The global monetary system is on the brink of collapse due to constant inflation created by central banks and fractional reserve banking, potentially leading to hyperinflation as money printing becomes unsustainable.
A currency reset to transition to a sound money standard like gold or Bitcoin may be necessary to prevent further inflation and economic collapse in the US.
The US government could implement a structured reset by issuing gold-backed bonds and Bitcoin-backed bonds, trimming the deficit, and slowly transitioning to a sound money standard.
The US industrial base has been hollowed out due to Triffin’s dilemma, where the reserve currency (dollar) becomes overvalued, making exports less competitive.
The fiat system distorts capital allocation in sectors like energy and manufacturing by making capital “free,” leading to bubbles and an economy living from one bubble to the next.
The US is on an unsustainable fiscal path with a $2 trillion deficit, and even cutting $200 billion in unproductive spending won’t solve the problem.
Central banks are becoming net buyers of gold, and China may have up to 10 times the reported 18,000 tons of gold, potentially reshaping the global monetary system.
Bitcoin’s sound money properties, limited supply, and digital nature make it a potentially better form of collateral than gold for a future monetary system.
Governments may attempt to control or confiscate Bitcoin through KYC, choke points, and seizure of ETFs, but self-custody and the mobile nature of Bitcoiners make it difficult.
The Fed’s inflation solution is consistently to print more money, leading to potential hyperinflation in the long run, as seen in every cycle including COVID, 2008, and 2000.
The US government and the Fed can implement yield curve control, financial repression, and quantitative easing to manage borrowing costs, but it’s unclear if they can avoid a bond market revolt.
The definition of a risk-free asset is changing, with bonds losing significant value in real terms over the past 2-3 years, while Bitcoin and gold have seen substantial increases.
The dollar price of Bitcoin may eventually become meaningless as people start using sats for everyday transactions, with Bitcoin potentially becoming the numeraire in 20 years.
The US government allegedly has 8,000 tons of gold stored at the New York Fed and Fort Knox, but no audit has been conducted since the 1960s.
A potential currency reset could involve the government declaring a return to a gold standard, with gold priced at $30,000 an ounce, leading to extremely high one-time inflation.
Credit card borrowing declined by its second-largest amount since COVID, posting a negative number for the first time since the pandemic, signaling unusual consumer behavior during economic downturns.
The housing market faces dire alternatives: either mortgage rates drop from 6.7% to 4%, or home prices substantially decrease to loosen the market’s vice grip.
The average consumer has been in recession for 4 years, with retail sales stagnant in real terms, while the upper half of the K-shaped economy sustains average statistics.
Student loan delinquency is forecasted to affect 10 million borrowers facing wage garnishment in the coming months, up from 2 million this summer.
The private credit market resembles corporate buy-now-pay-later, with companies constantly piling debt on debt, subordinating new debt, and pushing senior debt holders down the chain.
Buy now pay later transactions are now reported to credit agencies, negatively impacting consumers’ credit scores and borrowing capacity.
The 10-year yield has remained above its 3-4 year moving averages for an unprecedented duration, posing a real existential threat to economic growth.
The credit market is a light switch: on or off, with no dimmer, potentially leading to a sudden flip in risk appetite similar to 2008.
The Federal Reserve’s balance sheet now outweighs the Fed funds rate in determining long rates and will likely be used to monetize massive fiscal stimulus in the economic downturn.
The dollar may pay the price for fiscal spending sins, potentially leading to a change in monetary regime towards a hard asset-backed or commodity-backed currency.
The BRICS coalition is unlikely to be deterred by a potential 10% tariff on member countries due to their long-term focus and investment.
Treasury capital flows data reveals foreign central banks unloaded $110 billion worth of US treasuries in the first six weeks of 2025, accelerating sales at four times the previous rate.
The affluent consumer, accounting for 50% of spending, has been cautious since the start of the year, causing consumer spending to go sideways.
A credit bust triggered by a private equity firm, bank, or other entity could precipitate a broader repricing of credit risk, revealing the economy’s true weakness.
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