Paper Wealth, Physical Capacity: The 2027 Debt Cliff Hands China the Decade

S&P Global Ratings puts global corporate debt maturing between 2025 and 2029 at US$12.4 trillion, US$9.0 trillion investment grade and US$3.4 trillion speculative grade.  The United States carries US$5.9 trillion of that total, 48 per cent of the global figure.  Reuters’ own analysis of LSEG data shows US non-financial corporate bond maturities alone reaching US$4.3 trillion between 2027 and 2031, climbing from US$572 billion in 2027 to US$1.03 trillion by 2030.  High-yield bond maturities specifically quadruple across this window, from US$68.5 billion in 2027 to US$314.1 billion in 2029, with high-yield debt rising from 12 per cent of total maturities to a third.  CCC-rated bonds maturing in 2027 and 2028 face coupons that could double if refinanced at current index yields.

Goldman Sachs expects gross debt issuance by hyperscalers, Amazon, Alphabet, Meta, Microsoft, and Oracle, to reach US$420 billion in 2027 alone, a 60 per cent jump from 2026.  This is not background noise sitting alongside the AI story.  This is the AI story, financed onto corporate balance sheets that already face a refinancing wall arriving on the identical calendar.

The Market’s Current Exposure

The Magnificent Seven, Nvidia, Apple, Microsoft, Alphabet, Amazon, Meta, and Tesla, make up 34 per cent of the S&P 500, a combined market value near US$22 trillion.  Nvidia alone carries a US$5.23 trillion valuation, 7.5 per cent of the entire index on its own.  The top ten companies in the S&P 500 now account for 40 per cent of the index’s total value, well above the 27 per cent peak reached during the dot-com bubble of 1999 to 2000.  This concentration already delivered a preview of the risk.  In early June 2026, the Magnificent Seven shed approximately US$2 trillion in market value in a single episode, dragging the broader index down regardless of how the remaining 493 companies performed that day.

Paramount Skydance is in this same window, carrying US$80 billion in net debt against a pre-deal market capitalisation of US$15.3 billion, financing its US$110.9 billion acquisition of Warner Bros. Discovery with debt tranches priced at 8 to 9 per cent.  Debt rated B- and below reaches US$268.8 billion in 2028 alone, concentrated in healthcare, technology, media, and entertainment; Paramount’s sector is well inside that concentration.

Berkshire Hathaway is at the opposite end of the same market.  Chief Executive Officer Gregory Edward Abel held a cash and Treasury bill position that reached a record US$397.4 billion in the first quarter of 2026, larger than Apple, Amazon, Alphabet, and Microsoft’s cash holdings combined, before deploying it cautiously under shareholder pressure.

The AI Funding Circle

Nvidia invests in AI laboratories.  Those laboratories sign compute contracts with cloud providers.  Those providers spend the proceeds buying chips back from Nvidia.  Analysts have traced over US$800 billion moving through this loop.  OpenAI alone has committed US$1.15 trillion across seven vendors through 2035, against a projected US$14 billion loss in 2026, nearly triple the prior year.  This circular structure now compounds against the debt maturity wall, since the hyperscalers financing their side of this loop are issuing the debt coming due on the identical 2027 to 2029 calendar.

A credit event inside one company this concentrated does not stay contained.  It hits an index where seven names already carry a third of total value.  A default or a sharp downgrade among AI-linked hyperscalers would compress credit availability across the entire technology, media, and telecom sector simultaneously, given these companies share the identical lenders, the identical bond investors, and increasingly the identical revenue counterparties through the circular financing loop itself.  This is how Lucent Technologies and Nortel Networks collapsed together during the dot-com bust, lending customers money to buy their own equipment, booking the proceeds as revenue on both sides, until real demand failed to match financed demand and both firms went down in the same downturn.

This Hits Treasury Yields

The 10-year Treasury yield crossed 5 per cent in September 2026.  The Federal Reserve raised rates that same month, its first hike since 2023, because persistent inflation left no room to cut.  A wave of corporate refinancing, competing for the same pool of bond investor capital that sovereign debt issuance already strains, pushes yields higher across the board, not merely within the corporate sector itself.  The Treasury Borrowing Advisory Committee has already flagged a US$1.45 trillion funding shortfall for fiscal 2027 to 2028 at current auction sizes.  A corporate refinancing wall arriving on the identical timeline does not compete politely for capital.  It competes against the Treasury’s own borrowing need, and every percentage point that competition adds to yields raises the US government’s own interest bill, currently running at US$3.18 billion a day.

Temasek Holdings’ net portfolio reached S$518 billion as of 31^st March 2026, with the United States accounting for 26 per cent of it.  Temasek Holdings holds direct stakes in both OpenAI and Anthropic, committed to raising AI exposure from 6 to as much as 15 per cent of the total portfolio by 2031.  GIC led Anthropic’s US$30 billion Series G round, valuing the company at US$380 billion, while its own annual report acknowledged that high valuations “provide a challenging backdrop for forward returns.”  Both funds hold exposure sized to a market concentrated in the companies and the debt structure traced from the AI funding circle through to the 2027 to 2029 maturity wall.

China’s Growing Supremacy

While Western capital financed buybacks, leveraged media acquisitions, and a circular AI compute loop, China built physical manufacturing capacity.  China accounted for 30 per cent of global manufacturing value added in 2025, US$4.85 trillion, the largest share held by any single country for sixteen consecutive years.  Manufacturing still makes up 24.7 per cent of China’s GDP.  The United Nations Industrial Development Organisation projects China’s share of global manufacturing rising to 45 per cent by 2030, while the United States share falls to just 11 per cent.  China is twelve percentage points ahead of the second-placed United States today, and that gap is widening, not narrowing.

This is the direct consequence of two economic systems choosing differently for three decades.  One financed paper wealth, leveraged buyouts, stock buybacks, a circular AI compute loop now compounding against a corporate debt wall arriving on schedule.  The other financed physical capacity, processing 90 per cent of the world’s rare earths and a dominant share of global lithium alongside its manufacturing base.  When the refinancing wall hits between 2027 and 2029, and it will hit regardless of how confidently Wall Street currently prices around it, China will not need to win a trade war to become the dominant global economic power.  It will simply still own the factories while the West finishes paying off the debt it used to avoid building any.

