; they are the safest molecules available.

So why wouldn’t Russia price gouge its buyers? They have to play the friendly neighbor.

Source: Statista, IEA

Right now, roughly 85% of all Russian crude oil exports go to just two countries: China (47%) and India (38%). These nations are Russia’s sole economic lifelines. Because they are all intertwined within the BRICS circle, and because Russia is entirely reliant on Beijing and New Delhi for everything else, Moscow cannot push the price significantly higher without risking the relationships keeping their economy afloat.

We expect a hard floor built on the need for secure supply, and a hard ceiling built on BRICS diplomacy.

History May Rhyme: Case in point the 1973 Oil Shock

If you want to understand the mechanics of what might happen next, look back to the 1973 oil shock.

During the 1973 Yom Kippur War, geopolitical alliances caused an Arab oil embargo, resulting in a sudden, violent disruption of global energy flows. Crude oil prices essentially quadrupled in a matter of months, jumping from around $3 a barrel to nearly $12 by 1974.

Source: Bloomberg

The initial supply shock lasted for months, but the inflationary ripple effect defined the entire decade. Fiat currencies lost purchasing power, equities chopped sideways, and investors fled to hard assets. Precious metals went on a historic run as physical commodities became the ultimate safe haven, with gold prices surging from roughly $100 an ounce in early 1973 to an unprecedented $660-plus by 1980.

The Heyokha View: Deglobalization is Here

Markets might keep getting shocked by these headlines, but we are not.

We are watching the long-term trend of deglobalization play out exactly as expected. The frictionless, perfectly optimized global supply chains of the last decade are dead. We are in a volatile economy, marked by fractured trade routes and premium pricing for security.

In times of deep systemic fear, capital seeks out things that are real. That is exactly why we remain anchored in the hard assets we’ve held since long before this current wave of geopolitical chaos made the front page.

We don’t try to guess the top of the oil market. We just hold the hard assets that are built to store value and survive the storm.

 

 

Tara Mulia

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It has been a sobering, anxious week. When the geopolitical reality gets this dark, sometimes the only way to process the stress is to step back and find a sliver of humor in the sheer, chaotic absurdity of human behavior.

If you have ever wondered why that behavior feels so erratic lately, or why you can’t finish a movie without checking your phone, blame Mr. Beast.

In a December 2025 interview, Jimmy Donaldson, better known as the guy who gets 200 million views by burying himself alive or handing out islands, claimed that roughly 2% of all human time may now be spent on YouTube. He noted that to capture an American audience today, you actually have to make longer videos (pushing 25 to 30 minutes) to cut through the noise of TikTok’s doom-scrolling. But here is the catch: to keep people watching, the content has to be relentlessly fast-paced and constantly escalating. We have been trained to demand an adrenaline spike every five seconds.

Source: The New York Times, Youtube

We are officially living in the Goldfish Economy. Our collective attention span is shattered. We read the headline, skip the article, and trade the vibe.

Which brings me to the absolute comedy of the Indonesian stock market this week.

Over the weekend, the world watched with a knot in its stomach as tensions flared in the Middle East, with Iran launching drones and missiles toward Israel. It is a serious, complex crisis. The immediate, logical market fear was a disruption in the Strait of Hormuz, a critical chokepoint for global energy. Crude oil prices were expected to spike.

So, how did the highly sophisticated, incredibly focused retail investor process this heavy reality on Monday morning?

They panicked, opened their trading apps, seemed to search the word “OIL,” and aggressively bought the first ticker they saw: OILS IJ.

They bought it so fast and so hard that the stock hit its upper limit circuit breaker (Auto Reject Atas, or ARA) and nearly again the day after. The chart went vertical.

There is just one tiny, hilarious problem.

OILS IJ is the ticker for PT Indo Oil Perkasa Tbk.

They do not drill for crude oil. They do not have tankers in the Strait of Hormuz. They do not deal in fossil fuels at all.

OILS IJ refines coconut oil.

Geopolitics, powered by coconuts

Source; Bloomberg

Yes. In the face of a military conflict threatening global crude energy supplies, day traders blindly panic-bought a company that makes the stuff you use to fry tempeh and make your hair shiny. It is the purest distillation of the Mr. Beast era. No one read the prospectus. No one checked the underlying business. They saw a scary headline, matched the word “oil” to a ticker, and smashed the buy button before their attention drifted to a 15-second video of a cat doing a backflip.

But before we laugh too hard at the retail crowd hoarding coconut oil, we have to admit: the Goldfish Economy infects the big leagues, too.

Knee-jerk reactions are the new global standard. Look at what happened to gold this very same week.

The V-shape recovery of institutional attention spans

Source: Bloomberg

On the exact same geopolitical noise, algorithms and institutional panic-sellers momentarily lost their minds. They aggressively flushed the ultimate safe-haven asset, sending gold plunging down below $5,050 an ounce in a vicious, split-second shakeout.

And then? The attention span reset. The market remembered what physical metal actually is, and the price violently slingshot right back up, settling comfortably back above $5,130.

It was a classic algorithmic head-fake, a trap perfectly designed for a market running on a 15-second attention span.

This is the reality of investing today. Whether it is a coconut oil company surging on a literal misunderstanding or gold momentarily plunging on algorithmic panic, the market is built to shake out the impatient.

The edge no longer goes to the fastest trader. It goes to the one who can actually sit still, read the fine print, and outlast the panic.

 

 

Tara Mulia

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In November 2025, we warned you about the invisible engine funding the artificial intelligence boom in our piece, When AI Meets Private Credit: The Vessel, Not the Flaw. We noted that an opaque constellation of non-bank lenders was quietly fronting massive chunks of the $6.7 trillion needed for global AI infrastructure.

Six months prior, in AI Just Ate Your CRM. Now What?, we mapped out the existential threat facing traditional software, arguing that AI models would soon bypass clunky user dashboards entirely.

Today, those two distinct tectonic plates—shadow finance and AI software disruption are violently colliding. And the tremors are starting to crack the foundation of Wall Street.

Is This The Canary in the Coal Mine?

The shaking started a few weeks ago with Blue Owl Capital.

Blue Owl is a titan in the private credit space, managing nearly $300 billion in investor cash. But recently, their stock plunged as much as 10% in a single day. Why? They abruptly changed the rules on how investors can pull their money out of a major fund, shifting from a guaranteed 5% quarterly redemption to a discretionary payout model.

For perspective, Blue Owl is the second largest behind Blackstone on controlling almost half of BDC assets

Source: Financial Times, Pitchbook

Wall Street veterans immediately flashed back to August 2007. When a massive shadow lender suddenly throws up the gates to stop cash from leaving, it begs the ultimate question: What are they afraid of?

The answer lies in their loan books. In recent years, private credit has extended trillions of dollars in loans to businesses. And their absolute favorite borrower? Software companies.

