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The new Cold War is made of gold: A weapon against the dollar

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In 2024 and 2025, the world witnessed something extraordinary: gold, that ancient metal once thought to belong to kings and temples, suddenly became the new obsession of investors, governments, and even central bankers. Prices shattered all records, soaring past US$4,100 per ounce, doubling within a single year. Analysts scrambled to explain what was happening. Was this another bubble? A panic? Or something deeper—perhaps the beginning of a historic financial realignment?

The truth, as it turns out, lies not in the usual economic explanations of inflation or interest rates, but in two bigger and longer-lasting transformations reshaping the global financial landscape: the financialisation and the weaponisation of gold.

From Pharaohs to Financial Portfolios

Gold’s appeal has always gone beyond its glitter. From the tombs of the Egyptian pharaohs to the coins of the Roman emperors, gold has symbolised permanence and power. It became the ultimate standard of trust—the promise behind every paper note and national currency.

But the old “gold standard” system, which linked currencies directly to gold, had a dark side. It kept prices stable, yes, but at the cost of human suffering. When economies slowed, governments were forced to cut spending and raise interest rates to protect their gold reserves; policies that deepened recessions and unemployment. Mining itself was brutal, leaving scars on people and the planet.

When the United States finally abandoned the gold standard in 1971, many thought gold would fade into history. Yet, half a century later, gold is back—not as money in your pocket, but as a shadow currency in the portfolios of the powerful.

The New Gold Rush—Fuelled by Finance, Not Pickaxes

Fast-forward to the 21st century. Gold’s comeback has been powered not by miners but by markets. The launch of Exchange Traded Funds (ETFs) —financial products that let anyone buy or sell gold with a few clicks—has turned an ancient commodity into a modern investment craze.

Before ETFs, buying gold meant storing heavy bars or coins. Today, a college student can own gold on their phone app. This democratisation of access has led to massive inflows, more than US$60 billion in just nine months, according to the World Gold Council.

This surge in financial participation has changed gold’s very nature. It now moves less like a raw material and more like a stock, rising and falling with global risk appetite and social media sentiment. The “fear of missing out” (FOMO) effect has amplified every uptick, creating powerful feedback loops: rising prices attract new investors, whose enthusiasm drives prices even higher.

What was once a hedge against crisis has become, ironically, a product of financial exuberance. Gold is now as much a part of Wall Street as it is of the jewellery trade.

The Geopolitical Weaponisation of Gold

But there’s another, far more serious driver of this golden surge, one that reaches into the heart of global politics. In the last few years, central banks in China, Russia, India, and other emerging economies, have been buying gold at a record pace. Why? To protect themselves from the dominance of the US dollar, and the political power that comes with it.

When Western nations froze Russia’s dollar reserves, after the invasion of Ukraine, and blocked its access to global payment systems, like SWIFT, it sent a chilling message to other countries: your savings are only safe as long as Washington allows it

. In response, these countries began quietly shifting their reserves into gold, a neutral, physical asset that can’t be digitally seized or sanctioned.

Russia’s Central Bank now holds one of the world’s largest gold piles. China, too, has been a relentless buyer, increasing its official gold reserves every month, since 2022. For them, gold is not just an investment—it’s an insurance policy against Western financial power.

This is what economists call “de-dollarisation”: a gradual move away from dependence on the US dollar. Gold, with no flag or central bank of its own, is the only truly global form of money left.

A Fragmented Financial World

This geopolitical gold rush has created a form of price-inelastic demand; meaning countries will buy gold no matter how expensive it becomes. They aren’t chasing profits; they’re seeking safety. This type of demand places a firm floor under gold prices, making future crashes less likely and rallies more sustainable.

In other words, this isn’t a temporary boom. It’s a structural revaluation; a rewriting of what gold is worth in an age of political and digital fragility.

For the first time since the Cold War, the world is moving toward multiple financial poles. On one side, the dollar-based Western bloc; on the other, a growing coalition of countries building their own “sanctions-proof” reserves. Gold sits at the centre of this new global contest, quietly, gleaming, unaligned.

Winners and Losers in the Golden Age

Not everyone will lose in this new era. Countries rich in gold resources (like Australia, South Africa, and Canada) are emerging as quiet beneficiaries of this geopolitical reordering.

Australia, already a mining powerhouse, has seen gold exports skyrocket. If current trends continue, gold could overtake coal and iron ore to become the country’s second-largest export within the next two years. For a nation navigating the energy transition and trade tensions, the timing couldn’t be better.

For investors, gold has regained its reputation as a “safe haven,” but with a modern twist. It is now both a defensive asset and a speculative vehicle, blending ancient psychology with algorithmic trading. While some analysts, like Goldman Sachs, predict prices could reach US$4,900 by 2026, others warn of volatility if peace returns or interest rates rise sharply.

