Transition to the World’s New (Reset) Financial System

By: Raymond_Matison

Fiat monetary system since 1971, and its decline
As America’s currency printing became untethered from the restraints of previously-limiting gold backing in 1971, currency and debt started its relentless expansion to accommodate the worldwide demand for our dollars as a global trade and reserve currency.  Increasing confidence in this incredible privilege promoted growing domestic fiscal irresponsibility from our politicians, as budget deficits continued to escalate dangerously, and expand national debt.

It is arguable that our nation’s debt has been unsustainable already for more than a decade; now we are simply increasingly experiencing its consequences – which is long-term product price inflation reflecting loss in the value of our currency, resistance to and reduction of the U.S.  dollar in trade (de-dollarization), and diminished America’s global hegemony.  Confirmation in this global shift is seen from the massive purchase of gold by many of the world’s central and even some large domestic commercial banks, and development of non-western trade -increasingly without the use of our dollar.

Foreign countries have reduced or are no longer buying our treasury debt, but instead are selling it to buy gold.  While central banks of foreign countries are proactively accumulating gold, America’s official gold hoard, arguably the largest in the world, has not been audited since the 1950s, and there is credible suspicion that this gold may have been leased to other parties and sold such that its actual recovery is questionable.  In addition, unofficial or secretive accumulation of gold by foreign countries, may now surpass America’s official holding. 

We are rapidly moving from a system where debt was/is still used to create currency money, and is now failing from its unsustainable debt and debt service, to a new globalized, tokenized, asset-based technologically-advanced blockchain system, which as a consequence may give governments the power to partially reduce or completely reset their unsustainable debt of its prior fiat and debt-based system.

Money throughout history has been gold and silver.  Later governments introduced paper currency convertible, at the option of the holder, into gold and silver.  Soon thereafter, banks simply “backed” the paper currency with gold – moving people further away from direct convertibility and ownership of historic money. 

Backing the currency, implied that government would print no more than a limited amount of currency based on the actual amount of gold it held.  In 1971, the gold backing of our currency was completely abandoned, allowing the government to issue any amount of currency it wanted or needed.   Of course, new “money” was also created with commercial bank lending and the introduction of credit cards – another form of debt-based money.  Combined, debt and credit grew to become the disruptive elephant at the Federal Reserve.  Eventually, debt service and shortage of liquidity (availability of cash) overwhelmed the debt-based monetary system requiring its reset, and the introduction of a new technology-driven digitized asset-backed monetary system for the U.S, and the world.

Gold used to, and may yet again back some significant currencies, and in a new technologically transitioned monetary system tokenized assets will likely back the new system.  Thus, the virtual coins of platforms which have a use case, will provide a liquidity bridge between the new tokenized assets.  This capability will drive adoption to a new tokenized asset-backed monetary system and make stablecoins the new embraceable currency.

Aggressive U.S. policy regarding sanctions and trade tariffs will likely scare or incentivize foreign governments from purchasing new or additional US debt, thereby accelerating our debt spiral.  In addition, the long overdue Moody’s rating reduction of U.S. debt this year (Standard & Poor’s reduced their rating in 2011) adds to concerns about the quality of our debt, increasing its interest rate, yet reducing its demand.  In addition, China’s Dagong Global Credit Rating reduction of U.S. debt in 2025 from A- to BBB+ raises investment portfolio questions as to how much exposure should any country have of a government’s debt issue with rating of barely investment grade.

BRICS trade currency

BRICS as in Brazil, Russia, China, India, and South Africa is developing a new trade settlement system that bypasses the dollar, and therefore is an existential threat to England’s and America’s colonialist western hegemonic financial architecture.  Their new trade settlement system, is very likely to be backed by gold, which is something the western nations may be unwilling or not able to do.  The message is simply that the world is now transitioning to an asset-based monetary system, from the already demonstrably failing debt-based system.  Additional affirmation of such a system could be announced at BRICS July 2025 meeting in Brazil.

BRICS nations will surely continue reducing their use of the dollar, since its use cost over the last fifty years has been financially painful.  Also, the partially broken trust of a neutral reserve currency coming from sanctions now precludes countries from trusting the United States or its dollar.  In an irreversibly debilitating act, the seizure of Russia’s dollar reserves now completely eliminates trust in our western monetary system for other foreign countries, an act which could even make the dollar untrustworthy by/for some American citizens - making the old financial system now deeply suspect and eventually unacceptable.

The new trade settlement system of BRICS member countries will not create a new competing reserve or global currency to the dollar, but it instead will allow its trading countries to simply avoid the dollar and its inherent frictional costs, making global trade less costly and more efficient.

Incoming asset-based blockchain system

Offsetting this decline in use of our dollar, is the coming use of U.S. stablecoins that will not only increase demand for the dollar with increased usage of crypto transactions, but it also can somewhat increase demand for our federal debt.  The U.S. stablecoin is a tokenized version of the U.S. dollar.  It is usable as the on/off ramp to Web3 crypto space, and can and will be used to make payments in the new digitized economy.  Stablecoins are backed by its underlying asset, Federal Reserve Securities – bills and short-term notes.  However, the rules at present are such that you do not earn interest on these stablecoins – instead, the issuer does.  This is a great incentive for issuers to profit at your expense, and issue stablecoins.  Consequently, many private issuers of many countries will also purchase Treasury bills and notes increasing demand for all Treasury securities and strengthening the dollar.  

