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So, there's a theory that I want to share with you about what actually happened when Trump went to China and brought with him 18 CEOs: Elon Musk, Tim Cook, Jensen Huang, Larry Fink from BlackRock. The most powerful business leadership ever put together for a foreign trip in American history. The whole world is watching our meeting. Currently, transformation not seen in a century is accelerating across the globe, and the international situation is fluid and turbulent. The world has come to a new crossroads. Can we, in the interest of the well-being of our two peoples and the future of humanity, build a brighter future together for our bilateral relations?
These are the questions vital to history, to the world, and to the people. Now, the theory says that what this was all for was a negotiation for a new monetary order, probably the most significant one in our lifetime. The post-World War II order, imposed largely by the US, is breaking down. Would you say China has a substantial say, if not dictating, the next world order? Yes, of course. And this theory goes back 40 years ago to a deal that most people have probably never even heard of, but what it did was it restructured the whole global economy. And that deal made one country super rich, and it destroyed another one for 30
years. That deal was called the Plaza Accord. What is that? In 1985, the United States had a couple problems. It had a huge trade deficit. It had a dollar that was too strong, and American manufacturers couldn't compete globally, which kind of sounds exactly like today. So, the Reagan administration called in a secret meeting at the Plaza Hotel in New York City. They brought in France, West Germany, Japan, and the UK. And behind closed doors, they made a deal. The deal was other countries agreed to manipulate the currency markets to weaken the US dollar, specifically against the Japanese yen.
Now, why would the US want to do that? Well, because what happened then was the yen doubled in value almost overnight. Japanese exports became really expensive and American goods became cheap by comparison. So, the trade deficit got smaller and America became more competitive in manufacturing. Now, in exchange, Japan got something as well. Japanese companies were allowed to invest heavily into the United States. So, companies like Toyota, Honda, Nissan started to build factories here in America. Japanese money flooded into US real estate, US treasuries, and US businesses. And for a little while, everyone was winning. But, here's what happened to Japan. When their currency doubled that fast, their whole economy, which was mostly
export-driven, sort of seized up. So, Japan tried to compensate and save their economy by flooding it with cheap money. That cheap money created the biggest asset bubble in modern history. Real estate, stocks, everything went parabolic. And Japan spent the next 30 years trying to dig itself out of that hole. History calls it the lost decades and to this day, Japan never fully recovered. Okay, so how does this relate to China? How it relates to China is because I don't think the real negotiation was about tariffs.
There's a possibility that what they talked about was a rough draft of a new Plaza Accord. Why we think this is because China first proposed this deal themselves in October 2025 to Scott Bessent. Except, China's not going to let their currency get Plaza Accorded the way Japan got, cuz they watched Japan get destroyed by a currency revaluation. [snorts] So, if China's going to make a deal, it won't be a revaluation of the dollar against the yuan. It'll be done through another asset. The theory is that this asset is probably going to be gold. And if that is right,
it could change everything. It's going to change what it means for the dollar, what it means for inflation, what it means for your savings, your investments, and probably the whole money system itself. So, with that said, let's speculate together on why this is happening, what this deal might look like, and what this means for the US economy and our wallets. So, with that said, let's get into it. Hi, my name is Humphrey Yang. Hope you're doing well. Come for the finance and stay for China. So, to understand this deal and why this is being negotiated right now, we need to understand what's actually happening in the world at this moment.
So, let's start with what Xi Jinping said in his opening statement about something called the Thucydides Trap. Can China and the United States overcome the Thucydides Trap and create a new paradigm of major country relations? Now, the Thucydides Trap is a theory from political science. It's actually named after an ancient Greek historian who studied the war between Athens and Sparta around 400 BC. And what Thucydides noticed was this. When a rising power starts threatening the dominance of an existing power, the result is almost always war. That's cuz fear, pride, and competition makes conflict almost inevitable. So, after studying cases throughout history, they found 16 cases where a rising power
challenged the ruling one. And in 12 of the 16, they ended in war. So, Xi Jinping's like, "Hey, we both know China is a rising superpower, and we both know how this story usually ends. Let's not do that." Now, to understand why it's all happening right now, we have to look at the most important thing, which is the flow of energy. Because whoever controls the flow of energy controls leverage and what's called capital flow, aka where money goes. Now, we know that the Strait of Hormuz controls roughly 20% of the world's energy. And since the US-Israel war with Iran started earlier this year, the strait has been closed, and it is still closed.
