On Feb. 6, the total outstanding public debt of the U.S. federal government had exceeded 341 trillion dollars, 122 percent of the country's GDP5%, according to Goldman Sachs, at present, the time required for each trillion dollars of new debt has been shortened from the earliest six years to three months today, and worse, this debt snowball mountain will only get bigger and bigger, and it is clear that the macro environment of the US economy is now monetized debt.
Not only that, but on February 1, the U.S. Treasury Department also increased the size of its quarterly long-term bond issuance for the third time in a row, issuing $121 billion in three-year, 10-year and 30-year bonds in the refinancing operation, and increasing the five-year TIPS in April to $23 billion. In addition, it will increase the issuance size of the 10-year TIPS reopened in March to $16 billion, which will exacerbate the soaring US debt deficit and interest cost expenses, and eventually plunge the dollar into a spiral of collapse.
In this regard, Egvon, a legend who has successfully ** US quantitative easing and historical fluctuations in monetary history. In a report published on February 2, Egon von Greyerz said that since 1971, when Nixon lifted the dollar and most currencies off the gold standard, the U.S. debt spree began, and the U.S. dollar has depreciated by 97% in real terms, according to Egervon. Grayers mentioned that a revaluation of the value and position of the currency is imminent in the coming years.
Because the dilemma of such a huge monetary debt printed out of thin air by the United States is that it will lead to the fact that the debt will never be truly repaid, so that for the dollar, the inevitable consequence is that there will be a collapse and reset, and the value and credit of the dollar will shrink faster.
Therefore, from this point alone, the decoupling of the dollar from ** itself is an indication that the credit of the dollar is being lost, which shows that the dollar has a shelf life, the dollar is not gold, the real gold is, and at this critical moment when the dollar is thundering, there is something unexpected for Wall Street traders.
According to the announcement issued by the authorities of Hawaii, Georgia and Iowa on February 1, the three states have passed a bill (HB1724, HB895 and SF2108) to define ** as legal tender, which will treat ** and ** as the same legal tender as the US dollar, and cancel the state capital gains tax, and prohibit the state from seizing ** and ** (please refer to the figure below for details).
This also means that 35 states in the United States have officially declared their financial and monetary independence, **and** began to perform the general equivalent function in the commodity trading process, and can be used to repay the US debt and taxes in exchange currency, in order to cope with the decline in the purchasing power of the US dollar and inflation and other uncertain risks, these 35 states have laid the foundation for the abolition of the Fed's monopoly on the dollar.
We note that these bills also take additional steps to require states** to create a framework that allows the use of electronic digital currencies backed by fiat currencies within the state, thereby promoting the use of sound money. In fact, this will make it easy for people to pay with ** in their daily transactions.
We note that since the beginning of this year, several US states have taken the same steps (see the chart below for details), and as more US states begin to lose value with the US dollar, this will mean that the US economy may enter a hollow state where the trillion-dollar debt deficit may not be able to pay. At this critical juncture, another unexpected event occurred on Wall Street.
It is against this backdrop that US Senators Bryan Hughes and Mike of Texas. Mark Dorazio again submitted an updated proposal to Congress on February 2 (SB2334, see the picture below for details), calling for a return to the gold standard, which also made Texas the first to stop the dollar, and the proposal to return to the gold standard in the United States made headlines.
We note that these two parliamentarians made these remarks at a time when many countries were abandoning the gold standard in favor of digital currencies. Coincidentally, Georgia State Assemblymember Marjorie Taylor Green also proposed a similar return to a digital currency backed by ** in November last year.
Again, this can be seen in the fact that in recent months, we have checked the latest data released by the US Mint that more and more Americans are hoarding gold coins to combat the rapid decline in the purchasing power of the dollar, and this can also be seen in the phenomenon that global central banks are currently selling US bonds at the fastest pace in nine years and hoarding at the fastest rate in 55 years, these US lawmakers are calling for Texas to return to the gold standard as soon as possible when the world's central banks are developing digital currencies that are anchored**, The establishment and issuance of a digital currency backed by 100%** reserves, making the currency unpegged to the US dollar, officially halting the US dollar, and laying the foundation for the abolition of the Fed's monopoly on the US dollar.
This means that Texas will support the recent proposal by Congressman Alex Mooney to restore the 1971 gold standard, and returning to the gold standard would actually require the dollar to be put under the control of the states with the largest metal stockpiles.
This will clearly be seen as a clear halt to the existing dollar-dominated US financial system and the spread of distrust of the dollar, which is once again unexpected by Wall Street.
The actual way they mentioned in the draft is that the American people will buy digital currencies from the Texas authorities, and then the state authorities will use the money to buy them**. Then, these ** are stored in the gold and silver vaults of Texas, which means that people in Texas have direct access to their**. This also means that the digital currencies backed by ** are widely accepted (see the chart below for details).
