Business Negotiation is Warfare in a Suit

Imam Abu Hamid Muhammad ibn Muhammad al-Ghazali, the Persian philosopher and theologian, once observed that before we speak of a cup, it is important to know what a cup is.  I have always begun with definitions for the same reason.  Even when two parties share a language, misunderstanding remains entirely possible.  Everyone arrives at a conversation carrying the baggage of their own experience, viewing the exchange through a prism shaped by history, education, and whatever role they occupy in the relationship.

“Negotiation” refers here to any discussion undertaken with the intent of reaching an agreement.  The word entered English in the late fifteenth century, denoting the act of dealing with another person, derived from the Latin “negotiation”, itself from the verb “negotiari”.

“Culture” entered English somewhat later, in the mid-nineteenth century, from the Latin “cultura”, meaning tillage.  Culture was originally tied to the practices of people working the land.  Today it refers to the ideas, customs, and social behaviour of a society, encompassing its arts, its intellectual achievements, and its shared history, gathered under a specific label.  That label might be national, such as Singaporean or American.  It might be ethnic, such as Malay or Chinese.  It might be religious, such as Muslim or Christian.  The difficulty is that these lines blur constantly.  Every person carries multiple labels and identities, emphasised differently depending on context.  In that sense, almost every negotiation is, in fact, cross-cultural, whether the parties recognise it or not.

The Persona

Nobody arrives at the table as themselves.  We all wear masks, facades constructed for the occasion.  William Shakespeare wrote, in As You Like It, Act II, Scene VII:

“All the world’s a stage,

And all the men and women merely players;

They have their exits and their entrances,

And one man in his time plays many parts …”

Before reaching that table, real or virtual, every party must understand precisely which role they are playing, and which role every member of their own team is playing.  Negotiation, in most circumstances, is a team sport.  Someone plays the good cop, to a degree.  Someone else plays the bad cop, to a degree.  The team creates the impression that certain points are non-negotiable, while quietly searching for the compromise that actually matters elsewhere.  The briefing before the meeting frequently matters more than the meeting itself.

To operate effectively, a negotiator needs a clear picture of the people they represent, the people they face, and the role each plays within the wider project.  That clarity prevents overstepping, prevents the kind of mistake that diminishes credibility, and prevents inadvertently showing one’s hand.  This is chess.  This is poker.  Every move should matter.

In practice, my team builds a dossier on every significant counterparty ahead of major projects.  We construct the most complete picture available of the people we are about to negotiate with, and the people they answer to.  This includes the obvious, such as favourite child and marital stability, and the less comfortable, such as ongoing investigations and marital infidelity.  We acquire every advantage available to close the deal on favourable terms.

At the table itself, we wear what I call the speaker persona: a mask constructed from every rhetorical and psychological tool available, designed to shorten the distance between the other side and us.  Executed well, it convinces the counterparty that we sit beside them, understanding their perspective from the inside.  That is the actual power of rhetoric.

Rhetoric

The primary instrument of negotiation is rhetoric: the art of constructing a cogent, coherent argument, for or against a position, to move people.  Rhetoric is as old as civilisation itself.  The moment one person first convinced others to follow him, to believe what he said, to move together toward common action, society began, and human history commenced its long, uneven march of progress.  Anyone wishing to excel at negotiation must, by necessity, excel at speaking.

The art of rhetoric divides into three disciplines: the ability to listen carefully, the ability to discern the message beneath the words, and the ability to dissect that message and construct a response.  Negotiation should never be treated as a zero-sum contest, because reputation matters, and the other side’s network may well be worth doing business with again.

Some ruthlessness is required to secure a winning position, but that advantage must never be pressed home too brutally.  The other side must leave the table feeling they gained something, however modest.  Paradoxically, generosity that feels unearned generates suspicion rather than gratitude.  Everyone carries an ego, a measure of pride.  Excessive magnanimity, offered too freely, breeds resentment rather than goodwill, because nobody wishes to feel small.  Absolute ruthlessness is a card reserved for the moment bridges are meant to burn, for making an example of someone.  That is the domain of international diplomacy, or hostage negotiation with terrorists.  It has no place in ordinary international business.

Misconceptions

Several misconceptions about effective speaking deserve correcting outright.  The first: excellent command of language is not, in fact, required.  Effective communication requires only the ability to convey a point succinctly and simply.  Were mere facility with flowery language the actual requirement, poets and language teachers would run the world’s negotiating tables, and they emphatically do not.  Command of language, in the sense that matters here, means the ability to convey what one intends the other side to understand, and to discern accurately what the other side is conveying in return.

Mastery of grammar is similarly unnecessary.  The ability to write an essay on the morphology of words and the relationship between tenses does not make anyone a competent negotiator.  It is entirely possible to become lost in the surface meaning of a conversation while missing the message underneath entirely.

An expansive vocabulary is not required either, beyond the technical terms relevant to the subject matter at hand, whether shipping, finance, or otherwise.  The average reasonably fluent person uses between 16,000 and 20,000 words.  In a business exchange, that figure drops to roughly half, because tension pushes people toward the most familiar vocabulary, and sentences become utilitarian.  The actual skill lies in using the words the other party already uses, shortening the psychological distance between one’s own speaker persona and their listener persona.

The Stage

To paraphrase Sun Tzu, in the third chapter of The Art of War: “Know your enemy, know yourself; your victory is certain.  Know heaven, know earth; your victory is complete.”  Sun Tzu described nine varieties of ground: dispersive ground, weak ground, strategic ground, open ground, intersecting ground, serious ground, difficult ground, deadly ground, and desperate ground.  Identifying which ground one occupies is not optional.

Dispersive ground sits near home base, where soldiers, aware of a safe retreat, lack full resolve under pressure.  In negotiation, this is the opening phase, where the client one represents may fold at the first sign of resistance, absent an actual resolution.  This is addressed through briefing before the meeting, preparing the client for the other side’s feigned retreats, and pre-emptively rejecting apparent compromises that carry hidden costs.  A supplier offering a lower unit price while quietly altering payment terms is a textbook example.  Payment terms frequently affect a credit line far more than the headline price ever will.