We can see that in the data. The official story we've been told for months is that this will get resolved quickly, right? The peace deal is coming, Hormuz will reopen, everything will go back to normal, and the stock markets have been pricing in this perfect assumption. But the data is telling us a completely different story. The story it's telling us is that the world has been drawing down its emergency oil reserves to compensate for the closure. And those reserves are starting to run out.
Bloomberg reported that global oil inventories will hit operational stress levels by about June. Minimum floor levels, meaning the bare minimum that's needed to keep things like pipelines running and refineries operating, those will run out by about September. And Jeff Currie, who is the ex-head of commodities at Goldman Sachs, on Bloomberg said, "Parts of Europe and Asia are already in shortage right now." There's a big difference between a deficit and a shortage. We're in a deficit. Demand is above supply. We are drawing inventories. And so, you're borrowing oil from the future right now.
The US hits critical levels around July 4th. Even the CEOs of Chevron, ConocoPhillips, and Saudi Aramco are all giving interviews where they're saying that they're worried about the supply of oil. The US can't make up all of that supply. Mhm. Uh inventories in the system are being drawn down and uh and the supply situation is tightening and that's that's a concern. Morgan Stanley put out research saying there's essentially no demand destruction in oil until prices hit $140 a barrel. But for some reason oil is still under $100. Someone's been using the media and the paper markets to calm everything
down and stabilize the whole global financial system. Right, things like oil and rates and volatility are all being managed. They're buying the US some time. Minutes before each market-moving announcement, suspiciously timed trades made investors about $2.6 billion betting oil prices would drop and now the DOJ is investigating. Now, while all of this is happening I also think we're being sold a Hollywood story. Cuz the official White House press release from the Beijing summit said both Trump and Xi agree that Iran could never have a nuclear weapon. So, they want people to think of this story it's kind of like a Hollywood movie of good guys versus bad guys.
But here's the problem. You named the allies of China, they're all dirt bags. They're aligning with the worst people in the world. They're buying oil cheaply from Iran, keeping their war machine going. Same thing with Russia. If China stopped buying Iranian oil or threatened to do it, the war in Iran would be over. Okay, here's how you know that all of that is theater. China has nuclear technology. Russia has nuclear technology. And Russia has been Iran's closest ally throughout this whole conflict.
Russia and China have every motive in the world to pressure the West. Either one of those countries, if they wanted, could easily give Iran a nuke. Right? Here you go, Iran. Have fun. Go use that as leverage. But they haven't done that. Why? I think it's because they already have all the leverage they need. A closed strait is slowly draining the world's oil supply, and that is worth more to Russia, Iran, and arguably China than a nuclear war.
The strait being closed is their economic weapon of choice. So, when they all sit down and say, "Yeah, Iran could never have a nuclear weapon." Right? That is all just virtue signaling. It's all theater, and you're being told that Hollywood story. I believe the real story is that China and Russia are using Iran as a proxy, as a middleman to put pressure on the West so that they could get favorable leverage in this new monetary deal. Now, who actually benefits from this is Russia, Iran, and China because the longer Hormuz stays closed, the more urgently the United States needs to make a deal before its financial markets get exposed by the reality of the broken
supply chains. Right? And China now has enough economic power to buy themselves a seat at the table of this new global monetary restructuring. So, this theory says that is why Trump flew to China with 18 CEOs. He's like, "All right, guys. Let's make a deal." Right? And here's what this theory says they've been trying to build. And there's two parts to it. There's the part that's been made public, and there's another part that hasn't. So, the public part is this. According to reports from Bloomberg and the New York Times, Trump and Xi are considering a deal where China invests $1 trillion into the United States. And most of that money will be used to build factories in America. So, think
manufacturing plants, supply chains, industrial infrastructure, and guess what? That is the same strategy Japanese automakers ran in the 1980s after the Plaza Accord. Toyota, Honda, Nissan building their cars in America, right? Except this time it's Chinese capital or money. And the scale of this is way bigger. Now, that sounds like a win for America, and Trump can say that this will bring back jobs, factories, investments, and in some ways it is. But if you remember, China proposed this deal first in October 2025 during negotiations in Madrid. China gave this offer to Secretary Scott Bessent, and the terms were this.
China is going to flood the US with investment money, but in exchange, the US has to roll back national security restrictions on Chinese deals, and get rid of tariffs for Chinese-owned factories built here in the US. Chinese analyst Henry Wong says Beijing has leverage over Iran as its largest trading partner. He believes she could provide a much-needed off-ramp for Trump, but it's likely to come at a price. She wants a reduction in tariffs, removal of export controls on advanced semiconductors, and sanctions lifted. But what he wants most is Taiwan. So, the question you have to ask is, well, why would China want this?
