Podcast Summary: TFTC #657: China's Gold War with Mel Mattison

Date: September 6, 2025
Host: Marty Bent
Guest: Mel Mattison

Overview

This episode of TFTC dives deep into the rapidly shifting macroeconomic and geopolitical landscape, with a focus on the global “gold war” involving China, the evolving role of the US Federal Reserve, the future of Bitcoin and gold, and the potential for massive policy changes under the Trump administration. Mel Mattison, an independent macro strategist and author, shares bold market predictions, analysis of monetary policy trends, and nuanced perspectives on US-China dynamics.

Key Themes & Discussion Points

1. Macro Outlook, Market Trends & Fiat Debasement

• Long-Term Trends vs. Short-Term Noise:
  Mel asserts that despite news cycles and panic, larger trends dominate: ongoing fiat currency debasement (which benefits gold, bitcoin, and equities), political incentives for economic booms, and policy-driven markets.

  "There's so much noise right now. But when you step back there are these major trends...there's this general fiat debasement trade in place which is long gold, long bitcoin, beneficial for equities." (01:04)

• Bullish Predictions:

  • S&P above 7,000 in a year

  • Bitcoin over $150,000 by end of year

  • Gold over $4,000/oz

  • 10-year Treasury yields with a “three handle”

  • Expectation of economic boom driven by political will

    "I'll make the prediction again: in three months from now... bitcoin will have hit 140 [thousand] and SPX will be at 6,800...a year from now S&P over 7,000, Bitcoin over 150, gold over 4,000..." (01:36)

2. Federal Reserve, Interest Rates, and Political Interference

• End of “Fed Independence”:
  Mel strongly argues that US central bank independence is a myth:

  "There is an inherent bias in the Fed. It's never been independent, it never will be independent. It is under the control ultimately of the Treasury. It always has been." (06:39)

• Monetary Policy and Politics:

  • Expect merging of Treasury and Fed, especially amidst economic 'war footing'

  • Historic parallels with periods when political pressure dictated monetary outcomes (WWII, 1950s, etc.)

    "Whenever the US Government needs to do something on monetary policy, they tell the Fed what to do and the Fed does it... The central bank is a servant of the government." (07:15)

• Interest Rate Forecasts:

  • Predicts as many as 8–10 rate cuts in 12 months ("down to around 2% FFR" (15:15))
  • Bonds, stocks, gold, and bitcoin all bullish as a result

3. Labor Market, AI, and Socioeconomic Tensions

• Hidden Weaknesses in Jobs Market:

  • Official unemployment numbers mask the rising unemployment rate among native-born Americans, especially women

    "The unemployment rate of native born women is skyrocketing in this country... they're a better read on the white collar. They're skyrocketing." (17:55)

• AI & Social Stress:

  • Public anxiety about AI, wages, and housing compounding uncertainty

  • Mel and Marty agree that economic, technological, and geopolitical inflection points are converging

    "We are living through this incredible inflection point...debt crisis, geopolitical strife globally with wars and all that. And then you throw AI in the mix." (22:26)

4. Geopolitics, China’s Gold Accumulation, and Global Reserve Structures

• China’s Gold Strategy:

  • China amassing far more gold than officially reported (estimates up to 32,000 metric tons)

  • PBoC and China using the Shanghai Gold Exchange to collateralize and exert influence over global gold markets

    "According to unofficial calculation, China holds... closer to 32,000 tons. As of 2007, China has replaced South Africa as the world’s largest producer of gold." (27:53)

• Gold, Oil, and the Yuan:

  • China enabling oil-for-gold swaps, replacing treasuries as an anchor

    "You can go to the Shanghai Gold Exchange and you can take those yuan and you can get bullion and you can bring it back to Riyadh... and now I think the Chinese are flying gold into Riyadh." (33:37)

• China’s Global Posture:

  • Western pundits misunderstand that China’s worldview flows from being a civilizational “society” rather than a “nation-state”

  • Preference for dominance within their region, not global conquest

    "A lot of people think the Great Wall of China was built to keep invaders out. It was built to keep the population in... It is a little bit of a different mindset." (36:06) "Their culture...is very different and very seeped in history, dynastic history, specifically, they think in centuries, not quarters, like we do over here in the United States." (41:47)