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

The Shareholder-Primacy Dead End: How the West Mistook the Scoreboard for the Game

I believe the West did not simply make a series of poor corporate decisions over the past five decades.  I believe it built an entire economic operating system around a category error, mistaking the financial scoreboard for the actual game, and that error has now compounded into a structural dead end mathematically incapable of surviving a high-interest-rate environment or competing against state-directed industrial powers.

This essay traces that error from its theoretical origin to its current consequences.  Part I establishes how Milton Friedman’s 1970 doctrine redefined the corporation, and contrasts it against an East Asian model that never made the same redefinition.  Part II details the mechanics of the hollowing this produced, in capital allocation and in the generational transmission of industrial skill.  Part III shows the reckoning now arriving, using Paramount Skydance’s live debt-financed gamble on Warner Bros. Discovery as the cautionary case, against Berkshire Hathaway’s discipline as the counterexample, a discipline even Berkshire is now under pressure to abandon.  Part IV extends the argument to the geopolitical consequence: the asymmetrical dependency this financialised model has created against a China that spent the same five decades building physical capacity instead of paper wealth.

Part V brings the argument home.  I contend that Singapore’s own sovereign funds, GIC and Temasek Holdings, are increasing their exposure to the scoreboard I argue is structurally unsound; now, their leadership has publicly acknowledged the risk.  I do not write this as an outside critic of Western capitalism.  I write it as a warning against Singapore importing the same category error into institutions built, over six decades, on the opposite discipline.

I. The Theoretical Foundation and the Core Tension

In September 1970, Milton Friedman wrote in the New York Times that a corporation has one social responsibility: to increase its profits.  That sentence rewired the Western firm.  A corporation stopped being an institution balancing workers, customers, and shareholders, and became a machine with a single output variable.  Every other stakeholder became a cost to optimise against that one number.

East Asian corporations never adopted this model.  A Japanese keiretsu, a Korean chaebol, a Chinese state-linked enterprise, each operates as an instrument of national resilience first, and a profit centre second.  The distinction is not sentimental; it is structural.  A firm built to serve national industrial capacity builds factories, trains engineers, and stockpiles raw materials even when the quarterly return on that spending looks poor.  A firm built to serve shareholder return does the opposite the moment spending compresses the number investors are watching.

This produced what I would call the scoreboard fallacy.  Western capitalism mistook the stock market index for the actual game.  The index measures sentiment about future cash flow.  It does not measure physical production capacity, tacit engineering knowledge, or infrastructure.  A country can watch its index climb for a decade while the factory floor underneath it empties, and nothing on the scoreboard will tell anyone this is happening until the factory is needed and no longer exists.

II. The Structural Mechanics of Self-Hollowing

S&P 500 companies routinely return over 90 per cent of net income to shareholders through buybacks and dividends, rather than capital expenditure or worker compensation.  This is not occasional excess.  It is the default operating posture of the American public company, driven by two forces working together.  Institutional asset managers demand steady returns on a quarterly cycle, and executive compensation is tied directly to the share price those buybacks mechanically inflate by shrinking the share count.  An executive paid in stock options has a personal financial incentive to spend the company’s cash buying back its own shares, rather than building a factory whose payoff arrives in a decade, long after his own options have vested and been exercised.

Workers absorbed the other half of this mechanism.  A line-item variable cost, cut whenever margin optimisation demands it, was never merely an employee.  He was the literal custodian of tacit industrial knowledge, the kind of expertise that does not exist in a manual and cannot be rehired from a job posting.  Outsourcing manufacturing to East Asia did not simply move jobs abroad.  It severed the generational transmission of midstream chemical refining, precision tooling, and heavy metallurgy, skills a father once taught a son on a factory floor over years, not in a training course over weeks.  The West did not lose factories.  It lost the people who knew how to run them, and that knowledge does not come back the moment a tariff makes reshoring look attractive on paper.

III. The Looming Macroeconomic Reckoning, 2027 to 2029

Trillions of dollars in pandemic-era corporate debt, issued when rates were near zero, come due between 2027 and 2029.  Junk-rated tranches already command yields up to 9 per cent in the current market.  Companies that financed a decade of buybacks on cheap debt now face refinancing that same debt in a market charging triple the price.

The domino effect runs in a predictable sequence.  Higher interest expense compresses free cash flow immediately.  Companies halt the buybacks that had been propping up their own share price artificially, and cut dividends next.  Quantitative funds and institutional algorithms, which had been rewarding the buyback behaviour, reverse and dump the equity the moment that behaviour stops.  Credit rating agencies downgrade in response to the resulting cash flow deterioration, and a downgrade below investment grade forces forced selling by funds mandated to hold only investment-grade paper, freezing liquidity across the entire sector at once.

Paramount Skydance is living this sequence in real time.  The company’s US$110.9 billion acquisition of Warner Bros. Discovery, set to close on 6^th October 2026, saddles the combined entity with approximately US$80 billion in net debt, against a Paramount market capitalisation of just US$15.3 billion before the deal.  The debt issuance alone runs three times the size of the company’s entire equity value.  Some tranches of that debt carry yields between 8 and 9 per cent, the junk-rated cost of capital.  David Ferris Ellison, Chairman and Chief Executive Officer of Paramount Skydance, built this structure believing technological and content-library optimisation would justify the leverage.  His own father, Oracle founder Lawrence Joseph Ellison, personally guaranteed US$46.7 billion in equity financing to make the arithmetic work at all.  This is not a hypothetical cliff.  The company is betting its entire balance sheet that synergies will materialise fast enough to service junk-rated debt before the next refinancing window arrives, with one of the wealthiest men in the world standing behind it as personal guarantor.