Strategic, or contentious, ground carries value for both sides.  These are the primary points of contention, where each side seeks advantage while remaining convinced the other has also won something.  In an acquisition, the number of shares often matters less than the voting power those shares carry.  Control of a company does not require a majority stake.  Every party, every group, carries a psychological blind spot capable of exploitation.

Open ground offers both sides room to manoeuvre.  These are the open-ended contractual clauses that eventually become points of contention.  This is where rapport gets built, where small concessions accumulate into a bank of goodwill for later use.

Intersecting ground adjoins other ground, facilitating movement and communication.  Its strategic value lies not in what it contains, but in where it sits.  Real estate agents call this location, location, location.  In negotiation, it is the position that leads toward what is actually wanted.  Securing a term sometimes requires first securing the circumstances that produce it.  Consider an investment into Japan, where withholding tax runs close to 40%, and Japanese interests must hold at least 50% of any special purpose vehicle.  In such cases, structuring the investment through a trust or company elsewhere, which then loans funds to the Japanese vehicle, avoids the withholding tax entirely, because loan repayments are not subject to it.

Serious ground describes an army that has penetrated hostile territory without securing its rear, leaving it exposed to a multi-front assault or encirclement, its supply chain insecure.  In negotiation, this appears when a negotiator fixates on one issue, price above all else, while ignoring delivery schedules, payment timelines, tax liability, and currency exposure, every one of which will ultimately shape the real price paid.

Difficult ground resists manoeuvre.  A project spanning multiple stakeholders, several legal jurisdictions, and heavy political exposure qualifies.  The correct response is not to become entangled in it.  This demands considerable preparatory work: clearing contractual ambiguity, moving up the broker chain, and identifying the actual decision-makers.

Deadly ground is difficult terrain riddled with choke points.  Here, arriving early and preparing the ambush, rather than walking into one, is the only sound strategy.  Research and preparation before entering the room matter enormously.  Carrying oneself with decorum, dignity, and honesty is admirable.  Assuming the same of everyone else is foolish.  People come to the table to win.

Desperate ground is ground from which only immediate action can prevent destruction.  This ground is best avoided altogether.  When new developments, shifts in the wider world affecting price or availability, changes in legislation or management, catch a negotiator off guard mid-process, the correct response is recognition and retreat.  Returning another day beats being outmanoeuvred and losing outright.

Throughout all of this, knowing who attends the meeting matters, as does identifying who stands in a state of need and how that need might be created.  Above all, remember the question every party silently asks: what is in this for me?  Everyone wants something.  Effective negotiation appeals directly to that want.

The Performance

Three points of influence govern the performance itself: ethos, pathos, logos.  A fourth, kairos, completes the set.  Mastering all four properly is the work of a Toastmaster, which lies outside the scope of this piece.  Instead, consider the finer points that can be applied immediately.

George Bernard Shaw, the Irish playwright, observed that the United States and Great Britain are two countries separated by a common language.  The greatest negotiating challenges frequently arise with people who speak the same language as us, precisely because shared vocabulary breeds a complacency that produces expensive mistakes.  This returns directly to the earlier point about definitions.

Every conversation carries a distance between speaker and listener.  Closing that distance requires every rhetorical and psychological device available, convincing the other party that we walk in their shoes and think as they think.

Finally, people wish to be aggrandised, elevated, recognised.  The purpose of negotiation is fulfilling one’s mandate and securing the desired outcome.  Achieving that requires opening the hearts of the other side, and with them, their mouths, and occasionally, their wallets.

Further Considerations

Understanding the language a party thinks in matters, because that language shapes their thought process directly.  Some languages are more visual, others more linear.  This shapes how the negotiation itself will unfold.  Negotiations with the Japanese, or East Asians more broadly, proceed according to hierarchy, given the subtlety embedded in those languages.  The decision-maker is almost always the most senior figure present, though rarely the person one actually wants to address directly, and sometimes the reverse holds.

Power dynamics matter most visibly in a Western context, where establishing credibility demands extra time up front.  It remains impolitic to say so plainly, but post-colonial tensions still sit beneath the surface of many such meetings.  Where East Asians favour subtlety, Germanic peoples favour directness, Anglo-Saxons favour aggression, and Arabs favour fluidity of discourse.  These cultural distinctions require careful attention before anyone sits down.

Tip One: Play the Competent Fool

Negotiation, however personal it may feel, is never about ego.  It is about winning.  Being first to take charge in the room also makes one the first head offered up when blame needs distributing.  There is always someone at the table who wants to be seen as master of it.  Let him be, provided he sits on the other side, since roles on one’s own team have already been assigned.  That person will play his cards, and likely reveal considerably more than he intends.  Praise him, elevate him, and he will bloom like a flower, spilling exactly what is needed.

Claiming a position slightly lower in the hierarchy also helps, high enough to carry a say, not so high as to absorb the ultimate blame.  At an impasse, this allows an appeal to management, to a director, to a board, buying time to regroup and return with a revised strategy.  Flexibility matters.

Tip Two: Misdirect

Considerable time can be spent discussing matters that are not, in fact, the true objective, allowing the other team to prepare a position while leaving the actual target undefended.  In a recent biomass power plant project, worth US$250 million, a specific concession on the insurance coupon was the actual objective.  Over an hour was spent reviewing the finer contractual points, with full awareness that the other side faced a time constraint.  With fewer than fifteen minutes remaining, the conversation pivoted directly to the real objective, and secured it.  Time itself is a weapon.

Tip Three: The Power of Saying Less

Explicit statements of intent are sometimes necessary, but more often, saying less than required lets the other side talk themselves into a corner.  Most communication is non-verbal.  Very little of what people say is meant literally.  Allusion, allegory, and idiom saturate daily conversation, built on cultural assumptions that can work for or against a negotiator depending on whether both parties share them.

