PANews reported on April 5 that Arthur Hayes tweeted that U.S. Treasury bonds and U.S. stocks (to a lesser extent) are global reserve assets. Since Nixon abolished the U.S. gold standard in 1971, the U.S. Treasury bond balance has increased 85 times. The United States must create the credit dollars needed for world economic growth. This is good for some Americans and bad for others. Trump's election was driven by those who believe that they have not shared the "fruits of prosperity" of the past 50 years.
Once the U.S. current account deficit is eliminated, foreigners will have no dollars to buy bonds and stocks. If foreigners must stimulate their own economies, they will sell the U.S. bonds and stocks they own to finance their national priorities. Even if Trump softens on the severity of his tariffs, no Treasury secretary or world leader would bet against his reversal, so things cannot go back to the way they were. Every country must fight for itself.
Gold will be a neutral reserve asset. The dollar will remain the global reserve currency, but countries will settle global trade by holding gold. Trump has hinted at this, because gold is tariff-free. In the new monetary system, gold must circulate freely and cheaply. Today, most of those who benefited greatly from the old system are still in denial and have illusions that everything will eventually return to "normal". Absurd.
For those who want to adjust to a return to pre-1971 trade relations, they should buy gold, gold mining companies, and BTC.
