The Imminent Fall of the Eurodollar System | Alex Krainer

During a meeting with technology, crypto, and finance leaders held at the White House yesterday, President Trump brought up the GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins Act) again.

» I know, I know… The idea that the Trump administration is doing anything "legitimate"

may defy imagination by now, but the current arrangement is anything but legitimate. «

 

Trump framed the Act as part of his administration's broader crypto and digital-asset agenda (ending what he called the "war on crypto," launching "Project Crypto," establishing a US Strategic Bitcoin Reserve, and creating a Digital Asset Stockpile):

"One year ago this summer, I signed landmark legislation known as the GENIUS Act. … paving the way for widespread adoption of dollar-backed stablecoins, and that's worked out very well."

Indeed, the Act was already passed last summer, and Trump signed it into law on July 18, 2025, so why all the commotion about it now, more than a year later?

Could be earth-shattering…

Treasury Secretary Scott Bessent tweeted that the GENIUS Act established a landmark framework and clear rules of the road for payment stablecoins, and that the Treasury is moving quickly to implement that framework, asking for "input from stakeholders" in order to "cement the role of the US dollar as the world's reserve currency, and keep America the crypto capital of the world."

The US, via regulated dollar stablecoins and Treasury authority under the GENIUS Act, aims to shut down the unregulated eurodollar market, reclaim control of the dollar's global role, and defund the "rules-based order" and shadow networks, triggering market tremors, surging demand for legitimate dollars, and pressure on non-favored countries such as Britain, the EU, and Canada.

The Act establishes new US federal laws creating a comprehensive regulatory framework for payment stablecoins redeemable for a fixed monetary value (typically $1) and intended to maintain a stable value relative to the "legal tender" currency. It also restricts the issuance of stablecoins to "permitted payment stablecoin issuers," and this is where the GENIUS Act gets extremely interesting.

What GENIUS Is All About…

Speaking at the SALT Conference in Jackson Hole, Wyoming, the former Wall Street executive and prominent advocate for monetary reform Caitlin Long pointed out that the GENIUS Act enables the Treasury Department to define "what is allowed to be a so-called euro-dollar, euro-yen, euro-euro. Or yuan, right?" She continued:

"… the term ‘euro' doesn't mean European. It means a dollar issued offshore outside of the United States … These are tokenized fiat currencies issued outside of their home country, and the US Treasury is taking charge of the recognition of the validity of these. That is massive.

The fact that there are institutions outside of the United States that can issue US currency should be regarded as an illegal aberration. Effectively, they're counterfeiting US dollars, but in spite of that, for some reason, it has been taken as normal for decades now. That's in spite of the fact that counterfeiting US dollars abroad effectively robs the purchasing power of American taxpayers to fund any manner of nefarious activities."

Most likely, that's why this system was allowed to grow to such massive proportions. Caitlin Long again:

"… If you're a student of the financial markets, you know that the eurodollar market is as large as the domestic financial market. That's the offshore dollar market. When the US Treasury is taking control of what is recognized as valid, that is taken from the Fed. … The Treasury is taking power back over the US dollar, over the eurodollar markets, and, frankly, over the US role in the financial system globally from the Fed."

Long made these comments after discussing the GENIUS Act with "someone who just walked out" of a Treasury Department meeting, and if she is right (I believe she certainly is), the implications could be truly earth-shattering. To begin with, disenfranchising the Fed and taking control over the currency from it is the stuff of civil wars.

"To put that into context, when we were talking earlier about how antiquated the traditional system is and that the Fed's systems are themselves behind… If you've been watching, all of the other agencies have issued rules [in accordance with the GENIUS Act]. One glaring exception: the Fed has not issued its rules yet, and according to the GENIUS Act, all of the agencies' rules were supposed to be final a couple of weeks ago. The Fed hasn't even issued theirs yet, so there's this dynamic going on between the Treasury Department and the Fed."

"The dynamic" going on between the Treasury Department and the Fed is a political collision course in which the Treasury is trying to wrest control over the monetary system from the unelected private bankers and return it to the democratically elected government and its legitimate institutions.

I know, I know… The idea that the Trump administration is doing anything "legitimate" may defy imagination by now, but the current arrangement is anything but legitimate. It is also patently unconstitutional: the Constitution of the US explicitly authorizes Congress with the power "To coin Money, regulate the Value thereof…" (Article I, Section 8, Clause 5). The Constitution also gives Congress the power "to provide for the punishment of counterfeiting the Securities and current Coin of the United States."