Stablecoins will delay the demise of our dollar, as our dollar and stablecoins only gradually lose its value from continued fiat currency emission.  In addition, concerns over military conflict rising to the level of war will cause foreign wealth to flee to America, strengthening our dollar on an intermediate time basis.  But over a longer time frame, it is clear that the entrenched global trends are unstoppable and will result in the decline of America’s king dollar and its position as a global hegemon.

As government continues to increase its borrowing to cover its budget deficit and debt service costs, the dollar will continue to lose value with time, and become continually less used for trade by foreign entities.   Neither military threats nor sanctions will reverse this trend for the non-western world to simply not use the dollar.

In other strategies to maintain dollars use, some strategists inside and outside the government are suggesting that gold should be revalued from the $44 price at which it is valued at the Treasury on its books to its current market price of over $3300 per ounce, or some arbitrary sum even higher as a means to provide new funds to government.   Our financial press is broadcasting that gold has risen to over $3300 per ounce – no one is willing to acknowledge that the dollar has collapsed in value such that instead of it requiring $35 dollars to purchase a one-ounce gold coin, it now requires over $3300 to make that purchase.  This, folks, confirms the near complete value collapse of our dollar currency.  

Many crypto followers pontificate that bitcoin will rise to a million dollars or more in the coming years.  Also, few are willing to observe that after decades, the repression of the gold price by our government is finally failing.  Fewer still are willing to note that it is the dollar that is miserably failing, and that it is the reason for rising prices, including those of food, cryptocurrencies and bitcoin.  Let us speak the obvious truth: bitcoin will go to a million-dollar price, at the time the purchasing value of our dollar itself approaches zero.  Since 1971, according to the not completely reliable government CPI data, the dollar’s purchasing value has already declined by 87.5%.  

Our FED system owners have, and continue to take action which it knows will completely destroy our currency.  Under such circumstances, bitcoin can easily be priced over $1 million per coin as a simple egg may eventually cost tens or hundreds of dollars.  After WWI, in 1921, one could buy four eggs for one Reichsmark in Weimar Germany; but by the end of 1923 just one egg cost one billion Reichsmarks.  Therefore, are we now near the end of our empire?  Well, not today, as it has taken Britain decades to nearly a century to lose its prior hegemon status.

The dollar will not likely lose value quickly – but steadily over future years.  Fifty years ago, it was the petrodollar agreement that stopped the dollar from losing its value; today it is stablecoins that is delaying the dollar’s quick and full demise.  At the same time the advent of blockchain technology, tokenization of traditional assets and global adoption of digital currencies is bringing forth the new asset-backed monetary system.  The confluence of these notable historical events makes it impossible to forecast the actual sequence and economic impact of these global events, but it should be clear that they will be historic and momentous.  

Non-economic forces and the global financial reset

President Trump has been economically and geopolitically very active in trying to improve America’s economic status, stating that foreign countries have “been ripping off America in trade for years”.  He seems genuine in his criticism.  But how can any country in this world force the United States, with the world’s largest economy with its global currency the dollar, with the mightiest military in the world be put in a position of being ripped off.  It can’t.   Instead, this requires the direct acquiescence or active participation of our own corrupt politicians to compromise.   We did it to ourselves.

President Trump also announced that he would end the Ukrainian war before being confirmed.  This still has not happened.  It was easy to achieve by simply declaring that the U.S. would not participate in any future strategic information, armament, or funding towards the Ukrainian war, and it would be over.   But it seems that a new vector in this war has developed. 

Our president, who is preaching peace to end wars, strangely has provided the largest increase to our defense budget raising it to a record level.  In addition, the U.S. and the rest of NATO have permitted its missiles now unlimited range to be detonated deep within Russia’s landmass.  Recently, president Trump has called president Putin “crazy” for not doing what Mr. Trump expects in proposed peace negotiations.  Lastly, his supposed private praising of Ukraine’s recent successful drone strike on Russian bombers would suggest alternating allegiances to peace and war.  Serious current considerations to create new sanctions against Europe for buying energy products from Russia conspire to weaken both Europe and Russia – a contrary policy to foster peace, but a total win for maintaining America’s hegemony.  From a conspiracy perspective, all of this actually appears as a carefully choreographed plan to goad Russia into a broader European war, which may lead to a dangerous WWIII.

To be charitable, it seems likely that Mr. Trump has been “captured by the neocons of the swamp” to do their bidding.  Historically, they used sanctions and blockades to deny Japan strategic resources which were successfully used to draw Japan into attacking Pearl Harbor, even as our government knew of this attack yet allowed it to happen - just so that it could provide the necessary broad popular support for the U.S. to enter WWII.  We again have carefully and deceitfully, positioned ourselves to be peaceful, while orchestrating and promoting the next global world war by providing targeting intelligence to destroy a portion of Russia’s nuclear deterrent force with drones which needed complicity outside Ukraine.