Idioms and cultural assumptions are, by nature, culture-specific.  Assuming the other side understands them, or that we understand theirs, is a mistake, particularly across cultures.  In an Anglo-Saxon context, “letting the cat out of the bag” means indiscretion, a secret revealed.  Someone unfamiliar with the idiom might reasonably assume cats are habitually kept in bags, and recoil accordingly.

Deliberately saying less exploits the same principle.  The average person cannot tolerate silence.  Silence produces discomfort, which people instinctively fill with conversation and nervous smiles.  Sustained quiet, paired with an attentive gaze, draws most people into revealing considerably more than they intended.

Tip Four: Reputation is Everything

Every person plays a part, and credibility is the sum of one’s reputation, requiring active cultivation and protection.  Eventually, reputation alone closes a deal, or reputation alone loses it.  Reputation also depends on network, on association, which is why ruthless pruning of one’s connections and careful selection of one’s team is necessary rather than optional.

Anyone lacking cultivated credibility must borrow it.  The simplest method involves anchoring a point to a quotation from a recognised authority, a worthy sound bite from a known name in the field.  Credibility can also be borrowed through association, a consideration worth weighing carefully when assembling a negotiating team.

Reputation alone occasionally swings a meeting before a word is spoken.  That effect rests on an actual body of work.  My own team carries a combined 120 years of experience, built not merely from curricula vitae, but from decades of accumulated network.  Frequently, who one knows matters more than what one knows.

Tip Five: Appeal to Self-Interest

Appeals should target self-interest, never altruism, never benevolence, never pity.  Appealing to pity, or invoking past favours, may succeed once.  It will not succeed twice.  It creates resentment through an imbalance in the power dynamic, since nobody enjoys being reminded of an obligation, however small.  People want to feel empowered, and effective negotiation cultivates precisely that feeling.  Appeals to someone’s higher self are a lottery, and no business can be run on chance.  Certainty is required, and vanity, greed, and self-interest are as certain as anything gets.

The Benjamin Franklin Effect describes a proposed psychological phenomenon, a form of cognitive dissonance, in which a person who does someone a favour becomes more inclined to think well of them.  It might seem intuitive that people do favours because they already like us.  In business, the causation frequently runs the other way: people come to like us because of the favours we induce them to perform.  The effect takes its name from Benjamin Franklin, who wrote in his autobiography, “He that has once done you a kindness will be more ready to do you another, than he whom you yourself have obliged.”  Franklin illustrated this with an account of a rival legislator in the eighteenth-century Pennsylvania legislature: “Having heard that he had in his library a certain very scarce and curious book, I wrote a note to him, expressing my desire of perusing that book, and requesting he would do me the favour of lending it to me for a few days.  He sent it immediately, and I returned it in about a week with another note, expressing my sense of the favour strongly.  When we next met in the House, he spoke to me (which he had never done before), and with great civility; and he ever after manifested a readiness to serve me on all occasions, so that we became great friends, and our friendship continued to his death.”

The same dynamic appears among smokers borrowing a light from strangers.  A shared, trivial favour produces a cognitive bias suggesting mutual liking, which explains why smoking areas host conversations between people who have never otherwise met.  In a physical meeting, this is straightforward to replicate.  I habitually ask counterparts to fetch me coffee, which is nothing more than this same principle in practice.  In an online meeting, the same effect is harder to reproduce, though small talk touching on restaurant recommendations or local logistics achieves a diminished version of it.

Tip Six: Make Everything a Group Decision

At every milestone, securing something in writing, with as many signatures and as much buy-in as possible, matters considerably.  This makes retreat costly for any side, since reputational damage follows any unilateral withdrawal.  A bad decision reached collectively cannot result in an entire management team being dismissed.  Blame, when it lands, rarely distributes evenly, but enough spreads that everyone ends up smelling roughly the same.

This is precisely why organisations hold annual general meetings and similar events: the illusion of buy-in from every major stakeholder serves not just moral authority but a form of insurance against future criticism.  Once everyone has assented, nobody can credibly claim opposition, or work at cross purposes, without risking their own credibility in the process.

The same instinct applies at the negotiating table, regardless of who sits across it.  The moment agreement is reached, document it and record it.  Pausing the conversation at each milestone, and confirming accord on that specific point, creates a waymarker for the stage that follows.

Tip Seven: The Power Behind the Throne

Considerable business intelligence goes toward identifying who actually makes the decision.  It might be the managing director.  It might be his girlfriend.  Everyone has a pressure point.  I once attended a meeting at a hotel, negotiating the sale of an entire hotel chain, still new to the business and part of the team rather than leading it.  Everyone else arrived in expensive Italian or English-cut suits, wearing ties that cost more than most people’s monthly rent.  The billionaire arrived dressed like the gardener.  That is what real power looks like.  Enough money renders convention optional.

This concept extends beyond the decision-maker himself to whoever holds his softest spot.  In one negotiation, I discerned that a client’s youngest daughter was, without question, his favourite.  Steering the conversation toward her approval secured the sale.

Tip Eight: Check the Wind before Taking a Leak

Working as a deck cadet on a container vessel, using the toilet was not always practical, particularly at the forecastle, three hundred metres from the accommodation block.  The first lesson learnt was to check which way the wind blew before relieving oneself over the side, or face the consequences directly.  The same principle applies in negotiation: understand which way the wind blows before committing to a strategy.  No plan survives first contact.

In one project, discussing a potential investment in a neighbouring country’s port development, the other side kept trying to raise the cost rather than lower it, which was immediately suspicious.  It emerged they intended to have our side bid artificially high, then split the excess with them, effectively defrauding the state.  That is not how business gets done, and we walked away from the table entirely.

On a related note, anyone can claim to be honest.  Very few claims survive genuine testing.  Everyone has a price.  Most people have never actually been tempted to the limit of theirs.  Nobody can honestly claim incorruptibility without having walked away from millions offered purely on principle.  Reputation, career, health, even life itself, can be taken by others.  Only we can sell our own souls.  The task is ensuring the price for that sale sits so high nobody can afford it.