The Berkshire Hathaway Counterexample

Contrast this against Berkshire Hathaway, the one major American company built on the opposite discipline.  Under Warren Edward Buffett, and now under his successor, Chief Executive Officer Gregory Edward Abe, Berkshire Hathaway built a cash position that reached a record US$397.4 billion in the first quarter of 2026, larger than the combined cash holdings of Apple, Amazon, Alphabet, and Microsoft put together.  Berkshire Hathaway pays no dividend, on Buffett’s own long-stated principle that retained capital, compounded, creates more value than a one-time payout.  Its own buyback policy refuses to repurchase a single share if doing so would push cash and Treasury bill holdings below US$30 billion, a floor of less than a tenth of its current reserve.

Even Berkshire Hathaway faces the gravitational pull of shareholder-primacy culture.  Income-focused shareholders have spent 2026 clamouring for Abel to deploy that cash more aggressively, and Abel has begun doing so, US$4.5 billion in buybacks in the second quarter alone, alongside US$20 billion in net equity purchases, ending a fourteen-quarter streak of net selling.  The pressure to behave like Paramount, to stop hoarding and start returning capital, exists even inside the one company that spent six decades proving patience compounds better than leverage.  Berkshire Hathaway has not yet surrendered to that pressure.  Whether it continues resisting, under a chief executive who is not Warren Buffett and does not carry his sixty-year credibility with shareholders demanding otherwise, is the open question Berkshire Hathaway’s own board will spend the refinancing wall years answering.

IV. The Geopolitical and Competitive Imbalance

The shareholder model penalised long-term, low-margin industrial scaling that builds supply chain security.  China did not make this mistake.  It built a virtual monopoly over midstream refining and intermediate goods, processing 90 per cent of the world’s rare earths and a dominant share of global lithium, by funding loss-leading physical infrastructure for decades, accepting thin or negative returns in the years Western shareholders would never have tolerated from a public company’s quarterly report.

This is not an abstract strategic concern.  The United States imports 92 per cent of the potash it consumes, 60 per cent of its aluminium, and 57 per cent of its copper, each concentrated in one or two foreign suppliers.  Western assembly lines, however much capital they represent on a balance sheet, cannot physically operate without the processed intermediate goods China’s own loss-leading industrial strategy secured a generation ago.  A tariff does not create a refining facility.  It merely raises the price of the input the facility was never built to replace.

Europe is caught in the worst version of this trap.  It is strategically dependent on an American ally whose trade policy reverses within a single presidential term, and it competes directly against a Chinese industrial machine built for multi-decade dominance.  Europe has not merely lost the manufacturing contest.  It has lost the middle-ground distribution and intermediate processing layer between raw material and finished good, the layer China spent decades building.  This means America and Europe remain vulnerable to supply chain shocks even when they hold the raw materials themselves, because holding bauxite is not the same as operating the aluminium smelting capacity to turn it into anything usable.

The Cost of Financial Engineering

Western capital, meanwhile, remains tied up in leveraged buyouts, corporate restructuring, and litigation, activities generating immense paper wealth for private equity sponsors while creating zero new physical capacity and zero new resource security.  Paramount’s US$80 billion debt pile buys a media and streaming library.  China’s refining capacity buys the ability to process the metal every electric vehicle, wind turbine, and missile guidance system on Earth requires.  One of these is paper wealth.  The other is a monopoly measured in decades.  A system that consistently chooses the former, quarter after quarter, because the quarterly scoreboard rewards it, has not made a series of bad individual decisions.  It has built an economy mathematically incapable of competing against one that chose the latter, and the refinancing wall arriving in 2027 is simply the first bill for three decades of preferring the scoreboard to the game.

V. Singapore’s Sovereign Funds Risk Falling into the Same Trap

Everything above describes a Western economy built to reward the scoreboard over the game.  Singapore’s sovereign capital holds a meaningful stake in that same scoreboard, and I believe the exposure has grown faster than the underlying caution demands.

Temasek Holdings’ net portfolio reached S$518 billion as of 31^st March 2026.  The United States accounts for 26 per cent of it, the second-largest regional allocation after Singapore itself.  Temasek Holdings holds direct stakes in both OpenAI and Anthropic, and has committed to raising AI-related exposure from 6 per cent to between 10 and 15 per cent of the total portfolio by 2031.  Chia Song Hwee, Chief Executive of Temasek Global Investments, has told reporters AI overvaluation is “unavoidable,” and that nobody, Temasek Holdings included, can predict when a correction arrives.  A fund increasing exposure to a position its own leadership has already called overvalued is not hedging against the shareholder-primacy dead end.  It is buying further into the scoreboard, when the companies most exposed to that scoreboard demonstrate what happens when valuation detaches from productive capacity.

GIC raised its own equities allocation to 51 per cent in the year to March 2025, up from 46 per cent the year before, even as its own annual report acknowledged that high valuations “provide a challenging backdrop for forward returns.”  GIC led Anthropic’s US$30 billion Series G funding round, valuing the company at US$380 billion, a valuation built on projected revenue rather than demonstrated cash flow, financed through the same circular capital loop linking Nvidia, cloud providers, and AI laboratories.  GIC’s stated reasoning for overhauling its investment framework this year is that “a changing world order, rising fiscal risks, and advances in artificial intelligence” are the three forces driving the change.  The fund identified the risk correctly.  It then increased exposure to the asset class carrying that risk regardless.

Greg Abel deployed capital cautiously even under shareholder pressure, holding a floor well above what any reasonable liquidity need required, because Berkshire Hathaway’s own discipline treats patience as a strategic asset.  Singapore’s funds face the identical pressure Berkshire Hathaway faces: the expectation of competitive returns in a market rewarding leveraged, financialised behaviour.  GIC and Temasek Holdings have responded by increasing exposure rather than holding the line Berkshire Hathaway has, so far, maintained.

