Author: IntaCapital Swiss

Russia Hit with New Oil Sanctions

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Last week on 22nd of October, in Washington D.C, the U.S. Department of the Treasury’s Office of Foreign Asset Control (OFAC) announced that further sanctions on major Russian oil companies were being imposed due to Russia’s lack of serious commitment to a peace process to end the war in Ukraine. Experts advise that the aim of this increased pressure on Russia’s energy sector is to weaken President Putin’s ability to generate revenue for the war effort and to sustain an already fragile economy.

The sanctioning of both Rosneft and Lukoil* by the United States coincided with the EU’s 19th package of sanctions on Russia, which included a ban on Russian LNG (liquefied natural gas) imports. The United Kingdom had also added to its own sanctions list the previous week.

Rosneft – A vertically integrated energy company specialising in the exploration, production, refining, transportation, and sale of petroleum, petroleum products, and LNG. The Russian Government owns around 40.4% of the company, with the Qatar Investment Authority also holding a significant stake.

Lukoil – Engaged in the exploration, production, refining, marketing, and distribution of oil and gas across Russian and international markets. Lukoil is privately owned, with its founder, Vagit Alekperov, holding approximately 28.3%.

President Trump’s sanction package targeting Rosneft and Lukoil has triggered repercussions in the world’s two most populated nations, India and China. Experts report that a number of oil companies in both countries have begun cancelling orders ahead of the sanction deadline of 21st November 2025, fearing potential retaliation from the White House for sanction busting.  Analysts estimate that Russia exports between 3.5 and 4.5 million barrels of oil per day to Asia, with a significant portion coming from the newly sanctioned firms. However, experts warn that once the deadline passes, exports of between 1.4 and 2.6 million barrels per day to China and India could completely dry up.

Under OFAC’s latest rules, U.S. secondary sanctions may also be imposed for providing material support to Lukoil or Rosneft, or for operating within Russia’s energy sector. In essence, sanctions can be triggered by any significant transaction involving these companies. The threat of being banned from the U.S. financial system is expected to deter potential sanction busters from engaging in new or existing business with either firm.

The EU’s new sanctions package will prohibit the import or transfer, directly or indirectly, of Russian LNG from 25th April 2026, except for long-term contracts entered into before 17th June 2025. The EU’s implementation has been slower than that of the U.S. and UK due to its greater dependence on Russian LNG.

Meanwhile, both the European Union and the United Kingdom continue to target vessels operating within the so-called shadow fleet*, which is used to transport Russian oil and bypass Western sanctions. The UK has also imposed asset freezes on several companies supplying Russia with critical electronics for missiles and drones. Additionally, the EU has identified 45 new companies and entities that are directly supporting Russia’s war effort by helping to circumvent export restrictions on advanced technology.

Shadow Fleet – A collection of around 45 ageing, uninsured oil tankers used by Russia to export oil while evading Western sanctions. These vessels typically have opaque ownership structures, often sail under false flags, and operate outside the Western financial system. This enables Russia to sell oil below the Western-imposed price cap of USD 60 per barrel, designed to limit Moscow’s export revenues.

The latest round of sanctions is expected to result in increased enforcement activity and greater regulatory scrutiny, particularly if the United States maintains its renewed aggressiveness. With relatively short wind-down periods for both Lukoil and Rosneft, sanctioning authorities will need to act swiftly and with heightened diligence. Strong cross-border coordination among multinational organisations will be essential to ensure a robust and effective sanctions compliance framework.

President Trump and the Tariff Trade Wars

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On Thursday, 23rd October, President Donald Trump announced that he was halting all trade negotiations with Canada, blaming an advertisement funded by the Ontario Government, which cast negative connotations on his tariff plans by featuring the voice of former President Ronald Reagan. The advert used excerpts from a 1987 speech in which President Reagan criticised tariffs as outdated while defending the principles of free trade. Last year, the United States and Canada exchanged in excess of USD 900 billion in goods and services, and the cancellation of trade talks by President Trump has cast a cloud of uncertainty over bilateral trade relations between the two nations.

President Trump’s announcement, made via his Truth social media stated:

“Tariffs are very important to the National Security and economy of the U.S.A. Based on their egregious behaviour, all trade negotiations with Canada are hereby terminated”.