Martin Armstrong’s book “The Plot to Seize Russia” published in 2023, outlines how a number of powerful global players wanted to overthrow Russia’s government in the 1990s in order to seize and plunder its immense natural wealth.  Our deep state, neocon, and swamp controllers are self-interestedly focused on foreign war-promoting policy because that is where domestically trillions of dollars are available for capture and profit from government.  That also explains why we have been and still are a waring nation.   As marine general Smedley Butler, and winner of two congressional awards said in after WWI, “war is a racket”.   War is indeed immensely profitable to its protagonists, and some people and companies are currently profiting immensely from our proxy war with Russia in Ukraine. 

We seem also to be positioning for continued trade, scientific, technological, monetary, financial, economic and possibly military conflict with China.  We take pride as being “the exceptional nation”.  However, biology does not seem discriminatory, and intelligence has been evenly distributed among the world’s inhabitants.  In the most recent several decade’s important tech development of blockchain, digital assets, AI, Web2-3, and new global monetary systems, foreign people’s contribution is inescapably notable.  In the broad blockchain world, keystone platforms such as Bitcoin, Ehereum, Solana, Chainlink are foundational to this new technology.  Ethereum’s founder Vitalik Buterin, and Chainlink’s founder Sergey Nazarov, were born in Russia; Solana’s founder Anatoly Yakovenko was born in Ukraine, and Bitcoin’s founder Satoshi Nakamoto decidedly does not seem to be of western origin, while Chinese are the largest miners of Bitcoin.  Their world impacting innovations were developed in America, still the land of opportunity, which bring huge economic benefits to America.  Yet our political leaders are provoking geopolitical conflict with these nations?  If this is the action of an exceptional nation, it seems exceptionally stupid.  With our persistent war-goading policy we are risking incinerating the world’s inhabitants and ending humanity - instead of celebrating the exceptional contributions of the world’s great genius innovators, and their diverse ethnic differences.

Tomorrow’s view of our blockchain reset monetary world.

As long as our national debt grows faster than the economy, our dollar will continue to lose value through inflation.   Foreseeable currency collapse and high technology disruptive digital asset development has driven government agencies and the Federal Reserve to reset our monetary system.  Their necessary synchronization with international organizations such as the IMF and BIS, BRICS, major foreign countries such as China, and independent technological innovators of Web3, Bitcoin, and other industry changing platforms such as blockchain will delay its actual implementation.  Unilateral sanctions and tariffs from a global hegemon losing its former leadership also impedes this goal.  Regardless, contrary to centralized interests, an advanced technology new financial structure is also being put in place by those opposed to historical financial or military colonialism, offering actual sovereignty to non-western nations around the globe.

Our new monetary system will initially operate on domestic fiat currency, supported by creating on chain stablecoins, which are tokenized dollars.  Our stablecoin will be backed by treasury securities, which will reduce their supply making such securities stronger globally.  Stablecoins, with the utility of the internet become digital money, are also the on and off ramps to the digital asset space that will serve to make faster payments, be a temporary store of value, and a bridge for citizens to access crypto.    

Bitcoin will be a part of this new digital monetary system, once bitcoin becomes tokanized.  While its transactions are too expensive and slow on their own, “wrapping” or tokenizing bitcoin by a faster cheaper digital platform will bring it attributes which will make it useful, and solve most of its present protocol deficiencies.   By using faster and cheaper digital rails of a money transfer platform with smart contract capabilities, the new system should function quite effectively on a global basis without any banking intermediaries.  This new system requires tokenizing capability and global exchange platform payment rails which likely will be provided by the Ripple and XRP’s liquidity tokens, and thus it may become the gateway and backbone of the new financial system.  U.S. strategic reserves and wealth fund may help reduce our national debt in the future.

The antiquated method for international transfer of funds of messaging and settlement will be replaced by the simple function of sending tokens through the internet on a blockchain.  The transparency of transactions on blockchains will simplify all accounting and auditing, and should reduce fraud.  The asset-backed tokens will become the exchange of value and foundation of the new financial system, whereas liability fiat-based money will eventually become extinct.

We presently live in a false calm, similar to that provided by the eye of a great hurricane.  But very soon the debt and inflation black hole, and technology’s replacement and disintermediation of our fiat monetary system with active support from the global south, together with continued military conflict in this world instigated by a declining hegemon will combine to manifest itself with a fury that will destroy much that is in its path.   After this chaos which could take ten years to subside, and reset to the new technology-driven monetary system, with truer sovereignty of many formerly militarily or financially colonized nations, the storm will die down, and life will be able to resume its unrelenting path to a new and sunny day.

Raymond Matison

Mr. Matison was an Institutional Investor magazine top ten financial analyst of the insurance industry, founded Kidder Peabody’s investment banking activities in the insurance industry, and was a Director, Investment Banking in Merrill Lynch Capital Markets.   He can be e-mailed at rmatison@msn.com

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