The world ahead
“…and now they come for me, but it is too late…” — Bertolt Brecht.
Let’s Talk About Your Future
Whether you accept it or not, global politics and finance have big plans for everyone.
The origins of these plans are complex and too lengthy to cover in this article. Our goal here is to provide context for our professional services and to help you understand why you need us. Whether you realize it or not, we are here because you need us.
Key notes
- The Evolution of Currency and Its Implications:
Currency has shifted from being a value-backed medium of exchange to an instrument of credit, leading to systemic financial crises and increased monetary controls. This transition has placed significant burdens on the private sector, resulting in a destructive cycle that affects economic productivity and stability. - Global Financial Instability and Emerging Risks:
The article discusses how global financial dynamics, particularly the overreliance on credit and the weakening of the dollar, have created vulnerabilities in the current system. As geopolitical tensions rise and major powers reconsider their economic alliances, the risks to traditional financial assets, like the dollar and other fiat currencies, become more pronounced. - Diversifying and Protecting Private Wealth:
To safeguard against systemic risks, the article emphasizes the importance of diversifying investments beyond conventional assets like gold, the dollar, and Bitcoin. It highlights the need to consider the broader economic and geopolitical landscape when making financial decisions, offering strategies to protect private wealth in the face of emerging global challenges.
The near future includes the following:
- Trackable transactions
- Social scoring for access to basic services
- Monetary controls
To summarize the sequence leading to this outcome:
Currency originally represented value, backed by tangible assets and later by productivity. Over the 20th century, governments removed this backing, turning currency into an instrument of credit. This shift to credit-driven economies caused successive crises, leading to monetary controls that reduced productivity and fueled more credit issues, creating a destructive cycle.
As private productivity stagnated, interest rates were lowered to support government borrowing, inflating a credit bubble. Inflation indices were manipulated to mask the real impact, as the private sector faced growing debt while the public sector faced fewer fiscal constraints.
This dynamic forces the private sector to take on more debt, driving support for expansionary policies that devalue the currency and transfer debt from public to private hands. Over time, compounding interest worsens the problem, even if public spending is cut.
Studies suggest that this cycle may result in capital controls and a transfer of private property to the public sector and central banks.
This is where we come in.
Our proposition is simple: safeguard a portion of your capital by seeking higher returns that provide some degree of protection for your private wealth. We begin by understanding the economic cycle at a macro level and then gradually move to specific strategies.
Imagine your wealth as a house you want to build. By habit, you would choose a location close to conveniences like shopping centers, schools, police, and hospitals. But what if you ignored the possibility of being on a fault line, a tsunami-prone coast, a geopolitically exposed area, or a volcanic island? In the event of a natural disaster, you might rely on insurance, only to discover that many policies don’t cover natural events.
Similarly, imagine the risks of building your wealth in the most popular assets without considering how exposed you are to regulatory changes, defaults, capital controls, or political regime changes.
Let’s explore some of the most common hedges:
Gold
Gold has long been a safe haven in times of uncertainty, making it a key alternative during systemic crises. However, in today’s era of digital transactions and online commerce, using gold as a medium of exchange presents challenges such as: storing, transporting, divisibility, counteirfeiting… Generally speaking is less effective for broader exchanges.
The Dollar
The dollar has inherent structural weaknesses. As the global financial system’s currency, it bears the impact when that system falters. Commodity prices are often influenced by fluctuations in the Dollar Index.
In the event of major geopolitical disruptions, such as war, the dollar may lose its role as a reference point, while still providing financial services. However, commodities could be tied to countries in conflict.
Bitcoin
While Bitcoin is often hailed as a hedge against uncertainty, it has several critical limitations that undermine its effectiveness in this role. Beyond its heavy reliance on electricity and internet connectivity—both of which can become scarce during periods of crisis—Bitcoin has also failed to perform consistently as a store of value. Its volatility mirrors the boom-and-bust cycles of mainstream financial assets, rather than offering the stability expected from a safe haven. In times of economic stress, it has fluctuated in tandem with traditional markets, proving to be less resilient than many had hoped in preserving wealth during uncertain times.