They further said in their proposal that state authorities would ensure that they had enough ** to redeem all digital currency units that had been issued but not yet redeemed into ** or dollars, and that the gold standard would prevent the United States from irresponsible spending habits and the creation of dollars out of thin air to recover the loss of credibility after the dollar had caused damage to the sound monetary system of the United States, suggesting that Texas is paving the way for a new gold standard and that other states can follow Texas' example.
The United States adopted the gold standard in 1900 and maintained it until August 1971, when Nixon announced the end of the American gold standard, which marked a major shift in the global monetary system (see the chart below for details) and the disintegration of the Bretton Woods system, as well as the beginning of the fifth dollar crisis.
In this regard, Dario, the founder of the world's largest hedge company, said in a report published on February 2 that the United States has overprinted money, dragging the dollar into crisis, and digital currencies linked to inflation or ** may be a better choice, similar to inflation-indexed bonds.
According to the former Bank of England Governor Carney in an interview in early January, the dominance of the dollar has caused problems for some oil-producing countries, and he believes that in the context of the restructuring of the global financial order, the best way to reduce or bypass the role of the dollar is to create a fiat digital reserve currency that can be accepted and supported by central banks around the world.
This suggests that the current growing number of digital currencies may support the emergence of a new global monetary order independent of the US dollar, at which point the role of the commodity standard may once again be used, and these digital currencies can directly link more and more global central banks around the dollar system, suggesting that the role of the dollar is effectively being revalued.
Similarly, Daily FX analyst D**id Cottle also suggested in a report updated on February 2 that oil-producing countries such as Iran and Venezuela that are restricted by the US dollar could innovate foreign exchange systems and use the commodity standard to issue digital currencies as a means to circumvent the US dollar.
According to the analysis of Zoltan Bossa, a well-known Wall Street analyst known as the god of currency, "the petrodollar has entered the twilight, and at this time, the anchor of alternative commodity currencies such as ** and ** has ushered in the dawn."
The analyst suggested that Middle Eastern oil producers such as Iran, Iraq, and the United Arab Emirates could exchange some of their oil profits for reserves at a time when the price gap between China and oil is high, just like the global central bank swap U.S. bonds, to support the prospect of building an anchored global digital reserve currency system.
This is because oil, which is priced at the price, is less volatile and more stable than that denominated in the US dollar. At this critical juncture, there is a surprise for investors in the global market.
This is the first time in 38 months that China has broken its silence and sent a signal to increase its holdings of **reserves, exceeding market expectations, and in the 14 months to December last year, China reported a total of 287 tons of ** reserves.
According to the "Global ** Demand Trend Report" released by the World ** Association on February 1, the global ** demand for the whole year of 2023 will reach 4,448 tons, down only 5% from the strong performance of 2022, and the report mentions that China is the most important growth driver.
Among them, global central banks bought a total of 1,037 tonnes in 2023, rushing to the second highest level in history, only 45 tonnes less than the all-time high in 2022, 73% higher than in 2017 and 39% higher than the average of the last five years, 71% of central banks plan to continue to increase their reserves in 2024, an increase of 10 percentage points from last year, and define ** as a valuable strategic asset, exceeding market expectations.
The report also showed that when over-the-counter and other** demand is taken into account, demand for the full year of 2023 rose to a record 4,899 tonnes, which also made last year's demand 8% higher than in 2022, a record high.
Among them, China's ** demand has also increased significantly, we checked the latest data released by the World ** Association and Customs and found that China imported a total of **1378 tons last year, and from 2020 to 2022, China imported 1343 tons, 821 tons and 217 tons respectively, especially since last year, China's ** import volume is significantly higher than the average level in the past five years, which further confirms the analysis that our team has been thinking that China is increasing its purchasing strength for several months.
This shows that since the end of 2019, China did not report an increase in reserves, and as of January this year, the latest data published shows that 4,046 tons** have been shipped to China from major overseas markets such as the United States and Europe.
Immediately afterwards, Singapore's leading ** trader Mike Ben Deli said that now, while the world's central banks, including oil-producing countries, are selling US bonds, they are also actively buying** as part of the openness of the de-dollarization strategy, because whether it is the riyal ruble or the yuan, there is a ** figure behind it.
He further explained that the development of a global digital reserve currency backed by ** is expected to weaken the dollar's dominance and begin sooner than most expected, as the dollar reset process is expected to begin when global central banks really need to address the ballooning and already insolvent US debt deficit.
Based on this, considering that more and more state authorities in the United States have begun to enforce or declare legal tender status, which is on a par with the US dollar and can be used as a medium to repay the country's debt.
As a result, some congressional policymakers have put forward the idea that the U.S. could prioritize certain payments to China and some of the top Wall Street institutions or mint a $1 trillion platinum coin to pay off debts to ensure that the U.S. remains solvent, thereby continuing the credit and dominance of the U.S. dollar and U.S. Treasuries.
This suggests that the value and monetary function of the U.S. as a natural store of wealth is returning from the monetary history of the United States to express investors' loss of confidence in the U.S. dollar, as evidenced by the wave of U.S. debt swaps that many countries are shipping back to the Federal Reserve and central banks around the world are selling U.S. debt swaps. (ENDS).