Out-of-System Assets

Assets outside the traditional financial system, like gold and Bitcoin, are gaining traction due to geopolitical tensions and weakening government balance sheets.

Themes

Navigating Global Uncertainty

Timeframe

near-term

Subcategories

Economic Policy Global Markets Global Politics Governance & Policy Investment Strategies

Impact areas

Alternative Assets Financial System Geopolitical Risk Investment strategies

Detailed Analysis

The weaponization of the financial system through sanctions and rising public debt are driving demand for assets insulated from government control. Gold's recent outperformance, despite the absence of traditional drivers, highlights this trend. This shift reflects a growing concern about the return *of* capital rather than the return *on* capital.

Context Signals

Gold's decoupling from traditional drivers Rising US government debt Increased use of sanctions

Edge

Demand for out-of-system assets could continue to rise if geopolitical tensions persist. Digital assets like Bitcoin may become increasingly integrated into investment portfolios. This trend could challenge the dominance of traditional financial institutions and instruments.

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TRENDS

Keywords

alternative investments economic security financial diversification

All of this suggests that we have entered a new investment regime driven by two structural forces: weak government balance sheets and the intensive use of the centralised financial system by Western governments for sanctioning purposes.

Categories for this trend