Conclusion

Every point above converges on a single purpose: negotiation exists to create the conditions for a sale.  That “sale” is whatever outcome was set out to be achieved from the outset.  What gets sold is rarely a product or a service in the narrow sense.  It is a solution.  A genuinely good solution leaves everyone at the table satisfied, convinced they were part of something momentous, whether or not that conviction survives contact with the fine print later.

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Terence Nunis | Executive Chairman, Equinox Zenith | Author, The 1% Playbook: The Billionaire Cheat Code

Quora Answer: When Will the Malaysian Ringgit be Stronger Than the Singapore Dollar?

The following is my answer to a Quora question: “When will the Malaysian ringgit be stronger than the Singapore dollar?”

Since the currency union between Malaysia, Singapore, and Brunei broke down in 1967, the Malaysian ringgit has never once traded stronger than the Singapore dollar.  Not for a single day.  Fifty-nine years of continuous data, and the ringgit has spent every one of them on the weaker side of the pair.  The rate today sits at roughly 3.16 ringgit to one Singapore dollar, comfortably within the range it has occupied for the better part of two decades.  When someone asks when the ringgit will finally overtake the Singapore dollar, the honest answer is: not within any timeframe worth planning around, and the reasons are structural rather than cyclical.

The Structural Gap, in Numbers

Singapore’s GDP per capita stood at $98,814 in 2025.  Malaysia’s stood at $13,125.  That is a gap of roughly 7.5 times, and even adjusting for purchasing power, the gap remains stark: $150,689 for Singapore against $38,779 for Malaysia, a factor of nearly four.  The Heritage Foundation’s Index of Economic Freedom scores Singapore at 84.4, ranked first globally.  Malaysia scores 68, ranked 51st.  These are not close numbers separated by policy tweaks.  They represent two fundamentally different institutional architectures, one built on regulatory efficiency and rule of law attracting global capital, the other still carrying the drag of policies designed for a different era entirely.

Malaysia’s New Economic Policy, introduced in 1971 and its successor frameworks since, embedded ethnic quotas and preferential allocation into corporate ownership, government contracts, and university admission, in the name of redressing historical inequality.  Whatever the original justification, the effect over five decades has been a persistent misallocation of capital and talent away from pure merit and productivity.  Malaysia’s own brain drain confirms the consequence directly.  Hundreds of thousands of Malaysians, disproportionately ethnic Chinese and Indian professionals who felt the ceiling the policy imposed on them, have relocated to Singapore, where an estimated one million Malaysians now live and work, forming one of the largest single foreign populations in the city-state.  A country that exports its most productive citizens to the neighbour it is supposedly competing against does not close a currency gap.  It widens it, year after year, one departing engineer at a time.

Bank Negara Malaysia’s Incentive

Bank Negara Malaysia has no genuine institutional interest in seeing the ringgit strengthen past the Singapore dollar, even if the structural gap above somehow closed overnight.  Malaysia’s economy remains heavily export-dependent, running on electronics, palm oil, and petroleum products sold into competitive global markets.  A stronger ringgit makes every one of those exports more expensive and less competitive the moment it appreciates meaningfully.  BNM operates a managed float, not a free float, because an uncontrolled ringgit rally would damage the export sector its own mandate is partly built to protect.

When the Asian Financial Crisis hammered regional currencies in 1997 and 1998, Tun Dr. Mahathir bin Mohamad, then Prime Minister, rejected the International Monetary Fund’s prescribed orthodoxy outright.  On 1^st September 1998, Malaysia imposed capital controls and fixed the ringgit at RM3.80 to the US dollar, a rate chosen to support export competitiveness rather than to reflect market fundamentals.  The same month, his deputy, Dato’ Seri Anwar bin Ibrahim, who had pushed for IMF-style liberalisation, was sacked and subsequently prosecuted, a political rupture that still echoes through Malaysian politics today.  Mahathir’s peg held until 2005, when Malaysia finally shifted to a managed float.  The lesson from that episode has never actually left Bank Negara Malaysia’s institutional memory: currency strength is not treated as an unambiguous good.  It is treated as a variable to be managed in the service of export competitiveness, political stability, and whichever administration currently holds power.

The Conclusion

The ringgit will not become stronger than the Singapore dollar without Malaysia addressing the structural drag on productivity and capital allocation that decades of race-based economic policy have embedded into its economy, and without reversing a brain drain that keeps handing Singapore precisely the talent Malaysia cannot afford to lose.  Even if that structural reform happened, Bank Negara Malaysia’s own policy incentives run in the opposite direction, because a genuinely strong ringgit would injure the export sector the central bank has spent decades protecting.  Asking when the ringgit will overtake the Singapore dollar is, in effect, asking when Malaysia will choose structural reform over export competitiveness and political convenience simultaneously.  Fifty-nine years of data suggest that day is not on the calendar yet.

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Terence Nunis | Executive Chairman, Equinox Zenith | Author, The 1% Playbook: The Billionaire Cheat Code

Quora Answer: Is the US Over-Reliant on the Dollar’s Dominance as a Global Reserve Currency?

The following is my answer to a Quora question: “Is the US over-reliant on the dollar’s dominance as a global reserve currency?”

Yes, and the reliance is structural, not incidental.  The French economist and former finance minister Valéry Giscard d’Estaing coined the term “exorbitant privilege” in the 1960s to describe exactly this dynamic: a country that issues the world’s reserve currency can borrow in its own currency, run persistent deficits, and export its debt to foreign central banks who have no practical alternative but to hold it.  Robert Triffin, the Belgian-American economist, had already diagnosed the structural flaw a decade earlier.  To supply the world with the dollars it needs for reserves and trade, the United States must run persistent current account deficits.  That dependency becomes addiction once an entire government’s fiscal posture is built assuming the world will keep buying the debt regardless of how much of it gets issued.

