The current surge in metals prices is fueled by factors like central bank buying, geopolitical tensions, and AI-driven demand, occurring *before* a significant rise in inflation expectations. This suggests the trade has a powerful secondary catalyst; if inflation re-accelerates, it will add more fuel to an already burning fire.

The post-1980s neoliberal consensus of small government and free trade is being replaced by a mercantilist approach. Governments, particularly the U.S., now actively intervene to protect domestic industries and secure geopolitical strength, treating trade as a zero-sum game. This represents a fundamental economic shift for investors.

The surge in metals isn't just inflation (debasement). It's driven by emerging markets diversifying away from US dollar assets (de-dollarization) after Russia's assets were frozen, and a broader hoarding of physical assets that can't be seized amid rising geopolitical tensions.

The administration's explicit focus on re-shoring manufacturing and preparing for potential geopolitical conflict provides a clear investment playbook. Capital should flow towards commodities and companies critical to the military-industrial complex, such as producers of copper, steel, and rare earth metals.

For 20 years, pension funds and endowments shunned investment in mining and resources due to political and social pressures. Now, a confluence of geopolitical necessity and reshoring is creating a demand shock that institutional capital is unprepared for, forcing them to chase a supply-constrained sector and exacerbating the rally.

Increased defense spending, geopolitical ambitions like buying Greenland, and strong GDP figures are creating significant tailwinds for the commodity complex. The primary investment strategy becomes aligning capital with government spending priorities, effectively front-running fiscal outflows.

The current surge in metals prices is not just an inflation hedge but a structural repricing due to a loss of faith in sovereign bonds. Investors are seeking real assets as they anticipate trillions in future debt monetization, effectively squeezing the shorts on tangible goods over paper assets.

The strategic value of commodities in a modern portfolio has shifted from generating returns to providing a crucial hedge against two growing threats. These are unsustainable fiscal policies that weaken currencies ('debasement risk') and the increasing use of commodities as geopolitical weapons that cause supply disruptions.

The current geopolitical shift toward resource nationalism is focused on critical metals and minerals, not oil. The crude market is relatively well-supplied by producers like the U.S. and potentially Venezuela, making the 'death of globalism' primarily a story about securing supply chains for industrial and technological metals.