By industry estimates, at least 20% of all loans extended by private credit funds—and heavily concentrated within Business Development Companies (BDCs)—have gone to software firms. But the true number is likely much higher. A recent Bloomberg analysis found at least 250 investments, worth over $9 billion, that were quietly categorized by lenders as “business services” or “specialty retail” instead of software.

Source: Bloomberg, Barclays, Bloomberg

Private credit lenders loved software for one reason: predictable, recurring revenue. A company with 5,000 employees pays for 5,000 software “seats” every single month. That steady cash flow made it incredibly easy to underwrite massive loans.

But what happens to those loans when AI obliterates the “per-seat” business model?

The “SaaSpocalypse” and the Agentic Future

Let’s add some nuance to the “AI eats software” narrative.

People are panicked that AI will simply delete software companies from existence. That is not entirely true. Software isn’t dying; it is going headless.

To understand this, we need to look at the shift from basic AI Chatbots to AI Agents. A chatbot answers your questions. An AI Agent actually executes multi-step tasks for you across the internet. But an AI Agent does not have eyes. It doesn’t care about pretty dashboards, drop-down menus, or human-friendly interfaces.

It talks to software through an API (Application Programming Interface).

Think of an API as a “Digital Drive-Thru.” If you want food, you don’t have to park, walk inside the restaurant, read the menu, and sit at a table (the old software UI). Instead, you pull your car up to the drive-thru window, hand them a specific, structured order, and they hand you the food. An API allows an AI Agent to pull up to a software company, hand it code, and get the data back instantly without ever “looking” at the website.

A Day in the Life: The Agentic Shift

Let’s look at how this destroys the traditional software workflow. Compare a Marketing Manager’s job today versus the Agentic reality of 2027:

The Old Way (Software as a Destination):

1. You log into Google Analytics, manually clicking through filters to discover sales are down in Indonesia.
2. You log into Canva, picking a template and manually dragging your brand logo to create a “20% Off” flyer.
3. You log into Mailchimp, uploading the flyer, typing the copy, and manually segmenting your Indonesian VIP email list to hit send.

Result: You spent two hours acting as the “Human Glue” holding three different websites together.

The New Way (Software as an Invisible Engine): You open one command window—your AI Agent—and simply say: “Sales in Indonesia are lagging. Create a 20% discount campaign and send it to our top customers there.”

The Agent acts as the Director:

• It calls Google Analytics via API to instantly identify the lapsed customers.
• It calls Canva via API to automatically generate a perfectly on-brand flyer.
• It calls Mailchimp via API to blast the email through their trusted servers.

Result: You never looked at a single website. The software companies provided the grunt work invisibly in the background.

The Infrastructural Moats: Why Software Survives

So, why doesn’t the AI just build its own Mailchimp or Canva? Because traditional software companies own the physical and digital infrastructure.

• The Pipe Moat (Mailchimp): An AI can write a brilliant email, but if it sends 10,000 messages from an unknown server, Gmail will instantly block it as spam. Mailchimp owns the “Trusted Pipes” that the internet respects.
• The Sensor Moat (Google Analytics): An AI doesn’t inherently know what is happening on your website. Google has millions of digital sensors tracking clicks. The AI needs that raw data to “see.”
• The Guardrail Moat (Canva): An AI hallucination might accidentally make your corporate logo neon pink. Canva provides the strict “Brand Kits” that force the AI to stay inside the lines.

Software companies aren’t going to zero. They will survive by becoming the invisible plumbing of the internet.

This transformation does not automatically spell out a wave of mass defaults. Just hours after delivering another blowout earnings report, Nvidia CEO Jensen Huang pushed back against Wall Street’s doomsday narrative.

His message was blunt: AI agents are not going to cannibalize enterprise software; they are going to become its power users. As he explained, “These agentic AI will be intelligent software that uses these tools on our behalf.”

Whether it is an Excel spreadsheet, a ServiceNow workflow, or an SAP database, these platforms exist for a fundamentally good reason. They are the organizational infrastructure. AI agents won’t replace the tools; they will operate them. As Huang noted, in the end, we still need these tools to finish the work and format the information in a way humans can actually understand.

The A2A Ecosystem: When Agents Talk to Agents

If you think the future is just your company’s internal AI agent pulling levers on different software APIs, you are still thinking too small. The industry is rapidly moving toward an external, machine-to-machine economy powered by open standards like Google’s Agent-to-Agent (A2A) protocol.

While internal “multi-agent” architectures involve a closed team of AIs working within your own company’s walled garden, A2A is the open internet for agents. It allows an AI built by one company to dynamically discover, securely communicate with, and effectively hire an entirely independent AI built by another company.

How A2A works

Source: Google

In our marketing example, you wouldn’t just use one AI. Your “Director Agent” would use the A2A protocol to hire a specialized “Google Analytics Agent” to pull the data, securely negotiate with a specialized “Canva Agent” to design the creative, and hand the final product to a specialized “Mailchimp Agent” for delivery.

Software companies will no longer just build platforms; they will build and lease specialized agents into this global workforce. For the private credit industry, this adds another layer of complexity. They aren’t just underwriting software tools anymore; they are underwriting digital employees operating in an entirely autonomous machine-to-machine economy.

The Economic Obliteration and the New Moats

For the shadow banking system holding hundreds of billions in debt, this isn’t an extinction event—it is a massive repricing of risk. The software industry isn’t dying; it is simply mutating into a new form. To keep generating cash and paying back those private credit loans, software companies must fundamentally change what they sell and how they charge for it.

• The Death of the License and the Rise of the “Call”: Currently, if you have 50 employees, you buy 50 human “seats.” But what happens when a single AI agent can seamlessly do the work of those 50 people? The traditional per-seat license implodes. To survive, software companies must pivot to consumption pricing. Bosses will no longer pay flat monthly subscriptions for humans; they will pay fractions of a penny for every “API call” the agent makes. Software ceases to be a fixed subscription and becomes a variable expense—exactly like paying your electric bill.
• Data Security is the New UI: For the last decade, companies spent billions making software “human-friendly.” That capital is now stranded. Agents don’t care about sleek drop-down menus, intuitive design, or pretty color schemes. Human-targeted UI improvements are no longer a selling feature. Instead, the ultimate premium feature is data security. When autonomous machines are rapidly moving massive amounts of proprietary company data across the internet via APIs, the surviving software giants will be the ones offering ironclad security, impenetrable “guardrails,” and flawless backend execution.
• Open the API Gates: Software companies must become radically open. If a platform tries to build a walled garden and block AI agents from plugging in, the agent will simply take its transaction to a competitor that is open. In the agentic future, the path of least resistance wins the revenue.

For the $300 billion private credit market, the game has fundamentally changed. The lenders who survive this cycle will be the ones who realize that the companies they are funding are no longer selling dashboards to humans. They are selling secure, invisible tools to machines.