Experts suggest that the President is convinced the Ontario Government timed the adverts (which have been shown more than once) to coincide with a case in the Supreme Court challenging the legality of the tariffs, and to sow discord among Republican supporters. Canada’s Prime Minister, Mark Carney announced on Friday that the country was ready to resume trade talks with the United States and would pause the advert on Monday in the hope that U.S. trade officials would return to the negotiating table.

In a surprise move, President Trump predicted that Brazil and the United States may be able to “pretty quickly” strike a trade deal, despite having imposed punitive tariffs on Brazil earlier this year over the prosecution of former ally Jair Bolsonaro. Brazilian Foreign Affairs Minister Mauro Vieira stated that he hoped sanctions on Brazilian officials would be lifted and that he expected trade negotiations to be completed within weeks.

President Trump is attending the 47th ASEAN Summit and Related Summits in Kuala Lumpur from 26th – 28th October 2025, where he has held several meetings with regional leaders concerning tariffs. He is seeking to increase access to markets for U.S. agricultural goods and, crucially for his administration, to secure access to critical minerals and rare earth sectors. Such framework agreements will include exemptions from tariffs on key exports to the United States for several Southeast Asian countries, including Cambodia, Malaysia, Thailand, and Vietnam.

The United States has released a framework for a trade agreement with Vietnam, which will offer zero tariffs on selected products while granting preferential treatment by the Vietnamese Government to U.S. agricultural and industrial exports. A White House Statement said the agreement is expected to be finalised in the coming weeks, adding that both countries had agreed commitments on investment, digital trade, and services, though further details were not provided.

It has also been announced that a reciprocal trade framework between the United States and Thailand has been reached, under which the U.S. will maintain a 19% tariff on Thai exports, while identifying certain products where tariffs could be reduced or removed. Thailand will eliminate tariffs on approximately 99% of U.S. exports, covering industrial, food, and agricultural products. Both countries also signed a pact giving U.S. companies preferential access to rare earth minerals, crucial in manufacturing high-tech products such as jet engines and semiconductors. However, information released so far remains limited and given that China controls around 90% of the rare earth market, the overall impact for the U.S. may be modest.

Malaysia, as host of the 47th ASEAN Summit, has signed a Joint Trade and Critical Minerals Agreement with the United States aimed at improving trade across Southeast Asia and countering China’s tightening control of rare earth mineral exports. Analysts say the agreement gives Malaysia an advantage in accessing the U.S export market and, in return, Malaysia will develop its rare earth and critical mineral sectors with U.S firms, while addressing barriers that affect investment, digital trade and services. Furthermore, Malaysia will commit to purchasing products from U.S companies and restricting the export of any U.S. items on the unauthorised list.

Finally, China and the United States are both keen, according to experts, to avoid further escalation of the current trade war, and have shown signs of progress. After China increased export controls on rare earth and critical minerals, President Trump responded by imposing China with 100% tariffs on Chinese goods. However, on 26th October, it was announced that U.S. and Chinese trade and economic officials had reached an agreement on a framework for bilateral trade, and President Trump confirmed that he expects to finalise a trade deal with President XI Jinping in the coming days. Only time will tell whether the United States and China can reach a sustainable long-term agreement.

S&P Global Ratings Downgrade France’s Sovereign Credit Score

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In a move that surprised bond markets, S&P Global Ratings (Standard & Poor’s), one of the world’s leading credit agencies, announced on Friday, 20th October, that it had downgraded France’s sovereign credit rating from AA- to A+. S&P had originally been expected to review France’s rating next month, but brought its decision forward, citing growing fiscal concerns, particularly the suspension of the government’s controversial pension reform by parliament. Last week, the government narrowly survived a no-confidence vote after agreeing to opposition demands to halt President Macron’s pension changes, a political compromise that, according to analysts, preserved the government’s stability at the expense of fiscal reform.

France has now lost two of its AA- ratings in quick succession, with both Fitch and S&P lowering their assessments. Moody’s is scheduled to review France’s credit score of Aa3 (the lowest in the double-A category) on Friday 24th October. Experts warn that French bonds could become more vulnerable as downgrades come faster than markets anticipated. Following S&P’s decision, French government bonds came under pressure, with yields on the 10-year bond rising by three basis points to 3.39%, while German 10-year yields increased by one point. A key gauge of risk — *the French-German 10-year bond spread has widened sharply, nearing 90 basis points earlier this month, up from just over 50 basis points before Macron’s snap legislative election in 2024.

