The Next World Reserve Currency
These notes were generated by AI and may contain inaccuracies.
Macro theory: moving from a globalized dollar-based world to a world where power is more evenly distributed. In this transition, the role of the dollar is changing. Current events show the breakdown of the current monetary order.
Gold certificate from 1928 allowed exchange for physical gold at a bank. Silver certificate with blue stamp allowed exchange for silver. Original bank role: protect real money. These certificates did not say Federal Reserve note like today's money. This was the era of hard money.
In 1971, US left the gold standard on the verge of bankruptcy, entering a new monetary order where the dollar became central without backing. Global agreement: countries sell goods and energy in dollars, recycle dollars into US assets like Treasury bonds and US stock market. Stock market rose indefinitely; Americans lived beyond means. This sustained high dollar demand, allowed US trade deficits, cheap borrowing, offshoring jobs, consuming more than producing.
System required strong dollar, maintained by military-industrial complex.
Recent World Economic Forum: conversation on dividing power. Rules-based order fading. Quote: "We believe that from the fracture, we can build something bigger, better, stronger, more just."
New trade agreements; countries diversifying reserves from dollars in treasuries to more hard money like gold and silver, causing repricing and volatility.
This is a hinge point in history every couple of generations.
Countries not dumping dollars overnight to avoid self-harm, but diversifying reserves. Central banks buying more gold instead of only US treasuries. China built payment system independent of US banks.
US faces huge debt problem and shrinking industrial base, can't sustain importing everything, exporting paper money, funding forever wars.
This change explains gold and silver exploding and dollar weakening.
Video explains dollar situation, why plan might be to weaken it, and future direction. Sponsored portion by Weeble later.
Host: Andre Jick. Theory: shifting to regional multi-power system where countries share power; dollar role changes via currency weakness, causing volatility in stock market, commodities, gold, silver, Bitcoin.
Question to Jerome Powell (Fed chair): What's driving US currency lower and volatility?
"We don't comment on the dollar... the administration, especially the Treasury Department, has the job of oversight over the currency and exchange rates... I have nothing for you."
Every dollar bill says Federal Reserve note; Fed actions move the dollar. Fed avoids commenting due to political consequences. President Trump threatened Jerome Powell with criminal charges over interest rates not following presidential preferences (lower rates). Plan B: weaken dollar.
Trump interview on dollar value:
"No, I think it's great... dollar's doing great."
Weaker dollar: good or bad depends on perspective. Two US economies:
- Financialized America (last 40 years): strong dollar, cheap imports, rising asset prices, expanding debt. Strong dollar → cheap imports → higher spending power → more borrowing → bigger financial markets/debt. US main export: dollars, treasury bonds, financial assets. Made America feel richer; incentivized offshoring via NAFTA for cheap labor, borrow cheaply, pump stock values.
Model works if world buys US debt forever.
- Productive America: builds things, produces energy, runs factories. Strong dollar makes US labor expensive, hollows out industry. Weaker dollar lowers real debt burden, makes domestic production competitive, pushes capital to real output/assets vs. financial speculation (benefits banks via high rates, dollar dominance, global lending).
President suing JP Morgan for debanking family.
Weaker dollar good long-term for winning (build real things, like China); bad short-term (painful transition, decades to fix, volatility).
Markets price future events. Weeble prediction markets: positions on S&P 500 next hour, crypto prices, sports, Fed decisions. Yes/no contracts; price at 25 implies 25% probability, updates in real time. Available via registered futures commission merchant; exchange-traded, regulated. Highly speculative; consider risks at weeble.com/policy; consult professionals. Compensated by Weeble Financial LLC.
Everything measured in dollars, but weakening dollar distorts. Measure time in dollars:
- Late 1960s: federal minimum wage $1.40/hour, 40-hour week = $56, bought ~1.6 ounces gold at $35/ounce.
- Today: $7.25/hour, week = $290; at $4,000/ounce gold, need 22 weeks for same 1.6 ounces.
Dollar shrinkage erodes value of time; people can't get ahead.
Dollar shrinks via Keynesian economics, debt-based system on credit. Example: Lend $10 (all money in world) at 1% interest; no money for interest without expansion.
System needs growth/expansion for stability. US as consumer of last resort: world sells to US, earns/recycles dollars into US assets, keeps dollar strong, rates low (e.g., Japan as interest-free lender).
Now changing: countries/central banks diversifying.
Gold overtakes treasuries in central bank foreign exchange reserves (bank's reserve wallet).
Ray Dalio: supply-demand problem for debt (more supply, less demand).
Central banks buying gold aggressively to protect against new system.
Basel 3 (last year): gold valued at market price as higher quality reserve asset (not discounted), more attractive neutral reserve outside dollar system.
Debasement makes asset prices rise in nominal dollars (black line: MSCI index ex-US and incl-US up since 2000). In gold (blue line): markets lost value since 2000.
China/central banks accelerating via gold buys for parallel system.
Structural dollar demand declining (dollars = debt in treasuries); lower demand → future inflation.
Peter Schiff:
"Inflation is going to be much more pernicious over the next few years... gold and silver are a warning."
Dollar weakening serves US competitiveness but brings inflation, especially assets.
Lens of four power players:
- Financial industrial complex (transnational capital): controls financial plumbing (debt/stock markets, proxy votes). Three asset managers control >$30 trillion, influence companies via client votes. Banks want CBDCs to stay relevant. Fine with weaker dollar: measure wealth in real assets (stocks, real estate, infrastructure, energy, commodities) that rise nominally.
Hurts wage earners; benefits asset owners.
- Sovereigns (tier one nations with nukes): want control over supply chains, energy, people. Weaker currency rebalances trade, makes domestic production competitive, reduces deficit dependency.
Deeper layer: competition with China for societal control.
- Tech industrial complex: controls new tech systems amid fading monetary order. Economic transitions coincide with protection systems (digital ID, financial tracking, centralized infrastructure) sold during unrest. Tech as safety solution: digital IDs, social credit scores, car switches.
Mass deportations question: ties to increasing demand for control systems during instability.
- Military-industrial complex: enforces changes via instability (e.g., religion as justifier). Nations invest in defense, energy, strategic leverage, regional proxies, land/resource grabs.
Fork in road: inflation or deflation.
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Inflation path: New Fed chair Kevin Warsh (hawkish past) might lower rates (or not), volatility. Lower rates ease debt rollover. Less treasury demand → more dollars domestic → growing deficits → weaker currency → rising asset prices (stocks, real estate, commodities) nominally, but purchasing power lags for non-asset owners.
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Deflation path: Global investors lose US confidence → capital flight → higher rates → falling asset prices (painful short-term).
Transition favors asset owners over income-reliant (K-shaped world). Tech/AI might bring productivity boom/utopia, but path painful for unprepared.
All political theater; big things pre-negotiated. Link to personal investing below.
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