The BRICS Pay system, settling in 7 seconds and reducing fees by 98%, is being rolled out to 75% of the world’s population through the Belt Road Initiative, challenging the dollar’s reserve status.
Chief investment officers of Morgan Stanley and Bank of America have shifted portfolio allocations away from 40% US Treasury towards precious metals, which have outperformed US Treasuries over the last 25 years.
Saudi Arabia is building a vault to settle in gold, further challenging the dollar’s reserve status and contributing to the erosion of dollar’s global dominance.
Saving in dollars is considered the worst decision in the current environment, with the dollar losing 11% against a basket of currencies and 50% against gold and silver.
Gold is viewed as the only legal form of money for final settlement, with silver also recommended as a good option for preserving wealth.
Precious metals, equities, and cryptocurrencies are suggested as better options for mitigating exposure to the US dollar’s declining purchasing power.
Cryptocurrencies are described as a speculative mania with no legal standing, used by crooks and shysters, according to Alasdair MacLeod.
The US dollar’s purchasing power is expected to decline by 75% over the next 20 years, but it will likely remain the world’s reserve currency due to being the only global currency without a built-in constituency for devaluation.
The next decade is predicted to be challenging for those unprepared, necessitating a shift in investment strategies and asset allocation.
Money managers and asset managers are advised to reduce exposure to the US dollar and diversify into real assets like precious metals, equities, and cryptocurrencies to survive and thrive in the changing global monetary landscape.
China has accumulated 75,500 tons of gold since 1983, accounting for 35-36% of the world’s above-ground gold stock, creating a squeeze on the gold market.
The paper market will likely experience a major move into metals as prices rise, with insufficient physical bullion leading to soaring prices and a potential crisis.
A credit bubble burst is expected by year-end, potentially triggering a 1987-style or 1929-style crash due to record market leverage.
Goldman Sachs predicts gold prices to reach $4,000 by year-end, but physical bullion scarcity may cause a crisis.
The gold to silver ratio is expected to fall below 50, with silver outperforming gold as confidence in fiat currencies wanes.
The physical gold market has shifted to Shanghai, with the futures market becoming less reliable for indicating physical prices.
Fed interest rate cuts are considered misguided, as they won’t address the dollar’s purchasing power collapse driving gold prices up.
The Fed’s attempts to stop deflation by cutting rates may leave them wrongfooted when the crisis occurs.
The dollar is uniquely vulnerable to the credit bubble popping due to enormous foreign exposure, while Americans have limited exposure to foreign currencies.
The Fed’s basic function to protect everyone may lead to injecting money into struggling companies, contrasting with the 1929-32 scenario where 10,000 banks failed and the money supply contracted.
The barter story of money’s origin, first told by Aristotle, explains how money spontaneously emerges through direct and indirect exchange without being invented.
Carl Menger’s theory describes how unmarketable goods are traded for increasingly valuable ones, snowballing into a marketable good that becomes money.
The Misesian regression theorem is the only existing explanation for money’s value, requiring that money initially be a marketable good involved in trading.
The anti-barter story literature, led by Polanyi and Dalton, claims markets and money are recent phenomena, despite Aristotle describing market exchanges in the 4th century BC.
David Graeber’s argument that the barter story has been refuted is based on a flawed logical argument using the 20th-century Buryat Mongols experience.
The barter story has policy implications for the MMT movement, which claims the state creates money and sees private sector money creation as ideological.
Professor Georgy Ganev’s paper provides evidence that the Mengerian barter theory of money’s origin is still valid despite claims of refutation.
The absence of evidence for pure barter economies supports the Mengerian theory, as it only requires some barter for the most marketable good to become money.
Thomas Krump’s work supports the barter theory by acknowledging the existence of money and barter, albeit not as common arrangements.
The regression theorem remains the only coherent explanation for money’s value in modern economics, based on the value of exchangeable goods and services.
Archaeological evidence and historical records support the barter story, showing people have engaged in exchanges for thousands of years.