Still, even skeptics admit gold is no longer just reacting to crises—it’s part of the crisis-proofing itself.

The Psychology of Permanence

Why does gold, of all things, endure when entire currencies come and go? Part of the answer lies in human psychology. Gold is tangible, immutable, and universal. It glitters the same way in Beijing, Moscow, or Colombo. It is an anti-digital asset in an increasingly virtual world, unchanged by code, hacking, or political decree.

This emotional dimension, as economists now admit, carries real financial power. In times of social distrust and institutional decay, tangible symbols of permanence, like gold, become repositories of faith.

As one trader put it recently, “You can’t print gold, and you can’t freeze it.”

Global South’s Golden Shield

For many developing nations, gold accumulation is not just economic; it’s existential. Countries in the Global South have learned painful lessons from debt crises, currency collapses, and the volatility of foreign aid. Gold offers them a rare form of monetary sovereignty.

Sri Lanka, for example, has faced severe balance-of-payments challenges and currency depreciation. While it cannot match the gold-hoarding power of China or Russia, its policymakers now openly discuss diversifying reserves beyond dollars and euros. For smaller nations, even modest gold holdings can serve as a symbolic statement of independence and resilience.

In this sense, the “Goldasization” of the global economy represents a subtle but profound shift in power, from the financial centres of the West to the resource and production centres of the Global South.

The Limits of Glitter

Yet, this transformation is not without risk. The more gold becomes a political weapon, the more volatile its price could become. If major powers begin to hoard rather than trade, gold markets could tighten dramatically, distorting their role as a neutral store of value.

Moreover, the human and environmental cost of new gold mining could once again rise as demand surges. Already, illegal and unsafe mining has reappeared in parts of Africa and Latin America, raising questions about sustainability and ethics.

So, while gold may shine bright, it casts long shadows, just as it did centuries ago.

The Return of Eternal Metal

Gold’s story is, in many ways, humanity’s story: our longing for permanence in an uncertain world. It survived the fall of empires, the rise of digital currencies, and even the invention of Bitcoin. Each time it seems obsolete, it reinvents itself.

Today, in a world divided by politics, debt, and data, gold is once again uniting investors and governments in their search for something that lasts. Whether this new “gold standard” will bring stability or new inequalities remains to be seen.

But one thing is certain: the golden age is not behind us, it’s being remade before our eyes.



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Ranking public services with AI — A roadmap to reviving institutions like SriLankan Airlines

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Efficacy measures an organisation’s capacity to achieve its mission and intended outcomes under planned or optimal conditions. It differs from efficiency, which focuses on achieving objectives with minimal resources, and effectiveness, which evaluates results in real-world conditions. Today, modern AI tools, using publicly available data, enable objective assessment of the efficacy of Sri Lanka’s government institutions.

Among key public bodies, the Supreme Court of Sri Lanka emerges as the most efficacious, outperforming the Department of Inland Revenue, Sri Lanka Customs, the Election Commission, and Parliament. In the financial and regulatory sector, the Central Bank of Sri Lanka (CBSL) ranks highest, ahead of the Securities and Exchange Commission, the Public Utilities Commission, the Telecommunications Regulatory Commission, the Insurance Regulatory Commission, and the Sri Lanka Standards Institution.

Among state-owned enterprises, the Sri Lanka Ports Authority (SLPA) leads in efficacy, followed by Bank of Ceylon and People’s Bank. Other institutions assessed included the State Pharmaceuticals Corporation, the National Water Supply and Drainage Board, the Ceylon Electricity Board, the Ceylon Petroleum Corporation, and the Sri Lanka Transport Board. At the lower end of the spectrum were Lanka Sathosa and Sri Lankan Airlines, highlighting a critical challenge for the national economy.

Sri Lankan Airlines, consistently ranked at the bottom, has long been a financial drain. Despite successive governments’ reform attempts, sustainable solutions remain elusive.

Globally, the most profitable airlines operate as highly integrated, technology-enabled ecosystems rather than as fragmented departments. Operations, finance, fleet management, route planning, engineering, marketing, and customer service are closely coordinated, sharing real-time data to maximise efficiency, safety, and profitability.

The challenge for Sri Lankan Airlines is structural. Its operations are fragmented, overly hierarchical, and poorly aligned. Simply replacing the CEO or senior leadership will not address these deep-seated weaknesses. What the airline needs is a cohesive, integrated organisational ecosystem that leverages technology for cross-functional planning and real-time decision-making.

The government must urgently consider restructuring Sri Lankan Airlines to encourage:

=Joint planning across operational divisions

=Data-driven, evidence-based decision-making

=Continuous cross-functional consultation

=Collaborative strategic decisions on route rationalisation, fleet renewal, partnerships, and cost management, rather than exclusive top-down mandates

Sustainable reform requires systemic change. Without modernised organisational structures, stronger accountability, and aligned incentives across divisions, financial recovery will remain out of reach. An integrated, performance-oriented model offers the most realistic path to operational efficiency and long-term viability.

