馃捀 THE GREAT RESET: GOLD STANDARD vs FIAT MONEY CRASH 馃捀
The international monetary system is in ruins. Distrust in fiat money has triumphed, and the causes are linked to a debt crisis. Due to monetary and fiscal imbalances, governments have entered a debt spiral. What are the main reasons for this?
- Increased life expectancy versus retirement age
- Increased debt to pay interest and unproductive spending
- Pension cuts linked to increased technological versus human productivity
- Lack of productive investment in favor of political whims
- Loss of autonomy of Central Banks in favor of politics (State Monetary Interventionism)
- Search for cross-border safe assets in the face of a lack of trust in governments and global institutions
To address this, global central banks (primarily China and Russia) have increased their gold holdings. The main idea is an orderly de-dollarization, where fiat money is backed by a classic, safe haven asset: gold. Although tying productivity to gold would result in long-term stagnation, in the current climate, there is no other option given government waste and lack of trust, as well as more wars that undermine supply chains. In a multipolar world, no single currency will dominate.
The above is reminiscent of the Bretton Woods era. After the collapse of the USD/Gold standard (thanks to the reliance on the US dollar and its technical takeover/stealing of the global gold system), the US had to negotiate with Islamic theocracies to establish a "marriage" called petrodollars. Following the dollar's loss of hegemonic power, gold has appreciated. Therefore, both the US and Europe need to transfer their fiat junk to the citizens of the world (through CBDCs and digital currencies).
Today, the West faces a problem: it can no longer fully manipulate the price of gold, given that it is also listed on the Shanghai Stock Exchange. In this new reset, the unusual rise in the metal could only reflect one hypothesis: a decade of stagflation and an attempt to escape state interventionism and absolutism.
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J. Joel Padilla
Copyright: Joel Padilla 2025
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