Author: Brother Tiezhu is in CRYPTO; Source: X, @TiezhuCrypto

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

Whether it is a country, community, organization or individual, the essence is to do a repetitive action: exchanging the future for the present.

The economic growth and consumption prosperity we are accustomed to do not come from the emergence of wealth out of thin air, but from a highly institutionalized consensus that the future can be allocated in advance. Debt is exactly the technical implementation method of this consensus.

Understanding the world from this perspective, a more essential core lies in: who is more capable of discounting the future to the present, and who has the power to define the future.

In this sense, the creation and contraction of money are just expressions of the world of debt. There is actually only one magic in finance, and that is the intertemporal exchange of resources.

1. Understanding gold and the U.S. dollar from a debt perspective

If you put debt at the center of how the world works, the role of gold and the dollar becomes immediately clear. The dollar is not a currency, it is a tool for debt coordination and valuation.

U.S. debt is not simply a liability of the United States itself. Put in the global balance sheet, the dollar system is: the United States exports future commitments, and the world provides current debt-bearing capacity. The two parties used the U.S. dollar as a contract and reached the largest inter-temporal transaction in human history.

The uniqueness of gold is that it is the only financial asset that does not correspond to any liabilities. It does not require anyone’s endorsement or commitment, it is the final payment in itself. On the balance sheet, gold is the only asset that has no counterparty.

Because of this, when the debt system is functioning well, gold often appears inefficient, has no returns, and lacks imagination; but when people begin to doubt whether it can be successfully cashed in in the future, the value of gold will be re-understood.

Some people say that gold is a safe haven from geopolitical risks. But if you continue to use the balance sheet to dismantle it, this statement itself is incomplete. Geopolitics will not directly destroy wealth. What it really destroys is the stability of debt relationships.

2. Hedging is to find a healthy balance sheet

Understand the logic above. It is natural to understand that if you understand the world as an ever-expanding balance sheet, then the so-called risk aversion is not to find an asset that is always safe, but to find an asset-liability structure that is still healthy and sustainable at different stages. The most fundamental risk is not volatility at all, but an imbalance in the debt structure.

So, if we observe recent market trends, what is accompanying the depreciation of the US dollar and the huge fluctuations of the Japanese yen is the rapid appreciation of the legal currency of countries with relatively healthy balance sheets like Switzerland.

If we continue to look at it, why does silver rise and why do more commodities rise? Let’s look at it from a larger macro perspective. Currently, there is only one fundamental variable that affects the debt-creditor relationship: AI.

AI is not a pure industry. In my opinion, its fundamental lies in its ability to reshape the balance sheet. On one end, it infinitely reduces human efficiency costs exponentially, software becomes cheaper, labor is replaced, and information processing is close to zero cost; on the other end, it creates unprecedented rigid capital demands in the real world, with computing power, electricity, land, energy, and minerals all becoming the most powerful real constraints.

These two forces are acting on the global balance sheet at the same time: the efficiency side is getting lighter, and the capital side is getting heavier. This is fundamental to the reshaping of the current debt system.

In other words: The cost of any work that can be digitized, logicalized, and automated is returning to zero. Software, copywriting, design, basic code, these once expensive intellectual assets are becoming as cheap as tap water. Everything has a price, and correspondingly, the generation of every Token is driven by the burning of computing chips, the consumption of electricity, and the transmission of copper cables. The smarter the AI, the more greedy it will take from the physical world.

In the past few decades, global growth has relied more on financial engineering, credit expansion, leverage rolling, and expectation management. The future can be continuously discounted, so debt appears light and controllable. But when growth is tied back to the unimaginable variables of computing power, electricity, resources and production capacity, debt is no longer just a numbers game. From this perspective, if you look at silver and commodities, what the market is pricing is the advance pricing of future production capacity constraints.

Then, when growth is locked down by physical constraints, the magic of debt fails. Because no matter how much currency you put in, if there is not enough copper to build the power grid and not enough silver to build the panels, AI computing power will not be able to run.

3. Is the end of the US dollar coming?

Nothing is forever, including gold. After understanding the operating logic of the debt world, you must accept an unpalatable conclusion: gold is not the eternal answer. The current rise is simply the scarcity of the asset as it has no counterparty. However, gold cannot create cash flow, cannot improve production efficiency, and cannot replace real capital formation. From a balance sheet perspective, it is equivalent to temporarily freezing risks.

Back to the U.S. dollar, why even though the market has been badmouthing the U.S. dollar, it is still priced in U.S. dollars. It is because you need the world's deepest asset pool for collateral, settlement, and hedging; you hold U.S. debt not just because you believe in the United States, but because you need an asset that is recognized by the global financial system and can be mortgaged and financed at any time.

The strength of the U.S. dollar does not lie in its financial correctness, but in its irreplaceable network effect. It is currently the only container in human civilization that can carry tens of trillions of debt extensions.

In the past few decades, the core capabilities of the U.S. dollar system have been: discounting the future to the present, the U.S. issuing bonds, and the world paying the bill; the U.S. consuming, the world supplying, which is essentially the global redistribution of time value.

When the U.S. fiscal path becomes more and more dependent on continued balance sheet expansion and debt rollover, the credit of the U.S. dollar will undergo a subtle change: it is still the best choice, but it is no longer a free choice, and the opportunity cost has increased significantly.

But the fatal thing is not these, but when growth becomes more and more dependent on electricity, computing power, resources, and production capacity, the financial system is best at using expectations, leverage, and discount rates to move the future out of thin air to today, which will be hard constrained by the physical world.

The so-called Greenland, tariffs, manufacturing reshoring. The essence is a game around this hard constraint. In other words, the United States must take the lead in reshaping AI infrastructure and turn the U.S. dollar into the only certificate for purchasing the world’s strongest computing power and most efficient productivity. This is the necessary condition for the return of the dollar king.

Otherwise, in the context of physical constraints and AI redefining the global division of labor, the U.S. dollar system will gradually lose its ability to discount the future and gradually move toward the end of the law. A slow but irreversible relative decline until a monetary anchor more representative of real productivity and technological dominance emerges to replace it.