 

 

Tara Mulia

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As we established in last week’s blog, the structural deficit in aluminum is widening, and the era of infinite, elastic supply is dead. We broke down China’s 45 million tonne production cap and the crumbling Western industrial base.

But to truly understand where this market is heading, we must ignore the metal itself. We need to look at the power plug.

The Physics of “Congealed Electricity”

Most people miss the fundamental physics of this industry. Aluminum is not just a metal; it is effectively “congealed electricity.”

Power accounts for 30% to 40% of the total production cost of a single ingot. With global demand for the metal growing at 3% to 4% annually, the world requires an extra two million tonnes of metal every single year just to maintain the status quo.

To manufacture that extra metal, we need to add 3 to 4 gigawatts of continuous, baseload power to the grid annually. That is roughly the energy output of three to four nuclear reactors, or 15 to 20 massive data center campuses, running 24/7 forever.

The math is brutal. If we do not build the power plants, we cannot build the metal. In the past, we solved this by simply building more power generation. Today, that new power is being diverted to a much wealthier buyer.

The Auction for the Grid

We are witnessing a direct auction for grid capacity that aluminum producers mathematically cannot win.

High electricity costs are not a future risk; they are the root cause of the current devastation across the primary aluminum sector. Look at the recent casualties. Century’s Hawesville facility in Kentucky and Magnitude 7’s New Madrid smelter in Missouri did not shut down because of a lack of demand. They died because they failed to secure long term, competitively priced power deals and were forced into the day ahead spot market.

Historical timeline where Aluminum smelters closed coinciding when energy prices rose in select states

Source: The Aluminum Association and Energy Information Administration

Data from the Energy Information Administration paints a grim picture. In states that have seen their primary aluminum capacity permanently idled or completely gutted, power prices have marched relentlessly upward. Because power is the second largest component of total operating costs, a primary aluminum producer requires fixed costs to survive. A 20 year, competitively priced power contract is a strict prerequisite for securing any project financing. Without it, a smelter is dead on arrival.

But securing those long term contracts is now nearly impossible because a new apex predator has entered the market.

Competition for power between traditional manufacturing and the tech sector is not a fair fight. Data center demand is entirely price inelastic. Recent market transactions prove that tech hyperscalers effectively have no limit on what they are prepared to pay for dependable, 24/7 baseload electricity. Because reliability is everything for their models, they are happily paying premiums of up to $100 per megawatt hour to secure guaranteed supply.

A smelter begins to bleed out if power prices rise above $40 per megawatt hour. Now, compare that to the tech industry. Microsoft recently struck a deal with Constellation Energy to resurrect Unit 1 of the Three Mile Island nuclear plant in Pennsylvania. Analysts estimate Microsoft conceded to a staggering $110 to $115 per megawatt hour over 20 years. That is an 80% to 90% premium over intermittent renewables in the same region, and it completely prices out any industrial competitor. Meta is executing the exact same playbook, locking up nuclear power from the Clinton Clean Energy Center in Illinois for two decades at an estimated $80 to $85 per megawatt hour.

Data centers consume much more energy than aluminum. Would more focus and energy be given to the aluminum or on data centers?

Source: The Aluminum Association

Smelters are being priced out of the grid. McKinsey projects that U.S. data center electricity demand will triple over the next five years, jumping from roughly 3% of total consumption today to nearly 12% by 2030. To replace the roughly 4.8 million metric tons of aluminum the U.S. imports in 2023 with domestic smelting capacity, the country would need to generate 71 terawatt hours of dedicated, continuous power annually. To put that scale into perspective, that is the equivalent output of more than 15 Hoover Dams, or the entire annual power consumption of the state of Minnesota.

Source: McKinsey

In a constrained grid, governments and utility companies will always prioritize the high margin, national security imperatives of AI over industrial smelting. But this creates a glaring paradox: if Big Tech buys up all the power, where will they source the physical metal to build their own infrastructure?

The auction heavily favors tech today, but it leaves us with a critical open question. Will this bidding war eventually break the physical supply chain, or will policymakers be forced to step in and subsidize the exact metal required to keep the AI revolution running?

The Investor Takeaway: Buy the Energy Privilege

The era of cheap metal is over. As these structural deficits take hold, the market is bracing for a period of extreme volatility and sustained upward pressure on prices.

The winners in this cycle will not just be the companies with the best bauxite mines; they will be the producers who possess moats that insulate them from the global energy bidding war. In this environment, the metal itself is secondary. The real asset is the energy contract.

 

 

Tara Mulia

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Look around you. It holds your soda. It wraps your leftovers. It makes up the engine block of your car and the fuselage of the plane you fly out in.

We treat aluminum as disposable. It is the third most abundant element in the Earth’s crust, effectively the “cheap, cost-effective, and highly abundant” of the metal world.

But there was a time when this metal was the ultimate flex.

In the mid-19th century, aluminum was more valuable than gold. Because it bonds so tightly with other elements in nature, refining it into pure metal was nearly impossible. It was so rare that Emperor Napoleon III of France reportedly held dinner parties where the most honored guests were given aluminum cutlery, while the “lesser” nobility had to suffer the indignity of eating with mere gold and silver forks.

The obsession didn’t end in France. When the Washington Monument was completed in 1884, the U.S. government capped it with a 100-ounce pyramid of solid aluminum. It wasn’t just structural; it was a statement of industrial might. At the time, a pound of aluminum cost about $16, roughly $419 in today’s money.

The aluminum tip is placed atop the Washington Monument on Dec. 6, 1884 in a contemporary illustration.

Source: National Park Service, NPR

Then, everything changed. We discovered how to use massive amounts of electricity to refine it. The price crashed, and aluminum became the building block of the modern world.

But today, the pendulum is swinging back.

For the first time in a century, the era of cheap, infinite aluminum is over. The price has surged past $3,000 per tonne, not because the metal is rare, but because the global economy physically cannot respond. The supply is being killed by a hard cap in China, a drought in Africa, and a western industrial base that has forgotten how to build.

Aluminum hits above $3,000, which is a price not seen since 2022

Source: Bloomberg

We are not facing a temporary shortage. We are facing structural rigidity.

You don’t have to guess; the numbers tell the story. Look at the global supply-demand balance.

Since 2021, the market has been trapped in a persistent deficit. We haven’t seen a surplus in five years.

• 2024: A deficit of 544,000 tonnes.
• 2025: Deficit widening to 591,000 tonnes.
• 2026 (Projected): The deficit blows out to 843,000 tonnes.

Note: The electrolytic aluminum demand figures above include the demand for electrolytic aluminum used in recycled aluminum production.

Source: SMM, CRU, Huatai Research Forecast

 

Demand is growing steadily where it’s up around 2.3% YoY, but supply is hitting a ceiling where growth is slowing to just 1.9%. When demand outpaces supply for half a decade, inventories vanish, and prices explode.

