Andrei Jikh — China Is Preparing For $38,000 Gold

0:00 China's biggest retail ETF is now a gold ETF

• For the first time, the largest ETF ordinary Chinese people put money into is a gold ETF — $13B, having just passed the CSI-300-equivalent "China's S&P 500" at $12B.
• Framed against the US analog (the S&P 500, held via ETFs "like VOO"): in the world's second-biggest economy, the biggest chunk of retail money now sits in gold.

0:52 Buying gold while the price crashes — the PBOC's 20-month streak

• Gold peaked ~$5,600 earlier this year, then fell almost 30% below $4,000 — and China bought more into the drop.
• The People's Bank of China bought for the 20th month in a row (longest streak since at least 2015): ~15t in June (biggest monthly buy since Oct-2023), ~700t imported in the first 5 months, ~14,000t combined since 2015.

1:43 Central banks & countries pile in; China's July 24 paper-gold shutdown

• Not just the PBOC — world central banks bought 41t net in May alone; Poland, Uzbekistan, Kazakhstan all buying.
• On July 24, four of China's biggest banks shut down retail gold trading — pushing citizens toward the real thing, not "the paper representation of gold."

2:31 Bessent's WSJ op-ed: a return to Hamiltonian economics

• Two weeks earlier the US Treasury Secretary published a WSJ op-ed outlining a return to an economic system named after Alexander Hamilton.
• US gold: "all present and accounted for" at Fort Knox — the largest pile in the world, "over a trillion dollars at current market value." The op-ed, Jikh says, explains why China and central banks keep buying — and why "the math only balances out when gold reaches $38,000 per ounce."

3:43 Credit to Luke Gromen / FFTT — how empires get rich (cheat, then preach)

• He explicitly credits Luke Gromen of FFTT for connecting the dots (the op-ed, Hamiltonian economics, the gold flows).
• The pattern: rising powers "cheat" with protective policies and tariffs; once they win, they preach free trade to everyone else. Every country that got rich did it the same way.

5:12 Hamilton's playbook: tariffs + subsidies for "infant industries"

• 1791: Hamilton's "Report on Manufactures" — a two-part plan of (1) tariffs on foreign goods and (2) subsidies for American industry, protecting young "infant industries" until they could compete globally.
• That "operating system" ran ~150 years and took the US from a farming startup with no factories to the world's biggest industrial power; Trump has publicly referenced returning to it.

8:39 How empires fall: Britain's 85-year handoff; the US clock started in 1971

• Britain converted to free-trade "religion" in 1846 (repeal of the Corn Laws), slowly de-industrialized, and by 1931 was no longer the global empire — an ~85-year process that's why people don't notice it happening.
• For the US, the clock started in 1971, when the dollar came off the gold standard — which "eventually led to factories leaving."

9:53 Financialization / securitization — shuffling paper instead of making things

• De-industrialization happens via securitization: a country builds a paper market, and more of its income comes from moving paper than making real goods.
• The structural incentives that follow — share buybacks instead of building, cheaper imported parts, offshoring labor — push factories out and stock prices up, leaving the nation "rich on paper" but stripped of the capacity to build (even weapons to defend itself).

12:14 The trade America made: cheap goods, unaffordable essentials

• Since 2000, shippable goods collapsed in price (TVs −98%, toys −74%, software −73%) while un-shippable essentials soared (housing +111%, childcare +159%, tuition ~+200%, hospital services +281%).
• The bargain: unlimited cheap choice for consumers and paper wealth for asset owners, in exchange for the industrial base and the high-paying jobs that once let one income buy a house.

13:28 Greer at Davos + Bessent's five core principles

• US Trade Representative Jamieson Greer flagged the Hamiltonian turn at Davos in January; on June 23 Bessent's WSJ op-ed ("Hamilton inspires Trump's economic statecraft") laid out five principles.
• The operative ones: "economic security starts with national capacity" (make things again), openness "matched by reciprocity," and "financial leadership is a central instrument of statecraft" (use our dollars, price oil in them, buy our Treasuries/stablecoins).