Reforming loss-making institutions like Sri Lankan Airlines is not merely a matter of leadership change — it is a structural overhaul essential to ensuring these entities contribute productively to the national economy rather than remain perpetual burdens.

By Chula Goonasekera – Citizen Analyst

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Why Pi Day?

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International Day of Mathematics falls tomorrow

The approximate value of Pi (π) is 3.14 in mathematics. Therefore, the day 14 March is celebrated as the Pi Day. In 2019, UNESCO proclaimed 14 March as the International Day of Mathematics.

Ancient Babylonians and Egyptians figured out that the circumference of a circle is slightly more than three times its diameter. But they could not come up with an exact value for this ratio although they knew that it is a constant. This constant was later named as π which is a letter in the Greek alphabet.

Archimedes

It was the Greek mathematician Archimedes (250 BC) who was able to find an upper bound and a lower bound for this constant. He drew a circle of diameter one unit and drew hexagons inside and outside the circle such that the sides of each hexagon touch the sides of the circle. In mathematics the circle passing through all vertices of a polygon is called a ‘circumcircle’ and the largest circle that fits inside a polygon tangent to all its sides is called an ‘incircle’. The total length of the smaller hexagon then becomes the lower bound of π and the length of the hexagon outside the circle is the upper bound. He realised that by increasing the number of sides of the polygon can make the bounds get closer to the value of Pi and increased the number of sides to 12,24,48 and 60. He argued that by increasing the number of sides will ultimately result in obtaining the original circle, thereby laying the foundation for the theory of limits. He ended up with the lower bound as 22/7 and the upper bound 223/71. He could not continue his research as his hometown Syracuse was invaded by Romans and was killed by one of the soldiers. His last words were ‘do not disturb my circles’, perhaps a reference to his continuing efforts to find the value of π to a greater accuracy.

Archimedes can be considered as the father of geometry. His contributions revolutionised geometry and his methods anticipated integral calculus. He invented the pulley and the hydraulic screw for drawing water from a well. He also discovered the law of hydrostatics. He formulated the law of levers which states that a smaller weight placed farther from a pivot can balance a much heavier weight closer to it. He famously said “Give me a lever long enough and a place to stand and I will move the earth”.

Mathematicians have found many expressions for π as a sum of infinite series that converge to its value. One such famous series is the Leibniz Series found in 1674 by the German mathematician Gottfried Leibniz, which is given below.

π = 4 ( 1 – 1/3 + 1/5 – 1/7 + 1/9 – ………….)

The Indian mathematical genius Ramanujan came up with a magnificent formula in 1910. The short form of the formula is as follows.

π = 9801/(1103 √8)

For practical applications an approximation is sufficient. Even NASA uses only the approximation 3.141592653589793 for its interplanetary navigation calculations.

It is not just an interesting and curious number. It is used for calculations in navigation, encryption, space exploration, video game development and even in medicine. As π is fundamental to spherical geometry, it is at the heart of positioning systems in GPS navigations. It also contributes significantly to cybersecurity. As it is an irrational number it is an excellent foundation for generating randomness required in encryption and securing communications. In the medical field, it helps to calculate blood flow rates and pressure differentials. In diagnostic tools such as CT scans and MRI, pi is an important component in mathematical algorithms and signal processing techniques.

This elegant, never-ending number demonstrates how mathematics transforms into practical applications that shape our world. The possibilities of what it can do are infinite as the number itself. It has become a symbol of beauty and complexity in mathematics. “It matters little who first arrives at an idea, rather what is significant is how far that idea can go.” said Sophie Germain.

Mathematics fans are intrigued by this irrational number and attempt to calculate it as far as they can. In March 2022, Emma Haruka Iwao of Japan calculated it to 100 trillion decimal places in Google Cloud. It had taken 157 days. The Guinness World Record for reciting the number from memory is held by Rajveer Meena of India for 70000 decimal places over 10 hours.

Happy Pi Day!

The author is a senior examiner of the International Baccalaureate in the UK and an educational consultant at the Overseas School of Colombo.

by R N A de Silva

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Sheer rise of Realpolitik making the world see the brink

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A combined US-Israel attack on Iran.(BBC)

The recent humanly costly torpedoing of an Iranian naval vessel in Sri Lanka’s Exclusive Economic Zone by a US submarine has raised a number of issues of great importance to international political discourse and law that call for elucidation. It is best that enlightened commentary is brought to bear in such discussions because at present misleading and uninformed speculation on questions arising from the incident are being aired by particularly jingoistic politicians of Sri Lanka’s South which could prove deleterious.