The Consequences, in Numbers

The dollar still commands roughly 56.9% of global foreign exchange reserves as of the third quarter of 2025, according to IMF Currency Composition of Official Foreign Exchange Reserves data, down from a peak of 71% to 72% in 2000 and 2001.  That decline of roughly fifteen percentage points over two and a half decades is not catastrophic on its own.  It becomes significant when paired with what that privilege enabled domestically: a national debt trajectory Moody’s cited explicitly in its May 2025 downgrade of the United States from Aaa to Aa1, projecting federal debt reaching 134% of GDP by 2035, up from 98% in 2023.  Interest payments on that debt consumed 34% of federal tax revenue in the first quarter of 2025, up from just 9% in 2021.  A country that assumes infinite appetite for its debt eventually discovers the appetite was never infinite.  It was merely patient.

The De-Dollarisation Trend

The share of US dollars in official reserves fell from 57.79% in the first quarter of 2025 to 56.32% in the second quarter, and further to 56.92% in the third, according to IMF data, marking the lowest level since 1995.  China’s Cross-Border Interbank Payment System, the most credible alternative to SWIFT, recorded 750,540 transactions worth approximately $270 billion in March 2026 alone, connecting 194 direct participants and 1,597 indirect participants across 117 countries, with annual volume reaching 180 trillion yuan, roughly $25 trillion, in 2025.  The yuan still accounts for only 3% of global SWIFT payments against the dollar’s 48%, so this is not yet displacement.  It is infrastructure being built for a multipolar world that no longer assumes the dollar is the only viable pipe.

Gold tells the sharper story.  Central bank gold purchases averaged just 400 to 500 tonnes annually before 2022.  Since then, purchases have run at over 1,000 tonnes a year, reaching 1,037 tonnes in 2023 and roughly 1,045 to 1,050 tonnes in 2024 and 2025, according to World Gold Council data, more than double the pre-2022 norm.  The buyers are overwhelmingly central banks in China, Poland, India, Turkey, and Kazakhstan, nations simultaneously trimming dollar exposure while building reserves a foreign government cannot freeze.

Why the Weaponisation Backfired

In February 2022, the United States, coordinating with the European Union, United Kingdom, Canada, and Japan, froze approximately $300 billion of Russia’s central bank reserves in response to the invasion of Ukraine.  This was, until that moment, a theoretical risk that central banks discussed in seminar rooms rather than genuinely priced into their reserve strategy.  Overnight, it became demonstrated fact: dollar and euro reserves held in someone else’s financial system can be rendered inaccessible by a political decision, with no court proceeding and no advance warning.  Sanctions cut Russia off from key parts of global financial markets and froze nearly half of its $640 billion in gold and foreign exchange reserves, triggering its worst economic crisis since the 1991 collapse of the Soviet Union.

Every non-aligned central bank on the planet absorbed the same lesson simultaneously.  If Washington can freeze Moscow’s reserves over a war Washington did not fight, Washington can freeze anyone’s reserves over a policy dispute it decides matters enough.  Gold sits outside that entire risk category.  It cannot be frozen, sanctioned, or rendered inaccessible by a foreign government’s keystroke.  That is precisely why 2022 recorded the highest central bank gold purchases since 1950, and why the elevated pace has not eased since.

The Multipolar Shift This Produces

None of this means the dollar collapses next quarter, and pretending otherwise would be dishonest.  The dollar and euro together still account for over 77% of global reserves, and no single rival currency offers the liquidity, legal certainty, or capital market depth the dollar system provides.  What has changed is the assumption of permanence.  The weaponisation of the dollar was meant to demonstrate American financial power.  It has instead demonstrated the exact vulnerability every reserve currency eventually reveals: the moment holders discover the asset can be turned into a hostage, they begin, however slowly, to hold something else instead.  Washington did not lose the reserve currency status by mismanaging the economy alone.  It accelerated the loss by proving, in a single afternoon in February 2022, exactly why nobody should want to depend on it completely.

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Terence Nunis | Executive Chairman, Equinox Zenith | Author, The 1% Playbook: The Billionaire Cheat Code

The Basel Dividend: Insurance as Capital Relief

Brent crude rose above US$100 a barrel between April and May 2026, trading between US$105 and US$115 in early May, driven by tensions in the Strait of Hormuz.  Drone and missile strikes hit Fujairah and nearby facilities, causing refinery fires, a temporary suspension of oil loading, and port halts.  The Habshan-Fujairah pipeline, with a capacity of 1.5 million barrels per day, became a critical bypass route overnight.  Multiple inbound flights diverted to Muscat while authorities assessed airspace safety.

Dubai’s Liquidity Test

Dubai Land Department data shows total transaction value falling from AED20.7 billion the week before the strikes to AED10.4 billion the week after, a 50% weekly collapse.  Ready-sale transaction volumes fell around 37% year-on-year.  Anecdotal estimates put almost one in eight British residents leaving the UAE in the immediate weeks following the strikes.  Mortgage-backed registrations stayed comparatively stable.  This was marginal, discretionary cash buyers pulling out first, the segment that panics fastest and returns last.

Capital Controls and Their Limits

CBUAE imposed capital controls to prevent disorderly outflows, limiting fund movements while exempting vendor payments, debt servicing, and credit line settlements.  Expect enhanced due diligence from every global bank touching Gulf-linked flows from here forward.  That friction does not disappear when the missiles stop.  It becomes permanent institutional memory.

First Abu Dhabi Bank P.J.S.C. holds MAS licensing in Singapore, appearing on the MAS Financial Institutions Directory with Wholesale Bank and Exempt Capital Markets Services activities.  That licence enables ledger-to-ledger transfers, internal accounting entries moving value between accounts, branches, or legal entities within the same banking group without an immediate external payment leg.  It is exactly the plumbing that lets a Gulf private bank preserve a client relationship while quietly moving economic exposure into a jurisdiction not currently absorbing missile strikes.