I do not believe this calls for abandoning US equity exposure entirely.  I believe it calls for drawing the distinction between China’s loss-leading industrial capacity and America’s leveraged buyout culture, applied to portfolio construction.  A Singapore sovereign fund holding a stake in a company building processing capacity, semiconductor fabrication, critical minerals refining, physical infrastructure, is holding exposure to the game.  A fund holding a stake in a company whose valuation rests on a circular compute-financing loop, or a media conglomerate carrying debt three times its own market capitalisation to fund a content acquisition, is holding exposure to the scoreboard.  Singapore’s own institutional continuity, the six-decade track record EDB, HDB, and GIC have each built, is the asset that should let our funds wait out a financialised cycle the way Berkshire Hathaway has waited out every cycle before it, rather than chasing a return the scoreboard is currently offering at exactly the moment its own underlying game looks structurally unsound.

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

Quora Answer: If Trade with the Countries the US Relies on Stopped, What Would be the Consequences?

The following is my answer to a Quora question: “Could the United States economy handle a sudden stop in trade with countries it heavily relies on, and what would be the broader economic consequences?”

Obviously, no.  The United States economy cannot handle this.  Not gracefully, not quickly, and not without consequences reaching well beyond a single trade dispute.

The Lights Could Go Out

The United States imports 92 per cent of the potash it consumes, according to the United States Geological Survey’s 2026 Mineral Commodity Summaries.  Domestic production covers 400,000 metric tons against national consumption of 5.9 million.  Canada supplies 79 to 90 per cent of that shortfall, depending on the measure used.  Potash has no ready substitute in fertiliser formulation, and America’s own farmland cannot function without it.  The United States imports 60 per cent of its aluminium, mostly from Canada.  57 per cent of America’s copper, essential for electrification and grid infrastructure, is imported, led by Chile.  China accounts for 90 per cent of rare earth processing.

This is not a diversified supply chain with a spare option waiting in reserve.  It is a stack of single points of failure: energy, fertiliser, industrial metals, rare earths – each concentrated in one or two foreign suppliers, each feeding directly into the power grid, the food supply, and the manufacturing base simultaneously.  Cut any one of them off suddenly, and the disruption does not stay contained to that one input.  It cascades through everything downstream of it.

Current Policy is Pushing Partners toward Alternatives

Canadian aluminium exports to the United States fell by half between July 2025 and July 2026 as tariffs bit, according to Bank of Canada figures.  Canadian producers have argued American manufacturers, not Canadian exporters, are absorbing the real cost, paying US$1,500 to US$2,000 more per tonne than European competitors.  Canadian smelters can redirect shipments toward Europe and Asia instead, and increasingly are.  Washington’s own Section 338 tariffs, a fresh round targeting Canadian goods at 50 per cent from 22^nd August 2026, exempted energy, potash, fish, and critical minerals entirely, a carve-out that reveals which Canadian exports Washington judged too essential to touch even mid-dispute.  The exemption is an admission.  You do not exempt what you can afford to lose.

The United States Cannot be Trusted with Its Own Treaties

The 2019 USMCA deal removed Section 232 steel and aluminium tariffs on Canada and Mexico, with side letters committing Washington not to reimpose them.  That assurance lasted six years.  The scheduled six-year USMCA joint review, held on 1^st July 2026, produced no renewal commitment.  Washington’s own trade representative declared the United States would not renew the pact in its current form, citing persistent trade deficits, sliding the agreement into annual review cycles with its longer-term status unresolved.  Three weeks later came the 50 per cent tariff round described above.

The United States Supreme Court struck down the administration’s own “Liberation Day” tariffs in February 2026 as unconstitutional, and the administration simply reconstructed the same tariff wall using other statutes within weeks.  A trading partner negotiating with a government whose own courts have already ruled its trade policy illegal once this year, and which rebuilt that policy anyway under a different legal label, is not negotiating with a reliable counterparty.  It is negotiating with a government that treats a signed agreement, and a Supreme Court ruling, as opening positions rather than binding commitments.

The Numbers on the Economic Strain

The Tax Foundation estimates the current tariff regime will reduce long-run United States GDP by 0.4 per cent, while raising US$1.4 trillion in federal revenue from 2026 through 2035.  As a share of GDP, the 2026 tariffs increase tax revenue by 0.36 per cent, placing them among the twenty largest tax increases as a share of GDP since 1940.  The burden falls unevenly.  Tax filers in the bottom income quintile lose US$73 a year in after-tax income.  Filers in the top quintile lose US$1,868, a regressive burden once measured against income, since the bottom quintile’s loss consumes a far larger share of a far smaller income.

Foreign direct investment has collapsed rather than surged, despite the administration’s own predictions of a flood of new capital.  Quarterly FDI fell to US$52.8 billion in the first quarter of 2026, the lowest total since the fourth quarter of 2022, well below the ten- and twenty-year quarterly averages.  Total capital investment across FDI projects fell 62 per cent year-on-year in the same quarter, alongside a 17 per cent decline in the number of projects announced.  Excluding a single US$14.2 billion acquisition, Nippon Steel’s purchase of US Steel, FDI into metal product manufacturing would have declined by 60 per cent on its own.

The pre-tariff United States trade deficit stood at US$903.5 billion in 2024, falling to just US$901.5 billion in 2025, a decline of 0.2 per cent, nowhere near the correction tariffs were meant to deliver.

The Dollar Bypass

The 10-year Treasury yield crossed 5 per cent in September 2026, and the Federal Reserve raised rates that same month for the first time since 2023, because inflation had run too high for too long to accommodate a cut.  The dollar’s share of global reserves has fallen from over 70 per cent in 2000 to under 59 per cent, with central banks buying a record 288.9 tonnes of gold in a single quarter of 2026 alone.  China’s own Treasury holdings fell to their lowest level since September 2008, redirected instead into German and Swiss sovereign bonds, markets offering the same political stability without the same risk of a single frozen account.  Trade is not abandoning the dollar wholesale.  It is diversifying away from concentrated exposure to it, because this administration is treating its own trade agreements as disposable.  This gives every trading partner fresh reason to hold fewer US dollars and less of this government’s debt than it did five years ago.

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

Quora Answer: How Do You Structure a Shari’ah-Compliant, Halal, Investment Portfolio?

The following is my answer to a Quora question: “How do you structure a shari’ah-compliant, halal investment portfolio?”

