Summary
The failing banking system is driving a global monetary reset towards digital currencies and asset tokenization, highlighting the importance of investing in precious metals like gold and silver as a hedge against economic instability.
Economic Reset and Digital Currencies
Central Bank Digital Currencies (CBDCs) and asset tokenization are emerging as potential solutions for a global monetary reset, with China’s digital currency system serving as a real-world example.
Record debt, asset bubbles, and de-dollarization are signaling an impending global monetary reset, with precious metals like gold and silver recommended as hedges.
Central banks are purchasing gold at the highest rate in years, viewing it as a last-resort currency if CBDCs fail, potentially tying gold to CBDCs as a reserve requirement.
Precious Metals and Investing
Investing 10% of income in gold or precious metals is advised, as they maintain value over time compared to fiat currencies, with dollar-cost averaging recommended to avoid emotional decisions.
A high-end financial planner revealed that investing in gold would have outperformed their 35 years of algorithmic trading for wealthy clients.
The stock market peaked in 2000 on a gold basis, meaning the amount of gold needed to buy major indices peaked then, despite current nominal stock market highs.
Silver Market Dynamics
Silver has underperformed compared to gold over the last 10-15 years, with its industrial use and the psychology of money dominating the market, overshadowing its potential as a monetary asset.
For silver to function as money, its price would need to reach approximately $200/oz, but it’s currently treated primarily as an industrial metal in the Western Hemisphere.
Currency Devaluation and Inflation
The US dollar has collapsed since 1913, now worth only 1.5% of its original value, with 6 pennies now equaling the price of 1 Starbucks coffee.
The Zimbabwe dollar hyperinflation example demonstrates how quickly a currency can collapse, going from 1:1 with the US dollar to 50-100 million Zims for a Coke in just 18 months.
Alternative Perspectives
Tango dancing is used as a metaphor for money issues, emphasizing the need for a consciousness shift to break free from money’s control mechanism.
Tokenizing real-world assets like parks, minerals, and animals could provide collateral to back the $36 trillion US debt, potentially extending the current financial system’s lifespan.