The U.S. Just Copied China’s Playbook — And It Could Collapse Capitalism | Tom's Deepdive

In 1933, under the veil of the Great Depression, the US government did something unthinkable. They made it illegal to own gold. Executive Order 6102. It didn't just ask people to turn in their gold, it demanded it. Every coin, every bar, every certificate. And if you didn't comply, you faced 10 years in prison and a $10,000 fine. What was even more terrifying than the act itself is the reason for it. The goal wasn't to have the gold, it was to reprice it. So, 1 year later, the Gold Reserve Act of 1934 was passed, giving the government the power to jack up the price of gold, taking it from $20.67 an ounce to $35 an ounce. It doesn't sound like a big deal, but in fact, as you're going to see, it's one of the most immoral things the government has ever done. Why? Because they had to reprice gold because they had spent years counterfeiting their own currency. It's a practice known as money printing. But, if you want to understand its effects, just think of it as legal counterfeiting. By creating debt, you create a bunch of new money, but the only way to create money without creating a problem is to create it in the same amount as the businessmen create things people actually want to buy. Get that balance wrong and prices go up because everyone now has more money, but there's not more stuff to buy. So, people will pay extra for what there is. If there's only one pizza in existence and everyone has a million dollars, suddenly pizza becomes worth a lot more. So, with EO 6102, a single stroke of the pen stole 41% of the dollar's value. I would tell you to imagine it, to imagine what it would be like to have a $100 in your bank account that buys $100 worth of stuff one minute and $59 worth of stuff the next, but you don't have to imagine. This is exactly what happened during COVID and why it's so hard to make ends meet today. 1933 wasn't the only time we've done this. We did it again in 1971 when Nixon just flat refused to continue letting banks exchange their dollars for gold, a promise we had made to the entire world back in the 40s. Given that track record, you can understand why Anton Kobyakov, one of Putin's advisers, accused the US recently of using the crypto cloud, as he called it, to run a scam on the rest of the world. As Russia learned the hard way when it invaded Ukraine and we froze billions of dollars of their assets, with friends like the US, who needs enemies? But the question isn't whether the world needs to be wary of the US printing money, it absolutely does. The question is whether what we're doing with crypto now is nefarious or whether Russia has their own agenda. That's what we're going to cover today in five eye-opening parts. And if you want to know the depths of the US's economic depravity and check the veracity of Russia's claims, part one is for you. But you're going to be surprised by what we find. If you're a hodler who has an I love Michael Saylor coffee mug, head to parts two and three. But no matter why you're here, do not skip part five. That is the path forward. Welcome to part one. What exactly are we being accused of? On September 8th of this year, Anton Kobyakov stood before the Eastern Economic Forum in Vladivostok, Russia and accused the United States of attempting to rewrite the rules of the gold and crypto markets. He claimed that Washington is going to shove US debt into a crypto cloud and use Treasury back stablecoins to do it. And then, they will devalue the real debt burden via inflation impacting anyone who holds dollars or dollar equivalents, which would include every one of those stablecoin holders. His assertion is that the US wants to preserve US hegemony as trust in the dollar is collapsing using newer rails that the US can still dominate. And the truth is, he is almost certainly correct. How do I know? Because we're already doing it. The US dollar has lost over 96% of its value since the Federal Reserve started printing money in 1913. It takes $30 today to buy what a single dollar bought in 1913. And we've had 25% inflation in the last 5 years alone. Foreign nations already hold over 7.5 trillion dollars in US government debt and cash equivalents. That's trillions of dollars we're remotely devaluing every day. And everyone that holds dollars or gets paid in dollars is getting clobbered. The truth at the heart of Kobyakov's accusation is that our reckless deficit spending really does negatively affect the whole world already today. But the sad reality is that Kobyakov isn't simply a concerned global citizen sounding the alarm. This story is far more complicated than that. So, welcome to part two. What's really going on with crypto and the skyrocketing price of gold? Since 2022, China has quietly dumped more than 400 billion dollars in US Treasuries while importing gold by the ton through Hong Kong and Switzerland. In the same period, US Treasury demand hit its lowest point in two decades and gold surged across $4,300 an ounce, its highest price ever. Remember at the beginning of our story when it was just $20 back in 1934? Well, not anymore. But gold isn't getting more expensive because it's shiny, it's getting more expensive because China and Russia are buying it in bulk and very publicly. They want the world to know they're building an alternative monetary system and directly challenging the US. China was once the second largest holder of US debt, but those days are over. They're now selling that debt as fast as they can and trying to overthrow the dollar as the world's reserve currency by re-linking their currency to gold. There's a little bit of speculation in that statement, but not much and where China goes, you are going to find Russia. In a