This is a tricky question, and most answers to it are wrong for the same reason.  They start from a modern invention, the claim that all interest is automatically riba’, usury, and build an entire investment philosophy on top of a premise that classical fiqh, jurisprudence, never settled.  We need to address the underlying contentions before we talk about building any such portfolio.

The Definition of Riba’ is Not Settled

The Qur’an explicitly prohibits riba’.  What riba’ means has been argued since the earliest generations of Islamic jurisprudence, and the classical schools did not converge on a single answer.  Riba’ al-fadhl, the prohibition on unequal exchange of the same commodity, is applied specifically to six named items in ahadits, prophetic narrations: gold, silver, wheat, barley, dates, and salt.  Riba’ an-nasiyyah, the deferred-payment form, is the one modern discourse collapses into “all interest,” but classical jurists tied its prohibition to a specific mechanism: a debt that compounds as a penalty for late payment, extracting more from a debtor because he could not pay on time.  That is usury.  Usury requires an element of zhulm, oppression, a lender exploiting a debtor’s need or misfortune to extract wealth disproportionate to any service rendered.  Mere interest at the outset of a commercial arrangement between two consenting parties of roughly equal bargaining power is the cost of doing business, not exploitation.

Shaykh Nur ad-Din Abu ‘Ubadah ‘Ali ibn Juma’ah, Grand Mufti of Egypt from 2003 to 2013, argued that the four a’immah – Imam Abu ‘Abdullah Malik ibn Anas, Imam Abu Hanifah Nu’man ibn Tsabit, Imam Abu ‘Abdullah Muhammad ibn Idris ash-Shafi’i, and Imam Ahmad ibn Muhammad ibn Hanbal – restricted usury to the ribawi commodities, principally gold and silver as the recognised monetary metals of their era.  Banks deal in fiat currency, a different category of asset under this classical framework.  He argued the relationship between a depositor and a bank is financing and investment, not a straightforward loan between two individuals of unequal power.  This is not a fringe modernist improvisation invented to make Western finance palatable.  It is a contention grounded in the same classical texts the anti-interest position claims sole ownership of.  Shaykh ‘Ali ibn Juma’ah’s jurisprudential training was from the Shafi'i school.

al-Azhar’s Islamic Research Institute issued a formal fatwa in December 2002, under Grand Imam Shaykh Muhammad Sayyid Thanthawy, addressing bank interest on savings certificates.  The fatwa, and the furious rebuttal from the Islamic Jurisprudence Academy that followed, remains one of the most documented institutional disputes in modern Islamic finance, because it exposed that even Al-Azhar’s scholars could not agree among themselves.

The Shafi’i School Never Developed the Jurisprudential Machinery for This

Hanafi jurisprudence developed during the Abbasid Caliphate, then reached its administrative maturity across the Ottoman Empire, an institution running commerce, taxation, and finance across three continents for six centuries.  Maliki jurisprudence did the same across the Maghreb and West Africa, embedded in states that had to answer commercial questions at scale.  This produced schools with developed positions on contracts, partnership structures, and commercial necessity, because the empires applying them needed working answers, not merely correct ones.

Shafi’i jurisprudence never had this laboratory.  It found scholarly prestige and demographic reach; it remains dominant across the Malay Archipelago, including Singapore’s Malay Muslim population, but it was never the settled law of a single dominant polity administering commerce and finance at imperial scale over centuries.  This is a school of law refined primarily through scholarly transmission rather than sustained state administration, so it developed differently from one tested daily against the demands of running an empire’s treasury.  The modern Shafi’i-influenced fatwa councils inherit that inadequacy.

Modern Islamic Finance’s Blind Spot on Time Value

Modern Islamic financial theory largely denies the time value of money as a legitimate concept.  Alongside this, inflation and capital gains are treated as suspect categories rather than economic facts.  This is not a minor theoretical quibble.  As long as demand outstrips supply, prices rise.  Some inflation signals a growing economy.  Money and the instruments transferring it will vary in value across time regardless of any jurist’s ruling on the matter, and treating that natural variance as inherently riba’ conflates a real economic phenomenon with a specific, exploitative lending practice mentioned in the Qur’an.  Jurists disregarding infrastructure cost and opportunity cost when declaring all borrowing interest haram have not produced a more pious economics.  They have produced an economics divorced from how value moves through time, forcing “halal” product designers into the tortuous semantic workarounds, murabahah cost-plus sales dressed as trade rather than lending.  They are engaging in all this nonsense to satisfy a label while replicating the same economic substance these labels claim to avoid.  That is hypocrisy.

The Shari’ah Advisory Board System is a Rating Scam

A portfolio is not made shari’ah-compliant because a board stamped it so.  Most shari’ah advisory boards are employed by the financial institutions whose products they assess, a conflict of interest that would disqualify an auditor in any other regulated industry.  The vast majority of shari’ah-labelled funds underperform broader benchmarks, driven by a lack of diversification and the double compliance cost, conventional regulatory overhead stacked on top of shari’ah board fees, passed straight to the investor.  Muslims paying a premium for underperformance in the name of piety would achieve more religious benefit by giving that same premium as zakat or swadaqah.

The Focus Should be Ethical Screening, Not a Label

A properly structured portfolio requires no third-party halal certification at all.  It requires screening on values that already exist across classical jurisprudence: no investment in explicitly haram products, pork, alcohol, and intoxicants.  Beyond that, I extend the screen to harm: no defence contractors profiting from weapons deployed against civilians, no industrial polluters externalising cost onto communities with no say in the matter, no operations built on animal cruelty, no predatory lenders extracting wealth from people with no real alternative.  This screen excludes a considerable share of companies on conduct and business model, not merely on which sector code they are classified under, and it requires no certifying board to validate it, only a fund manager willing to read what a company does.

Shari’ah compliance begins with niyyah, intent, a principle routinely neglected once the conversation moves to product structuring.  Wealth accumulated through ethical means and then hoarded, or spent purely on status, fails the spirit of the framework as thoroughly as wealth accumulated through a technically halal-labelled but ethically hollow investment vehicle.