 

Contrary to its name, the eurodollar has nothing to do with the European currency. The eurodollar market is an offshore fractional-reserve banking system in which dollar deposits held at banks outside the US are multiplied through interbank lending and book-entry creation, largely free of Fed reserve requirements, to form a vast parallel dollar funding market that ultimately settles via US payment systems.

Eurodollar, Fed, and the Shadow Governments

The counterfeit US dollars circulating abroad are the glue that holds the global "rules-based" order together: they enable the funding needed to bribe foreign officials, pay for and arm the sundry jihadi terror groups and separatist militias. The colossal network of NGOs, charitable organizations, and other groups and activities of shadow governments around the world can't be fully funded through legitimate legal means. These activities often require illegal activities and trillions in embezzled funds.

For example, according to recent reports, billions of dollars have been offered to Iranian officials to sell out and turn Iran over to a government more friendly to the Trump team. In the past, we know that hundreds of millions in US bank notes are routinely smuggled from the Federal Reserve Bank of New York, past the US Comptroller of the Currency, to provide funding for coups, assassinations, regime-change operations, and similar "special assignments" by the shadow government.

That is why it should be essential for the US government to regain control of the dollars circulating abroad (or to render those dollars illegitimate and worthless), defunding the "rules-based global order" and reasserting US economic and financial sovereignty. While it would be too optimistic to expect that the Trump administration has pushed the GENIUS Act to achieve any such elevated goals, we should hope that it might leave behind the means needed for American democracy to reassert its economic and financial sovereignty and turn its currency into a tool to recover its prosperity and economic edge.

In the Meantime, Tremors

Given that half or more of all US dollars in circulation around the world are outside the United States, the administration's intended actions (there'll be ambushes; we'll find out) will cause major tremors in world markets, driving demand for "legitimate" dollars and rendering the "illegitimate" ones worthless. This will enable Trump and his team to exert pressure on governments around the world and dictate the terms at which their dollar balances may be converted into new stablecoins needed for trade settlement and reserve requirements.

I expect that Great Britain, the EU, and Canada won't be among the "most favored nations" in the near future, which will further worsen their fiscal positions, make it difficult for them to access global markets and procure commodities like oil, natural gas, wheat, and others. This will lead to shortages and exacerbate inflationary pressures at home.

Reference:

Alex Krainer (August 20, 2026) - The imminent fall of the Eurodollar system.

See also:
Alex Krainer (August 17, 2026) - Japan's Yen Collapse Threatens to Drag the US Down With It.
Martin Armstrong (July 17, 2025) - Trump's GENIUS Act Sets the Stage for US CBDC.

August 2026 Eclipses: Financial Markets & Monetary Regimes | Margo Amala

The August 2026 eclipse season is a potentially significant period for markets, monetary systems, geopolitical developments, and political leadership. The August 12 (Wed) total solar eclipse at 20° Leo centers sovereignty, executive authority, leadership, and public power. It belongs to Saros 126, historically associated with recessions, financial dislocations, geopolitical shocks, and leadership transitions. The August 28 (Fri) Pisces lunar eclipse completes the current Pisces series, marking the culmination of a decades-long Pisces cycle and a transition away from themes of uncertainty, ambiguity, and systemic fluidity.

Leo-Pisces / Saros 126 Eclipses and Major Events, 1836 to 2026. 

The Leo–Pisces axis and Saros 126 repeatedly coincide with major political and financial turning points. In 1971, a Leo–Pisces eclipse sequence preceded the August 15 Nixon Shock, which ended dollar convertibility into gold and transformed the international monetary system. In 1980, the cycle coincided with Reagan's defeat of Carter and a major silver-market peak. In 1990, a Saros 126 eclipse occurred shortly before Iraq's invasion of Kuwait. In 1998, the Leo–Pisces transition coincided with the final phase of the dot-com boom. In 2008, Saros 126 preceded the Lehman Brothers collapse by approximately 45 days. Earlier monetary precedents include the 1836 Specie Circular, the 1893 Silver Purchase Act, and the 1931 sterling crisis preceding Britain's abandonment of the gold standard.

Partial Solar Eclipse (August 12, 2026) and Partial Lunar Eclipse (August 28, 2026) over New York.

