The Bank for International Settlements just dropped its annual report, and it reads like a warning label. The global economy is entering what they call a pivotal moment. Not a soft patch. Not a cycle. A structural shift. The kind that doesn’t reverse with a rate cut or a stimulus bill.
Agustín Carstens, the outgoing head of the BIS, said the world is moving into a new era of heightened uncertainty and unpredictability. That’s not a throwaway line. It’s a signal. The BIS is the central bank for central banks. When they speak, it’s not noise. It’s the temperature of the room.
The report outlines a few key fractures. Trade fragmentation is accelerating. Protectionist policies are stacking up. The US dollar has dropped 10% since January, the sharpest half-year decline since the 1970s. Sovereign funds are hedging. Central banks are shifting allocations. The dollar is still dominant, but the cracks are visible.
Public debt is climbing. Fast. Global debt-to-GDP ratios are back near pandemic highs. Military spending is rising. Fiscal buffers are thin. The BIS warned that governments are losing their ability to spend their way out of the next crisis. The math is getting tight.
Inflation expectations have changed. The post-COVID spike didn’t fade from memory. It rewired consumer behavior. People expect prices to rise. That expectation is sticky. It feeds into wage demands, pricing models, and policy responses. The Fed and ECB are watching it closely. So is the BIS.
Then there’s the trust issue. The report says public confidence in central banks is eroding. That’s not a political jab. It’s a data point. The institutions that manage money are losing credibility. That has consequences. It affects how markets respond to guidance. It affects how citizens respond to policy. It affects stability.
Now look at what central banks are doing with their own reserves. Gold holdings are back to levels not seen since the 1960s. Over 1,000 metric tons added annually for three years straight. That’s not a hedge. That’s a repositioning. The World Gold Council’s 2025 survey shows 95% of central banks expect global gold reserves to rise again this year. Forty-three percent plan to increase their own holdings. None plan to cut.
The BIS didn’t say the system is breaking. But they made it clear the old playbook is running out of pages. The next shock won’t be absorbed the same way. The buffers are thinner. The trust is lower. The tools are blunter.
Most people missed this shift while it was happening. But the central banks didn’t. They’ve been preparing. Quietly. With metal.
Sources
https://www.rte.ie/news/business/2025/0630/1520986-bank-for-international-settlements-report
https://x.com/BankerWeimar/status/1939396150815056044
https://www.gold.org/goldhub/research/central-bank-gold-reserves-survey-2025