*French-German 10-Year Bond Spread – this is an important indicator of market risk, comparing France’s borrowing costs to those of Germany, the Eurozone’s benchmark “safe” borrower. A widening spread indicates that investors are demanding higher returns for holding French bonds, reflecting increased concern about France’s fiscal health or political uncertainty.

The hung parliament resulting from President Macron’s snap elections on 30th June and 7th July 2024 has created a political stalemate that has driven up bond yields (now among the highest in the Eurozone). These pressures have been further exacerbated by S&P’s downgrade. France’s public debt currently stands at around 113% of GDP, with S&P forecasting it could rise to 121% by 2028. The agency warned that the country’s economic outlook (the Eurozone’s second-largest economy) remains uncertain ahead of what could be France’s most pivotal election in decades in 2027.

Another challenge for French bonds is that, with the rating now below the AA threshold, some funds bound by “ultra-strict investment criteria” may be forced to sell their holdings, pushing yields higher. However, analysts note that most funds will likely continue to hold French government debt. Some fund managers, anticipating the downgrade, have already amended their internal rules, reportedly in response to client demand, to allow holdings of A-rated French securities.

Overall, analysts warn that France faces significant fiscal challenges, including a large public deficit and mounting national debt. Two major rating downgrades in quick succession highlight investor concern about rising borrowing costs. While inflation remains low and France retains economic strengths in services, tourism, and technology, a lack of political consensus on structural reforms and budget discipline is hampering progress. The draft 2026 budget, which includes tax rises and a surtax on large corporations, faces fierce opposition both from parliament and the public, underlining how difficult it will be for the government to stabilise the nation’s finances.

The Global Banking System at Risk from the USD 4.5 Trillion Private Credit Market

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Senior Wall Street figures have voiced growing concerns that the global banking system could be facing serious risks from the USD 4.5 trillion private credit market. The main worries centre on risky lending practices, potential contagion, and a lack of transparency, all underscored by recent high-profile bankruptcies. Because the private credit market operates outside traditional banking regulations, it tends to carry higher leverage and riskier loans, which could spill over into the wider financial system and impact banks and investment firms around the world.

The sense of unease across Wall Street has deepened amid fears that large-scale defaults in the private credit market could trigger a broader systemic shock. Experts note that global credit has expanded rapidly over the past decade, with particularly sharp growth in private credit. Senior finance figures explain that this wave of expansion typically starts with private credit, then extends into high-yield bonds* and leveraged loans**, both of which amplify financial risk

*High Yield Bonds – In finance, a high-yield bond is one rated below investment grade by credit agencies. These bonds offer higher returns but carry a greater risk of default. They are often issued by start-ups, highly leveraged companies, capital-intensive industries, or so-called “fallen angels”, firms that once held investment-grade ratings but have since dropped below the threshold.

**Leveraged Loans – These are high-risk loans granted to companies with weak credit histories or heavy debt loads. Because of the elevated risk, they come with higher interest rates. There’s no strict definition for what constitutes a leveraged loan, but they are generally identified by low credit ratings or large margins above benchmark interest rates, such as floating-rate indexes that determine how loan costs fluctuate over time.

Investor anxiety intensified recently when two major car parts suppliers in the private credit space, both carrying multi-billion-dollar debts, declared bankruptcy amid fraud allegations. At the same time, two regional banks revealed they were sitting on several irrecoverable bad loans. The news sparked a sharp sell-off across both U.S. and U.K. stock markets last week. Analysts said many investors fear this could be just “the tip of the iceberg,” prompting a rush to safer assets.

In the U.K., data showed that within the FTSE 100, investors sold off shares in Schroders and ICG, both seen as particularly exposed to the private credit market. Banking stocks also fell sharply, reflecting concerns that traditional lenders are more deeply tied to this market than previously thought. The International Monetary Fund (IMF) recently warned that global banks’ exposure to private credit, often dubbed the “shadow banking sector”, amounts to around USD 4.5 trillion, a figure larger than the entire U.K. economy. The IMF also cautioned that as many as one in five banks could face significant trouble if the sector deteriorates further.