The Death of Elasticity

Elasticity just means when prices rise, supply usually expands to meet it, but it’s looking tougher with this pro-longed deficit. To understand why we are in a deficit, you have to look at the breakdown of the world’s supply engine: China.

For twenty years, China was the world’s “swing producer.” Whenever the world needed more metal, Beijing built a coal plant and a smelter. That valve has been welded shut.

• The Hard Cap: The government is strictly enforcing a 45 million tonne capacity cap to curb pollution. They physically cannot legally build more smelters.
• The Internal Black Hole: Worse, they are no longer exporting their surplus. The new “Two New” stimulus policy (a massive trade-in program for old appliances and industrial gear) is sucking up that metal domestically. China has flipped from the world’s factory to the world’s consumer, and they are keeping their metal for themselves.

How can the rest of the world catch up to China?

Source: International Aluminum Org

The Western Supply Shock

While China locks its doors, the Western supply chain is snapping.

In March 2026, South32’s Mozal smelter, a giant facility responsible for supplying nearly 20% of Europe’s aluminum imports, is shutting down.

Why? Not because it isn’t profitable. But because of a severe drought in the Zambezi basin and a failed negotiation with the local utility. That is 560,000 tonnes of metal vanished from the market overnight, leaving Western buyers scrambling.

This isn’t an isolated incident. It is a symptom of a western industrial base that is crumbling. In the U.S. and Europe, high operating costs have already forced half of all smelting capacity offline since 2021. Those plants aren’t coming back.

The Demand Renaissance: Not Your Grandfather’s Foil

While supply is hitting a brick wall, demand is undergoing a quiet revolution. Aluminum is no longer just about soda cans and window frames. It has become the “lightweight champion” of the energy transition.

1. The EV Diet Plan Electric vehicles are heavy. Batteries weigh thousands of pounds. To get decent range, automakers have to strip weight out of everything else. That means swapping heavy steel for light aluminum. An EV uses roughly 200kg of aluminum, which is 50% more than a gas car. As EV adoption grows, so does the baseline demand for the metal.
2. The Poor Man’s Copper Copper prices have skyrocketed, making it too expensive for many industrial uses. With the copper-to-aluminum price ratio hitting a 20-year high (4.1x), manufacturers are switching to aluminum for wiring and cabling wherever physics allows. It is the “substitution trade” of the decade.
3. The Skeleton of AI Even the digital world needs physical bones. The massive buildout of AI Data Centers isn’t just about chips; it’s about the chassis, the racks, and crucially, the cooling systems. Aluminum is the material of choice for heat sinks and thermal management because it dissipates heat efficiently. Every new data center coming online is effectively a massive structure of aluminum piping and plating.

Aluminum is now 4x cheaper than Copper

Source: Bloomberg

The Investor Takeaway

We leave you not with a forecast, but with a dilemma.

The world is betting its future on the exponential growth of digital intelligence (AI) and the green transition (EVs). Both of these revolutions are physically built out of aluminum. Yet, the energy and geopolitical systems required to produce that metal are flashing red.

This disconnect forces us to ask tough questions about how—or if—this gap can be bridged:

• Can we recycle our way out? Secondary aluminum (scrap) requires 95% less energy than primary smelting. Is the world ready to build the sophisticated supply chains needed to turn old cars into new data center racks, or will the quality mismatch be too high?
• Is the “China Cap” a ceiling or a lever? Is the 45 million tonne limit a hard environmental line in the sand, or is it a geopolitical tool that Beijing will release once the price hurts Western manufacturers enough?
• The Substitution Trap: At what price does the AI industry stop using aluminum? Is there even a viable alternative for thermal management that is scalable, or is this metal the non-negotiable “bones” of the digital age?

Think about it this way: If aluminum hits $5,000/ton, do auto companies delay their EV models launch? Do tech companies slow its data center buildout? Or do they just eat the cost and pass it to consumers?”

Something has to give. Will it be the environmental goals, the profit margins, or the pace of the buildout itself? For the observant investor, the answer to that question will define the next commodity supercycle.

 

 

Tara Mulia

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We are currently witnessing the largest capital expenditure in the history of technology. Hundreds of billions flowing into a machine designed to create infinite digital abundance. It looks like a paradox: Why fight a resource-heavy war over a technology that promises infinite digital abundance?

The answer lies in a lesson history has taught us repeatedly: Abundance does not mean equity. The neighbors fighting over the orange tree aren’t fighting for the fruit; they’re fighting to decide who owns the fence around the orchard.

Source: Accenture

The Logic of Control

The reason nations are hoarding chips and energy isn’t because they don’t believe in the abundance AI will bring. It’s because they don’t trust how it will be distributed.

History is littered with technologies that created massive surplus value, only to have that value concentrated in the hands of whoever owned the pipes.

• The Printing Press made information cheap; publishing houses became gatekeepers.
• Railroads made transportation cheap; railroad barons became oligarchs.
• The Internet made distribution free; platform monopolies became trillion-dollar rentiers.

 

The lesson is clear: New technologies don’t make old power structures obsolete. They get captured by them.

The question isn’t whether AI will make intelligence cheap. It is whether that cheap intelligence will be a public utility or a rentier’s monopoly. Right now, tech giants have been spending $427 billion on infrastructure in 2025 alone, and nations and corporations are betting trillions on it as well. They are securing their position not for a world of scarcity, but for a world where controlling the infrastructure of abundance is the new form of power.

For perspective, $427 billion is the size close to Norway’s entire GDP

Source: RBC Wealth Management

The Current Battlefield: Strategic Stockpiles

This shift has created a “Wartime Economy” for physical assets where nations have stopped viewing compute as a commercial service and started viewing it as a strategic reserve.

If you look at the global map, the chess pieces are moving to secure the two things AI consumes. Energy acts as the calories, and Rare Earths serve as the vitamins. The diplomatic maneuvering behind these acquisitions is geopolitical calculus rather than casual cooperation.

Read more on our Think Pieces and Reports page

1. Three Mile Island: When AI Resurrects the Dead

In September 2024, Microsoft struck a deal that crystallizes just how desperate the energy situation has become: a 20-year power purchase agreement to restart Three Mile Island—yes, that Three Mile Island, site of America’s most notorious nuclear accident in 1979.

The reactor being restarted (renamed “Crane Clean Energy Center”) wasn’t part of the 1979 meltdown, but it had been shut down in 2019 for economic reasons. Now, with AI driving unprecedented electricity demand, what was economically unviable five years ago has become strategic necessity.

Here’s where government got involved: Pennsylvania Governor Josh Shapiro personally pushed for the project to be fast-tracked through PJM Interconnection’s grid approval process. Normally, power projects languish in PJM’s queue for years. Crane was the largest project ever expedited by PJM, cutting the timeline from an expected 2028 restart to 2027.