Central bank buying, particularly from countries like Russia, China, India, Japan, Turkey, and Iran, is driving a major bull market in gold, creating a price floor and offering unlimited upside potential for investors.
Gold serves as an “everything hedge”, protecting against deflation, inflation, social unrest, natural disasters, wars, and general uncertainty, as evidenced by its 75% increase during the Great Depression while the Dow Jones fell 82%.
James Rickards predicts a gold price of $23,000 due to spiraling debt and deficits, continued central bank stacking, and the metal’s renewed role as money.
Silver, being both a precious metal and industrial commodity, offers a more practical alternative to gold for everyday transactions and “walking around money” in crisis situations.
The silver price is expected to rise faster and more dramatically than anticipated, catching up to gold’s performance as it reaches higher levels.
The US Treasury market faces potential collapse if the United States continues to weaponize the dollar, driving investors towards alternative assets.
Rickards views the Russia-Ukraine conflict as “Trump’s Vietnam”, a war inherited and escalating as Russia gains more territory.
The greatest threat to America is identified as internal enemies, including lone wolf attacks and sniper attacks on ICE detention centers, facilitated by dark web services.
Rickards criticizes the US for failing to address internal enemies, such as neocons in Washington driving the Ukraine war, and urges a focus on domestic issues over foreign conflicts.
The justice department and FBI should prioritize shutting down online services that encourage and coach vulnerable individuals to carry out domestic attacks.
The US is in an era of fiscal dominance, where deficit spending becomes the primary determinant of economic growth and inflation, overshadowing monetary policy and private sector lending.
The 2025 US fiscal deficit is projected to be the 3rd largest in history, behind only the COVID emergency spending years of 2020 and 2021, despite no ongoing global pandemic or economic lockdown.
Fiscal dominance creates a two-speed economy, benefiting wealthier investors through asset price appreciation while middle-class workers struggle with inflation, high mortgage rates, and tight monetary policy.
The US deficit is primarily composed of the “big four” spending areas: social security, Medicare, defense, and interest on debt, which are politically difficult to cut due to their popularity among voters and lobbyists.
Healthcare costs and demographics are major long-term structural issues driving the deficit, making it challenging to address without unpopular decisions.
The US trade deficit and fiscal deficit are interconnected due to the global reserve status of the dollar, with excess dollar demand fueling trade deficits and artificially boosting import power.
The “heavy is the head that wears the crown” concept from Lyn Alden’s book “Broken Money” highlights the significance of the US dollar’s global reserve status in shaping economic dynamics.
In a fiscally dominant environment, value equities, particularly medium-sized banks in good financial shape, are attractive investments as they are less likely to be impaired by recession.
Emerging markets, including Brazil, offer investment opportunities in a fiscally dominant environment, potentially benefiting from dollar weakness.
Energy pipelines, especially midstream companies and limited partnerships (MLPs), are considered attractive for income-focused investors due to reasonable pricing and higher yields.
Under fiscal dominance, recessions may manifest as shallower, stagflationary periods of malaise rather than severe busts, characterized by above-target inflation and mild economic downturns.
The AI capex flywheel is a key variable to watch in the next 6-12 months, with potential risks of overinvestment echoing the dot-com era.
The new administration’s policies have shown strong trade focus but mixed execution, with tariffs potentially acting more as a tax on Americans than achieving trade wins.
Freedom of speech remains a bedrock value, with decentralized social media solutions like the Nostr protocol emerging to protect free expression in the digital age.
China’s 10-year strategy aims to accumulate gold, diversify from the US dollar, and shift global financial power through new offshore gold vaults in Hong Kong, Singapore, Zurich, and Dubai.
Central banks are diversifying away from the dollar, making gold the second most held reserve asset worldwide, ahead of the euro.
China’s gold accumulation strategy focuses on centralizing power by controlling gold storage locations, security, and insulation from Western policies.
The strategy seeks to “redistrict the globe” around gold as a hard currency, creating a new power base and increasing high-quality gold trading globally.