IMF Managing Director Kristalina Georgieva has publicly admitted to “sleepless nights” over the potential risks stemming from non-bank financial institutions. Financial commentators say her concerns arise from the lack of regulatory oversight in this sector, where non-bank lenders can take on risks that traditional banks would likely avoid. The absence of third-party scrutiny only compounds the problem, leaving markets in the dark about the true scale of exposure. The world learned painful lessons during the 2007–2009 global financial crisis, and with the collapse of Silicon Valley Bank in 2023 still fresh in memory, few are willing to rule out another shock on the horizon.

What Ignited the Recent Record Crypto Crash?

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On Friday, 10th October, just after reaching an all-time high, the cryptocurrency market imploded, wiping out around half a trillion dollars in value. Bitcoin alone lost more than USD 200 billion. Most experts, analysts, and financial commentators agree that the crash was triggered by President Trump’s announcement on his Truth Social platform that he would impose 100% import tariffs on China from 1st November 2025. Following the post, Trump’s own meme coin plunged to USD 4.65, leaving his followers nursing losses of around 40% in a single day. The same coin had recently traded at a high of USD 45.

Leveraged trading has become standard practice among many crypto traders, who borrow money to increase the size of their positions. While such trades can be highly profitable, they are equally risky when prices move sharply in the wrong direction, as they did last Friday. In today’s crypto market, heavily leveraged bets are automatically closed by exchanges once losses reach a level that would make repayment impossible. Experts say this system amplified the crash, as countless traders with high leverage were forcibly liquidated by exchange algorithms once prices began to fall.

Allegations of insider trading have also surfaced after an investor reportedly placed a short position on Bitcoin, earning around USD 200 million when prices collapsed. This trade occurred just 30 minutes before President Trump’s post on Truth Social announcing the new tariffs on China. Many within the crypto community have questioned whether the investor had access to insider information from within the White House. The trader has since been dubbed the “Trump Insider”, particularly after opening another large short position on Bitcoin this week, sparking fears of a second market downturn.

The unwinding of leveraged trades also had a devastating impact on altcoins, leaving the wider market reeling. Ethereum dropped by around 11% to USD 3,878, while Cardano and Solana both fell roughly 30%. Other major cryptocurrencies such as XRP, Dogecoin, and ADA also tumbled by 19%, 50%, and 25% respectively, according to market data. Analysts say stablecoins which are pegged 1:1 to fiat currencies such as the USD, GBP, or gold, are edging closer to mainstream adoption as Congress debates the *Genius Act. However, during the sell-off on 10th October, Ethena’s yield-bearing stablecoin (USDe) briefly lost its dollar peg, plunging to 65 cents on Binance before rebounding to close just below USD 1. Financial commentators say this episode should give Congress some food for thought when refining the legislation.

The *“Genius Act”, passed in July 2025, is a U.S. law that created the first comprehensive federal regulatory framework for stablecoins. It aims to provide clarity and consumer protection by requiring issuers to maintain a 1:1 backing with high-quality assets such as cash or short-term U.S. Treasuries. The Act also establishes both federal and state licensing pathways and includes provisions for financial stability, disclosure of reserves, and legal safeguards for holders in the event of insolvency.

Experts suggest several key lessons can be drawn from the 10th October 2025 crypto crash. Earlier that week, China announced restrictions on rare earth mineral exports, reigniting speculation about a renewed U.S.–China trade war. President Trump’s retaliatory post amplified global concerns, sending shockwaves through financial markets. While traditional markets were closed, the 24/7 nature of crypto trading meant that digital assets bore the full force of the panic almost instantly.

This has been the largest single liquidation event in cryptocurrency history. Data shows that around USD 19 billion in leveraged positions were wiped out in under 24 hours, though some commentators believe the true figure could be higher. Analysts say the episode highlights the extreme risks of trading with leverage in such a volatile environment. The market’s structure also contributed to the collapse, as automatic deleveraging mechanisms at major exchanges like Binance triggered further sell-offs, creating a vicious cycle.

The crypto industry now faces serious questions about its own resilience and governance. The ecosystem is so interconnected that when one segment collapses, the rest often follow. Moreover, repeated allegations of insider trading, including claims that an unknown trader made USD 200 million shortly before President Trump’s announcement, have further damaged trust. To avoid similar crises, experts say exchanges and market participants need to adopt stronger risk management systems and institutional-grade compliance standards. However, given crypto’s historical resistance to regulation, some argue that Congress may need to intervene to ensure proper oversight as stablecoins move into mainstream financial markets.

