The current financial system is unsustainable, and it is critical to understand the long-term consequences of the ongoing bank run and the economic fallout from the pandemic. In many ways, our current situation is similar to what occurred in 2008, and we are at a similar juncture to 1971, when the United States transitioned from a quasi-gold standard to a pure debt-based standard. What has changed is the consolidation of power, particularly among larger banks that are becoming even more systemically important.
The system's leverage is alarming, especially when compared to end-user trading. Even more concerning is the amount of information being withheld from the public, particularly the true size of bets placed. This lack of transparency, as well as the fact that the current system relies on public trust because there is nothing left in the system, is cause for concern.
Simply put, there are only two options: hyperinflation or hyperdeflation, and both result in the same outcome. The shift to digital currencies implies that the government will have more control and surveillance over people's financial transactions. While the FedNow payment system appears to be in response to the current financial system's distress, it may be a means of hastening the transition to digital currencies.
Investing in physical metals outside of the system may be a way to protect one's wealth, but it isn't a complete solution as long as central banks have the power to dictate what currency we use for exchange. Although the black market may evolve to facilitate transactions outside of the system, we would still need to convert our gold to the current tool of barter for things like paying a mortgage or a tax bill. We must eventually transition to a new system because the current one is no longer viable.
Source:
Stansberry Research, 6 April 2023, "Financial System Is Done, Nothing Left: Fed Will Now Fast-Track CBDCs Warns Lynette Zang",