Then in 2025, the Trump administration’s Energy Department announced a $1 billion federal loan to support the restart. This is explicit government backing to resurrect a dormant nuclear plant exclusively to power Microsoft’s AI data centers.

This isn’t economic development. This is the government treating AI infrastructure like wartime production, fast-tracking approvals and deploying federal capital to ensure the power doesn’t run out. When you’re restarting nuclear reactors mothballed for safety concerns, you’re not optimizing—you’re scrambling.

 

2. Greenland: The Fight for Vitamins

Greenland represents the other half of the equation. As we analyzed in “The Grandmaster’s Gambit,” the island is a fortress of strategic necessity because of its critical minerals.

AI data centers require advanced cooling systems and high-performance magnets, which rely on rare earth elements like neodymium and dysprosium. China currently dominates roughly 90% of the processing for these minerals and 94% of rare earth magnet manufacturing. This leverage is a structural vulnerability that Western policymakers are desperate to close.

If China cuts off rare earth exports tomorrow (as they did during the 2010 rare earth crisis with Japan), Western AI infrastructure stops scaling. Not gradually. Immediately.

To counter this, the Trump administration announced Project Vault, a $12 billion strategic minerals stockpile designed to fortify supply chains. The goal is to treat Greenland and similar upstream sources as insurance against geopolitical supply disruptions. A supply chain that does not control its rare earth inputs cannot guarantee uninterrupted AI manufacturing.

 

3. Pax Silica: The Allied Supply Bloc

Beyond unilateral stockpiling, we are seeing the formation of a “NATO for Supply Chains.”

In late 2025, the U.S. and allied nations convened the Pax Silica Initiative. This coalition includes Japan, South Korea, the Netherlands, and the UK. Their goal is to build a resilient global silicon supply chain that spans from upstream minerals to data centers.

This initiative is explicitly positioned to protect against coercive dependencies—to ensure China can’t use rare earth leverage the way Russia used gas pipelines. It creates a collective stockpile and innovation infrastructure regime constrained by allied trust networks rather than free market arms races.

But there’s a vulnerability: the “America First” imperative. What happens when U.S. priorities clash with Japanese or Korean interests? Can partners be assured their access won’t be cut off when Washington changes course? This is the tension nobody wants to discuss publicly, but it’s the fault line that could fracture the coalition.

Some diplomacy had to be involved but can partners be assured the “America First” agenda imperative won’t overshadow efforts?

Source: U.S. Department of State

China Isn’t Sitting Idle

While the West scrambles to diversify supply chains, China is doubling down on its advantages.

1. Export Controls as Strategic Leverage

China has moved beyond simple export policy tweaks to use export controls as a tool of industrial diplomacy:

• April 2025: China placed seven medium and heavy rare earth elements including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium under an export-control licensing regime. This requires government permits for exports and gives Beijing bureaucratic discretion over flows.
• October 9, 2025: Beijing announced a much broader set of export controls covering additional rare earths, associated technologies, and related materials, including five more medium/heavy rare earths (erbium, europium, holmium, thulium, and ytterbium) and even materials/tech that have downstream industrial applications.
• November 7, 2025: China paused implementation of many provisions of the October export-control package through Nov 10, 2026 under an agreement with the United States, effectively creating a temporary suspension, not a full rollback. The underlying licensing requirements and levers of control remain in place, and China continues to control the vast majority of processed rare earth exports.

What this means:
Rather than an outright ban, China now works with a licensing and procedural regime that gives it a scalable strategic lever. Even during the “pause,” China retains control over rare earth export licenses and can tighten or relax terms as geopolitical conditions evolve.

Source: IEA

2. Supply Chain Leverage and Global Flows

China’s dominance in rare earths remains remarkable:

• China accounts for over 90% of processed rare earth supply globally, a concentration that gives Beijing outsized influence over global magnet, EV, and high-tech supply chains — even if controls are not always actively tightened.
• Western governments and firms remain acutely aware of this leverage: critics warn China could return to more aggressive export behavior once temporary suspensions lapse.

Source: Statista

3. Domestic Stockpiling + Recycling as Resource Security

While precise numeric targets like “75% of global battery materials recycled by 2030” are difficult to verify in authoritative public policy documents, the direction of travel is clear: China is scaling recycling into a strategic extension of its critical minerals dominance.

• China is rapidly expanding its battery recycling industry, with forecasts showing strong growth through 2030 and expectations that it will remain the global leader in recycling market share.
• Installed recycling capacity was already in the multiple-million-tonnes per year range by 2024, positioning China as the world’s hub for end-of-life battery processing.
• Chinese firms and state-linked enterprises are building global recycling footprints, partnering internationally on recycling centers and after-sales recovery networks.
• Most importantly, Beijing has begun formalizing this into national industrial architecture: the China Resources Recycling Group Co., Ltd. (CRRG) was established in 2024 as a central, state-backed recycling platform spanning batteries, metals, and e-waste.

A state-owned recycling champion is a tell: China isn’t treating recycling as ESG. It’s treating it as resource security. If Beijing can control not just mining and refining, but also the “second mine” of end-of-life recovery, it can keep domestic industry fed while retaining long-term leverage over global supply chains.

The Real Bet

The question isn’t whether AI creates abundance. It’s who controls access once abundance arrives.

And they’re probably right.

You can have the smartest AI in the world. But if you don’t have the kilowatts to run it, the chips to scale it, the rare earths to cool it, or the legal sovereignty to control it, you’re a client state.

They’re not fighting over intelligence. They’re fighting over who gets to set the terms once intelligence is abundant.

And when intelligence is abundant, infrastructure is and will be the bottleneck.

 

 

Tara Mulia

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The Canvas Bag Theory of Markets

If you want to understand why gold just hit an All-Time High of $5,500, don’t look at the Federal Reserve’s balance sheet. Look at a $4.99 (IDR 83,000) canvas bag.

Last year, Trader Joe’s released a mini canvas tote bag. It was functional, simple, and cheap. It also caused grown adults to line up at 5:00 AM, fight in aisles, and resell them on eBay for $500. In London, Tokyo, and even close to home here in Jakarta, the bag became a status symbol. Why?

FOMO (Fear Of Missing Out).

It wasn’t about the canvas. It was about the crowd. When everyone else is running toward something, it’s very much human instinct to feel we should probably run that way too.

Even the normal tote bags are being sold upwards of $950. Now that’s a 200x return!

From Aisle 4 to Asset Class

This same psychological contagion is now bleeding into the gold market.

A few months ago, buying gold was for central banks and “doomsday preppers.” Today? It’s the topic that no one could stop talking about all day even during your most mundane routines. One of our team members shared his badminton buddies started asking if they should pile in. My grandpa who comes to visit every weekend also started asking if gold could go higher instead of what to eat for Sunday brunch.

We saw the preview of this last year in Asia and Australia. In Sydney, buyers at ABC Bullion were sleeping overnight on the pavement just to be first through the door when the shop opened. In China, young Gen Z buyers started buying “gold beans” (tiny gram-sized nuggets) because they stopped trusting savings accounts.