Saros 126 has a reported historical correlation of approximately 75% with recessions occurring within two months of the eclipse. Equity-market behavior tends to show a two-stage pattern: relatively positive short-term performance followed by slower deterioration over subsequent months, consistent with a rolling recession or delayed structural repricing rather than an immediate collapse. Individual equities can experience corresponding leadership and valuation inflection points; Tesla, for example, is currently associated with a breakdown around a 20-week cycle low.

Eclipse Paths of Saros 126 from 1179 to 2459.

Precious metals occupy a central position in the historical pattern because major Leo–Pisces and Saros 126 periods repeatedly coincide with monetary-system transitions. The 1971 Nixon Shock is the principal precedent: the eclipse sequence coincided with a fundamental redefinition of money, monetary convertibility, and control of the global monetary system. Comparable historical episodes include the 1836, 1893, and 1931 monetary disruptions. Gold and silver are currently approaching or experiencing a 20-week cycle low, creating a technical timing point within the broader monetary-cycle pattern. The key issue is therefore not merely metal-price volatility but a potential reassessment of currency, monetary authority, and the role of hard assets.

August 12, 2026 Solar Eclipse Map of Path on earth.

 

Historical backtesting of Saros Series 126 and the 19-year Metonic cycle reveals a sharp decoupling between equity markets and underlying macroeconomic conditions:

► Recession Risks: Dating back to 1828, 75% of total eclipses in Saros Series 126 (8 of 12) preceded an economic recession within two months. This aligns with the Lunar Nodes shifting into the Aquarius-Leo axis—a movement historically correlated with business cycle troughs.
► Equity Trajectory: Following Metonic cycle eclipses, short-term equity performance is overwhelmingly bullish, boasting positive market returns 87.5% of the time at 1 month and 75% at 3 months. However, returns decay steadily to 50% at 6 months and 37.5% at 12 months, signaling a gradual market roll-off rather than an immediate crash.

The geopolitical expression is concentrated around sovereignty, resources, territorial control, and strategic chokepoints. Astrocartographic emphasis includes Greenland, associated with resources and energy; Spain, associated with immigration and political leadership; and the Strait of Hormuz, associated with Saturnian restriction, strategic blockage, and constrained movement. Mars in Cancer reinforces protectionism, defensive nationalism, territorial concerns, and emotionally charged public reactions.

 

The central historical analogy is 1971, when a Leo–Pisces eclipse sequence coincided with a fundamental monetary-regime change and a structural transformation in precious metals. August 2026 combines the same eclipse-axis symbolism with a Saros 126 recession signal, a 20-week precious-metals cycle low, heightened geopolitical constraints, and visible questions surrounding political and monetary authority. 

The principal risk is therefore a synchronized transition across equities, precious metals, currencies, leadership structures, and geopolitical power rather than an isolated eclipse-driven market move.

Reference:

Margo Amala & K.M. Garland (August 11, 2026) - August Eclipse Season & Market Rotation. (video)

 

 

One of August's most concentrated astro-timing windows.

The August 12 eclipse hits Greenland and cuts directly through Reykjavík, Iceland. Look out for major moves in Arctic geopolitics, climate impact, rare earth mining.

Profits and losses in the DJIA during the four phases of the Moon.

 

See also:

Fred Espenak (2012) - Eclipses and the Saros.

TPR (2026) - The S&P 500 versus the Speed of the True Lunar Node. 

TPR (2026) - Louise McWhirter’s Forecasting Theory: The US Stock Market Through 2028.

TPR (2026) - 2026 US Stock Market Forecast Based on Jack Gillen's Principles.

The Slow Demise of France’s Enduring Colonial Currency System in Africa

There is a currency circulating across 14 African nations. Designed in Paris, printed in France, it required for decades that its users deposit up to half their foreign reserves in the French Treasury. Called the CFA franc (officially Communauté Financière Africaine, i.e. African Financial Community), it has operated continuously since 1945. The same instrument created to control and manage France's colonial possessions in sub-Saharan Africa still functions in many ways today. More than 155 million people use it; 14 formally sovereign nations depend on it. And the debate over whether it represents stability or subjugation has never been louder.

UEMOA + CEMAC + Comoros = CFA franc zone.

