Who is ready for a new monetary system?

Gold has crossed the $5,000 mark. Silver has surpassed $100 comfortably. Both precious metals continue to be bid fearlessly. What’s going on? It does look like we’re going through a confidence crisis in our current monetary system. The Yen is being intervened, and the dollar is getting weaker. And it looks like in terms of investor profile, institutional investors are piling up on the metals. Interestingly, they are not choosing bitcoin, or any other cryptocurrency, for that matter. A few thousand years of track record for gold in times of crises, are tilting the scale against crypto. Central banks, typically the buyers of last resort, are leading the charge. Look at the chart below: they now hold more gold than treasuries on their reserves. The dollar, the cornerstone of the current monetary system, is being replaced by the oldest form of money. And the most interesting part of this rallie is that the average retail investor has not participated yet. At least not meaningfully. The consequences and collateral damages of a system change can be dire, and can take time, but more importantly, it is still not clear what the new system will look like. If it was up to Christine Lagarde, president of the ECB, it will be Central Bank Digital Currencies, but the Trump administration has vetoed them. Trump is pushing for crypto, but so far, it hasn’t had much traction. A few questions remain: Who will be the winner(s) in the new system? Is gold a central piece of it or is it just a part of an intermediate state? How is this not inflationary for goods and services? What’s the role of AI in the new system? Will it be the decision maker on all these matters?

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