Silver Soars Above $50 as Squeeze Hits London Silver Market

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On Thursday, 9th October, silver breached the $50 per ounce mark for the first time since the 1980s, evoking memories of the Hunt brothers*, before continuing its climb to reach a high of $51.23 per ounce. The surge in silver prices, already up by around 70% since the start of the year, has been driven by investors rushing to safe-haven assets such as silver, gold, and other precious metals, as well as by a surge in demand from India. Another key factor is silver’s critical role in industrial markets, with wind farms and solar panels now accounting for nearly half of global demand.

*Hunt Brothers – Nelson Bunker Hunt and his brother were Texas oilmen whose worldview was shaped by a sense that the odds were stacked against them. With inflation at 15%, scrutiny from the IRS (Internal Revenue Service), and tensions with Muammar Gaddafi, they felt under siege. After refusing Gaddafi’s demand for half the profits from their Libyan oil fields, the Hunts saw their assets seized. Determined to protect their wealth, Nelson Hunt decided to hedge against inflation by hoarding silver, leading the brothers to begin one of the most infamous market plays in modern history.

Experts note that Nelson Hunt was not a typical “buy and sell” trader. Out of paranoia and conviction, he and his brother began stockpiling silver in 1973, when it was priced at just $2 per ounce. By 1980, the price had reached $45 per ounce and was still rising. The Hunts had amassed around 200 million ounces of silver, and the craze spread. People sold family heirlooms, thieves targeted silverware, and anything containing silver was melted down, all of which pushed prices even higher.

The fallout prompted regulators to act. On 7th January 1980, both **COMEX and the Chicago Board of Trade introduced emergency measures, including higher margin requirements. Experts at the time said the new rules effectively outlawed further silver buying, allowing only liquidation contracts. Prices soon collapsed from a high of $49.45 per ounce to $16.60 by 18th March that year. After years of legal battles and financial manoeuvring, the Hunt brothers eventually lost everything.

** COMEX – The Commodity Exchange, a division of the CME Group, is a global derivatives marketplace that allows clients to trade futures and options across major asset classes. It also provides clearing and data services and serves as the main exchange for trading metals such as gold, silver, copper, and aluminium.

Fast-forward to the 21st century, and the London Silver Market is experiencing what many describe as a historic squeeze. As prices continue to rise, the mismatch between supply and demand has become so severe that a global hunt for bullion is underway.

Some traders are even booking space on commercial flights from New York to London (a costly method) to transport silver bars and take advantage of the $1.20 per ounce arbitrage opportunity seen on Monday this week. The shortage of silver bars has been fuelled by several factors, starting with Donald Trump’s threat to impose tariffs on the metal. This prompted a mass exodus of bars across the Atlantic as traders rushed to beat potential levies.

Other contributing factors include a spike in demand from India, increased debasement trading (where investors sell currencies and buy safe-haven metals as global debt climbs), and production shortfalls among miners who are failing to keep pace with demand. Additionally, large volumes of silver are held in vaults underpinning ETF trading, meaning they cannot easily be sold or leased. The leasing market has become so tight that traders holding short spot positions are paying sky-high rates to borrow silver to roll over their contracts.

Market analysts in London believe that natural momentum will eventually see silver bars flow back to the city from reserves elsewhere, helping to ease the shortage. However, traders in New York remain hesitant to export silver to London, as the US government lockdown could cause customs delays, potentially costing millions in missed opportunities. There is also widespread caution over President Trump’s potential tariffs on silver, which is under investigation as a critical mineral under Section 232. Should the US decide not to impose tariffs, part of the squeeze in London could ease. The coming four to six weeks will be crucial in determining how this tightness in the London silver market unfolds.

Gold Rally Helping China Towards Less Reliance on the Dollar and U.S. Financial Dominance

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China and its partner countries in BRICS* have long aspired to develop an alternative currency to the US dollar, as well as their own payment systems and other financial instruments that would reduce global dependence on the de facto reserve currency and the financial dominance of the United States. In this context, the three-year bull run in gold, confounding many sceptics and recently breaching the USD 4,000 per ounce mark (yet another record), is aiding China in its quest to diminish US influence across global financial markets.