What does China get out of investing a trillion dollars into America, right? Cuz it's not a charity case. So, think about what they're actually buying with this money. They are buying market access because America's the biggest consumer market in the world, and China's export economy needs it, right? They're buying monetary legitimacy, a seat at the table when the global financial system gets restructured, and gold appreciation, right? Because if this deal triggers a repricing of gold, China's huge reserves explode in value. [snorts] The trillion-dollar investment could potentially pay for itself. And then, there's almost [clears throat] certainly something else that's kind of implied in all of this, which is Taiwan and rare
earths. It's also critical for America's economy. Taiwan produces more than 90% of the world's most advanced semiconductors, crucial for AI and defense, making Taiwan ground zero for a global supply chain. See, the coexistence between the two superpowers, between China and America, they both know that this Thucydides trap usually ends in war. But China's not going to make the same mistake Japan made. Remember, Japan let their currency get doubled in value overnight. It destroyed them for 30 years. China will not allow for a direct revaluation of the yuan against the dollar. That is their hard line. Here's what China's going to do instead.
They can allow for another asset to reprice. They can use that asset as an escape valve for this repricing. That asset is most likely gold. Here's why. The United States government holds over 8,000 tons of gold. But here's the thing. On the US government's books, the gold is valued at only $42 an ounce. That is still the price today, which was set way back in 1973. The actual market price of gold right now is somewhere over four and a half thousand dollars per ounce. Which means the US is sitting on a balance sheet that is dramatically understated, right? Now, China also holds insane amount of gold reserves. We
don't really know how much gold they have, but they have a lot. And unlike the US, China's been aggressively accumulating more gold for years. And according to research from Luke Roman at FTT, for five of the last six months, the single biggest export out of the United States, bigger than oil, bigger than pharmaceuticals, bigger than aircraft engines, has been gold, something called non-monetary gold. Physical gold is leaving America. Where is it going? It's going to China. Or Switzerland first and then eventually to China. Right, why is that such a big deal? It's a big deal because there's a rule of thumb that has held true throughout basically most of history.
The rule is that the country exporting its gold is usually the one losing, and the country importing gold is usually the one winning. For example, think about what happened to Great Britain in the early 20th century. As the British Empire declined, gold left London and came into New York. And by the time World War II ended, America held more than half of all the world's gold. That gold pile is literally why the dollar became the world's reserve currency. The country with the gold writes the rules. Ironically, you don't see China and all their financial power coming to meet Trump here in America. It's the other way around, right? And right now in 2026, the United States is the single biggest exporter of gold in the world. It's
going to China. Right, this is the silhouette of a monetary transition that's happening right now. It's not 100% for sure, but these are sort of like the fingerprints of a deal that is being made in China. And here's what this gold-centric Plaza Accord might actually look like. So, instead of China revaluing the yuan against the dollar, which would destroy China's export economy the way it destroyed Japan's, both sides could allow the dollar to weaken against gold. The US could mark its gold reserves to market price, and all of the sudden, the US balance sheet could look dramatically better.
The debt burden would look a lot more manageable. The dollar weakens, not against the yuan directly necessarily, but indirectly against gold, which means China's huge gold reserves also go up in value as well, and China gets richer without ever having to touch the yuan exchange rate. Now, in return, Chinese money floods into American manufacturing. A trillion dollars of investment for factories, infrastructure, jobs. The American industrial base could potentially get rebuilt, ironically with Chinese money, but either way, Trump gets to look like a hero, and China gets access to American markets. They get tariff relief. And most importantly, they get a seat at the table in this new monetary structure.
Chinese cars could potentially hit the US market within about 5 years from now. And both sides could call it a win. Right? They both get to look like Hollywood heroes that saved humanity by not allowing Iran to have a nuclear weapon. The reality of this is that it's most likely a coordinated devaluation of the dollar against something else. And here's what makes me think that this might be more than just a theory. The market could potentially be pricing this in. The insiders know, right? Since late March, right around the time of US Treasury markets starting to show signs of stress, the dollar's been falling against the Chinese yuan.
That is the opposite of what you think would happen in a war that's supposedly designed to put pressure on China. Right? The Chinese currency has been getting stronger, not weaker. At the same time, this is the chart which shows a country's borrowing costs. These are bond yields. And you can see the Chinese government's bond yields, that turquoise line, that's been pretty steady. It's been going down. All other countries borrowing costs, including the United States, they're all going up. That is also the opposite of what should be happening if China was hurt by any of this. So, the only logical conclusion here is they're not really affected by this.
