What Is Driving the Global Monetary Reset?
The global financial system is experiencing a gradual but significant reset, largely driven by the weaponization of the US dollar. This has had profound effects not only on the dollar itself but more importantly on the Treasury market. Countries worldwide are increasingly concerned about holding assets that can be frozen, confiscated, or devalued at will by a single nation.
"I think the weaponization of the dollar has profound effects globally on not only the dollar but more relevant the treasury market," explains Andy Schectman of Miles Franklin in a recent interview at the 2025 Rule Symposium.
The freezing of Russian reserves in 2022 served as a watershed moment, accelerating what some experts call "de-treasurization" – the deliberate move away from US Treasury bonds as the world's primary reserve asset. This gold and dollar reset is becoming increasingly evident in global financial markets.
The Shift Toward Transparency and Physical Assets
This reset involves a fundamental shift from opaque debt instruments issued on promises toward transparency through blockchain technology, commodities, and physical possession of tangible assets. Central banks and sovereign wealth funds are increasingly focused on removing counterparty risk by holding physical commodities rather than paper promises.
"I think we're in the midst of a gradual reset… a move away from opaque debt instruments issued on a promise… moving towards transparency like blockchain commodities and physical possession of said commodities," notes Schectman.
This trend represents a broader movement toward financial systems that prioritize transparency, verifiability, and direct ownership.
Gold's Outperformance of Traditional Assets
Despite limited mainstream attention, gold has consistently outperformed traditional financial assets. Over the past year, all-time high gold prices have significantly outpaced US Treasuries – up approximately 30% while Treasuries gained only about 1.5% on a year-over-year basis.
The performance gap is even more dramatic when looking at slightly longer timeframes, with gold up 40% versus Treasuries up just 4% during the previous year, according to Schectman. During the same period, the dollar has declined by approximately 10%.
This performance gap highlights the growing divergence between traditional financial instruments and hard assets in the current economic environment. Understanding gold-stock market dynamics is essential for investors navigating this transition.
How Are Central Banks Repositioning Their Gold Holdings?
A clear signal of the ongoing monetary reset is the widespread repatriation of gold by central banks worldwide. Over 40 central banks have requested the return of their gold from traditional storage locations like the Bank of England and the New York Federal Reserve. These gold holdings had been stored in Western financial centers for decades, primarily for convenience and perceived security.
"Over 40 central banks have done that. Give us back our gold. It had been left there for 50 years to give direct access to the LBMA and the COMEX, safe jurisdiction, Western jurisdiction, rule of law, etc. That's okay. We'll forgo the convenience, we want it in house," explains Schectman.
The sudden rush to bring gold home signals a fundamental shift in trust and priorities among global financial authorities.
Record Gold Accumulation
Central banks have been accumulating gold at unprecedented rates. This acquisition trend isn't limited to a few countries but represents a coordinated global movement. Nations that have traditionally been net exporters of gold are now becoming net importers, with the United States itself becoming a net gold importer since late 2022 – a dramatic reversal of long-standing trends.
In fact, according to Schectman, the United States has imported nearly $100 billion worth of gold since November 2022, representing a historic shift in gold flows. The country gold reserves analysis shows significant changes in the global distribution of gold holdings.
Strategic Diversification Away From Western Financial Centers
The movement of gold away from traditional Western financial hubs like London and New York represents more than just physical relocation – it signals a strategic diversification of financial power. Countries are establishing new gold storage facilities and trading hubs across multiple jurisdictions, particularly in Asia, the Middle East, and Africa.
This multi-jurisdictional approach reduces dependency on any single financial center and creates a more distributed global financial architecture. The strategic realignment of physical gold holdings reflects a fundamental reassessment of trust in the existing financial order.
What Role Will Gold Play in the New Monetary System?