Swukuk is Not a Substitute for a Rated Bond

Swukuk represents fractional ownership in an underlying asset or venture, generating returns from that asset’s performance rather than a fixed coupon on borrowed principal.  This structure carries value where the underlying asset is real and productive.  It is not, however, a functional replacement for a diversified, credit-rated bond allocation.  Swukuk markets remain shallower, less liquid, and more concentrated by issuer and jurisdiction than the global bond market.  A blanket exclusion of conventional fixed income, based on a reinterpretation of riba’ leaves a portfolio structurally overweight on equity risk.  A correct reinterpretation of riba’ along the lines of Shaykh ‘Ali ibn Juma’ah and the classical commodity-specific reading of usury supports open conventional, transparently priced fixed income as part of a properly constructed shari’ah-conscious portfolio.  This corrects an imbalance that has cost swukuk-only investors measurable diversification for decades.

MUIS and PERGAS’s Position Falls Short

Singapore’s Islamic Religious Council, MUIS, and the Singapore Islamic Scholars and Religious Teachers Association, PERGAS, both issue guidance operating within this same underdeveloped framework, inherited through Shafi’i channels given Singapore’s Malay Muslim demographic base.  The deeper problem is not which school they draw from.  It is that fatwa committees staffed predominantly by scholars trained in classical jurisprudence and theology, without formal grounding in finance, economics, or portfolio theory, are answering a technical financial question using purely doctrinal reasoning.  A jurist who has never modelled duration risk, credit spread, or the actual mechanics of a murabahah versus a conventional term loan is poorly positioned to rule on whether that structure differs in economic substance, only in form.  Ideological caution substituting for financial literacy produces a rating system that certifies form, penalises substance, and leaves ordinary Muslim investors paying a compliance premium for portfolios that underperform, all in service of a definition of riba’ that the classical schools themselves never fully agreed on to begin with.

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

A Global South Diversification Strategy

I believe Singapore should reject binary alignment with either Washington or Beijing, not as a temporary hedge, but as a permanent structural doctrine, and I believe this doctrine should be backed by concrete diversification across critical minerals, reserve composition, institutional positioning, and formal trade targets across the Global South.

Part One: Trading American Dependence for Chinese Dependence Solves Nothing

Outright alignment with China trades dependence on one great power’s currency, capital markets, and political stability for dependence on another’s, with the same category of risk simply relocated.  China’s economy carries documented vulnerabilities: a property sector still working through Evergrande’s January 2024 Hong Kong liquidation and the broader sector’s US$300 billion in defaulted debt, a domestic consumption base structurally weaker than its export capacity, and a demonstrated capacity for abrupt, centrally imposed policy reversal, visible in the sudden December 2022 abandonment of zero-Covid following nationwide protests, and in the 20 per cent offshore trust tax Beijing imposed with a 90-day compliance window in July 2026.  I believe jumping from American overreliance to Chinese overreliance is not diversification.  It is the identical structural mistake wearing a different flag.

Part Two: The Non-Alignment Doctrine Already Exists

I did not invent this position.  Foreign Minister Vivian Balakrishnan has stated Singapore “does not take sides” but rather “upholds principles,” and has described our approach as “omni-directional engagement ... with all the multiple poles of power that are emerging.”  Speaking to Parliament in February 2026, he went further, stating Singapore would not act as “a proxy for any major power,” and must be prepared to “courteously stand up and say no,” a principle he applied to China as much as the United States.  Then Prime Minister Lee Hsien Loong stated on 1^st April 2022 that Singapore is not a US ally, will not conduct military operations on its behalf, and will not seek direct US military support, a position Prime Minister Wong Shyun Tsai reiterated in 2024.  When Donald John Trump imposed a 10 per cent baseline tariff on Singapore in April 2025, despite Singapore running a trade deficit with the United States, Wong stated Singapore was “very disappointed” and that “these are not actions one does to a friend.”

Foreign Policy magazine identified the risk: “The danger for the United States is not that Singapore suddenly pivots toward China.  It is that Singapore gradually diversifies its diplomatic, economic, and strategic relationships in ways that reduce US” leverage.  I believe this diversification is already under way, and I believe we should stop framing it, in official communication, as a reactive hedge adopted each time external pressure forces a response, and start stating it as the permanent structural doctrine it already is in substance.

Part Three: Singapore Should Not Pursue Reserve Currency Status

The Singapore dollar held its value through the 2019 Gulf tensions with only a 0.4 per cent decline, against 1.5 to 2.5 per cent losses among regional peers, and repeated this through 2026’s Iran-linked turbulence.  This makes Singapore Government Securities look, on paper, like a candidate for central banks diversifying away from concentrated Treasury holdings, especially given the dollar’s reserve share has fallen from over 70 per cent in 2000 to under 59 per cent by 2024, and central banks bought a record 288.9 tonnes of gold in a single quarter of 2026.

I do not believe Singapore should pursue this, and MAS’s decades-long policy already reflects why.  MAS has maintained a long-standing policy of actively discouraging internationalisation of the Singapore dollar.  A 1996 IMF working paper explained the reasoning: “The MAS frowns on internationalising the local currency because it believes that a large pool of Singapore dollars in the hands of non-residents can be a source of exchange rate instability.”  MAS manages inflation through the exchange rate, not the interest rate, the “only macroeconomic instrument” it uses to stabilise domestic prices.  A pool of foreign reserve demand for Singapore dollars would introduce persistent currency appreciation pressure unrelated to our domestic needs, forcing an impossible choice between an overvalued currency and continuous, self-defeating intervention.

Economist Robert Triffin’s 1960 dilemma applies here even in Singapore: supplying enough currency to satisfy global reserve demand typically requires running persistent external deficits, undermining the currency’s stability.  Singapore has built its AAA rating on the opposite discipline, a net asset position sustained by current account surpluses.  I believe this recommendation should be rejected, and MAS’s existing non-internationalisation stance affirmed as correct.