*BRICS is an intergovernmental organisation formed as an acronym for Brazil, Russia, India, China and South Africa, established in 2009 (with South Africa joining in 2010). Membership has since expanded to include Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates. Saudi Arabia has been offered full membership, though its government is still considering the proposal. Partner nations with potential for future membership include Belarus, Bolivia, Cuba, Kazakhstan, Malaysia, Nigeria, Thailand, Uganda, Uzbekistan, and Vietnam.

Experts suggest that Russia views BRICS as a means of countering Western sanctions, while China, through BRICS, is expanding its influence across Africa with ambitions of becoming the leading voice of the “Global South”. Analysts predict that over time, BRICS will evolve into both a geopolitical and economic powerhouse, posing a direct challenge to the G7 group of nations. Current data indicate that BRICS countries account for 44% of global crude oil production, with a combined economic output exceeding USD 28.5 trillion, equivalent to approximately 28% of the global economy.

The global spotlight remains firmly on gold, and China has been steadily accumulating reserves of the yellow metal for over a decade. Experts estimate that the nation’s gold stockpile is now the sixth largest in the world. The metal’s ascent to record highs is helping China pursue its geopolitical and economic objectives. Amid escalating global tensions, protectionist tariffs, and a widening rift between the United States and its traditional allies, Chinese policymakers are capitalising on the moment.

For the first time, the Chinese government has established an offshore vault for the Shanghai Gold Exchange in Hong Kong, enhancing its status as an international trading hub. China has also approached several countries with offers to store gold in its bonded warehouses. Experts suggest that such initiatives will encourage sovereign wealth funds and central banks to trade the stored gold, diverting business away from established centres such as the London Metal Exchange (LME).

Data shows that China is the world’s largest gold producer and is expanding its influence within segments of the financial system where it faces the least resistance. The yellow metal is playing a pivotal role in helping the government achieve several of its economic ambitions. Financial commentators note that controlling a larger share of the global bullion market could elevate China’s international standing, with gold reinforcing the wider use of the yuan. This could ultimately allow China to offer the world an alternative to US financial dominance, bringing it closer to realising its long-standing vision. China has even eased capital controls to enhance its weight in financial markets, while its resurgent technology sector continues to attract international investors.

However, despite its substantial gold holdings, China has yet to make significant progress in promoting the yuan as a dominant currency within the commodities markets. Although some cross-border contracts are denominated in the yuan, analysts note that for key commodities such as oil and copper, yuan contracts possess only a fraction of the liquidity seen in dollar-denominated benchmarks and remain far from displacing the US dollar in global trade, particularly among developing countries.

Nevertheless, China is renowned for its long-term strategic approach, and its efforts to cultivate stronger relationships with central banks play a key role in its plan to provide an alternative currency framework. In light of Western sanctions on Russia and other countries, China’s economic system may appeal as a network insulated from Western political interference. As part of its persuasion strategy, China is expected to highlight examples such as Venezuela’s gold, valued at around USD 1 billion, which has been frozen for years in the Bank of England.

Western nations and other developed economies would be unwise to underestimate China’s ambitions. Should Saudi Arabia decide to join BRICS, those ambitions would gain even greater momentum. Some analysts argue that President Trump’s policies are inadvertently facilitating China’s rise, with America’s massive debt burden and escalating tariff disputes straining relationships with traditional allies. Moreover, as global debt continues to climb and geopolitical tensions intensify, fuelled further by the now popular “debasement trade” (selling currencies and buying gold), China’s ambitions may well be realised sooner rather than later.

Gold & Bitcoin Gold & Bitcoin

Precious Metals and Bitcoin Rise on the Back of Debasement Trades

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A financial strategy in which investors allocate funds to assets such as Bitcoin and gold as a hedge against the devaluation of fiat currencies is known as a debasement trade. Key drivers include rising sovereign or government debt, geopolitical instability, and inflation. Experts note that investors have been selling major currencies and moving towards alternative assets such as gold (both physical and ETF), silver, Bitcoin, and even certain collectables such as Pokémon cards, which recently reached an all-time high.