joint meeting on the 4th of February of 2022, China and Russia issued the following statement: "Relations between Russia and China are superior to political and military alliances of the Cold War era. Friendship between the two states has no limits. There are no forbidden areas of cooperation." This is explicit rhetoric of an open-ended partnership. It signals that China and Russia view themselves as partners unbound by geographical or even ideological restrictions. And according to DGap's since February of '22, China has gradually become one of the key enablers of sustaining Russia's war effort, demonstrated by the growing frequency of joint military exercises. Now, when you have collectively starved around 50 to 60 million of your own people to death in just the last 100-ish years, you'll forgive me if I clutch my pearls when you start doing public displays of affection. But that's where we are. Both Russia and China have expressed their dissatisfaction with the US's influence on global affairs. And between COVID, QE, and deficit spending, they know that America has printed over $6 trillion in just two years, making us weaker and weaker economically. Something they know they can play to their advantage. Once you know that, it becomes clear that Anton Kobyakov has his own agenda. And as I said before, many times, every word out of a politician's mouth is spin and positioning. They are the great illusionists, constantly attempting to get people to distrust their lying eyes and believe what they say. But if they're all lying, doesn't that hold true for the US? And since the obvious answer is yes, of course it does, what are they really up to with their crypto strategy? We'll get back to the show in a moment, but first, let's talk about why you keep starting and stopping. Most people consume endless content, but never master and deploy the fundamentals. That's exactly why Shortform exists. Take Atomic Habits by James Clear. It's packed with proven systems for building habits that stick. But the book is 300 pages of theory mixed with stories, and most people read it, then struggle to apply what they learn. Shortform cuts through that problem. Their guides aren't just summaries. They're written by real human writers who extract clear's core systems and give you step-by-step implementation guides. Plus, they create master guides that combine insights from different experts on the same topic. And their AI browser extension breaks down articles, videos, and even political analysis, so you get the key frameworks from everything you consume. Click the link below and get a free trial and 3 months off the annual plan to access the decision-making systems behind every major breakthrough. And now, let's get back to the show. Welcome to part three. What is the US up to with its crypto policies? In 2013, the government of Cyprus did something absolutely unthinkable. Overnight, they confiscated up to 47.5% of people's bank deposits, literally seizing nearly half of citizens' savings to bail out failing banks. In 2015, Greece froze more than 60 billion euros in bank withdrawals during its debt crisis. Ordinary citizens were limited to 60 euro per day, not because they did anything wrong, but because their government and their banks wildly mismanaged their debt. In 2012, Spain raided private pension funds pulling billions of euros to plug budget shortfalls, money people had worked their entire lives to save. And none of this is new. In 1998, Russia itself defaulted on 40 billion dollars of debt and wiped out every ruble-denominated savings account overnight. And in 2001, Argentina froze every personal bank account in the country under what they called the corralito, blocking citizens from withdrawing their own money. And that's why in October of 2008, while the financial world was collapsing and America was bailing out their own banks, a modern miracle happened. No speech, no new laws, no politicians spin spin spinning, just an email quietly posted on a tiny cryptography forum. It said, "I've been working on a new electronic cash system that's fully peer-to-peer with no trusted third party." And it was signed Satoshi Nakamoto. No anger, no politics, just math. While governments robbed from the poor and gave to the rich by bailing out banks, someone built money that couldn't be printed, frozen, or seized. Then, January 3rd, 2009, the first block of Bitcoin dropped. Embedded in its code was a message about why it was created. The Times, the 3rd of January 2009, Chancellor on brink of second bailout for banks. A headline burned into history, a warning to the future. And then, after dropping that first block, Satoshi just vanished. No interviews, no goodbye, no rug pull, just code and the ability to control our own money and not have it taken from us via inflation or outright seizure. A ghost that built a lifeboat and then disappeared before anyone else could sink it. That's why, despite the US's grotesque track record of deflation, it's an unmitigated good that they're going to allow for private innovation in digital currencies. There are three reasons why this is good. One, money needs to go digital, but it would be a disaster for it to be in the hands of the government. I'll plenty more on that in the next section. Two, by providing the necessary regulatory framework for the private sector to innovate around digital currencies, potentially billions of people around the world will get access to a stable, albeit inflating, currency for the first time. There's no doubt that Western governments have fumbled the economic ball and there is little doubt that eventually the world is going to go beyond the current US led system. But, there is also absolutely no doubt whatsoever that the US dollar is leaps