The gold beans that went viral in China. Very demure, Very cutesy, and Very Gen Z

Image source: Bloomberg

Here in Jakarta, there are recounts of people staying overnight in front of gold shops since 9pm to place their names in an queue honor system piece of paper

Image source: CNA

When people who have never owned an ounce of metal suddenly feel the itch to buy at all-time highs, it signals a shift. But it also signals danger. When you buy on emotion, you sell on panic.

Navigating the Vertigo

The question on everyone’s mind has shifted from “Should I buy?” to “Is it crashing?” now that we’ve seen a sharp correction.

Buying or holding at these heights feels unnatural. It feels dangerous. It gives you vertigo.

But let’s look at another feat of vertigo. Just this week, Alex Honnold (the climber from Free Solo) free-soloed the Taipei 101 building. No ropes. No safety net. Just him, 508 meters of glass and steel, and a crazy short 90-minute climb that the world watched with sweaty palms.

 

 

 

 

 

 

 

 

 

 

Images source: Netflix

To the average person, looking up at the 101st floor looks insane. It looks like a death wish. But to Honnold? It was just math, physics, and preparation. He didn’t climb it because he was reckless. He climbed it because he had studied the “bamboo boxes” of the structure. He knew exactly where the holds were, and more importantly, he knew what to do if he slipped.

Navigating this gold market requires that same “Honnold Preparation.”

The chart looks intimidating. The drop looks scary. But if you have done the homework, you realize that the fundamental structure hasn’t changed. You aren’t just reacting to a price tick; you are looking at a repricing of the dollar itself. As we wrote in our previous reports, when the currency is being debased, the price of real things has to go up even if the path there is bumpy.

If the Metal Scares You, Look at the Dirt

If buying the metal at these levels still gives you too much vertigo, there is another door open: the miners.

Think of gold mining like a neglected apple orchard. For years, investors ignored it, so no new trees were planted. Since 2018, production largely flatlined, but the high prices are finally acting as fertilizer. The latest data shows Q3 2025 mine production hit a quarterly record of 977 tonnes (up 2% year-on-year), putting 2025 on track to set a new all-time high for annual output.

Source: Heyokha Research

The orchard is waking up.

1. The Margin Explosion: The Average All-In Sustaining Costs (AISC) for miners hover around $2,250/oz, making the math undeniable. With gold at $5,500, miners are pocketing a record spread of nearly $3,000 per ounce. A 1% rise in gold can now drive a 2–3% jump in miner valuations.
2. The Hidden “Option” Value: Higher prices turn “waste rock” into “wealth.” Take Barrick Gold—their latest report showed a 23% jump in gold reserves (adding ~17 million ounces). They didn’t magically find new deposits; the higher price just made the old rock profitable to dig up.

While the crowd fights for physical bars, the smart money is quietly buying the companies that own the dirt.

Preparation Over Panic

The old safety net of the 60/40 portfolio of stocks and bond is fraying. With U.S. interest payments now exceeding defense spending, bonds aren’t the safety rope they used to be.

If you are feeling that itch to buy or the urge to panic-sell because of the correction, don’t just follow the crowd with the tote bags. Do the prep.

Alex Honnold didn’t start climbing until he had mapped every inch of the route. You shouldn’t allocate capital until you’ve done the same.

• Read our deep dive: Gold: The Return of Real Money

You can access and browse all our past reports here:

• Think Pieces
• Reports

The climb might look high, but the view from the top is worth it. Just don’t forget to bring your own bag.

 

Tara Mulia

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The Opening: A Musical Flop and a Geopolitical Stage

In 1986, ABBA’s Benny Andersson and Björn Ulvaeus teamed up to write Chess, a musical about the Cold War where the board served as a metaphor for superpower rivalry. Despite the catchy score, the production was a flop. It struggled to balance human drama with the cold machinery of global politics.

Caught the Broadway production in December. Full house. It seems American audiences can feel the geopolitical temperature rising. Suddenly, this musical feels less like history and more like a preview

Fast forward to 2026, and we are watching a new production on the global stage that is anything but a song and dance. President Trump has officially signed the charter for the “Board of Peace” at Davos. While it was initially pitched as a mechanism for Gaza’s reconstruction, the charter signed this January reveals a much broader mandate: to “promote stability” and resolve international conflicts.

While the name sounds diplomatic, the mechanics are novel. Permanent membership on the board reportedly requires a $1 billion contribution, and the charter grants “Chairman Trump” sweeping authority, including veto power over resolutions. It is a bold attempt to create a “nimble” alternative to the United Nations. However, in a game of chess, you need players willing to sit at the table. While over 20 nations like Saudi Arabia, Turkey, and Indonesia have signed on, heavyweights like France and Germany have declined, citing concerns over undermining the UN. Right now, much of the world is busy building their own boards.

The Thesis: The Empire Strikes Back

It is easy to dismiss Trump’s headlines: buying Greenland, slapping 25% tariffs on neighbors, proposing grand peace boards: as eccentric noise. But what if they aren’t random at all?

At Heyokha, we see these moves as a coherent strategy to build a resource-based American empire in a de-globalizing world. Trump isn’t just making deals; he is attempting to lock down the hard assets: land, energy, and minerals: required to survive the end of the “just-in-time” global order.

Remember this post that the White House did last year?

Why Greenland Was the Opening Move

In 2019, the world laughed when Trump suggested the U.S. buy Greenland. But as Trump wrote in The Art of the Deal, “Location is everything.”

Maybe we should brush up and read the “Art of the Deal”. Cover image is from our blog – “Art of the Deal” Tops Amazon as Tariffs Stirs Comedy and Chaos

 

Even though the Greenland talks have now subsided into a formal framework for cooperation, the underlying intent of the original ‘buy’ offer to secure resources remain.

Greenland isn’t just ice; it is a fortress of strategic necessity:

• Critical Minerals: The island holds massive reserves of rare earth minerals (estimated at 1.5 million metric tons, with some deposits reaching 28 million metric tons). These are the vitamins of modern defense and technology, and China currently dominates roughly 90% of global processing.
• Arctic Shipping Lanes: As sea ice declines, the Northern Sea Route offers up to 40% savings in time and cost for shipping between Asia and Europe. Controlling this “Polar Silk Road” is a generational prize.
• The AI Power Race: As we explored in our AI Curveball blog, the bottleneck for AI is no longer just code; it is energy and cooling. Greenland’s massive hydro potential and Arctic climate make it a “sovereign heat sink” for the data centers of the future.

 

This isn’t real estate speculation; it is Monroe Doctrine 2.0. It is a move to secure the Western Hemisphere’s physical supply chain. As we noted in The Price of Sovereignty, in 2026, safety isn’t measured just in missiles, but in who owns the warehouses of food, fuel, and the resources needed to win the AI race.