Part Four: Institutional Continuity is a Measurable Comparative Advantage

I believe Singapore’s institutional continuity is not a marketing claim, but a measurable, decades-long track record we have not yet stated with sufficient force.  The Economic Development Board was established in 1961.  The Housing and Development Board followed in 1960, now housing over 80 per cent of citizens under one continuous mandate.  GIC was established in 1981 and has run a single investment mandate for over four decades.  The World Bank’s Worldwide Governance Indicators score Singapore’s Political Stability index at an average of 1.27 points across 1996 to 2023, against a global average of negative 0.06, ranging narrowly between 0.88 and 1.6 across nearly three decades.  A range this narrow, over this long, shows not merely high governance quality but near-zero volatility in it.

This is already converting into measurable capital.  Singapore’s single family office count grew from 400 in 2020 to over 2,000 by 2026, assets under management approaching S$7 trillion, driven by capital fleeing China’s offshore trust tax, the UK’s non-domicile exodus, and Dubai’s conflict exposure.  Each source market shares the same driver: a sudden, discontinuous policy shift our institutional architecture does not produce.  I believe we should state policy continuity itself as the headline argument in economic diplomacy and EDB investment promotion, rather than leaving it implicit inside a list of Singapore’s more frequently cited attributes.

Part Five: The Concrete Critical Minerals Opportunity

Thirty years of reversed American policy on tax, infrastructure, and industrial strategy stand in contrast to China’s decade-long planning cycles, visible in its consolidation of rare earth markets.  China controls 90 per cent of global rare earth processing capacity, over 60 per cent of lithium refining, and imposed export licensing on seven heavy rare earth elements in 2025, pushing European prices to six times Chinese domestic levels.

I see a concrete opportunity here, built on treaty architecture we already hold.  Singapore and Australia signed the Singapore-Australia Green Economy Agreement and Digital Economy Agreement, both in force.  Both countries are part of RCEP and CPTPP.  Australia holds substantial lithium reserves but limited processing capacity.  Indonesia controls the world’s largest nickel reserves, though 75 per cent of its refining capacity is already controlled by Chinese firms following over US$30 billion in Belt and Road-linked investment.  Australia’s counterbalancing effort, Nickel Industries’ US$1.7 billion investment at Morowali Industrial Park, remains a fraction of Chinese capital in the same sector.  I believe a Singapore-based trading and financing intermediary, built under our existing treaty framework, could aggregate Australian lithium output, blend it with non-Chinese-controlled Indonesian nickel supply, and route it toward AI infrastructure buyers across CPTPP markets, without a single new treaty.  The window is real because Western reshoring remains structurally years away: the EU’s Critical Raw Materials Act targets only 10 per cent domestic extraction by 2030, and Washington’s US$12 billion Project Vault exists to stockpile minerals, not build processing capacity.

Part Six: A Formal, Measurable Global South Target

Singapore already applies precise, tracked metrics to bilateral trade.  Trade in goods with Latin America more than doubled over five years to over S$35 billion in 2025.  The Pacific Alliance-Singapore Free Trade Agreement entered into force in May 2025.  Our bilateral trade in goods with the UAE reached S$24 billion in 2024, with services trade growing 22 per cent year-on-year, and Singapore’s investment into the UAE grew 13 per cent to S$4.9 billion in 2023.  We have maintained a Gulf Cooperation Council free trade agreement since 2013.

The gap is with Africa.  Africa’s trade with Southeast Asia amounted to just 2.2 per cent of the region’s total world trade in 2021.  African investment into ASEAN totalled just US$188 million that year, 0.1 per cent of ASEAN’s total inward investment.  Then Minister Gan Kim Yong himself acknowledged this at the Africa Singapore Business Forum, stating investment flows “pale in comparison to the opportunities available.”  I believe MTI and MAS should answer that question by formalising a single, published Global South diversification target, tracked with the same specificity already applied to individual bilateral FTA performance, and reported on a fixed schedule Parliament can hold the government to.

My Conclusion

I have made the case that Singapore should reject binary alignment permanently and explicitly, not pursue reserve currency status despite its surface appeal, state our institutional continuity as the headline diplomatic asset it already is, build concrete critical minerals infrastructure on treaties we already hold, and set a formal, measurable Global South diversification target where the gap, particularly with Africa, is already documented and already raised in our Parliament.  None of this requires choosing a side in the cycle described in my first paper.  I believe it requires building the infrastructure that lets Singapore keep functioning regardless of how that cycle resolves.

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

The Case for an Independent Blue Carbon Exchange, Built to Fund the Loss and Damage Fund

I believe the Loss and Damage Fund, established to help developing countries adapt to climate change, has failed on its terms, and I believe an independent, investment-grade compliance carbon exchange is the most credible instrument available to fund it properly.  Here, I make that case, and contend that the Loss and Damage Fund is the explicit strategic endpoint of everything that follows, not an implicit byproduct of building better market infrastructure.

Part One: The Loss and Damage Fund Has Failed

The Loss and Damage Fund closed COP28 with pledges just over US$600 million, a sum that was smaller than the cost of building the Dubai Expo City venue hosting the conference.  By September 2024, pledges reached US$702 million from 23 contributors.  The UN itself estimates actual need at US$300 billion a year by 2030, rising to US$500 billion by 2050.  The gap between pledge and requirement is 400 to 1.

The pattern has only worsened since.  The United States rescinded US$4 billion in Green Climate Fund pledges in February 2025, the first country ever to formally withdraw a commitment already made.  The United Kingdom halved its pledge in spring 2026.  A planned pledging event at COP30 for the Least Developed Countries Fund and Special Climate Change Fund was cancelled outright in November 2025, for lack of contributor interest.  The World Bank dropped its 45 per cent climate co-benefits target in June 2026, the very month it had already exceeded that target at 48 per cent, under pressure from the United States, Russia, and Saudi Arabia.

I believe public, pledge-based climate finance is structurally unreliable, because it depends on donor governments whose domestic politics can reverse a commitment at any point, with no penalty for doing so.

