.png)
Brave New World
- Diego Carranco/Brien L. Smith CFP®
- 2 hours ago
- 3 min read
In the summer of 1944, the United States gathered 44 nations at Bretton Woods, New Hampshire, and wrote the rules of the post-war world. The dollar would be the reserve currency. The IMF would manage imbalances. The World Bank would finance reconstruction. And the US Navy would underwrite the safety of global trade. For eighty years, it worked. Mauldin's argument, drawn from his 2026 Strategic Investment Conference, is blunt: that era is over.
The Asterisk on the Dollar
For decades, foreign governments held US Treasuries not merely as bonds but as claims on the American-led global system itself. Treasuries equaled commodities. Sell bonds, buy food. Sell bonds, buy oil. That was the implicit deal. When the US froze Russia's dollar reserves after the Ukraine invasion, every finance ministry in the world noticed. Treasuries still equal commodities, but now with an asterisk: only if Washington approves of your foreign policy. As Gavekal's Louis Gave framed it at the conference, why would a foreign government buy US Treasuries when the US president has described seizing another country's assets with no questions asked and meant it as a compliment?
Foreign central banks have not yet sold Treasuries in large numbers. But they are buying gold. Central bank gold demand hit 244 tons in Q1 2026 alone, up 17% from the prior quarter and well above the five year average. The buyers, Poland, Uzbekistan, China, and Kazakhstan, are not random. They are countries hedging against a system they no longer fully trust.
The Strait of Hormuz and the Limits of US Power
The second fracture point is military. Iran closed the Strait of Hormuz, and the US Navy could not simply reopen it. The Red Sea had already been closed. Two of the world's most critical shipping chokepoints were simultaneously off limits, and American naval power proved insufficient to restore them. The deeper implication, as one conference speaker noted, is that the foundational logic of buying US Treasuries was always that you could count on the US Navy delivering you the food, the weapons, and the oil you needed. Two events in five years have proven that assumption is untrue.
The reason military power cannot simply reassert itself is technological. Drones closing a strait from a thousand miles away, guided by satellite intelligence and autonomous systems, can reinfest a waterway within hours of any attempt to clear it by conventional means. Low earth orbit is the new ocean, and the race to control it has already begun. There are roughly 15,200 functioning objects in orbit today compared to around 1,000 a decade ago, with Starlink accounting for most of the difference.
China's 90% Policy and the Industrial Base Problem
China has spent fifteen years building an industrial and energy base specifically designed to function without American permission. Their so-called 90% policy, the goal of achieving domestic self-sufficiency across critical industries and supply chains, threatens not just US manufacturing competitiveness but the global industrial ecosystem that developed countries across Europe and elsewhere outsourced away in the name of efficiency. As one speaker put it, every country that outsourced its industrial base and called it efficiency is now paying the price.
This is particularly acute for Western Europe, which is growing far below the US rate of roughly 2% in 2026, and which has neither the industrial base nor the energy independence to absorb the shocks of a fractured global order.
What This Means
Mauldin closes as an optimist about where humanity ends up, but not about how we get there. The transition from Bretton Woods to whatever comes next is not a restructuring in the conventional sense. The horse and buggy did not restructure into a car. Print shops did not restructure into digital publishing. The old world ended. A different one began. For investors, the implications are significant. The safe assets of the past carry asterisks. The military guarantees underpinning global trade are in question. And the industrial and technological competition between the US and China is not a trade dispute. It is a contest over who writes the rules of the next eighty years.
Sources