As matters stand, there seems to be no credible evidence that the Indian state was aware of the impending torpedoing of the Iranian vessel but these acerbic-tongued politicians of Sri Lanka’s South would have the local public believe that the tragedy was triggered with India’s connivance. Likewise, India is accused of ‘embroiling’ Sri Lanka in the incident on account of seemingly having prior knowledge of it and not warning Sri Lanka about the impending disaster.

It is plain that a process is once again afoot to raise anti-India hysteria in Sri Lanka. An obligation is cast on the Sri Lankan government to ensure that incendiary speculation of the above kind is defeated and India-Sri Lanka relations are prevented from being in any way harmed. Proactive measures are needed by the Sri Lankan government and well meaning quarters to ensure that public discourse in such matters have a factual and rational basis. ‘Knowledge gaps’ could prove hazardous.

Meanwhile, there could be no doubt that Sri Lanka’s sovereignty was violated by the US because the sinking of the Iranian vessel took place in Sri Lanka’s Exclusive Economic Zone. While there is no international decrying of the incident, and this is to be regretted, Sri Lanka’s helplessness and small player status would enable the US to ‘get away with it’.

Could anything be done by the international community to hold the US to account over the act of lawlessness in question? None is the answer at present. This is because in the current ‘Global Disorder’ major powers could commit the gravest international irregularities with impunity. As the threadbare cliché declares, ‘Might is Right’….. or so it seems.

Unfortunately, the UN could only merely verbally denounce any violations of International Law by the world’s foremost powers. It cannot use countervailing force against violators of the law, for example, on account of the divided nature of the UN Security Council, whose permanent members have shown incapability of seeing eye-to-eye on grave matters relating to International Law and order over the decades.

The foregoing considerations could force the conclusion on uncritical sections that Political Realism or Realpolitik has won out in the end. A basic premise of the school of thought known as Political Realism is that power or force wielded by states and international actors determine the shape, direction and substance of international relations. This school stands in marked contrast to political idealists who essentially proclaim that moral norms and values determine the nature of local and international politics.

While, British political scientist Thomas Hobbes, for instance, was a proponent of Political Realism, political idealism has its roots in the teachings of Socrates, Plato and latterly Friedrich Hegel of Germany, to name just few such notables.

On the face of it, therefore, there is no getting way from the conclusion that coercive force is the deciding factor in international politics. If this were not so, US President Donald Trump in collaboration with Israeli Rightist Premier Benjamin Natanyahu could not have wielded the ‘big stick’, so to speak, on Iran, killed its Supreme Head of State, terrorized the Iranian public and gone ‘scot-free’. That is, currently, the US’ impunity seems to be limitless.

Moreover, the evidence is that the Western bloc is reuniting in the face of Iran’s threats to stymie the flow of oil from West Asia to the rest of the world. The recent G7 summit witnessed a coming together of the foremost powers of the global North to ensure that the West does not suffer grave negative consequences from any future blocking of western oil supplies.

Meanwhile, Israel is having a ‘free run’ of the Middle East, so to speak, picking out perceived adversarial powers, such as Lebanon, and militarily neutralizing them; once again with impunity. On the other hand, Iran has been bringing under assault, with no questions asked, Gulf states that are seen as allying with the US and Israel. West Asia is facing a compounded crisis and International Law seems to be helplessly silent.

Wittingly or unwittingly, matters at the heart of International Law and peace are being obfuscated by some pro-Trump administration commentators meanwhile. For example, retired US Navy Captain Brent Sadler has cited Article 51 of the UN Charter, which provides for the right to self or collective self-defence of UN member states in the face of armed attacks, as justifying the US sinking of the Iranian vessel (See page 2 of The Island of March 10, 2026). But the Article makes it clear that such measures could be resorted to by UN members only ‘ if an armed attack occurs’ against them and under no other circumstances. But no such thing happened in the incident in question and the US acted under a sheer threat perception.

Clearly, the US has violated the Article through its action and has once again demonstrated its tendency to arbitrarily use military might. The general drift of Sadler’s thinking is that in the face of pressing national priorities, obligations of a state under International Law could be side-stepped. This is a sure recipe for international anarchy because in such a policy environment states could pursue their national interests, irrespective of their merits, disregarding in the process their obligations towards the international community.

Moreover, Article 51 repeatedly reiterates the authority of the UN Security Council and the obligation of those states that act in self-defence to report to the Council and be guided by it. Sadler, therefore, could be said to have cited the Article very selectively, whereas, right along member states’ commitments to the UNSC are stressed.

However, it is beyond doubt that international anarchy has strengthened its grip over the world. While the US set destabilizing precedents after the crumbling of the Cold War that paved the way for the current anarchic situation, Russia further aggravated these degenerative trends through its invasion of Ukraine. Stepping back from anarchy has thus emerged as the prime challenge for the world community.

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