[In-depth] The World of Gold, Dollars, and Debt: Revaluation of Balance Sheets

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

Whether it's nations, communities, organizations, or individuals, the essence lies in repeating one action: trading the future for the present.

The economic growth and consumption prosperity we take for granted don't originate 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 implementation of this consensus.

From this perspective to understand the world, a more fundamental core lies in: who has greater ability to discount the future into the present, 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 actually has only one trick: the intertemporal exchange of resources.

1. Understanding Gold and the Dollar from a Debt Perspective

If you place debt at the center of how the world operates, the roles of gold and the dollar immediately become clear. The dollar isn't money—it's a tool for debt coordination and valuation.

U.S. debt isn't merely America's own liability. In the global balance sheet, the dollar system works like this: the U.S. exports promises of the future, while the world provides present debt-absorbing capacity. Using the dollar as a contract, the two sides have achieved the largest intertemporal transaction in human history.

Gold's uniqueness lies in being the only financial asset that doesn't correspond to any liability. It requires no one's endorsement or promise—it is the ultimate settlement. On the balance sheet, gold is the only asset without a counterparty.

Precisely because of this, gold often appears inefficient, unprofitable, and lacking imagination when the debt system functions well. But when people begin doubting whether the future can still be smoothly realized, gold's value is rediscovered.

Some say gold hedges against geopolitical risks. But if you dissect this using balance sheets, the argument itself is incomplete—geopolitics doesn't directly destroy wealth; what it truly undermines is the stability of debt relationships.

2. Hedging Means Seeking Healthy Balance Sheets

Understanding the above logic naturally leads to the realization that if you view the world as an ever-expanding balance sheet, so-called hedging isn't about finding some perpetually safe asset, but rather identifying balance sheet structures that remain healthy and sustainable at different stages. The fundamental risk isn't volatility—it's the imbalance of debt structures.

Thus, observing recent market trends, the dollar's depreciation and the yen's wild fluctuations coincide with the rapid appreciation of currencies from countries like Switzerland with relatively healthy balance sheets.

Extending this view, why are silver and more commodities rising? From a broader macroeconomic perspective, there's currently only one fundamental variable affecting debt-credit relationships: AI.

AI isn't just an industry—its fundamental nature lies in its ability to reshape balance sheets. On one end, it infinitely drives human efficiency costs down exponentially: software becomes cheaper, labor gets replaced, and information processing approaches zero cost. On the other end, it creates unprecedented rigid capital demands in the physical world—computing power, electricity, land, energy, and minerals have become the most powerful real-world constraints.

These two forces are simultaneously acting on the global balance sheet: the efficiency side is getting lighter, while the capital side is getting heavier. This is the root of the current debt system's transformation.

In other words: any work that can be digitized, logicized, or automated is seeing its costs approach zero. Software, copywriting, design, and basic code—once expensive intellectual assets—are becoming as cheap as tap water. Everything has its price, and correspondingly, behind every token generated lies the burning of computing chips, the consumption of electricity, and the transmission through copper cables. The smarter AI gets, the more greedily it demands from the physical world.

Over the past few decades, global growth relied more on financial engineering—credit expansion, leverage rolling, and expectation management. The future could be continuously discounted, making debt appear light and controllable. But when growth becomes re-anchored to non-fictional variables like computing power, electricity, resources, and production capacity, debt is no longer just a numbers game. From this angle, when you look at silver and commodities, what the market is pricing is the advance pricing of future production constraints.

Thus, when growth is locked by physical constraints, the magic of debt fails. Because no matter how much money you inject, without enough copper to build power grids or enough silver for panels, AI's computing power can't run.

3. Has the Dollar's Endgame Arrived?

Nothing is eternal, including gold. Understanding the operating logic of the debt world means accepting an unpleasing conclusion: gold isn't the eternal answer either. Its current rise is merely due to its scarcity as a non-counterparty asset. Yet gold can't generate cash flow, improve production efficiency, or replace real capital formation. From a balance sheet perspective, it's equivalent to temporarily freezing risk.

Returning to the dollar: why, despite constant market pessimism, is it still used for pricing? Because you need the world's deepest asset pool for collateral, settlement, and hedging. You hold U.S. debt not just because you trust America, but because you need an asset recognized by the global financial system that can be pledged for financing at any time.

The dollar's strength lies not in its financial correctness, but in the irreplaceability of its network effects. It's currently the only container in human civilization capable of bearing tens of trillions in debt extension.

For decades, the core capability of the dollar system has been: discounting the future into the present—America issues debt, the world buys it; America consumes, the world supplies. This is essentially the global redistribution of time value.

But as America's fiscal path increasingly relies on continuous balance sheet expansion and debt rolling, the dollar's credibility undergoes a subtle change: it remains the best choice, but is no longer a free choice—its opportunity cost has risen significantly.

Yet the fatal issue isn't this, but that as growth becomes increasingly tied to electricity, computing power, resources, and production capacity, the financial system's expertise in using expectations, leverage, and discount rates to magically bring the future into the present will collide with the hard constraints of the physical world.

So-called Greenland, tariffs, and manufacturing reshoring are essentially games around this hard constraint. In other words, America must take the lead in reshaping AI infrastructure, turning the dollar into the sole credential for purchasing the world's strongest computing power and most efficient productivity. This is the necessary condition for the dollar's triumphant return.

Otherwise, against the backdrop of physical constraints and AI redefining global division of labor, the dollar system will gradually lose its ability to discount the future, slowly entering its endgame—a gradual but irreversible relative decline, until a monetary anchor better representing real productivity and technological dominance emerges to replace it.