Data released indicates that investors have added momentum to debasement trades due to growing concerns over fiscal challenges affecting many of the world’s largest economies, several of which are struggling under an expanding burden of debt. Analysts also highlight that political instability within these economies has further encouraged investors to pursue debasement hedges by purchasing gold, Bitcoin, and other crypto assets, particularly as the US dollar, Japanese yen, and euro face mounting fiscal and political pressures.

Experts suggest that one of the main reasons investors are rebalancing their portfolios is the rising debt levels in countries such as the United States, Japan, and across the Eurozone. These nations are finding it increasingly difficult to manage their debt piles, which in turn has enhanced the appeal of debasement trades. Gold opened today, surpassing USD 4,000 per ounce, a new record, as it continues to demonstrate its role as a safe haven amid economic and geopolitical uncertainty. Recent data also revealed that Q3 saw the largest global gold ETF monthly inflow on record at USD 17 billion, resulting in the strongest quarter ever, totalling USD 26 billion.

On the Bitcoin front, the cryptocurrency has risen steadily over the past year, driven largely by President Trump’s introduction of crypto-friendly legislation. However, the United States is grappling with a massive debt load, standing at USD 37.88 trillion as of the close of business on 30th September 2025 and still climbing. The ongoing US government shutdown has also acted as a strong buy signal for Bitcoin, much of it linked to debasement-related transactions.

Indeed, on Sunday 5th October Bitcoin reached USD 125,689, surpassing its previous record set on 14th August this year, driven primarily through Bitcoin ETFs. Data shows the coin is up 30% for the first three quarters of the year. Yesterday, 6th October, Bitcoin hit another record of USD 126,279 with the US dollar having weakened approximately 30% against the cryptocurrency this year. Several Wall Street analysts now predict Bitcoin will reach between USD 160,000 and USD 180,000 by the close of business on 31st December 2025.

Analysts advise that investors engaging in or considering debasement trades need only to look at France for an example of why hedging has become increasingly common. Newly appointed Prime Minister Sebastian Lecornu lasted only 26 days in office, surpassing the brevity of former UK Prime Minister Liz Truss’s record by 23 days. The French leader did not even manage to deliver an inaugural address to parliament, let alone present a budget that could achieve cross-party support.

Commentators suggest that debasement trading will continue an upper trajectory, as Europe contends with instability in France and beyond. Japan has also unsettled markets with a newly elected pro-stimulus Prime Minister and concerns over further debt expansion. In the United Kingdom, the Chancellor is preparing a budget that many expect to be highly contentious. Meanwhile, in the United States, already burdened by an out-of-control debt pile, a prolonged government shutdown, and a President seeking to assert influence over the Federal Reserve, the pressure continues to mount.

Swiss Government Offering Gold Concessions to U.S. for Improved Tariffs

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To reduce the tariffs currently standing at 39%, imposed by President Trump, the Swiss government has offered to invest in the United States’ gold refining industry in the hope that the White House will reconsider its position. The tariff has already harmed exports* to the United States, and in a statement, the Swiss Government said: “Diplomatic and political exchanges will continue with a view to achieving a quick reduction in additional tariffs.”

*Exports to the United States have been severely affected since the 39% tariff came into effect. In August, exports fell by 22% (excluding gold and adjusted for seasonal fluctuations) compared with the previous month. Swiss watch exports to America dropped sharply in August, further compounded by weak demand from China. In a statement on Thursday, 18 September, the Federation of the Swiss Watch Industry announced that all major markets were down, with the U.S. market (the industry’s largest) falling by 24%, and overall exports down 17% year-on-year.

*Gold bullion exports to the United States in August fell to 0.3 tonnes, taking a dramatic decline. However, clarification from the White House confirmed that tariffs on gold would not be implemented, a decision only formalised in September, allowing the resumption of the bullion trade. America’s trade deficit with Switzerland fell by one-third in August compared with the previous month, from CHF 2.93 billion to CHF 2.06 billion (USD 2.6 billion), marking the lowest level since 2020, according to data from the Swiss Customs Office. Overall, Swiss exports declined by just 1%, as increased shipments to Europe, Canada, and Mexico helped offset the U.S. tariffs.

Experts have advised that, according to sources close to the talks, proposals made by the Swiss government to both U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer involve Swiss refiners relocating their lowest-margin business to the United States. The offer, insiders report, also includes melting down gold bars traded in London and recasting the metal into the smaller sizes preferred in New York.