and bounds ahead of every other currency on the planet. For billions of people, a distributed currency backed by the US dollar via Treasuries would be a kind of salvation that few of us in the developed world can even imagine. Roughly 1.4 billion adults worldwide still don't have access to a bank account. Entire continents operate in cash because local currencies are worthless, banks are corrupt, the country is run by a despot, or all of the above. In places like Venezuela, Zimbabwe, Lebanon, and Nigeria, inflation is an outright catastrophe that makes it impossible for people to do anything but fight daily for survival. With stable coins made trustworthy through sensible regulation, a smartphone becomes a bank anyone can access. A digital wallet becomes a savings account. And for the first time in human history, a farmer in rural Kenya, a developer in Caracas, and a shopkeeper in Kabul can all transact in the same reliable unit of value instantly, globally, and without permission. That's not just a plausible scenario, it's already happening. USDT, USDC, and PayPal's PYUSD are spreading faster than any financial product in history. Stablecoins are not only fast, but they give people a bridge to stability and a way around oppressive governmental controls. The third reason why it is an unmitigated good that the US is creating the pathway to private innovation in digital currencies is that it lengthens the exit ramp from the dollar. When a plane crash lands, you first want to run it out of fuel so it doesn't burst into a fiery ball of death on impact. The financial world is awake to what's happening with inflation. Finally, that's why the price of gold is skyrocketing. China is gobbling up gold and creating a new gold corridor and working to convince the world that despite being a dictatorship known for kidnapping businessmen when they get out of pocket, that they're now a safe place for money. Central banks around the world have been reducing their USD holdings significantly in the last 10 plus years, but they also know a very ugly truth. Virtually every currency on earth is being devalued through inflation, and at least the US is currently a mostly stable country politically. The bad news is though, that the average citizen is still unaware of what's happening to them, and it would be catastrophic for the entire global economy if America suddenly crashed economically because there was no demand for our debt. If it happened today, the airplane would indeed smash into the ground and burst into a fiery ball of death. By creating a regulatory framework for stablecoins that requires a one-to-one backing of US Treasuries, the demand for US debt will remain high enough for long enough that either the US will get its together and stop abusing people, or people at least can exit out of the system entirely in a more orderly fashion than if it happened really fast all at once. Here is the thing. The government knows all of this. They've watched crypto grow. They've seen stablecoins explode. They've seen the private sector build a faster, fairer, freer financial system, and they're terrified of it. They don't want innovation. They want integration into the government. That's why the Biden administration was so hostile to crypto. They wanted to absorb the technology and use it to tighten their grip. The current admin definitely wants to export inflation and continue to debase their currency. I certainly do not assume that they have good intentions, but at least they see an opportunity in the marketplace that they can exploit that happens to actually be good for the average citizen. If the private sector isn't allowed to build the next generation of economic rails, then central banks and governments around the world will build their own versions of digital currency. CBDCs or central bank digital currencies. In fact, as I covered in this video, they're already doing it. They're pitching CBDCs as progress, but make no mistake. These are not innovations. They are massive upgrades to surveillance and control because unlike Bitcoin or privately issued stablecoins, CBDCs are centralized. They're programmable and provide total control over your money. With a CBDC in place, a government can and will monitor, record, and or block transactions in real time based on whatever criteria they want. Once money becomes code, whoever controls the code controls you unless that code is decentralized and run by the private sector. So, while the private sector's version of digital money could free billions, the government's version could enslave them, and I'm not kidding. And that's what we need to talk about next. So, welcome to part four. Digital money done poorly will be used to enslave. In 2022, the government of Canada had the gall to freeze more than 200 bank accounts, not for terrorism, not for crime, but for donating to a protest. Mhm, not actively protesting. Donating to protesters. No trial, no warrant, just boop, no more banking for you. That same year, the European Central Bank announced pilot testings for the digital euro, a currency that will give Brussels the power to track and limit how you spend your money down to the last cent. And as of today, more than 130 countries, representing over 98% of global GDP, are actively developing central bank digital currencies, the CBDCs. That includes the United States, by the way. China, as you might expect, leads the pack. Their digital yuan has been rolled out to 260 million citizens with built-in geolocation tracking and programmable spending rules. Not to be outdone, Nigeria has launched its eNaira. India is testing the digital rupee. The European Union, of course, is running pilot programs for the digital euro. And the Bank of England is studying caps on