 

A country that controls another country's currency controls that economy. France understood this better than almost anyone. While the British pound zone dissolved France held on and the invisible scaffolding linking Paris to Dakar, Abidjan, Yaoundé and Libreville has never been dismantled.

Return to 1945. Europe lies in ruins. France, liberated from Nazi Germany, struggles to feed itself. Inflation spirals; the metropolitan franc loses value weekly. Across the Atlantic the Bretton Woods agreements establish the postwar financial order: the gold-backed dollar as global anchor, every nation required to declare its currency's value to the new IMF. France's shattered economy forces a sharp devaluation of the metropolitan franc against the dollar.

 

West African CFA franc—fiat bills with zero intrinsic value, backed

only by an ECB-mandated fixed exchange rate to the euro.

 

De Gaulle's finance minister Pleven applies different rates to the metropole and the colonies. In France the franc falls hard. In French West Africa, French Equatorial Africa, and the Comoros a new currency is born at a stronger rate: one CFA franc equals 1.7 metropolitan francs. By 1948 the ratio is two to one. The colonies suddenly possess a currency stronger than France's own.

Presented as generosity, the mechanics tell another story. A strong currency in a raw-material exporter that imports finished goods acts as an import subsidy and export tax. It cheapens French manufactures for the colony and makes the colony’s own goods less competitive abroad. From day one the CFA franc's pricing structure channeled African purchasing power toward French industry and quietly strangled the development of competitive local export sectors. Solid Rothschild architecture designed to endure.

A fixed exchange rate set below equilibrium creates excess demand for foreign currency

(Qd > Qs), which the central bank must cover by selling reserves to maintain the peg.

 

And its original name said everything: Colonies Françaises d’Afrique—French Colonies of Africa. No euphemism. Notes were printed then, and still are, in Chamalières by the Banque de France. Four pillars underpinned the system and proved remarkably durable: a fixed exchange rate with the French franc (later the euro) guaranteeing unlimited convertibility by the French Treasury; free capital movement between the CFA zone and France; and the operations account requiring the zone's central banks to deposit a large share of foreign-exchange reserves in the French Treasury.

At founding that share was 100 percent. By 1973 it fell to 65 percent; by 2005 to a 50 percent ceiling. Even at half, 'sovereign nations' handed over half their foreign exchange wealth to a former colonial power in exchange for a guarantee against currency collapse. Defenders cite stability: relatively low inflation compared with much of Africa, insulation from crises that wrecked Zimbabwe or Venezuela. Outside one massive 1994 devaluation the CFA franc has tracked the French franc and then the euro almost lockstep for nearly eighty years. But stability for whom, and at what cost?

Viral 2019 Italian TV clip of Giorgia Meloni (then opposition leader, now Prime Minister) holding a CFA franc note and calling it France's "colonial currency" to exploit resources via seigniorage and export controls.  

Pegged at 655.957 CFA francs to the euro, member states cannot adjust the exchange rate to their own conditions. They cannot devalue to boost exports, expand the money supply in a downturn, or set independent interest rates. Monetary policy—the core tool of any sovereign country—is outsourced to the European Central Bank, which sets policy for Germany, France and the Netherlands, not Senegal, Cameroon or Chad. In 2008 and again during the COVID-19 plandemic, countries with sovereign currencies printed money and cut rates; CFA countries could not.

Economists have long argued the franc is chronically overvalued relative to the productive capacity of its users. Overvaluation makes imports cheap and exports expensive—fine for comprador elites buying luxury goods in Paris, devastating for farmers selling cocoa or cotton against competitors with weaker, flexible currencies. The structural result is a permanent tilt toward importing rather than producing and deep dependence on foreign capital. This is a design feature, not an accident.

 

Olympio, murdered—like Kennedy—by the small hat money printers in 1963.

 

Sylvanus Olympio, first president of Togo, was elected in 1961 and immediately pushed to leave the CFA system and establish a national central bank. He saw monetary and political sovereignty as inseparable. On January 13, 1963, less than three years after independence, he was assassinated in a coup led by a French-trained sergeant. The new government proved far more amenable to French interests; Togo remained in the CFA zone. Leaders who challenge French economic control tend to meet violent ends or removal; those who cooperate enjoy long, French-supported tenures.

Sankara—radical anti-imperialist, pan-Africanist and austere leader

—prioritized self-reliance, massive social reforms, and integrity.

Murdered by the small hat money printers in 1987. 