In the emerging financial system, gold isn't necessarily replacing currencies but rather replacing what backs currencies – currently US Treasuries. The new model appears to be one where countries continue using their own currencies for domestic transactions and international trade, but settle imbalances in gold rather than Treasury bonds.
"In essence, gold isn't replacing currency. It's replacing what backs the currency, treasuries. So every country uses their own currency which makes them keep their monetary house in order and settles imbalances in gold," states Schectman.
This approach would require countries to maintain more disciplined monetary policies since they would need physical gold for settlement rather than simply acquiring more debt instruments.
The Integration of Gold Into Modern Financial Infrastructure
The new monetary system is likely to integrate gold with modern technologies like blockchain. This combination would enable rapid settlement (within seconds rather than days), transparency through distributed ledgers, and significant reduction in transaction fees. Such a system would maintain gold's historical role as a stable store of value while addressing traditional limitations around divisibility, transferability, and verification.
Gold's Remonetization Through Regulatory Changes
Regulatory changes are gradually reintegrating gold into the formal financial system. Under Basel III regulations, gold is increasingly treated as a tier-one asset – essentially equivalent to cash for certain banking purposes.
"Gold is considered a tier one asset, which is as good as cash… for liquidity ratios, it is in essence… It is HQLA [High Quality Liquid Asset]," explains Schectman, referring to Basel III's treatment of gold.
While some distinctions remain between gold and traditional financial assets like bonds and stocks, the trend is clearly toward greater recognition of gold's role as a high-quality liquid asset within the banking system.
How Are BRICS Nations Reshaping Global Finance?
The BRICS nations (Brazil, Russia, India, China, South Africa) and their expanding alliance are developing alternative settlement systems that operate independently from Western-controlled financial infrastructure. These new systems, like the "Bridge" technology mentioned by Russian Foreign Minister Sergey Lavrov, settle transactions in local currencies within seconds rather than days.
According to Schectman, this Bridge technology has already been rolled out to countries representing 38% of global GDP in Asia. The system settles transactions in just 7 seconds compared to the 3-5 days required by SWIFT, with a reported 98% reduction in fees.
Incompatibility With Western Currencies
A critical aspect of these new settlement systems is their deliberate incompatibility with Western currencies like the dollar, euro, and pound. Schectman quotes Russian Foreign Minister Sergey Lavrov as saying: "We are opening this technology, this bridge technology, up to non-BRICS members, but it is not compatible with the pound, the euro, or the dollar."
This technical incompatibility creates a structural separation between financial ecosystems, allowing BRICS-aligned countries to conduct trade and settle balances without using Western financial infrastructure or currencies.
Expansion Beyond Core BRICS Membership
The alternative financial architecture being developed isn't limited to the core BRICS nations but is being extended to a much broader coalition of countries. This expansion includes nations participating in China's Belt and Road Initiative, members of the Shanghai Cooperation Organization, and various regional economic unions.
Collectively, these aligned countries represent a significant majority of the global population and a growing share of global GDP, creating a viable alternative economic sphere that can function independently of Western financial systems.
What Are the Signs of Gold's Increasing Monetary Importance?
The commodity exchanges that have traditionally facilitated paper trading of gold are experiencing unprecedented physical deliveries. The COMEX and London Bullion Market Association (LBMA) have seen record amounts of gold being withdrawn from their systems.
In May 2023, the largest delivery in the history of the COMEX market occurred, with over $8.5 billion worth of gold delivered on the May contract – a clear indication that major players are converting paper claims to physical possession. The gold market performance has been exceptionally strong despite these significant withdrawals.
Extended Delivery Timeframes
Traditional gold markets are showing signs of strain through extended delivery timeframes. The LBMA, which typically operates on a T+1 settlement basis (meaning delivery should occur one day after the trade), has extended delivery times to approximately eight weeks.
"Where the LBMA is a T+1 settlement, meaning if you have bars in London, I stand for delivery… Sorry, they say it's 8 weeks delivery. T plus eight weeks because the Bank of England evidently has a shortage of manpower and trucks," Schectman observes with skepticism.