offline holdings for a digital pound to make sure no one can save too much outside of their system. This is so dystopian. It's not innovation, at least not for anything healthy. It's infrastructure for guaranteed control and obedience. In China, the national ID system and the digital yuan already work hand in glove. The same network that lets you pay for groceries can also block you from buying a train ticket if your social credit score is too low. In the UK, the government has already proposed using financial data to enforce carbon quotas, literally tracking how much you drive, eat, or travel. And it's not a stretch to see where this goes. Once every transaction is digital, programmable, and centrally controlled, freedom becomes hyper-conditional. Buy too much red meat? Transaction denied. Attend the wrong rally? Account frozen. Donate to the wrong cause? Flagged for review. This is the nightmare version of digital money that we must resist. A system that knows everything you buy, everywhere you go, and everyone you support. And it's not hypothetical. It's what's happening. Over 100 central banks are either in active testing or pilot deployment phases as we speak. And the International Monetary Fund has called CBDCs the future of the monetary system. This is what they're building towards, and that's why what the US does next, regardless of the sneering of Anton Kobyakov, will determine whether the future of money is one that empowers individuals or empowers the government to have total authoritarian control. Here is the ground truth. Money is already digital. 90% of it only exists in numbers in a bank database. But up until now, it's been the wrong kind of digital. Slow, fragmented, and controlled by middlemen. You can stream a movie from Tokyo in 4K in real time, but you cannot send $10,000 to your brother overseas without waiting 3 days and paying a 6% fee. That is madness. The global economy runs in real time, but our money runs on a 1970s wire system. And worse, it's run by a cartel. Credit card companies have a monopoly on credit, charging fees that crush small businesses and punish consumers. Banks can and do cut people off from the financial system with a single click, even if that person has not broken a single law. I know because it happened to me. That's not capitalism. That is gatekeeping of the worst kind. We need competition. We need options. We need innovation because when money goes digital under private innovation and not government command, it unlocks creativity, lowers costs, and opens the financial system to everyone. That's the kind of digital future that's worth fighting for. One where the rails are instant, global, and open. Not programmable by bureaucrats or throttled by cartels. If the US doesn't modernize through the private sector, China's already waiting with the aforementioned state-controlled digital yuan. So yes, money needs to go digital, but only if it's built by the free markets, not by central planners. And that's precisely what America is proposing right now. A regulatory framework that will create appetite for US debt. And that debt will almost certainly be inflated. But, it will also put the power into the hands of the people. As much as I believe that money printing is immoral, only assets like gold and Bitcoin offer a plausible shield from that, and neither of them function as a currency. And all other currencies in the current global economic system are subject to both money printing and tyrannical control. So how do we do this well? How do we buy enough time to land the plane safely and create a monetary system that gives the individual actual sovereignty? We'll be right back with the show in just a second, but first, most entrepreneurs pick a platform that works great at launch, but breaks when they grow. You start small, gain traction, then you hit a wall. Now, you're migrating platforms mid-growth, losing momentum, losing sales, and rebuilding everything from scratch. Smart founders though, start with the end in mind from the beginning, and that's where Shopify comes in. Whether you're making your first $100 or your first million, whether you're testing your first product or processing thousands of orders daily, the platform of Shopify is going to grow with you. Stop betting on platforms you know you're going to outgrow. Build for scale from day one. Sign up for your $1 per month trial and start selling today on shopify.com/impact. Go to shopify.com/impact. And now, let's get back to the show. Welcome to part five. Where do we go from here? The US is buried under $37 trillion in debt, and that's rising by roughly $1 trillion every 100 days. Interest on that debt is now over $1.1 trillion a year. An expense so large it is already eclipsed defense spending. As of today, the US's debt-to-GDP ratio sits around 122%. 130% has proven to be a line in the sand beyond which no country can stay except for apparently Japan for any meaningful period of time without tearing itself apart from the inside. The kind of reckless spending that leads to this unsustainable level of debt forces the government to print money, and money printing is inflation, and inflation has made it impossible for young people to buy a home since real wages have not kept up with inflation. And that's how we've ended up here in a populist moment where an open socialist is running for mayor of the financial capital of the world, and many are excited for it because at least it's different. But if you're in the desert dying of thirst, licking the surface of the sun would be different, but it would also be much, much worse. But when you're playing the propaganda war as Anton Kobyakov is, what's true is of little concern. The goal is to play on people's emotions, to get them riled