Other nations are because their borrowing costs are going up. And of course, gold has been on an absolute tear. These are just fingerprints of what could be a deal that is sort of underway. The market is sniffing it out before the announcement because smart money, they kind of know this. The insiders know. And if this deal gets done, what happens is the dollar devalues while Chinese investment restructures American manufacturing and it sets off a chain reaction across every asset class. And what that leads to is inflation, right? Inflation is not just a side effect of this deal. It might be the whole point because the dirty secret of modern finance is that inflation is how you make
unpayable debt payable again. Right? You inflate it away. A dollar of debt borrowed in 2020 gets repaid in $2030 that are worth half as much. So, the debt shrinks in real terms. And the way normal people experience this is through the price of eggs, rent, and gas. But inflation doesn't hit everyone equally. Right? If you own assets like stocks and real estate, gold, Bitcoin, ancient gold coins, Pokémon cards, watches, whatever, inflation makes you richer. Your assets go up in what's called the nominal value. So, you get protected. This is the top half of what economists call the K-shaped economy, the line that goes up. But if you don't own assets and you're living paycheck to paycheck and your wealth is in a savings account somewhere,
then inflation destroys you. Your dollar buys you less over time, which means your rent goes up, your groceries cost more, and wages don't keep pace. That is literally what's happening right now in the data. That's the bottom half of the K, the line that's going down. But now, layer in on top of all of that, what's happening with AI. The AI revolution that's making the top half of the economy more productive is also getting rid of the jobs that the bottom half depends on, like customer service, right? Data entry, trucking, manufacturing, warehouse work. These changes are literally happening right now. And not everyone's going to be able to adapt because math and statistics.
Transitions of this scale always leave some people behind. That creates anger. It creates low consumer sentiment, which is what we're seeing in the data. The kind that sometimes leads to social instability, protests, unrest, and potentially a breakdown of trust in institutions. And the people that are sort of engineering this monetary transition, the central planners, they've known this was coming for a long time. And that's why they've built the infrastructure to manage it. Now, they call it financial innovation, digital identity, programmable currency, digital ID, the world run on algorithms. But what it really is a centralization of power. It's a digital control grid. And you need people on their best behavior when the class
divide gets worse. So, the tools to do that are being built right now. And if you want to learn more about that, you can watch it somewhere up here, but it's called the digital control grid. So, tying all of this together, just remember that all of this is a theory. These are the most informed guesses we can make with the information available right now. So, the deal might never get done, right? Hormuz might reopen tomorrow, and maybe this gold theory is completely wrong. Or maybe it's right, but we don't know exactly where this inflation gets absorbed. Will gold be the absorber of all the inflation? Will it be consumer prices? Will it be a combination of both? We don't know. And maybe the digital control grid is all just
paranoia. Regardless of whether this is Plaza Accord 2.0 or whether the supply chains break and markets crash, which is also another possibility, I think all scenarios sort of point to the same thing. The dollar loses value, and the people who are protected are the ones who own the assets. So, the question is, which side of the K-shaped economy are you on? If your wealth is sitting in cash or in a savings account in dollars, you might be on the wrong side of the trade. The assets that make sense to hold in this environment are ones that governments can't print more of. Now, gold is the obvious choice, right? Bitcoin is another one. This is not investment
advice or a call to buy anything. It's just an asset that the government can't print more of. And, broadly speaking, any asset that has scarcity and utility. So far, this story is not over. This deal is probably not been signed yet. The oil crisis hasn't peaked, right? Kevin Warsh hasn't taken over the Fed yet. There's still a lot more coming. There's a lot more to this story, and I'll be breaking it down as it develops, but for now, this theory makes a lot of sense. And if you want to see how I'm personally preparing for all of this, the specific assets that I'm holding, what I think of this market, and what I'm actually doing with my own money, those videos live in the premium members
section. I also post more videos there, and you'll get access to the videos earlier than on the main channel. And if that is useful to you, the link is down below. Thank you for the support. It allows me to take on fewer sponsors in the future and continue to make videos like this one. In the meantime, I'd love to hear your thoughts about all of this and what your theory is. I hope you have a wonderful rest of your day. Smash the like button. Subscribe if you haven't already. I'd love to see you here next week. I'll see you soon. Bye-bye. Shh.