The Basel Mechanism

The Basel III final reforms, including the 72.5% output floor, materially raise capital requirements for internationally active banks.  Higher capital costs make loans, premium financing, and on-balance-sheet credit exposures considerably more expensive to hold.  Banks are offloading credit risk through insurance-backed mechanisms, unfunded credit protection, synthetic securitisations, and Master Risk Participation Agreement structures, achieving RWA reductions industry white papers cite at between 15% and 80%, depending on structure and insurer credit quality.

As premium financing and direct credit exposure become costlier to carry, banks increasingly prefer referring clients into insurance products, unit-linked, participating, whole-of-life, rather than fund guarantees directly on their own books.  Insurers must absorb larger inflows while managing tightening disclosure regimes under IFRS 17 and SFRS(I) 17.

Singapore’s Numbers

Total Weighted New Business Premiums in Singapore reached S$6.53 billion in 2025, up 11.3% year-on-year, with investment-linked policies and annual premium products leading that growth.  MAS’s implementation timeline for final Basel III reforms phases output-floor increases through 2029.

Singapore is the regulated, MAS-supervised booking centre a Gulf client should have moved to eighteen months ago and is only now moving to under duress.  Lead with liquidity and portability, partial withdrawal mechanics and short surrender penalties.  Position the product suite around genuine client anxiety: single-premium participating variants for capital preservation with access, investment-linked structures with guaranteed minimum riders, and multi-currency wrappers with FX-hedging add-ons for Gulf clients whose liabilities sit in USD or AED.

The uncomfortable truth for every complacent private banker still treating insurance as the boring cousin of proper wealth management: Basel made this trade for you, years before Fujairah’s refineries caught fire.  The missiles just made the client finally return your call.

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Terence Nunis | Executive Chairman, Equinox Zenith | Author, The 1% Playbook: The Billionaire Cheat Code

Quora Answer: Why is Donald John Trump Causing the US Dollar & US Treasury Prices to Tumble & The Stock Market to Drop?

The following is my answer to a Quora question: “Why is Donald John Trump causing the US dollar and US Treasury prices to tumble and the stock market to drop?”

The question has a specific, documented mechanism behind it, and that mechanism has played out in real time across 2025 and into 2026, with the kind of data trail that makes speculation unnecessary.  We can talk about the data, but I cannot explain the intent since that assumes there is a logical train of thought behind this – something I remain sceptical of.

The First Reason: “Liberation Day”

On 2^nd April 2025, President Donald John Trump announced a sweeping set of tariffs, more severe than markets had priced in, branding the announcement “Liberation Day.”  The S&P 500 plunged nearly 5% the following day, its worst single day since the COVID crash of 2020.  The day after that, it fell a further 6% as China’s retaliatory response raised the spectre of a full trade war.  Critically, this was not a normal equity selloff, where frightened capital flees into the dollar and government bonds as a safe haven.  The dollar fell alongside stocks, and the Treasury market itself, historically considered the safest asset class in existence, began showing genuine signs of stress.  Trump himself acknowledged the bond market had gone “queasy,” and paused the tariffs on 9^th April 2025 specifically in response to that bond market reaction.  When a President has to walk back policy because government debt itself is refusing to behave, that is not noise.  That is markets pricing in a genuine loss of confidence in US fiscal management.

The Second Reason: A Sovereign Credit Downgrade Building for Over a Decade

On 16^th May 2025, Moody’s downgraded the United States’ long-term credit rating from Aaa to Aa1, ending the country’s triple-A status across all three major ratings agencies, following S&P’s downgrade in 2011 and Fitch’s in 2023.  Moody’s cited persistent fiscal deficits, projecting federal debt to reach 134% of GDP by 2035, up from 98% in 2023, with the deficit widening toward nearly 9% of GDP.  Interest payments on US debt already consumed 34% of federal tax revenue in the first quarter of 2025, up from just 9% of federal revenue in 2021, according to St. Louis Federal Reserve data, an almost fourfold jump in the government’s own debt-servicing burden in under four years.  The US Dollar Index fell below 100.50 immediately following the downgrade, then continued sliding toward 99.50 within days, as Federal Reserve officials, including San Francisco Federal Reserve President Mary C. Daly and Atlanta Federal Reserve President Raphael Bostic, publicly flagged deteriorating business and consumer confidence tied directly to erratic trade policy.

The Third Reason: The Attack on Federal Reserve Independence

A research note from the Centre for Economic Policy Research identified policies undermining the Federal Reserve’s independence as a distinct and separate driver of dollar weakness, alongside the fiscal deterioration itself.  A central bank perceived as politically captured loses the one credibility asset that makes its currency a global reserve asset in the first place: the belief that monetary policy will be set on economic grounds rather than presidential preference.  Markets do not need the independence to actually be compromised to react.  They only need to believe it might be, and price the risk in accordingly.

The Fourth Reason: Cumulative Uncertainty

Matt Orton, chief market strategist at Raymond James, described 2025 as a year defined by “more volatility events because there is so much uncertainty with respect to policy, politics, inflation, and the path of rates.”  Uncertainty itself carries a price.  Every asset class demands a higher risk premium when the policy environment generating cash flows and interest rate paths becomes genuinely unpredictable from one announcement to the next, and 2025 delivered exactly that kind of unpredictability, tariff announcements reversed, paused, struck down by the Supreme Court in a 6-3 ruling in February 2026 under the International Emergency Economic Powers Act, then reimposed through other legal channels.

Moving Forward

The administration points to roughly $600 billion in tariff revenue collected as of early 2026, a genuine fiscal offset even sceptics acknowledge, and corporate earnings growth has continued driving US equities to fresh all-time highs through much of 2025 and 2026, suggesting markets have absorbed and partially priced through the initial shock.  Some strategists maintain that once tariff policy stabilises and Federal Reserve communication under new Chair Kevin Warsh settles into a predictable pattern, much of the volatility premium currently priced into Treasuries and the dollar could unwind.  They are delusional.  Whether that stabilisation materialises, or whether the structural fiscal trajectory Moody’s flagged simply reasserts itself once the current news cycle moves on, remains genuinely unresolved, and reasonable analysts sit on both sides of that question.  The US has precipitated a decline borne from a lack of confidence in the underlying democratic institutions.  That level of institutionalised spite and kakistocracy will not disappear when Trump steps down.  The people that enabled this are still there – and they vote.