The most iconic case is Thomas Sankara. In 1983, aged 33, he seized power in Upper Volta and renamed it Burkina Faso—"land of upright people." He ran mass vaccination campaigns, planted over ten million trees against desertification, banned female genital mutilation, appointed women to high office, refused air-conditioning, drove a modest Renault 5 and cut official salaries including his own. His greatest offense in Paris's eyes was open challenge to the CFA franc and Françafrique—the web of political, military and economic ties binding former colonies to France. On October 15, 1987 he was assassinated in a coup led by his deputy Blaise Compaoré, who then ruled the country for 27 years and reversed the anti-French course. In April 2022 a Burkinabe military tribunal convicted Compaoré and associates in absentia; Compaoré, living in exile in Ivory Coast, received a life sentence. The tribunal confirmed French agents were in Ouagadougou the day after the coup. Sankara's family formally accused France of masterminding the killing. Macron pledged in 2017 to declassify related documents; they have not been fully released.

Françafrique operates on a larger scale still: French bases, advisers inside ministries, preferential access for French firms to African resources, and the CFA franc as monetary backbone. Comprador elites enjoyed convertibility that let them move wealth to Paris, an overvalued currency that made luxury imports affordable, and French political and military protection. Ordinary citizens faced scarce credit, interest rates dictated by European conditions, import competition that crushed local firms, and capital mobility that functioned largely as a one-way valve outward.

France confronts rising anti-French sentiment in West Africa—Bamako,

Mali, 2020: "France get out" demonstration against French, EU and UN forces. 

By the late 1980s the franc was severely overvalued. Commodity prices—cocoa, coffee, cotton, oil—were falling while the French franc appreciated, dragging the CFA with it. On January 12, 1994 the CFA franc was devalued 50 percent overnight. The decision was taken in Paris, not in any African capital. French Prime Minister Édouard Balladur later confirmed it was done at France's instigation "to help these countries in their development." Overnight the purchasing power of roughly 150 million people was halved. Prices of imported food, medicine and fuel doubled; urban poverty surged; foreign-currency public debt effectively doubled. The cost fell entirely on African citizens who had no vote and no veto. The event laid bare the system's reality: sovereign in name, monetary dependencies in fact.

When France joined the euro in 1999 the CFA franc was pegged at 655.957 to the euro—a rate that still holds. The anchor changed; the dynamics did not. Monetary policy is now set by the European Central Bank for a union of wealthy European states with zero representation or accountability to the African economies bound to it. Notes continue to be printed in Chamalières; until recent reforms the operations accounts still funneled reserves to the French Treasury; French representatives sat on the boards of the BCEAO in Dakar and the BEAC in Yaoundé.

 

Rothschild stooge Macron arrives in Ivory Coast—for Christmas with his troops.

 

By the 2010s a new generation of African intellectuals and leaders challenged the system with growing force. Senegalese economist Ndongo Samba Sylla called the CFA franc "an anachronism requiring orderly elimination." In 2015 Chadian President Idriss Déby declared that a "cord preventing development in Africa" must be severed—everyone knew which cord. In 2019 Italian Prime Minister Giorgia Meloni held up a CFA note on television and accused France of exploitation, an accusation that resonated widely.

 

In December 2019, under pressure, Macron and Ivory Coast's Alassane Ouattara announced reforms in Abidjan: the West African CFA franc would become the Eco; the 50 percent reserve deposit requirement would end; French board seats at the BCEAO would disappear; the operations account would close and reserves return to Dakar. Headlines called it historic. The fine print was more cautious: the fixed euro peg remained, French convertibility guarantee continued, and France retained a backup credit line. The most symbolically offensive features were removed; the macro-economically decisive peg stayed.

Muammar Gaddafi's African gold dinar was a 2009-2011 pan-African initiative to introduce a single, gold-backed currency aimed to replace the US dollar and the French-backed CFA franc across Africa, allowing nations to sell oil and resources for gold to achieve complete financial independence from Western systems. Murdered by the small hat money printers in 2011.

Critics call it rebranding. The name Eco had already been chosen for a broader ECOWAS common currency that would have included Nigeria; a francophone-only Eco complicated that project. The reforms covered only the eight West African states. The six Central African users of the BEAC franc—Cameroon, Central African Republic, Chad, Republic of Congo, Equatorial Guinea, Gabon—still deposit 50 percent of reserves in Paris and still have French board representation. As of today, the Eco has not launched; the latest ECOWAS target of 2027 is viewed with widespread skepticism.