Part Two: A Secondary Market Solves the Reliability Problem a Pledge Cannot

Article 6’s rulebook, finalised at COP29 in November 2024, and the Paris Agreement Crediting Mechanism, operational following COP30 in November 2025, give carbon credits legal infrastructure to trade as a transferable financial asset rather than a voluntary gesture.  The EU Emissions Trading System has already proven this model at scale, cutting covered emissions 51 per cent since 2005 while raising over €265 billion in revenue, funded entirely by market participants pricing their carbon output, with no pledging conference and no government able to walk the commitment back.

I believe a market-priced instrument, once built properly, does not depend on the next election cycle in Washington, London, or anywhere else.  This is the structural advantage a secondary carbon market holds over every pledge-based mechanism, and it is the reason I am proposing this exchange as a Loss and Damage funding vehicle, not as a Singapore commercial opportunity.

Part Three: The Verification Process is Broken

Verra, the dominant voluntary registry, lets project developers hire and pay their auditors directly.  Science magazine’s editorial board stated, “Auditors are unlikely to stay in business if they disapprove credits at the high rates that research suggests would be appropriate today.”  Carbon Market Watch found 21 of 33 accredited auditors active in 2024 had signed off on at least one of 95 projects later found to have overstated their climate benefit.  Transparency International US described the resulting arrangement as “students designing their assignments and grading their papers.”

PACM’s first issuance, a Myanmar cookstove project approved in February 2026, was subsequently found to have been approved for roughly seven times more credits than its actual emission reductions likely warranted.  It operated through institutions controlled by Myanmar’s military junta, in conflict-affected regions, with verifiers unable even to conduct site visits due to security concerns.  SK Telecom, the buyer relying on these credits, has itself publicly acknowledged the claimed reductions cannot be verified.

I believe this is no longer a niche technical criticism.  It is a documented, publicised failure spanning both the dominant voluntary registry and the UN’s flagship compliance mechanism, and it gives institutional buyers a concrete, citable reason to seek a genuinely independent alternative.

Part Four: The Structural Fix

Whoever verifies a credit’s emission reduction claim must have no financial relationship with the project developer seeking that credit approved.  A verification architecture paid by the exchange, by an independent buyer-side consortium, or through a standing endowment rather than per-project developer fees removes the incentive that is the root cause of the Verra pattern.

Mangrove and seagrass carbon sequestration suits this model in a way human, developer-paid auditors structurally cannot match.  Satellite-based remote sensing can measure canopy coverage, biomass density, and sequestration rate directly, independent of any relationship between verifier and developer, and independent of the security access constraints that left Myanmar’s verifiers unable to confirm anything in person.  I believe applying AI-based MRV to blue carbon specifically converts a verification method that failed catastrophically in cookstove methodology into one resistant to the same failure mode, because the underlying claim is measurable from orbit rather than dependent on a developer’s self-reported survey data.

Part Five: The Legislation and Compliance Architecture Required

Internationally, Article 6.2’s corresponding adjustment mechanism prevents double counting, requiring the host government to formally record the transfer in its national emissions inventory.  A Letter of Authorisation must be issued by the host state and verified by the relevant carbon standard before any credit can trade internationally.  CORSIA’s compliance phases already require this authorisation as a precondition for airline offset eligibility.  AI-based MRV for blue carbon would need to satisfy the Article 6.4 Supervisory Body’s methodological standards, currently scoped narrowly to methane flaring and nitrous oxide abatement, meaning a formal new methodology submission and approval process precedes any blue carbon-specific AI verification protocol gaining recognition under the compliance-grade international framework.

Domestically, I believe Singapore’s regulatory architecture already provides usable scaffolding.  The Variable Capital Companies Act 2018 allows a fungible carbon credit exchange to be structured with segregated sub-funds, ring-fencing different project pools, vintages, or geographic sources, administered by the Accounting and Corporate Regulatory Authority with anti-money laundering oversight from MAS.  A verification layer built independently of the credit issuer would need to satisfy MAS’s capital markets licensing framework under the Securities and Futures Act if it intends to offer credit-linked derivatives or structured products.  Any blue carbon project sourcing credits from Southeast Asian coastal states would need bilateral Article 6 authorisation agreements negotiated with each host government individually, since PACM and Article 6.2 operate project by project and country by country, not through a single blanket regional approval.

Part Six: Singapore’s Existing Position

As of June 2026, Singapore has signed Article 6 Implementation Agreements with eleven countries: Papua New Guinea, Ghana, Bhutan, Chile, Peru, Rwanda, Paraguay, Thailand, Vietnam, Mongolia, and the Philippines.  In September 2025, Singapore contracted 2.175 million tonnes of nature-based carbon credits from projects in Ghana, Peru, and Paraguay.  On 6^th July 2026, Singapore signed a major bilateral agreement on carbon credit collaboration with Indonesia, witnessed by Indonesian President Prabowo Subianto and Singapore Prime Minister Lawrence Wong Shyun Tsai, establishing a corresponding adjustment framework for cross-border trading.

Singapore’s commissioned study by the Economic Development Board and Enterprise Singapore estimates the carbon services and trading hub ambition could generate US$1.8 to US$5.6 billion in gross value added.  That study assumed Singapore’s continued positioning as the region’s default hub, an assumption now contestable as Indonesia, Vietnam, and Malaysia each build their domestic registries and exchanges.  I believe the task ahead is not building new bilateral relationships from scratch, largely complete, but building the interoperability layer that keeps Singapore central as these national systems mature, through active participation in the ASEAN Common Carbon Framework the ASEAN Alliance on Carbon Markets is already developing.

My Conclusion

A market-priced, independently verified compliance carbon exchange, built specifically for blue carbon and verified through AI-based remote sensing rather than developer-paid human auditors, is not merely a better carbon market.  It is, I believe, the most credible mechanism currently available to close the gap between the US$300 billion a year developing countries need and the US$700 million the pledge-based Loss and Damage Fund has managed to raise.  Singapore already holds the treaty architecture, the regulatory scaffolding, and a documented lead in bilateral Article 6 agreements to build this.  What it does not yet have is the independent verification layer, and I believe that is the single piece of infrastructure Singapore should now be directed toward building.

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