Venezuela is not the story – permission is.
When the United States moves to impose control over Venezuela, openly citing narcotics, or oil, or proximity, or presidential dislike, it is not simply intervening in Latin America. It is signaling that power, not restraint, now defines the outer boundary of acceptable behaviour.
This is not new conduct presented as novelty. The United States has intervened before, often forcefully and often hypocritically. It has backed dictators, broken states, and ignored international law when it suited strategic interests. What is new is the total, complete absence of disguise. There is no attempt to frame it in an upholding/ protecting democracy narrative, no multilateral fig leaf, no effort to anchor action in norms that might also bind others. The justification is blunt, transactional and unapologetic.
That shift matters far more than the US’ recent action in Venezuela itself.
For decades, the post-war order rested on a fragile but powerful bargain. Major powers would not always follow the rules, but they would claim to believe in them. That claim mattered. It imposed friction. It slowed escalation. It gave allies diplomatic cover and smaller states a language through which to resist pressure. Even when violated, the rules still exerted gravitational pull.
That gravity is now weakening.
The emerging logic is not legitimacy, but leverage. Access, recognition, sanctions relief, security guarantees and investment flows are no longer embedded in a rules-based framework. They are bargaining chips. Sovereignty is conditional. Geography matters again. Assets matter more.
In that world, Venezuela is not an unique case. It is a precedent.
Once Washington treats its hemisphere as negotiable territory rather than governed space, the signal travels. If proximity justifies intervention, buffer zones become fair game. If energy assets legitimise coercion, so do pipelines, ports, chips and data infrastructure. If historical grievance is sufficient cause, the archive becomes a weapon.
This is why the implications extend far beyond Latin America.
Moscow does not need to invent new arguments for Ukraine. Beijing does not need to clarify its position on Taiwan. Others are watching not for rhetoric but for tolerance. What matters is not what the United States says, but what it demonstrates it can do without consequence.
The result is not immediate chaos. It is something more subtle and more dangerous.
Middle powers are already adjusting. Alignment is no longer framed as values-based. It is situational and reversible. Neutrality has thinned. Hedging has become more expensive. The assumption that rules provide insulation against pressure is fading, replaced by a colder calculus about leverage, exposure and dependency.
This is the real inflection point. Not quite a return to nineteenth-century imperialism, but the quiet normalisation of a world where rules exist until power decides otherwise. In such a system, order does not disappear. It hardens. It becomes legible only to those strong enough to impose it, and unpredictable for everyone else. That is the risk now unfolding. Not disorder, but a disciplined hierarchy with fewer constraints, fewer pretences and far less room for those caught in between.
Venezuela is simply where the signal became impossible to ignore.
Portfolio Implications: The Cost of Permission
For investors, the shift underway is not ideological. It is operational. As constraint weakens, political optionality increases for large powers and shrinks for everyone else. That changes how risk should be priced.
First, geopolitical risk is becoming less episodic and more structural.
Events once treated as tail risks – intervention, asset seizure, retroactive justification, sanctions escalation – are increasingly part of baseline assumptions. Country risk premia should reflect not just domestic policy quality but exposure to great-power leverage.
Second, asset security is now conditional, not assumed.
Energy, minerals, ports, data infrastructure and logistics nodes are no longer neutral investments. They are strategic assets. Ownership structures, political alignment and historical grievance now matter more than contract language alone.
Third, middle-power hedging strategies will generate volatility.
As states rebalance away from single-anchor dependence, capital flows will be choppier, FX regimes more managed and policy signalling less transparent. Expect more administrative controls, quiet regulatory tweaks and selective capital discrimination.
Fourth, alliances no longer guarantee insulation.
Formal alignment does not eliminate exposure if interests diverge. Markets should expect sharper repricing when political cover weakens – particularly in jurisdictions assumed to sit comfortably inside a rules-based perimeter.
Finally, predictability is becoming asymmetric.
For dominant powers, the system is increasingly navigable. For everyone else, outcomes depend less on compliance and more on leverage. That widens dispersion across EM and FM assets and raises the premium on political intelligence over headline data.
The takeaway is simple. This is not a world collapsing into chaos. It is a world consolidating power with fewer constraints. Portfolios built on assumptions of restraint, predictability and norm-based protection will need to adjust accordingly.
How We Think
We are not moving into a world without rules. We are moving into a world where rules apply selectively, are enforced asymmetrically and are increasingly subordinate to leverage. The task now is not to debate whether this shift is good or bad, but to recognise it early, map where constraint is thinning and position accordingly. In that environment, the greatest risk is not volatility. It is mistaking habit for protection.
The Great Game is back – but without any pretence of decency or fairness.
Check back in with us soon for more.