The Great Reset: Geopolitics, Commodity Pricing, and the End of the Yen Carry Trade

Overview

The conversation weaves together a sweeping geopolitical narrative that links the so‑called “Great Reset” to shifts in commodity pricing, the demise of the yen carry trade, and a new U.S.–China partnership that aims to wrest control of strategic assets from the historic London‑centric system.

Historical Context

• 18th‑19th century industrial powers – Europe and Great Britain set the pricing regime for industrial inputs.
• 21st‑century reality – The United States and China are now the dominant industrial powers and should therefore dictate pricing for metals, energy, and other strategic commodities.

The Great Reset and Trump’s Role

• The “Great Reset” originally envisioned a radical societal overhaul (bugs, mass migration, etc.).
• After the 2024‑2025 elections, the reset morphed into a financial realignment driven by the Trump administration.
• Key actions:
• Imposed reciprocal tariffs on the EU, forcing a trade deal that weakened the London‑based pricing mechanisms.
• Leveraged Treasury Secretary Scott Bessent to drain the LBMA’s gold reserves, printing dollars to purchase gold and moving it to New York vaults.
• Re‑listed “Fanny and Freddy” (U.S. mortgage‑backed entities) to regain control of the long end of the yield curve.

Commodity Pricing Shifts

• Gold & Silver – 2025 saw a coordinated U.S.–China tag‑team that moved pricing away from the London Bullion Market Association (LBMA) to New York, causing a rally in gold followed by a silver surge.
• Copper – The next strategic metal; price fought around $5 / lb, eventually closing near $5.6‑$5.7 / lb after a year‑long battle.
• Oil & Other Metals – Russia’s uranium, tungsten, nickel, and Venezuelan copper‑gold‑silver concentrates were removed from the market, cutting China’s supply chain and weakening the LBMA’s influence.

End of the Yen Carry Trade

• Historically, cheap yen financing allowed investors to borrow in yen and invest in higher‑yielding dollars, supporting the short end of the global yield curve.
• Japan’s 2024‑2025 rate hikes (the only major central bank to raise rates) and the closure of the yen‑carry‑trade loophole eliminated this source of cheap dollar funding.
• Consequences:
• Reduced ability to manipulate U.S. short‑term rates.
• Forced a capitulation by Venezuela’s Maduro, freeing precious‑metal concentrates for the U.S./China market.
• Signaled a broader shift toward normalising U.S.–Japanese yield‑curve spreads (targeting 25‑50 bps by year‑end 2026).

Strategic Moves in Venezuela and Japan

• Venezuela – Trump pressured Maduro to surrender control of gold, silver, and copper concentrates, cutting off cash flows that funded illicit networks (Hezbollah, Hamas, etc.) and weakening Russian/Chinese influence in the Western Hemisphere.
• Japan – A sovereignist coalition led by Takahashi displaced the LDP‑backed establishment, ending the post‑WWII Allied governing council and opening the door for a U.S.–Japan security pact that could normalize Japanese yields and end the carry trade.

Implications for the U.S. and Global Financial System

• Short‑end control – With the yen carry trade gone, the U.S. Treasury and Fed can set short‑term rates without external arbitrage.
• Long‑end control – Relisting “Fanny and Freddy” restores American influence over mortgage‑backed securities and housing affordability.
• London’s Decline – The LBMA and London Metal Exchange (LME) lose pricing authority; the U.S. and China become the new hubs for gold, silver, copper, and oil pricing.
• Geopolitical Realignment – The U.S. leverages economic tools to counter Russian, Chinese, and Davos‑driven agendas, while also reshaping immigration and domestic fiscal policy.

Outlook for 2026

• Expect continued normalisation of U.S.–Japanese yield spreads and a further rise in copper, aluminum, tin, lead, nickel, cobalt, and tungsten prices as they move out of London‑based pricing.
• Anticipate tighter U.S. control over strategic commodities, especially oil, which will be priced outside the traditional London framework.
• The “Great Reset” will be measured less by social engineering and more by the re‑allocation of financial power from the City of London to Washington and Beijing.

The collapse of the yen carry trade and the deliberate dismantling of London’s commodity‑pricing dominance signal a decisive shift: the United States, backed by China, is reshaping the global financial architecture and reclaiming control over strategic assets, ushering in a new era of geopolitical and economic order.