Author: Tiezhu Ge on Crypto

The most fundamental and implicit organizational and coordination mechanism in modern society is not money itself, but the continuous extension of debt-creditor relationships.

Whether it's a nation, a community, an organization, or an individual, they are all essentially doing the same repetitive action: exchanging the future for the present.

The economic growth and consumer boom we take for granted do not stem from wealth appearing out of thin air, but from a highly institutionalized consensus that the future can be allocated in advance. Debt is precisely the technical means of realizing this consensus.

Understanding the world from this perspective reveals a more fundamental core issue: who has the greater ability to present the future, and who has the power to define the future?

In this sense, the creation and contraction of money are merely expressions of the debt world. The magic of finance is actually only one thing: the intertemporal exchange of resources.

I. Understanding Gold and the US Dollar from a Debt Perspective

If you place debt at the center of how the world works, the roles of gold and the dollar immediately become clear. The dollar is not a currency; it is a tool for debt coordination and pricing.

US debt is not simply a liability of the United States itself. Placed within the global balance sheet, the dollar system represents: the US exporting its future promises, and the world providing the capacity to absorb current debt. Both sides, using the dollar as a contract, have reached the largest intertemporal transaction in human history.

Gold's uniqueness lies in the fact that it is the only financial asset that is not backed by any liabilities. It requires no endorsement or promise from anyone; it is the ultimate form of payment. On a balance sheet basis, gold is the only asset without a counterparty.

This is why gold often appears inefficient, unprofitable, and lacking in potential when the debt system is functioning well; however, its value is only re-evaluated when people begin to doubt whether it can be successfully redeemed in the future.

Some say gold is a safe haven against geopolitical risks. But if you continue to analyze it using balance sheets, this statement is incomplete. Geopolitics doesn't directly destroy wealth; what it truly undermines is the stability of debt relationships.

Second, risk aversion means finding a healthy balance sheet.

Having grasped the logic above, it becomes clear that if you view the world as an ever-expanding balance sheet, then hedging isn't about finding a single, perpetually safe asset, but rather about identifying healthy and sustainable balance sheet structures at different stages. The fundamental risk isn't volatility, but rather the imbalance in the debt structure.

Therefore, if we observe recent market trends, what is accompanying the depreciation of the US dollar and the huge fluctuations of the Japanese yen? It is the rapid appreciation of the fiat currency of countries with relatively healthy balance sheets, such as Switzerland.

If we extend our perspective further, what are the reasons for the rise in silver prices, and for other commodities in general? Looking at it from a broader macro perspective, there is currently only one fundamental variable affecting debt-creditor relationships: AI.

AI is not simply an industry; in my view, its fundamental nature lies in its ability to reshape balance sheets. On one hand, it exponentially reduces human efficiency costs, making software cheaper, replacing labor, and bringing information processing to near-zero cost. On the other hand, it creates unprecedented rigid capital demands in the real world, with computing power, electricity, land, energy, and minerals becoming the most powerful real-world constraints.

These two forces are simultaneously impacting global balance sheets: efficiency is decreasing while capital is increasing. This is fundamentally related to the current restructuring of the debt system.

In other words, any work that can be digitized, logicalized, and automated costs zero. Software, copywriting, design, and basic code—once expensive intellectual assets—are becoming as cheap as tap water. Everything has a price; the generation of each token involves the burning of computing chips, the consumption of electricity, and the transmission of copper cables. The more intelligent AI becomes, the more greedy it demands from the physical world.

For decades, global growth has relied heavily on financial engineering: credit expansion, leverage rollover, and expectation management. The future could be continuously discounted, making debt appear lightweight and manageable. However, when growth is re-tied to intangible variables like computing power, electricity, resources, and production capacity, debt is no longer just a numbers game. From this perspective, when you look at silver and commodities, what the market is pricing is essentially a pre-pricing of future production capacity constraints.

Therefore, the magic of debt fails when growth is locked in by physical constraints. Because no matter how much currency you inject, without enough copper to build the power grid and enough silver to manufacture the panels, AI computing power cannot run.

III. Has the end times for the US dollar arrived?

Nothing is permanent, including gold. Understanding the workings of the debt world necessitates accepting a less-than-ideal conclusion: gold is not a permanent solution either. The current price increase is merely a reflection of the scarcity of assets with no counterparty. However, gold cannot generate cash flow, improve productivity, or replace real capital formation. From a balance sheet perspective, it essentially freezes risk temporarily.

Returning to the US dollar, why is it still used for pricing despite the market's constant pessimism about it? It's because you need the world's deepest pool of assets for collateral, settlement, and hedging. You hold US Treasury bonds not just because you trust the US, but because you need an asset that can be recognized by the global financial system and can be used as collateral for financing at any time.

The strength of the US dollar lies not in its financial correctness, but in its irreplaceable network effect. It is currently the only container in human civilization capable of supporting the extension of tens of trillions of dollars in debt.

For the past few decades, the core capability of the dollar system has been to discount the future to the present. The US issues bonds and the world pays for them; the US consumes and the world supplies them. Essentially, it is a global redistribution of the time value.

However, as the US fiscal path increasingly relies on continuous balance sheet expansion and debt rollover, the credibility of the dollar will undergo a subtle change: it will still be the best option, but no longer a free option, and the opportunity cost will rise significantly.

But the fatal flaw is not these factors. Rather, it is that as growth becomes increasingly reliant on electricity, computing power, resources, and production capacity, the financial system's most adept methods of using expectations, leverage, and discount rates to artificially transfer the future to the present will be subject to the hard constraints of the physical world.

The so-called Greenland issue, tariffs, and the return of manufacturing are all essentially games revolving around this hard constraint. In other words, the United States must first complete the reshaping of AI infrastructure, making the dollar the sole credential for purchasing the world's strongest computing power and most efficient productivity. This is a necessary condition for the dollar's return to its former glory.

Otherwise, against the backdrop of physical constraints and AI redefining the global division of labor, the dollar system will gradually lose its ability to discount the future, gradually heading towards an end-of-days era. A slow but irreversible relative decline will occur until a monetary anchor that better represents real productivity and technological dominance emerges to replace it.