The “Board of Peace” vs. The Board of Reality

Trump’s “Board of Peace” pitch fits this empire-building mold: a transactional attempt to manage global stability from a position of top-down strength. But the board has changed since 1945.

We aren’t in a unipolar world anymore. As highlighted in our report on De-dollarization, nations like the BRICS bloc are actively building parallel financial rails to bypass the dollar. They’ve seen the U.S. weaponize the dollar against Russia, and they are opting out of the game entirely. You can set up a “Board of Peace,” but it’s hard to play when half the grandmasters are leaving the tournament to start their own league.

The Bill for the Empire

This brings us to the most uncomfortable truth. Empires are expensive.

While the strategy to secure hard assets like Greenland makes geopolitical sense, the balance sheet tells a different story. In FY 2025, the U.S. federal government spent $970 billion on net interest alone. This exceeded national defense spending ($917 billion). When you combine interest payments with mandatory entitlements (Social Security and Medicare), these costs are essentially consuming the vast majority of federal revenue, around 92%.

How is this sustainable?

 

Think about that. Nearly every dollar the government collects is swallowed up just to service past debt and keep the lights on for mandatory programs. That leaves almost nothing for defense, infrastructure, or buying massive islands. The U.S. is effectively trying to finance a 19th-century style expansion with a balance sheet that looks like a distressed tech startup.

The Investor Takeaway

We have been writing about this shift for years: from our Gold: The Return of Real Money report predicting the flight to hard assets, to our analysis of the debt spiral from the report. The “Trump Trade” isn’t just about lower taxes; it’s about a turbulent transition from a paper-based global order to one backed by hard resources.

When a superpower tries to reassert control while drowning in debt, the currency is usually the casualty. That is why central banks are hoarding gold at record rates. They know the cost of maintaining this empire is likely to be paid in inflation.

The End Game

As the U.S. races to lock down Arctic shipping lanes and mineral deposits, the picture is becoming clear. Trump may be playing a winning hand on the geopolitical chessboard, but the financial clock is ticking louder than anyone admits.

The real question isn’t whether America is building a new empire: it’s whether the American people realize they are financing one they can no longer afford.

 

Tara Mulia

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Something big happened. And no, we’re not talking about the dramatic military footage from Caracas. That was the trailer. The real story is about systems: who runs them, who controls access, and how trust in those systems is unraveling in real-time.

For decades, the petrodollar system anchored U.S. financial dominance. It was never about just oil, it was about trust. Trust that global trade would run through U.S. dollars. Trust that national borders would be respected. Trust that rule of law, not rule of force, governed the world’s financial plumbing.

That trust just took a direct hit.

If you need a refresher of the events that transpired

Source: Al Jazeera

Venezuela Was Never About Venezuela

Let’s get one thing out of the way: Venezuela’s importance isn’t about what it produces now, it’s about what it could produce and who controls it.

Officially, Venezuela sits on the world’s largest proven oil reserves, an estimated 300 billion barrels. To put that in perspective, that is more than Saudi Arabia that holds an estimate of 267 billion barrels. Yet, the nation’s actual output has cratered:

• Peak (Early 2000s): ~3 million barrels per day (bpd).
• Today: Struggling to stay above 800,000–900,000 bpd.

Infrastructure is decaying. Expertise has fled. Most foreign players, save Chevron, were kicked out long ago. And yet, the U.S. is back.

Why?

Because even if Venezuela’s current output is minimal, it possesses the specific “heavy sour” crude needed by U.S. Gulf Coast refineries to optimize margins. However, the narrative that the U.S. can simply “turn on the taps” is a logistical fantasy.

The Dollar’s Soft Power Turns Hard

For years, the game plan was “isolation through paperwork.” Washington used sanctions to lock Venezuela out of Western banks and U.S. capital markets. It didn’t work.

Caracas simply built a “parallel plumbing” system to bypass the dollar. They rerouted trade through shadow fleets and leaned on Beijing for survival.

The China Play: Between 2007 and 2015, China funneled $60 billion into Venezuela. But Beijing isn’t a charity—they’ve spent the last decade quietly de-risking. By halting new loans and focusing on “extraction-for-repayment,” they have recouped roughly $50 billion, leaving a manageable $10–12 billion on the books.

This operation was never about a “war for oil” in the traditional sense. While the U.S. Strategic Petroleum Reserve (SPR) is low (currently holding 413 million barrels, near 1980s benchmarks) the U.S. could be worried about a war higher than just oil.

U.S emergency stockpile is as low as it was in the 1980s. This gives the U.S. less flexibility in a crisis and weaker leverage against OPEC+ adversaries

Source: U.S. Energy Information Administration

 

This is a war for primacy. If a nation in the Western Hemisphere can successfully decouple from the dollar system using Chinese financial rails, the precedent is dangerous.

So, Washington pulled the emergency brake.

Maduro was taken. The military operation was swift and surgical, closer to a “decapitation strike” rather than a full invasion. But what followed wasn’t a puppet installation, but a bizarre cohabitation. With Delcy Rodríguez now sworn in as Acting President, the U.S. has proven it can remove a leader, but it hasn’t proven it can easily govern the aftermath.

Empire by Other Means

This is not a new doctrine—it’s the Monroe Doctrine, version 2.0.

We’ve talked about the Munroe Doctrine before in our Gold Report, here’s a sneak peak

But Venezuela is not a “banana republic” of the 1950s; it is a fragmented state with 20–30 million people and over 20 different armed groups controlling the interior.

And here’s the kicker: even if you stabilize the country, reactivating Venezuela’s oil machine will require more than $100 billion in capex and over a decade of patient rebuilding. That is a staggering sum for a nation that is effectively insolvent.

To put the scale of this challenge in perspective, consider the mountain of debt already on the books:

• Total External Debt: Estimated between $150–$170 billion.
• Economic Output: The International Monetary Fund (IMF) estimates Venezuela’s nominal GDP at about $82.8 billion for 2025.
• The Debt Trap: This implies a debt-to-GDP ratio of between 180%–200%.

In short: the cost to simply fix the oil fields is larger than the country’s entire annual economic output, and the debt they already owe is double that. This isn’t just a recovery project; it’s a multi-generational financial restructuring.

A Catalyst for Hard Assets

But what does all of this mean for investors?

Wars are inflationary. Always have been. Resources are hoarded. Supply chains are weaponized. Deficits explode. And trust, especially trust in the currency used to finance these deteriorates.

War has always been inflationary

Source: RSM US

At Heyokha, we’ve been writing about this for years:

• In our Q2 2020 report History: A Better Guide than Good Intentions, we’ve argued that Modern Monetary Theory would eventually unleash inflation. With today’s ballooning war budgets and rising debt service, that forecast is aging well.”
• In “Gold: The Return of Real Money”, we mapped the declining credibility of fiat currencies and why gold is re-emerging as a store of trust in a fractured world.
• In “The Stablecoin that Bought a Central Bank’s Worth of Gold”, we showed how even crypto-native companies are seeking shelter in gold, echoing the behavior of central banks.