5. The Role of Bitcoin & Gold – “Stores of Value” in a Fractured World

• Gold and Bitcoin as Monetary Anchors:

  • Both increasingly viewed as the only stable stores of value, outperforming traditional assets in the fiat debasement era

    "Gold is the monetary metal... most of gold’s value is this monetary premium that people assign to it. Bitcoin is the new gold in that sense..." (38:58) "In the long run, there's only two stores of value right now. There's gold and there's bitcoin and that's it." (40:56)

• Bitcoin’s Maturation:

  • Increasing integration into traditional finance (TFI), volatility suppression, and its role as a global “release valve” for asset inflation

    "Bitcoin is becoming a part of the financial infrastructure of the United States... Bitcoin is going to be key to this whole Trump administration plan." (88:11)

6. US Foreign Policy, National Focus, and Political Volatility

• Questioning US Global Hegemony:

  • Mel suggests the US should surrender its role as Asian and global hegemon, instead focus on Western Hemisphere prosperity

    "Let China be the Asian hegemon... Let's just make Western hemisphere great again and let Russia worry and Britain and Germany and let China deal with Indonesia and Thailand." (44:29)

• Trump Administration’s Potential Moves:

  • Highlights possibility of unprecedented policy actions to “create a massive boom ahead of the 2026 elections,” including:

    • Direct intervention in mortgage/housing markets (e.g., buying MBS, reducing mortgage rates)
    • Potential “MAGA mortgage” products (federally subsidizing home buying)
    • Executive branch using former wartime precedents to override institutional constraints

    "There's going to be somebody next year who gets a 4% mortgage... people are going to start getting mortgages with four handles again... this is part of this boom that this president is trying to force through hell or high water." (74:28)

Notable Quotes & Segments

• On the Fed’s Role:
  • "Jerome Powell and the Federal Reserv. A bunch of crooks behind the curtain...there is an inherent bias in the Fed." (05:29)
• On Gold’s Primacy:
  • "Gold is the monetary metal... Bitcoin is the new gold in that sense..." (38:58)
• On the Fourth Turning:
  • "We're at a pivotal point... Do we want to... desperately hold on to some sort of global hegemony... or we could turn the page to something worse." (48:53)
• On the US Housing Market:
  • "Housing is huge. Housing is like 16, 20% of GDP... there's so much money that could pour into this economy, Juice this economy, if rates were lower." (72:11)

Timestamps for Key Segments

• Macro Trends, Market Outlook: 00:51–03:20
• Fed Independence, Treasury, and Political Pressure: 04:30–09:10, 54:00–56:00
• Jobs Market and AI-related Socioeconomic Fears: 16:05–18:55, 22:26–23:30
• China’s Gold War and Geopolitics: 26:13–42:30
• Debating US Global Leadership & Strategy: 42:31–47:00
• Trump Admin’s Bold Policy Outlook: 59:44–69:41
• US Housing Market Policy Proposals: 71:39–76:27
• Risks: Electricity Prices, AI, Employment: 81:40–87:50
• The Future of Bitcoin & Gold: 88:11–91:11
• Endnotes & Future Predictions: 91:11–92:27

Memorable Moments

• Mel’s bold predictions and callbacks to previous accurate forecasts
• Colorful analogies (Fed as Wizard of Oz, “orange slippers” for modern Dorothy, etc.)
• Candid, history-rich perspectives tying Jackson-era political battles to today
• Discussion of structural changes in global gold flows and the modern “gold war”

Concluding Thoughts

Mel Mattison paints a future shaped by aggressive monetary and fiscal policy, declining central bank independence, and a new era of competition for global monetary primacy. China’s gold maneuvers are seen as both a warning shot and a sign of a shifting reserve paradigm. For investors and citizens alike, the advice is to look past the noise, expect volatility, and anchor in gold and bitcoin as policy gyrations and global reordering accelerate.

The next episode, expected at year’s end, will revisit these predictions and offer a forward look to 2026.