A Controlled Unwind and a New Bretton Woods with Bitcoin
For over a century, the global financial system has been increasingly built on papered-over leverage, fiat expansion, and financial engineering. Since 1913, governments, financial institutions, and central banks have systematically distorted money and markets, creating an unsustainable system of derivatives, credit expansion, and hidden leverage.
That’s the state of the system today.
We are witnessing the tough decisions required to begin a great unwind—a shift back to sound money, a purge of systemic leverage, and the restructuring of the monetary order. If controlled, this transition will be painful but orderly. If not, we risk a chaotic collapse akin to 1929 or 2008.
The key players in this transition? Trump and Scott Bessent, who have both signaled a shift back to sound money. But they cannot simply declare a return to a gold-backed dollar overnight. Doing so would implode the current system immediately.
Instead, they appear to be executing a multi-step plan to transition the U.S. financial system away from fiat-based leverage and back toward a structure rooted in gold, commodities, and Bitcoin.
Step 1: The End of the Fiat & Derivative System
For more than a century, the world has been built on leveraged financial claims that far exceed the actual underlying assets.
Gold is the hidden anchor of the system, yet governments and central banks have deliberately suppressed its price through paper derivatives.
Rehypothecation and derivatives have created a massive pyramid of financial claims, where multiple institutions believe they own the same underlying gold, Treasuries, and assets… many times over.
The U.S. debt and Treasury market, supposedly “risk-free,” is now the most fragile part of the financial system, with debt levels soaring beyond sustainability.
Why Now?
Foreign buyers (China, Russia, BRICS nations) have all but stopped accumulating U.S. Treasuries—a clear sign of de-dollarization. De-dollarization efforts are accelerating, as nations seek settlement alternatives outside of the U.S. financial system. At the same time, the dollar is rising as countries scramble for them to pay off dollar-denominated debt. Is it the ultimate catch-22?
U.S. deficits have reached unprecedented levels. We are currently at 123% Debt to GDP while rising interest rates are making debt servicing mathematically unsustainable.
The only realistic way forward is monetary restructuring, either through a controlled transition (Bessent & Trump’s plan) or a disorderly collapse. Oh, and of course we have to cut out the political fraud. Robbing citizens via the tax code to create generational wealth for both sides of the aisle is beyond uncalled for.
Step 2: Signaling the Shift Toward Sound Money
Trump and Bessent appear to be signaling the end of fiat leverage and the return to a more sustainable monetary system.
The purpose of this move?
Send a clear signal to smart money that the system is shifting, pushing intelligent investors to exit paper holdings before an uncontrolled collapse forces them out at a loss.
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