Meanwhile the Sahel transformed. Coups between 2020 and 2023 toppled governments in Mali, Burkina Faso, Niger and Guinea, each fueled in part by anti-French sentiment over military presence, European and US sponsored Jihadist terrorism, economic extraction and the CFA franc. In 2024 Mali, Burkina Faso and Niger left ECOWAS and formed the landlocked Alliance of Sahel States, explicitly rejecting French influence and discussing exit from the CFA franc toward national or shared Sahelian currencies. Chad and Senegal demanded withdrawal of French troops, Niger the retreat of the French and Americans. 

 

» The slave that cannot carry out his own revolt deserves no pity. «
Ibrahim Traoré, President of Burkina Faso.

 

Senegal's president Bassirou Diomaye Faye and his prime minister Ousmane Sonko campaigned in 2023 on economic sovereignty; Sonko declared in 2025 that the CFA franc is "both a symbolic and an economic problem." The cry "La France dégage" (France, get out!) has echoed from Niamey to Bamako to Ouagadougou to Dakar, encompassing French military bases, mining concessions and, above all, monetary sovereignty. The CFA franc had become the most visible symbol of unfinished decolonization.

» Jub, Jubal, Jubanti. «
(Be upright, act with integrity, and rectify what is crooked.)

Faye, elected president of Senegal in 2024, had expelled French troops by March 2025 and was

elected Chairman of ECOWAS in July 2026; however, Senegal has not left the CFA franc. Hello Eco...

What replaces it remains complicated. Exit without credible alternatives requires building central-bank capacity, reserve management, monetary-policy frameworks and market confidence from scratch. Countries that left earlier—Guinea in 1960, Madagascar and Mauritania in 1973—faced significant turbulence. Yet defenders must confront the system's record: the 14 CFA countries include some of the world's poorest; Niger, Chad, the Central African Republic and Burkina Faso rank near the bottom of the UN Human Development Index; per-capita GDP remains a fraction of the global average. Eighty years of promised stability have not delivered development, poverty reduction or structural transformation. The question is no longer only whether these countries can afford to leave, but whether they can afford to stay.

 

Why would-should-could all these countries remain in the CFA franc zone? 

A monetary system whose notes are printed in France, whose reserves have historically been held in the French Treasury, whose exchange rate is set by a European institution, and in which the actual users long had no meaningful say, was designed under colonialism, preserved through co-optation, coercion and violence, and maintained by institutional inertia and the complicity of local comprador elites who benefit. 

 

At no point in history has the CFA franc been closer to its demise, just coinciding with the scheduled 2027 rollout of the

Eco—the proposed new ECOWAS common currency, directly pegged to the Euro. Again. One couldn't make this up.

And it just sounds, looks, and smells as fantastic and promising as the Euro...

 

The CFA franc is a monument to the idea that independence can be granted with one hand while economic sovereignty is withheld with the other. The most effective control is not always exercised with guns and borders; sometimes it is exercised with exchange rates, reserve requirements and banknotes printed thousands of kilometers from the pockets that carry them.

 

Whether or when the CFA franc system collapses, adapts once more as the Eco, national sovereign currencies, or something else remains open. What is clear is that a reckoning is already under way across the Sahel and beyond. A new generation asks the question Sankara asked four decades ago: "If a nation does not control its own money, can it truly call itself free?"

 

Reference: 
Enrico Creta (2026) - The CFA Franc and the Mechanics of Monetary Servitude in Francophone Africa.
Alassane Dialloa Dego & Adama Bac (2024) - From French franc to euro: An economic impact for CFA franc zone countries?
Fanny Pigeaud & Ndongo Samba Sylla (2021) - Africa's Last Colonial Currency: The CFA Franc Story.

The US Just Made Gold Its Number One Export | Gerry Nolan

America just made gold its number one export, and it’s pouring straight into China via Switzerland. For the last five months running, US gold shipments have topped everything else the country sells abroad. In March alone, they were 1.7 times larger than oil, twice pharma, and two and a half times aircraft engines.