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Terence Nunis | Executive Chairman, Equinox Zenith | Author, The 1% Playbook: The Billionaire Cheat Code

Quora Answer: How Strongly Competitive is the Singapore Dollar against the Chinese Yuan?

The following is my answer to a Quora question: “How strongly competitive is the Singapore dollar against the Chinese yuan?”

The question assumes these two currencies compete in the same arena.  They do not.  One is a fully convertible currency belonging to a city-state with no domestic market of consequence, managed explicitly against a trade-weighted basket.  The other belongs to the second-largest economy on the planet, and remains only partially convertible by deliberate government design.  Comparing their competitiveness without acknowledging that distinction is like asking whether a scalpel is more competitive than a bulldozer.  Wrong comparison, and the answer changes entirely depending on what you are actually trying to cut.

The Spot Numbers, Since Data Should Always Come before Opinion

As of July 2026, one Singapore dollar buys roughly 5.24 to 5.29 Chinese yuan.  Over the preceding twelve months, the SGD weakened by around 5% against the yuan, yet remains approximately 9.7% stronger than it was five years earlier.  Most forecasters expect the pair to hold broadly within a 5.20 to 5.45 band through the remainder of 2026, rather than moving decisively in either direction.  That is a currency behaving exactly as designed: stable, unexciting, and entirely uninterested in providing headlines.

The Monetary Authority of Singapore does not primarily set an overnight interbank rate, something almost no other central bank does.  It manages the Singapore dollar’s trade-weighted nominal effective exchange rate, the S$NEER, against an undisclosed basket dominated by the US dollar, the Chinese yuan, the euro, the Malaysian ringgit, and the Japanese yen, allowing it to appreciate or depreciate within a defined policy band.  After five consecutive tightening steps between October 2021 and October 2022, MAS began easing that band from 2024 onward, and by early 2026 core inflation had normalised to roughly 1.5% year-on-year, comfortably within its 1% to 3% target range.  This is a central bank running its currency the way a Swiss watchmaker runs a movement.  Small, precise, and engineered to keep working regardless of what is happening outside the case.

The renminbi climbed to the fifth most used global payment currency by 2023, up from thirty-fifth in 2010, according to SWIFT data, and China’s Cross-Border Interbank Payment System reported 194 direct participants and 1,597 indirect participants as at 24^th June 2026, clearing roughly RMB 180 trillion in transactions over 2025 alone.  That is a serious piece of financial infrastructure, built with serious intent.  It has not translated into a currency that competes with the Singapore dollar on the metric that actually matters for wealth structuring: reliable convertibility.  The renminbi’s share of global payments through SWIFT peaked at 4.74% in mid-2024 and has since fallen back to somewhere between 2.75% and 3.1% in early 2026.  Its share of global allocated foreign exchange reserves sat at just 1.95% in the fourth quarter of 2025, against the US dollar’s 56.77%.  The Federal Reserve’s own research places the renminbi’s aggregate international usage at roughly 2.5%, lagging not just the dollar but the euro, sterling, and the yen as well.  The reason is structural, not incidental.  The renminbi is not fully convertible on the capital account, and Beijing has shown no serious intention of changing that, because full convertibility would mean surrendering exactly the capital controls that let the People’s Bank of China manage its exchange rate and domestic monetary conditions on its own terms.

On 11^th August 2015, the People’s Bank of China devalued the yuan by roughly 2% in a single day, the largest one-day move in two decades, in what it described as a shift toward a more market-determined exchange rate.  The move triggered a wave of panic through Asian markets, accelerated capital flight out of China through informal and formal channels alike, and sent investors scrambling for currencies perceived as stable stores of value.  Singapore, with its fully convertible currency and MAS’s exchange-rate-anchored policy framework, was one of the principal beneficiaries of that flight, absorbing capital that no longer trusted a currency subject to sudden, centrally announced repricing.  That is not a currency competing on strength.  That is a currency competing on trust, and trust does not respond well to a central bank that can devalue you by government decree on a Tuesday morning.

How Strongly Competitive is the Singapore Dollar against the Yuan?

On raw economic scale, the comparison is absurd.  On the metric that actually determines where global capital parks itself during genuine stress – full convertibility, policy transparency, and freedom from capital account intervention – the Singapore dollar is not merely competitive.  It is the currency the yuan’s own architects are still, twenty years into the project, trying to build something equivalent to.

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Terence Nunis | Executive Chairman, Equinox Zenith | Author, The 1% Playbook: The Billionaire Cheat Code

Capital Flight From Dubai: Why Singapore is Not Just the Beneficiary, but the Better Structural Choice

Dubai spent the better part of a decade selling itself as the untouchable safe haven for global wealth.  By late 2024, Dubai’s family offices were managing over US$1.2 trillion in assets, and the UAE stood as the world’s top destination for relocating millionaires.  Then the Iran war began on 28^th February 2026.  Dubai took direct hits.  Dubai International Airport sustained damage.  Property transaction volumes halved within weeks.  The safe haven narrative Dubai had spent years constructing collapsed in a matter of days, and it collapsed for the most obvious reason imaginable: a safe haven that gets hit by missiles has stopped being one.

The Current Picture, without Exaggeration

Reuters reported that within days of Iranian retaliatory strikes reaching Dubai, two India-based entrepreneurs attempted to transfer over US$100,000 each out of local bank accounts to Singapore, purely as a risk-hedging manoeuvre.  A Singapore-based private wealth lawyer, Ryan Lin, disclosed that seven of his twenty Dubai-based clients, averaging US$50 million in assets each, had already reached out with concrete plans to transfer assets to Singapore.  Iris Xu, a principal at Anderson Global, a corporate and fund services provider, received enquiries from ten to twenty family offices within a single week about relocating.  Grace Tang, CEO of Phillip Private Equity, reported ten to twenty of her predominantly Asian clients making similar enquiries.

