There is a “soft landing” scenario that actually seems to be where the central banks are going, but I don’t give it much long-term chances for success.

Basically, the central banks lowered the interest rates to the point where a large percentage of bonds are now yielding negative interest. Negative interest on bonds is technically called a default. Also, Basel III magically reassigned gold from a level 3 security (valued at 50% nominal) to a level 1 security (valued at 100% nominal). Before that, only the bonds were level 1. This means the central banks can now legally swap bonds for gold, and they are actually doing that for quite a while. If they reach more than 20% of monetary emission backed by gold, and more likely 40%, we are then technically on a gold standard, although the public might not even realize. There are, however, problems with this. According to my estimate, dumping bonds for metal will deflate the economy, in a process very similar to what’s going on in a refrigerator, when the compressor liquefies the gas, and bleeds extra energy into the environment. This will basically bleed bullshit from the economy and solidify assets into smaller volume but greater reality and reliability. As this takes place, the states will lose the ability to convert debt into monetary mass, since the market will be saturated by their unwanted, negative-yielding debt. Also, all sorts of imaginary n-th order derivatives will evaporate, they will collapse into nothing, or at least very minor percentage of their overall volume will be converted into solid assets.

Eventually, as the monetary mass is converted into real assets, monetary metal will appreciate at least by a factor of 10, but that is a conservative assessment. Silver might actually over-correct and appreciate by a factor of 100. Basically, if you don’t want some asset-class to evaporate, you will need to convert it or back it with solid assets. The central banks will buy the most of monetary metal on the market before anyone else smells the coffee, so the fiat currency might actually survive the impact with purchasing ability relatively intact, but money might be quite scarce. The rest of the asset-holders will fight for scraps and try to buy whatever monetary metal and other solid assets on the market for extremely high prices and in very small quantities.

During this process, there will be a huge social crisis due to the reduced availability of money, where the populist politicians will rally the mob against the central banks “that hoard gold while people starve”, and they will successfully pressure the governments into printing money to throw at the mobs wielding pitchforks, at which point the system will collapse and civilization will die in a hyperinflatory explosion. The alternative is for the government to figure out how to kill off a significant portion of the population that is currently in debt, creates no solid income and is reliant on government aid. Basically, either those people die, or everybody dies. My assessment based on game theory is that everybody dies.