Is the Global Monetary System Facing an Imminent Collapse ?

When the Fed Chair Admits the Failure of the Monetary System

A statement made in recent days has gone almost unnoticed. However, it could mark a historic turning point in the global economic history. Jerome Powell, the chair of the US Federal Reserve, has half-heartedly admitted that the Central Bank has broken the monetary system as we know it.

In a speech on June 2, 2025, Powell referenced the end of the Bretton Woods agreements as the point where the global financial system started to derail. A stunning admission considering that it’s precisely from that period that the Fed has assumed a central role in the global financial balance.

It’s a bit like the manager of a McDonald’s standing at the entrance of the restaurant warning customers that the food is mediocre. The global economic compass now points to the problem… being the compass itself.

The Agony of the Monetary System : Debt, Budget Chaos, and Political Deadlock

To grasp the extent of the crisis, we need to revisit the basics. The Bretton Woods agreements, signed in 1944, placed the United States at the center of the global economy with a dollar convertible to gold. This system came to an end in 1971 when Nixon abandoned the gold standard, allowing the US currency to float freely.

This decision marked the beginning of an era where money is no longer tied to a finite material asset. Drawing a parallel with the crypto world, it’s as if the supply of Bitcoin suddenly transitioned from 21 million to infinity, with a single entity making all decisions.

Fifty years later, the outcome is clear: the financial system is broken. American debt has reached staggering heights:

• $36.2 trillion in total
• $106,000 per American citizen
• 114% of the national GDP
• An increase of $1 trillion every 180 days

To grasp the scale of these figures, a comparison is necessary:

• One million seconds represent about 11.5 days (it was May 29)
• One billion seconds take us back to 1993
• One trillion seconds thrust us to 30,000 BC

Long-term projections are even more alarming. The debt could reach 195% of the GDP by 2050 if nothing is done. It’s like hiking with a backpack, and with every kilometer, you add 1/36th of the initial weight. In less than a day, the burden becomes unbearable, and you collapse.

Trump’s Plan : A Two-Phase Strategy

Facing this critical situation, the Trump administration is implementing a two-phased strategy to try to save the US economy.

Phase 1 : Elon Musk’s DOGE and Budget Cuts

The first step was to establish the Department of Governmental Efficiency (DOGE), led by Elon Musk. Its mission was to drastically reduce public spending. The results look impressive on paper :

• $160 to $175 billion in savings
• An amount surpassing the budget

Despite these considerable efforts, Musk himself acknowledged the relative failure of this approach. The savings, while substantial, are insufficient in the face of the scale of US debt and deficit.

Phase 2 : Separating the Private Sector from the Public Sector

This is where the strategy takes a radical turn. The Trump administration shifts focus from deficit reduction to supporting economic growth, even if it means sacrificing the value of the dollar.

The “One Big Beautiful Bill Act,” passed by the House of Representatives on May 22, 2025, exemplifies this new approach. This massive spending plan aims to boost economic activity and reduce taxes, albeit through a deliberately inflationary policy.

This strategy, which has contributed to the recent clash between Trump and Musk, is based on a cynical calculation but potentially effective:

• A depreciating dollar mechanically reduces American debt (denominated in dollars)
• Private sector companies become more competitive internationally with a weak dollar
• Tax cuts for businesses give them more maneuvering room

The flip side? Government employees, retirees, and all those reliant solely on the dollar for their purchasing power will see a significant decline in their standard of living. With 16% of the American population working in the public sector, this strategy could nonetheless “save” a majority of Americans while sacrificing a minority.

Towards a Planned Fall of the Monetary System

Analysts now agree on a well underway downward trend for the greenback. Some projections even suggest a potential devaluation of 30% of the US dollar in the coming months.

This perspective, which would have seemed catastrophic a few years ago, is now considered a pragmatic solution to the debt problem. By devaluing its currency, the United States could significantly alleviate the burden of its financial obligations.

This scenario is reminiscent of what happened in Turkey during the Turkish lira crisis. While the national currency was collapsing and government employees and retirees were tightening their belts, the Turkish stock market and Bitcoin were reaching new heights.

The logic is clear: when a currency collapses, the priority for holders is to exchange it as quickly as possible for more stable or high-growth potential assets.

Cryptocurrencies as the Ideal Haven

In the context of a planned devaluation of the dollar, cryptocurrencies emerge as a particularly attractive alternative for investors seeking to preserve their purchasing power.

Several factors support this thesis:

• The average investor currently holds only 0.3% of their portfolio in Bitcoin
• Larry Fink, CEO of BlackRock, recommends an allocation of 2 to 5%
• The US real estate market, with $700 billion in properties for sale, is already overpriced and inaccessible due to high interest rates
• Companies are increasingly converting a portion of their treasuries into Bitcoin (MicroStrategy, Tesla, etc.)

Even more surprising, countries themselves are beginning to seriously consider cryptocurrencies as a strategic reserve. Beyond El Salvador, a pioneer in this regard, countries like Argentina, Pakistan, Kenya, and Ethiopia are now actively leveraging Bitcoin using their governmental resources.

This trend is all the more remarkable as most of these countries are under agreement with the IMF, an institution that has traditionally shown strong hostility towards cryptocurrencies. The fact that these nations are taking the risk of displeasing the “banking cartel” indicates the growing allure of Bitcoin as an alternative to the traditional monetary system.

Toward a New Bretton Woods with Bitcoin at the Center ?

The recent initiative of Russia’s largest bank, which has launched Bitcoin-indexed bonds, illustrates the global enthusiasm for cryptocurrencies. These bonds, which track both BTC fluctuations and the exchange rate between the dollar and the ruble, allow Russian investors to benefit from Bitcoin’s rise while being paid in dollars.

This convergence of interests around Bitcoin, from Washington to Moscow, Buenos Aires, and Islamabad, suggests that we may be witnessing the beginnings of a new global monetary system where cryptocurrencies would play a central role.

The concept of “Bitcoin Bonds” could foreshadow what a “Bretton Woods 2.0” would look like: a fusion between the old debt-dominated system and major banking institutions, and our fast-growing digital economy that relies less on debt.

In this new paradigm, cryptocurrencies would serve as “rails” for international payments and fundamentally transform the structure of global capital:

• Fiat currencies would still exist but intentionally weakened (like a dollar at -30%)
• Assets such as Bitcoin would serve as new reserves, financing, or collateral bases
• The system would shift from a debt-based logic to a “post-credit” approach based on decentralized digital assets

Which Cryptocurrencies Will Thrive ?

If the scenario of a controlled collapse of the dollar materializes, we could witness a widespread “Alt Season,” where all cryptocurrencies would benefit from a massive inflow of capital.

Several categories of digital assets could stand out:

• Bitcoin : as the digital “gold” and ultimate store of value, it would remain the preferred choice for institutional investors and states
• Stablecoins : paradoxically, these dollar-indexed currencies could play a crucial role in transitioning to a new system
• Ethereum and other programmable blockchains (Solana, Cardano, etc.): their ability to serve as infrastructure for decentralized finance would make them essential players
• Payment tokens like XRP: they could benefit from the increasing adoption of cryptocurrencies for international transactions

The golden rule in this context would be simple: “Anything but the dollar!” Investors would seek to exchange their fiat currency as quickly as possible for tangible or digital assets to safeguard their purchasing power.

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