up, and to take advantage of the fact that people do not understand how economics works well enough to vote for policies that will actually improve their lives. So, that's what we're going to discuss right now because there is a path forward that will actually improve people's lives and countless paths forward that will accelerate our trajectory of ruin. Here it goes. Here is the path forward for the US and the monetary system of the future. Continue to embrace a digital future that makes economic sovereignty possible. Outlaw CBDCs and digital tracking and control. Cut the red tape regulation that strangles monetary innovation. Create the light touch regulatory framework the private sector needs to secure funding and innovate with confidence that they're not going to be fined or get arrested. Balance the budget. Immediately do whatever is necessary to reduce US debt without breaking the economy or causing capital flight. Stop promising free things you know we can't pay for without stealing from savers through inflation. It hurts the most economically illiterate. It hurts the poor the most. Avoid a collision with China. Look up through Sisyphus' trap and show the world that you can be fiscally disciplined enough that savvy investors stop looking for an exit from the dollar. I don't expect us to, but if we can do those things, our economic future will be bright indeed. But, make no mistake, Kobyakov is correct. If Washington keeps running multi-trillion-dollar deficits, it won't just be Americans footing the bill. Everyone holding a digital dollar anywhere in the world will absorb the hidden tax of inflation. But even if that's the case, even if the US keeps spending like an out-of-control drug addict, their Hail Mary of using stable coins to create demand for Treasuries is still the right thing for the world. It not only buys the world time to migrate away from the dollar in the least dramatic way possible, but it also helps ordinary people escape the clutches of tyrannical governments and monetary systems that are orders of magnitude more unstable than the dollar. And before I land this plane without crashing, let's discuss head-on what I'm sure many people are already thinking. Wait a second. Isn't crypto just a scam? Isn't this a big con of rug pulls, offshore casinos, celebrity pump and dumps, and the like? There's no doubt the world is full of scammers. SCAMMERS GO HARD. BUT THAT IS A FLAW WITH HUMANS, not a flaw in decentralized money, which is exactly why the move now is not to ban the tech or to centralize it, but instead to civilize it. Clear rules, not political choke points used by elites to maintain control. One-to-one reserves for stable coins. Audited custody and segregation of client funds. Transparency. Plain English disclosures and licensing that has teeth. Now, if you do all of that, you will sweep out predators without killing the protocol. The rails already exist and they work. What's missing is adult supervision, so the upside, speed, openness, resilience, and freedom from government control will actually serve the public instead of enslaving it. And that's the paradox at the center of this moment. The same technology that can save us can also be used to press down on our economic necks forever. Depending on how we build and secure the economic rails of the future will determine who controls the future itself. Will we get sovereignty and innovation or tyrannical top-down control? And that brings us back to Kobyakov. Rome clip coins, Britain debase sterling, modern states print money. Inflation's not new, nor is it limited to the US. It's just how money goes when it's centralized. The reason Kobyakov is calling out the US's approach to stable coins isn't because he's looking out for people, it's because he wants to be the one that controls the future of money. His derision isn't moral clarity, it's marketing for a China-Russia architecture where money is programmable by the party. China's flirtation with gold linkage is honestly very smart, but it's old money and being done by a nation I do not trust at all. Gold isn't going anywhere anytime soon. I own more than my fair share, but we have to look to the future as well. And whether the US is doing the right thing for the right reasons or the right thing for the wrong reasons, I don't really care. As I always tell entrepreneurs, all that matters is what you do. Your intentions are irrelevant. Here's the uncomfortable truth. America's crypto cloud gambit driving treasury demand via stable coins is a massive improvement over where we are today. Even if the US keeps deficit spending. Kobyakov is right about the sickness, but he's wrong about the cure or worse, he's being insincere in his framing to get Russia control. The reality is that eventually the dollar's credibility will finally break and something else will rise to replace it. But whether that's decentralized and in the hands of the private market or it's centralized and in the hands of the government will be the difference between ending up in 1984 with a boot stamping on our face forever as Orwell warned or finding our way to a future of freedom like what Satoshi made possible. All right, if you want to see me explore topics like this in real time, be sure to join me live on YouTube, X, Twitch, or Kick. You can join the debate or just chill in the community. We're live every Wednesday and Friday at 6:00 a.m. Pacific. I hope to see you there. All right, guys, until next time, be legendary. Take care. Peace. If you like this conversation, check out this episode to learn more. In 2022, something happened in Canada that should have stopped the world in its tracks. Hundreds of ordinary citizens, teachers, mechanics, stay-at-home moms, all had their bank accounts