Executive Summary
A widely shared e-mail argues that all fiat currencies are intentionally being “demolished” to force populations onto central-bank digital currencies (CBDCs). Elements of the story are grounded in fact—record global leverage, active CBDC pilots—but the sweeping claim of a synchronised, near-term fiat breakdown is not corroborated by macro data or market pricing. Our base-case remains gradual digital-rail adoption, punctuated by episodic policy errors, not an overnight reset.
1 | Claims Tested Against Evidence
| E-mail Assertion | Current Evidence | Assessment |
|---|
| “All currencies are collapsing.” | OECD headline CPI has eased from 8-10 % (2022) to ≈ 4½ % (Oct–Nov 2024). IMF projects 4½ % global inflation for 2025, trending lower thereafter. OECDIMF | Real-income erosion persists, but a disorderly FX collapse is not in the data. |
| “Global debt explosion proves the reset.” | Total debt hit USD 323 trn in Q3-2024, a record high. Institut međunarodnih financijaInstitut međunarodnih financija | Elevated leverage = higher fragility, not automatic collapse. |
| “Every nation is on the same CBDC timetable.” | 94 % of central banks explore CBDCs, but roll-outs range from China’s retail pilot to the U.S. still in research phase. Bank for International Settlementspaymentscardsandmobile.com | Coordination on research, not on deployment dates or design. |
| “Programmable money will include expiring balances & social-credit scores.” | BIS/IMF papers discuss identity layers, but also hard-wired privacy, offline use, and caps. Design decisions remain open. Bank for International Settlements | Risk exists if safeguards fail; not yet codified. |
| “Rate suppression + asset inflation = coordinated theft.” | Emergency-low rates (2020-22) did inflate asset prices; 2022-24 hiking cycle partly reversed that transfer. | Policy mistakes ≠ deliberate universal coup. |
2 | Macro & Market Diagnostics We Track
| Indicator | Current Reading | Signal |
|---|
| DXY | 104 (-4 % y/y) | No sign of flight from USD. |
| G-7 CPI (median) | ~3.9 % | Disinflation trend intact. |
| Cross-currency basis (3-m EUR/USD) | – 4 bp | Normal funding; stress begins > –20 bp. |
| Treasury auction tails (3-, 10-, 30-yr) | < 1 bp YTD avg | Dealer capacity sufficient; watch > 3 bp. |
3 | Portfolio Implications & Algo-Fund Stance
| Theme | Positioning | Rationale |
|---|
| Gradual CBDC adoption | Long payment-rail & ID-verification equities vs. legacy card processors. | Rails benefit whatever the final CBDC design. |
| Leverage-driven volatility | Maintain S&P-500 3-m 10-Δ put spread (carry ≤ 0.25 % NAV). | Cheap tail gamma hedges policy errors. |
| Inflation glide-path | 5-yr breakeven wideners vs. spot gold call spreads. | Hedge baseline disinflation yet retain upside if credibility slips. |
| FX concentration risk | Up-to-30 % non-USD short-duration sovereigns plus 5 % gold allocation. | Diversification without betting on fiat extinction. |
4 | Red-Flag Triggers to Watch
| Catalyst | Action if Triggered |
|---|
| Bill mandating CBDC wallets for tax refunds or benefits | Increase rails exposure; reassess privacy risks. |
| > 3 bp average tails in two consecutive Treasury cycles | Add 2s/30s steepeners; raise liquidity haircuts. |
| 3-m EUR/USD basis ≥ –25 bp | Deploy dollar-funding hedges; shorten HY credit. |
| Sustained OECD CPI re-acceleration > 6 % | Rotate into inflation-linked and real-asset plays. |
Concluding Remarks
Yes—fiat money inherently depreciates, and CBDC research is nearly universal. But current macro data argue for a managed evolution toward digital settlement, not a sudden, globally coordinated currency extinction. Our playbook therefore focuses on liquidity metrics, legislative signals, and option-value hedges, rather than positioning for a one-day reset.As always, we will adjust exposures if hard data—not viral e-mails—indicate regime change. For deeper discussion, reach out to your Algo-Fund strategist.(This note is informational and not investment advice.)