 

» How exactly does this serve the United States? «

  

Most of it doesn’t even stay in America: it sails through Switzerland’s refineries and lands in Beijing’s vaults. This is highly unusual. The US doesn’t ship its oldest store of value to its biggest rival at record pace under normal conditions. Geopolitical tension, inflation hedging, and quiet signals that gold is becoming a settlement mechanism in US–China trade have flipped the script.

America is quietly surrendering the one asset that still commands respect when the dollar starts to wobble. It’s the visible symptom of a deeper reckoning: Beijing is no longer content to hold endless piles of US Treasuries or accept dollars for its oil and goods. With every sanctioned barrel and every BRICS handshake, China is forcing real settlement in the one currency that can’t be printed into oblivion. The empire ships bullion east while its navy steams around the Gulf, pretending it still runs the world. The numbers don’t lie, and neither does the direction of travel.

» Real money to the competition while the dollar-printing machine keeps spinning. «

 

So, tell how exactly does this serve the United States? It doesn’t. But it sure as hell serves China. The empire is literally melting down its patrimony and handing the real money to the competition while the increasingly worthless dollar-printing machine keeps spinning.

Gerry Nolan, May 5, 2026.

 

See also:

Martin Armstrong (May 3, 2026) - Gold and the Stock Market Will Rise Together. (video)
Ray Dalio (2025) - How Countries Go Broke: The Big Cycle.

How Countries Go Broke: The Big Cycle | Ray Dalio

The big cycle is the period from one era of great change and turbulence, in which various systems or orders are transformed, typically through fighting, to the next. Then, through that evolutionary process, we arrive at yet another period of breakdown. The last big cycle began in 1945 at the end of World War II.

 

» This will lead to dramatic changes. «

 

Within that world order, there are shorter-term cycles, like the economic and political cycles. The economic cycles have lasted for about six years from one recession to the next, and they unfold in a way where the economy is weak.  

 

 » In considering which spending to cut, when one looks at the possibilities, one quickly notices that about 70% of the non-

interest spending is considered “mandatory”—i.e., it is either contractually required or politically nearly impossible to cut. «

 

Central banks put a lot of money and credit into it. That causes markets to go up. There's a lot of spending; it gets too hot; inflation rises. They tighten monetary policy, and that causes the economy to go down into recession. Since 1945, there have been twelve and a half of those.

 

» It appears clear that, as the gaps in people’s productivity, wealth, and values grow along with

levels of dissatisfaction about how their democracies are working, it leads to more populist conflict 

and more policies that are like those in the 1905-14 and the 1933-38 periods. «

Average global levels of political polarization since 1900.

 

We sometimes don't pay as much attention to the big cycle when it reaches excesses, such as debt excesses. This is because debts rise relative to incomes. If you look at a chart of most countries, their debts keep rising relative to their incomes, but the incomes are needed to pay the debts. So, when you get to a point where the debts are high relative to the incomes, and debt service is very expensive and starts to crowd out other spending, and investors do not want to hold the debt as much because the debt does not provide them good returns and they start to sell that debt, you begin to have a change in that big debt cycle.

 

 » For the United States, the big cycles look mostly unfavorable. «

 Ray Dalio's “Power Index” for great powers and empires over time.

 

That big debt cycle typically corresponds with the big domestic political and social cycle because wealth and well-being matter to people. When there's disruption to people's wealth and well-being, then you have political disruption, such as what we are experiencing now. Consequently, there's more fighting over wealth and power, and so on. These things come together, which then creates the new conflicts, the new big conflicts: the changes and breaking down of the old orders, the old monetary orders, the old domestic political order, the geopolitical order, and such things to cause seismic shifts. These are periods of great risk for the markets and great risk for society. It's very important that they're understood.

Quoted from: 
Ray Dalio (May 28, 2025) - The Big Cycle Explained in 3 Minutes. (video)

Countries are allowing their reserves or assets to decline while acquiring gold. Central banks bought more gold 

in 2025 than in any year in history. They are not telling the public why, but their actions speak volumes.

See also:

Ray Dalio (2025) - How Countries Go Broke: The Big Cycle (Principles). 

Ray Dalio (October 30, 2025) - Gold is the Safest Money. 

Ray Dalio (April 7, 2025) - Don't Make the Mistake of Thinking That What's Now Happening is Mostly About Tariffs. 

Ray Dalio (March 26, 2017) - The Developed World Populism Index.

Martin Armstrong  (October 24, 2025) - "The United States Is Due for Another Massive Civil War".