Records show that the bullion trade with the United States is, on average evenly balanced. However, this changed in the first quarter of the year as fears arose that President Trump might impose tariffs on gold. This not only created a substantial surplus but also opened up highly profitable arbitrage opportunities for traders. The first quarter distortion of Switzerland’s trade surplus figures with the United States (bullion accounted for than two-thirds of the surplus), ignited criticism of the gold industry. Attention quickly turned to the canton of Ticino, home to the world’s largest gold refining hub, through which almost all of the world’s gold passes.

Analysts suggest that the Switzerland’s gold refining industry is an easy target for U.S. politicians. However, to portray it as the villain behind Switzerland’s distorted trade surplus with the United States is considered by many to be far-fetched. The surplus, which appears to be the justification for President Trump’s 39% tariff, is, according to some experts, merely an excuse to raise levies. They note that the United States itself had a gold surplus of approximately USD 3.6 billion in 2024. The surge in gold bullion shipments from Switzerland to New York altered that balance, as many Swiss refineries operated at full capacity to melt down the 400-troy-ounce bars traded in London into the smaller one-kilogram bars preferred in New York.

Overall, the Swiss economy has remained relatively resilient. However, due to the tariffs, the government has warned that slower growth is expected for the remainder of the year. The Swiss government is currently working to diversify its trading partnerships and, together with other members of the European Free Trade Association (EFTA), signed a new free trade agreement with the South American Mercosur bloc in the third week of September. EFTA comprises Norway, Switzerland, Liechtenstein, and Iceland, while the Mercosur countries include Argentina, Bolivia, Brazil, Paraguay, Uruguay, and Venezuela.

U.S. Politicians Ensure First Government Shutdown for Six Years

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The deadline for the United States Congress to approve federal funding was midnight, and once again, politicians have put America in jeopardy by refusing to agree on a budget. The Republicans and Democrats are locked in a conflict over healthcare subsidies, and while the Republican Party controls Congress, they need the Democrats to pass the funding bill. Today’s standoff could lead to the loss of thousands of federal jobs, as President Trump may well use the shutdown to trim many thousands of jobs from federal agencies. In fact, he has warned Democrats that the shutdown could well clear the path for more redundancies, which will coincide with his push to cut 300,000 federal employees by December of this year.

The current shutdown, the fifteenth since 1981, will suspend scientific research, slow air travel, delay the payment of salaries to United States troops, and lead to enforced holidays for 750,000 federal workers, costing USD 400 million per day. Regarding air travel, Vice President Vance has gone on record saying that essential staff who work through shutdowns, such as air traffic controllers, would be concerned about the non-receipt of paycheques. He warned air travellers that they may not arrive on time, as TSA (Transportation Security Administration) and air traffic controllers would not receive their wages today.

A stopgap measure was proposed to keep the government funded until 21st November 2025. However, this was denied by Democrats, who, according to some commentators, would rather have government employees go unpaid than use the time to come to an agreement over federal funding. Both Republicans and Democrats are throwing accusations, casting blame for the shutdown at each other in the hope of gaining an early advantage in the 2026 midterm elections, where all 435 seats in the House of Representatives and 100 seats in the Senate will be up for re-election.

The problem with the funding bill is that the Democrats wish to add USD 1.5 trillion to the bill, primarily to boost healthcare and other funding. They have made it clear that not even a stopgap funding bill will be passed unless their USD 1.5 trillion healthcare funding is included, which, of course, the Republicans have flatly refused. Senior Democratic figures have accused President Trump and the Republicans of not wanting to protect the healthcare of the American people. If Congress does not approve a funding bill and the impasse continues, Obamacare premium tax credits will expire on 31st December 2025, leaving around 20 million people facing sharp premium hikes.

According to many experts, this has descended into a political impasse, with Team Trump saying they have the upper hand over the Democrats because they have rallied the rank and file behind the stopgap bill. The majority leader of the U.S Senate has said that the Democrats will be blamed, just as the GOP (Grand Old Party – Republican) was in 2013 when they engineered a shutdown over repealing Obamacare. However, this time the Democrats are asking for something to be added to the bill. The bottom line is that the Republicans need 60 votes to pass this bill (voted down by 55-45), and unless there is some political give, it appears that America is in for a lengthy shutdown.

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