China’s gold stockpiling aims to circumvent external economic threats like account freezing by maintaining a physical gold reserve for rapid liquidity conversion.
Gold prices are projected to surge toward $4,500, while silver is expected to reach $60, as more nations move their gold reserves to Eastern hubs.
Exploding government debt is forcing countries to prioritize debt management over traditional economic goals like jobs and inflation, with interest payments on national debt costing $360 billion per year for every point increase in interest rates.
Fiscal dominance effectively castrates central banks by nullifying their primary tools of rate adjustments, compelling them to maintain low rates and engage in quantitative easing (QE) to finance mounting debt.
The current national debt of 120% of GDP means that even a Fed rate hike to 19% (as done in the 1970s to combat inflation) would now strangle the economy and cancel the deficit, unlike when debt was 10 times smaller.
With the current $2 trillion deficit, of which half is debt interest, an increase in debt interest rate to 19% would balloon the deficit to $3.12 trillion in 12 months and nearly $5 trillion in 2 more years, approaching 20% of GDP.
The Fed is forced to become the buyer of last resort, printing money to finance the deficit, which exacerbates inflation, as seen in countries like Turkey or Sri Lanka that “blow out” at 10% deficit, with investors unlikely to buy a 20% deficit.
The US dollar default is inevitable due to unsustainable debt levels, with Rick Rule expecting a 75% loss in purchasing power over the next decade, mirroring the 1970s.
Central banks continue buying gold due to US dollar weaponization, viewing US Treasuries as an arithmetically bad deal offering 4.5% yield in a currency deteriorating at 8%.
The S&P 500 is 40% comprised of just seven stocks, making it difficult to value relative to gold, prompting a focus on absolute markets.
Gold prices could triple or quadruple in the next decade, driven by the decline in fiat currency purchasing power and investor sentiment towards savings instruments.
Top mining CEOs include Amar Aljundi (Agnico Eagle), Randy Smallwood (Wheaton), and Franco Nevada’s corporate culture, with emerging leaders like Alexandra (Empress Royalty) and Craig Perry (Visa Silver).
Rick Rule sells junior gold stocks to de-risk his portfolio, believing their cash-flow negative status will underperform top gold mining companies as gold prices rise.
The copper price is expected to be materially higher in five years due to structural supply deficits caused by underinvestment in new projects and sustaining capital.
The rare earths market is becoming more competitive as China’s cost advantage erodes, benefiting companies with cost-competitive heavy rare earths deposits outside China.
Argentina has huge potential for growth in oil, gas, mining, and infrastructure if President Milei can secure fiscal stability agreements and increase foreign investment.
The US government faces two default options: an honest default admitting inability to pay, or a more likely dishonest default inflating away debt value through the political process.
The long end of the market is becoming market-driven, not Fed-controlled, with higher yields expected as the market attempts to finance the growing debt.
Money is an exchange commodity, not a production commodity, allowing prices to adjust to any amount of money, making any quantity sufficient for economic growth and population expansion.
In a well-functioning economy with a private money supply, prices would naturally decrease, as evidenced by the falling costs of electronics and other non-government regulated goods and services.
The Federal Reserve Act’s goal of providing an elastic currency was based on a flawed solution to banking panics, shifting the risks of poor banking practices to the public through inflationary credit expansions.
In a free banking system with fractional reserve banking, banks compete by issuing fiduciary media backed by reserves, with the potential for bank failures if reserves are insufficient.
Wealthy individuals benefit disproportionately from monetary inflation through increased asset prices and reduced debt payments, while low-income individuals face higher expenses without a net increase in living standards.
The central bank’s constant inflation policy is based on the myth that poor people benefit from a depreciating currency, when in reality, rich people benefit more due to their higher debt levels.
The Austrian school of economics argues that deflation is a natural and beneficial process for economic growth and higher living standards, allowing for price discovery and resource allocation based on market forces.
Any amount of money is viable for economic growth as long as prices adjust, with gold’s divisibility making it technologically easy to transact with even minute quantities.
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