This is not yet a mass exodus, and I will not pretend otherwise, because the data does not support that framing.  Dhruba Jyoti Sengupta, CEO of WRISE Private Middle East in Dubai, has publicly stated his firm has observed no serious capital flight discussions, describing his clients as sophisticated investors who remain committed to the UAE’s long-term growth story.  Both things are true simultaneously.  A meaningful number of enquiries and early-stage transfers are underway, while the majority of capital has not yet moved.  This is flight-to-safety positioning, not panic liquidation, and treating it as anything more dramatic than that would be dishonest.

On Currency Controls: Watch the Direction of Travel, Not the Current Absence of Action

The Central Bank of the UAE has not announced broad capital controls.  It has instead emphasised resilience measures, its digital-dirham initiative, and regulatory updates intended to reinforce confidence in the banking system.  That is the correct posture for a central bank trying to prevent a self-fulfilling panic.  It is also the posture every central bank adopts in the weeks before it stops being able to maintain it.  CBUAE notices need active monitoring, not passive assumption of continuity. 

Why Singapore is the Structurally Superior Destination, Not Merely the Geographically Convenient One

Singapore’s advantage was not manufactured by this crisis.  It was already compounding before the first missile struck Dubai.  MAS data shows over 1,400 single family offices established in Singapore as of 2025, up from fewer than 400 in 2020, a 250% increase in five years, with some industry estimates placing the figure above 2,000 by the end of 2024.  Singapore has displaced both Switzerland and Hong Kong as the preferred domicile for ultra-high-net-worth Asian families over that period, for reasons that have nothing to do with regional security incidents: rule of law, mature trustee services, a deep private banking ecosystem, and clearly codified family office incentives under Sections 13O and 13U of the Income Tax Act.

Dubai offers speed and tax simplicity.  Singapore offers permanence and governance.  For a client whose priority is legal certainty and trustee substance, that is not a close contest, and it was not a close contest before the war either.  The war has simply forced clients who were previously choosing speed over permanence to confront what they were actually trading away.

Insurance Assigned to Trusts: The Mechanics That Make This More Than a Banking Relocation

Assigning a life policy to a Singapore trust is a well-established estate planning pattern, and it deserves to be central to any capital relocation conversation, not an afterthought bolted on at the end.  The policy is assigned to the trustee, proceeds are paid into the trust, and the trustees control distribution according to the trust deed.  Properly documented and properly notified to the insurer, this structure delivers liquidity, probate avoidance, and creditor protection simultaneously.  The critical legal step, and the one clients most often skip under time pressure, is recording the assignment formally with the insurer and maintaining genuine trustee substance rather than a nominal trustee relationship that will not survive scrutiny.

For HNW clients moving capital into this structure, the relevant instruments typically include investment-linked policies, single-premium participating or savings wrappers, policy loan facilities, and riders engineered specifically for liquidity or legacy planning.  These can be structured to sit behind a trust, and paired with premium financing or currency hedging where the client’s underlying asset base warrants it.  None of this is exotic.  It is standard architecture, deployed with more urgency than usual given the current environment. 

The Exposures, and the Solutions, without Pretending Any of Them are Optional Extras

Currency exposure exists wherever the client’s domicile currency and the Singapore dollar diverge.  Foreign exchange hedges, multi-currency account structures, or SGD-hedged underlying funds address this directly.  Tax exposure runs through BEPS Pillar Two and the GloBE rules, which now apply real teeth to cross-border assignments that were previously treated as administrative formalities.  GloBE modelling, formal legal opinions, and properly documented commercial rationale and substance are not defensive paperwork.  They are the difference between a structure that survives an audit and one that does not.

Political exposure is the lesson Dubai has just taught the entire wealth management industry in real time.  Perceived safety can evaporate within a single news cycle.  Diversifying custody, using Singapore trustees rather than a single-jurisdiction concentration, and keeping operational functions onshore are not paranoid overengineering.  They are what a Dubai-based client wishes; this month, they had already done last year. 

The Practical Complications Nobody Mentions until They Hit One

Rapid transfers of this nature trigger AML and KYC friction, and Singapore’s private banks, still calibrated by the aftermath of the 2023 S$3 billion money laundering case, will apply real scrutiny to sudden large inflows from the Gulf.  Pre-clearing source of funds, staging transfers rather than moving everything at once, and routing through established private banking corridors materially reduces friction.

Pillar Two top-up tax and recharacterisation risk is a live issue for any cross-border assignment structured hastily under crisis conditions.  Contemporaneous transfer pricing documentation and tax memoranda, modelled against realistic top-up tax scenarios, need to exist before the transfer, not as a retrospective justification after a regulator asks questions. 

Insurer acceptance of assignments across jurisdictions is the detail that derails more of these structures than any other single factor.  Written confirmation from the insurer, and trust language drafted under Singapore law rather than adapted awkwardly from a UAE-law precedent, is not a nicety.  It is the entire foundation the rest of the structure sits on. 

The Conclusion is Not Complicated, Even If the Execution Requires Genuine Discipline

Dubai’s safe haven premium was always partly psychological, and psychological premiums evaporate the moment the psychology changes, which is what has happened since 28^th February 2026.  Singapore’s advantage was never psychological.  It was structural, built over years through trustee law, regulatory codification, and a deep, boring, reliable private banking ecosystem that does not make headlines precisely because it does not need to survive a missile strike to prove itself.  Clients moving now are not fleeing to safety.  They are finally arriving at the destination the structural argument always pointed to.

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Terence Nunis | Executive Chairman, Equinox Zenith | Author, The 1% Playbook: The Billionaire Cheat Code