15:22 Gromen's trilemma: factories / Main Street / strong dollar — pick two

• Those principles imply three goals — rebuild factories, protect Main Street, keep the dollar strong — that, per Gromen, can't all be true at once: any two forces sacrificing the third.
• Rebuild + Main Street ⇒ the dollar must fall (the expensive dollar is what makes US factories uncompetitive). Main Street + strong dollar ⇒ factories never come back (the last 50 years). Factories + strong dollar ⇒ huge tariffs and inflation. "Bessent is way too smart not to know this" — the one he gives up is the dollar.

16:55 The escape valve: sacrifice the dollar into a neutral reserve asset (gold)

• The "clever" way to lower the dollar without blowing up the system is to route the adjustment through a neutral reserve asset — one that's no single country's currency and can absorb the move.
• "There's really only one asset on Earth with a couple thousand years of experience doing that" — gold.

17:22 China's 2009 blueprint: Zhou's paper reviving Keynes's bancor

• After the 2008–09 crisis, China — holding trillions in US Treasuries while the Fed printed — published (March 2009) the PBOC governor's "Reform the International Monetary System," calling for a reserve currency "disconnected from individual nations."
• It revived John Maynard Keynes's bancor: a settlement currency backed by a basket of ~30 commodities that punishes both surpluses and deficits, automatically correcting the imbalances that let one country hollow out another.

19:56 The 1944 irony — and Zoellick (2010) & Rogoff (2016)

• The US rejected Keynes's plan at Bretton Woods because in 1944 it ran the giant surplus ("the China of the world") and didn't want a system that punished surpluses — Greer admitted as much at Davos. Now the US is on the losing end and quoting the same argument.
• Others echoed the neutral-asset case: World Bank president Robert Zoellick (2010 FT op-ed, gold "as an international reference point"), and ex-IMF chief economist Ken Rogoff (2016) — gold, "despite being in nearly fixed supply… there is no limit on its price."

22:25 Why $38,000: settling China's trade surplus in gold

• Gold "cannot do that job at today's prices — it's just too low." The revaluation math: take China's last trade surplus (~$1.2T) and divide by its 2024 gold imports (940t) → ~$38,000/oz, the price at which gold could settle the biggest imbalance.
• "Trade surplus divided by gold." At today's price gold is too cheap to settle world trade; at $38,000 "it covers most of it."

22:51 The evidence checklist confirming the regime

• If the theory were right, you'd expect: central banks buying a lot of gold — exactly what's happening (PBOC 20 straight months through a 30% crash; ~1,000t/yr globally for 3 years, ~double the prior decade).
• Plus the paper-gold ban (kill the leveraged claims suppressing the metal before a revaluation) and record US non-monetary gold exports to China (largest in the data's history, starting Q4 last year after US–China talks) — which Gromen predicted the Hamiltonian system would require.

25:57 Two endings, one destination; timing is the only unknown

• Gromen's two paths: the MAGA re-industrialization plan fails — the post-1971 system comes apart "the bad way" (the 1922–1945 analog: depression, currency collapses, a world war) and gold skyrockets; or it works — a controlled transition to gold as the neutral settlement asset China asked for in 2009.
• "Both roads lead to the same outcome" — gold higher; the only variable is how fast and how painful.

27:35 Measuring in gold: the safest assets have been the worst place to be

• He expects a capital rotation from "financialized America" into real infrastructure and commodities — where "gold will outperform everything else."
• Since early 2018 (the first China trade war): S&P 500 +161% in dollars but −15% in gold; long Treasuries −31% in dollars / −78% in gold; gold miners +200%. Dollar prices are "an illusion" — measured in un-inflatable money, the "safest" assets were the worst place to be.

29:28 His own position: no gold yet, waiting for a safer entry

• None of this is secret ("it's in the Wall Street Journal… announced at Davos") — hiding in plain sight; he thinks it could take more than a decade, with major corrections "even for gold."
• Being right on direction ≠ right on timing — which is why he "personally doesn't hold any gold yet," watching daily for a safer entry. The eventual buy video will live in his premium member section (earlier videos + extra economy thoughts).