War also kicks off commodity prices to surge

Venezuela fits squarely into this narrative.

The show of force may have delivered a short-term win. But the long-term effect is clear: if you’re a resource-rich nation thinking of pricing oil or metals outside the dollar, this operation was a warning. The message? Don’t even try.

But the world is watching and taking notes. BRICS members are already settling trades in local currencies. China’s Cross-Border Interbank Payment System (CIPS) now links over 1,400 financial institutions across 109 countries. Gold purchases by central banks hit multi-decade highs last year.

In other words: trust is shifting.

Final Thoughts: A Wake-Up Call for the Financial System

The aircraft have left Caracas. Maduro is in New York facing trial. But the damage to the “rules-based order” is permanent.

This wasn’t just a regime change—it was a message to the rest of the world: U.S. access to resources comes first. Financial autonomy comes second.

That message will echo far beyond Latin America.

It will accelerate the move away from dollar-based systems. It will deepen skepticism of U.S. financial assets. And it will push more capital into real stores of value—like gold, silver, and the infrastructure tied to energy sovereignty.

Up 73% since October 2025. How much higher can it go with increased political uncertainty?

At Heyokha, we see this moment not as an isolated geopolitical event, but as part of the broader endgame of the fiat era. When trust erodes, when power shifts, when the military becomes the backstop of monetary policy—it’s time to think hard about what you own.

Gold isn’t just a hedge anymore. It’s a protest vote. A way to opt out of systems that break their own rules. And the story of Venezuela might be the loudest signal yet.

 

Tara Mulia

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When the quiet metal stops whispering and starts shouting.

Just a few months ago, we wrote about silver’s long-overdue glow-up in “The Silver Awakening” blog. Back then, silver was still the underdog, the Luigi to gold’s Mario if you will, quietly building a case as both a monetary hedge and an industrial scarcity trade.

Now? It’s screaming. Loudly.

Silver has hit another all-time high, breaking past $60 an ounce for the first time. And while headlines focus on price, the real story lies beneath — in vaults running dry, critical minerals lists getting updated, and a market caught in its tightest squeeze in decades.

We’re not surprised. We warned this might happen.

YTD silver has gained 115%. Up and up!

Source: Bloomberg

When Inventory Vanishes, Prices Speak

It didn’t happen overnight. The signs were all there in early 2025: a structural supply deficit, overstretched mine production, and vaults across London and Shanghai thinning out like hairlines in a stress-filled market.

By March, silver flowed aggressively into COMEX, with inventories surpassing 420 million ounces. Meanwhile, London and Shanghai were bleeding metal. Traders were relocating inventory to the U.S. in anticipation of tariffs and Section 232 reviews.

Come summer, the real pain began. LBMA free-float inventories dropped to multi-year lows, hovering around 777 million ounces. Lease rates surged. Shanghai’s drawdowns intensified. And then in August, the U.S. officially added silver to its Critical Minerals List putting it in the same bucket as lithium and rare earths.

From there, the squeeze only accelerated.
By October, China exported over 21 million ounces of silver to London. This is an unusually large relief shipment that showed just how tight things had become. But it wasn’t enough. COMEX started sending silver back to London too, and borrowing costs in London spiked to record highs. At one point, banks were yelling over phones, refusing to quote lease prices.

Silver leasing rate remains elevated. This trend has been spiking up since the start of 2025.
Source: Bloomberg

India Pulls the Pin

And then came India.

As Diwali season approached, domestic demand exploded. For the first time in 27 years, the country’s largest precious metals refinery ran out of silver. Influencers fanned the fire with viral videos claiming the 100:1 gold-silver ratio made silver the trade of the year. The FOMO factor worked. Premiums in India shot past $5/oz.

Customers flocked to jewelry shops to buy silver in Mumbia
Source: Bloomberg

Banks like JPMorgan stopped delivering physical silver to Indian clients altogether. Vaults ran dry. At one point, multiple major ETF providers had to halt new subscriptions because they couldn’t source silver fast enough.

And this wasn’t just a demand shock. It was a geopolitical chess move, too.

Critical Minerals, Critical Pressure

Silver’s inclusion on the U.S. Critical Minerals List was a turning point. It reclassified the metal as essential infrastructure for energy, defense, and semiconductors, not just jewelry and coins.

This changed everything:
• Front-loading into U.S. vaults (COMEX hit ~456 million oz, triple historical norms)
• Concerns over tariffs or export controls
• Policy-fueled stockpiling in anticipation of Section 232 review outcomes

Effectively, the U.S. started hoarding. China started leaking. India started panicking. And London, the pricing hub, broke.

Let’s recap the December scoreboard:

Most London silver is “spoken for” by ETFs. In fact, 83% of LBMA silver was ETF-allocated as of end-September, meaning the actual available float was likely under 150 million ounces, which is barely enough to cover two days of London trading volume.

And let’s not forget: silver is in its fifth consecutive year of deficit. Global demand exceeded 1.14 billion ounces in 2025. Supply? Just 1.03 billion.

Even if you wanted more silver, it’s not easy to dig up. Production is stagnant. The top five producing nations control 62% of supply. Many of their flagship mines are nearing depletion.

Policy, Panic, and… Saudi Arabia?

Amid the chaos, Saudi Arabia quietly signaled a shift. As we noted in The Silver Awakening, the Saudi Central Bank opened positions in iShares Silver Trust and Global X Silver Miners ETF — its first-ever silver allocation.

It might look small on paper, but in geopolitics, signals matter more than size. A central bank that helped anchor the petrodollar is now experimenting with silver. It won’t be the last.

This fits the bigger pattern we’ve been tracking for years: real assets are in, fiat trust is out.

Silver: The Critical Commodity with Conviction

Silver has now been:
• Reclassified as a critical mineral in the U.S.
• Accumulated by central banks
• Strangled by ETF tightness
• Pulled in three directions by U.S., China, and India
• Embedded in everything from solar panels to semiconductors
• Used as a monetary hedge and an industrial necessity

No wonder it’s outperforming gold on momentum.
This isn’t just a catch-up trade. It’s a regime shift.

Final Thoughts: What’s the Real Price of Scarcity?

Silver is not merely the poor man’s gold anymore. It’s the broke system’s loudest whistleblower.

If gold reflects fear, silver reflects system strain. And right now, the system is groaning under the weight of physical shortages, policy bifurcation, and investor distrust.

We still believe silver is the most underappreciated character in this commodity cycle. It may not have gold’s headlines (yet). But when physical reality meets monetary erosion, silver doesn’t just wake up.
It explodes.

The rally isn’t the surprise. The surprise is that so few saw it coming….again.

Tara Mulia

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