The official explanation cites logistical constraints, but many market observers interpret this as evidence of physical supply limitations.
Strategic Accumulation Through Price Suppression
Sophisticated investors appear to be using the paper markets' price suppression mechanisms to their advantage. By maintaining relatively subdued prices in Western paper markets while aggressively accumulating physical metal, these players can acquire larger positions without driving prices dramatically higher during their accumulation phase.
This strategy suggests a long-term perspective focused on securing physical metal rather than short-term price appreciation, and indicates a fundamental disconnect between paper and physical gold markets.
How Might the US Adapt to the Changing Monetary Landscape?
There are indications that US financial authorities may be considering ways to integrate gold more formally into the Treasury market. Former Federal Reserve nominee Judy Shelton has discussed the possibility of issuing long-term Treasury bonds that would be redeemable in gold at maturity.
Schectman shares a quote attributed to Judy Shelton: "Trump and I have had discussions when I was part of the transition team… and we've talked about it a lot, and he's going to make a very big deal of next July 4th, 2026, the 250th year anniversary in the country… It's my belief that they will issue 50-year treasuries redeemable in gold."
This approach would create a direct link between US government debt and gold, potentially increasing demand for Treasury bonds among investors seeking gold exposure. The gold price forecast 2025 suggests continued strength as these structural changes unfold.
Gold Revaluation Possibilities
The US government maintains gold on its balance sheet in an account specifically called the "gold revaluation account." This accounting structure potentially allows for a formal revaluation of gold holdings.
According to Schectman, every $4,000 increase in the gold price would provide approximately $1 trillion in balance sheet capacity to the US Treasury, creating financial flexibility without requiring new debt issuance. As discussed in Trump's potential monetary reset, such a revaluation could be part of a broader strategy.
Strategic Gold Accumulation
The United States appears to be strategically accumulating gold, having become a net importer of the metal after decades as a net exporter. Since late 2022, the US has reportedly imported nearly $100 billion worth of gold.
Schectman references a quote attributed to former President Trump: "He who has the gold makes the rules," suggesting that there may be strategic awareness of gold's importance at the highest levels of US government.
This dramatic shift suggests preparation for a monetary system where gold plays a more central role in international finance and potentially in backing government obligations.
Why Is Retail Awareness of Gold's Importance Still Limited?
Despite gold's strong performance and increasing importance in the global financial system, retail awareness remains limited. This disconnect is partly due to financial media's focus on short-term price movements rather than fundamental shifts in the monetary system.
"Gold is really important, far more than the price would lead us to believe because the most well-informed traders in the globe, their actions say that. Forget about price. That's the easiest way to misdirect the public. You misdirect them with volatility, rhetoric, and price action, yet it continues to go higher," explains Schectman.
Gold's price volatility is often emphasized while its consistent outperformance of traditional assets over longer timeframes receives little attention.
Institutional vs. Retail Behavior Divergence
A significant divergence exists between institutional and retail investor behavior. While sophisticated institutional investors are accumulating physical commodities and reducing equity exposure, retail investors are doing the opposite.
"The retail mom and pa have the largest exposure to equities ever in the history of the markets… the institutionals have been selling every week since June… selling equities on average two billion a week," notes Schectman.
This pattern often precedes major market shifts, with institutional positioning typically proving more prescient.
The Gradual Nature of Monetary Evolution
Monetary systems don't change overnight but evolve gradually over years. The current transition is occurring incrementally through multiple channels – regulatory changes, central bank actions, development of alternative settlement systems, and physical gold flows.
This gradual process makes the transformation less obvious to casual observers but no less significant in its long-term implications. By the time public awareness catches up to institutional positioning, the major shifts may already be well underway.
What Are the Investment Implications of the Monetary Reset?
In the emerging monetary landscape, physical possession of assets is gaining importance relative to paper claims. Investors seeking to align with this trend should consider the distinction between owning physical gold and silver versus paper derivatives or exchange-traded products.
The premium for physical ownership reflects the growing recognition of counterparty risk in the financial system. As more institutional players seek to secure physical metal, the gap between paper and physical prices may continue to widen.
Metals Allocation Priorities
For investors looking to build a precious metals allocation, market experts often suggest prioritizing silver first, then gold, followed by platinum. Schectman directly recommends this approach: "I'd buy silver first, then gold, then platinum."
Silver offers both industrial demand and monetary characteristics, while gold provides pure monetary value. Platinum, while 30 times rarer than gold according to Schectman, has less historical monetary recognition but offers compelling value based on supply constraints and industrial applications.
Long-Term Perspective Required
Precious metals should be viewed as wealth preservation tools rather than speculative vehicles for quick profits. The primary function of gold and silver in a portfolio is to serve as financial insurance and stores of value over long time horizons.
"You don't buy it to get wealthy. It's the wrong place. You own enough, you will be eventually, but you have to have a long enough time horizon," advises Schectman.
Investors who approach these assets with unrealistic short-term profit expectations often exit prematurely, missing the long-term benefits of monetary metal ownership.
How Might the Reset Impact Global Power Dynamics?
The emerging monetary system represents a significant shift away from Western financial dominance toward a more multipolar structure. Countries that have traditionally been rule-takers in the global financial system are becoming rule-makers, establishing alternative financial infrastructure and practices that reflect their priorities and interests.
This rebalancing of financial power mirrors broader geopolitical shifts and may accelerate changes in international relationships and alliances.
Reduced Effectiveness of Financial Sanctions
The new financial architecture will likely reduce the effectiveness of financial sanctions as a foreign policy tool. As countries develop alternative settlement systems and reduce their dependence on Western financial infrastructure, their vulnerability to financial pressure decreases.
The development of incompatible settlement systems specifically designed to exclude Western currencies represents a direct response to the weaponization of the dollar and euro. This change will require Western nations to develop new approaches to international relations and conflict resolution.
Increased Fiscal Discipline Requirements
A monetary system with gold as a settlement mechanism would impose greater fiscal discipline on all participating nations. Unlike the current system, where the reserve currency issuer can create unlimited currency units, a gold-settled system would require countries to maintain sustainable trade balances or surrender physical gold to cover deficits.
This constraint would fundamentally alter government spending patterns and trade relationships, potentially leading to more balanced global trade and more sustainable fiscal policies.
What Timeline Can We Expect for the Monetary Reset?
While the monetary reset began gradually, its pace appears to be accelerating. What started as isolated actions by individual countries has evolved into coordinated movements across multiple fronts – from central bank gold accumulation to the development of alternative settlement systems and the establishment of multi-jurisdictional trading hubs.
The increased tempo of gold repatriation, record physical deliveries, and the expansion of alternative settlement systems all suggest that the process is gaining momentum.
Strategic Positioning Before Public Awareness
The current phase of the reset involves strategic positioning by major financial players before widespread public awareness. Central banks, sovereign wealth funds, and sophisticated institutional investors are securing physical assets and establishing new infrastructure while retail investors and the general public remain largely focused on traditional financial markets.
This divergence between institutional and retail behavior creates both risks and opportunities for investors who recognize the emerging trends.
Potential Catalyzing Events
While the reset is occurring gradually, specific events could accelerate public awareness and market repricing. These might include formal announcements of new gold-backed financial instruments, significant revaluations of official gold holdings, or high-profile failures within the traditional financial system that drive demand for alternative assets and settlement mechanisms.
The 250th anniversary of the United States in 2026 has been mentioned as a potential milestone that could coincide with formal changes to the US monetary approach, possibly including gold-redeemable Treasury bonds.
FAQ About the Gold and Dollar Reset
Is gold replacing the
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