China Takes Over $15.7 Trillion Industry as US “Safe Haven” Begins Slow-Motion Collapse

Added: 2026-06-01

[00:00:00]All right, guys. So, everything is turning into a comedy show and everyone is running to China once again. Now, remember when we said Nvidia gave up on China completely? Looks like Jensen Huang still wants a way back in. He's about to join the board of Beijing Tsinghua University. And to put that into perspective, this is China's most prestigious technology university. This is the global leader in AI patents.

[00:00:26]This one Chinese university produced 90% of global AI patents in 2024.

[00:00:33]Just one institution. Now, Jensen is clearly very curious about how China pulled that one off.

[00:00:39]But, Jensen joining a Chinese university board is just the opening act because something far more significant just happened in the global financial world.

[00:00:49]Now, Hong Kong has officially overtaken Switzerland as the world's top cross-border wealth hub. Global money is flowing to China and it is accelerating fast. Now, why is this happening?

[00:01:01]Mainland Chinese investors, they have a lot of money and they're pouring all the funds in. Now, they account for 60% of total flows, but 40% is coming from foreign countries. International investors, they want access to China's booming IPO market and they're moving a lot of money to get there. Now, over the past 12 months, China listed some genuinely exciting companies. CATL wants to dominate global battery production.

[00:01:29]Zijin Mining wants to dominate global gold. And investors, they all see these opportunities and they want a piece of the action. Cross-border wealth flowing to Hong Kong climbed by 10.7% in 2025 and he has reached $2.95 trillion.

[00:01:46]Switzerland grew by only 7.6% over the same period. China has caught up and overtook them in a flash. Now, this shift is deeply troubling for Washington. Money that lands in Switzerland doesn't just sit there. It flows through a very specific pipeline.

[00:02:03]Now, Swiss private banks, they funnel the money into Luxembourg funds. Those funds then buy US Treasuries, and the pipeline has quietly supported US debt markets for decades. Now, by pulling wealth away from Switzerland, China is disrupting this entire process at precisely the moment the US needs buyers the most. This is not a coincidence.

[00:02:25]This is a structural shift where global money trusts to go and is flowing away from the West, and is flowing east. Now, the scale of this Treasury market problem is bigger than most people realize. Switzerland and Luxembourg together, they hold at least $700 billion in US government debt. That is more than China's entire official Treasury holdings.

[00:02:48]And as private wealth migrates from Switzerland to Hong Kong, that $700 billion lifeline for US bonds starts to look very, very shaky. And Scott Bessent needs to sell an enormous amount of Treasuries this quarter. The timing couldn't be worse.

[00:03:05]Foreign holdings of US Treasuries held at the Federal Reserve, they've already dropped below 2.7 trillion. That's the lowest level since 2012. And since the Iran war started, foreign holdings have dropped by another $120 billion in just 3 months.

[00:03:22]Think about that from an investor's perspective.

[00:03:25]Would you pile money into US bonds right now? With a war that could drag on indefinitely, and with bond values at risk of collapsing further as yields continue to rise, the answer is becoming more and more no. And Trump just made things worse.

[00:03:42]He has publicly signaled he doesn't even care about the midterms, which means there's no political pressure forcing him to end the war quickly. The oil crisis and inflation problem could persist for very, very long time.

[00:03:56]>> They thought that he was going to outwait me, you know, we'll outwait him.

[00:03:59]He's got the midterms. I don't care about the midterms. Look what happened last night. That was the prelude to the midterms. People understand it. They know that very simple, Iran cannot have a nuclear weapon. I'm doing that for the world.

[00:04:11]I'm not doing it just for us.

[00:04:13]>> Now, the gap between Hong Kong and Western wealth hubs is going to keep widening.

[00:04:17]And by 2030, the difference in assets under management is projected to hit $600 billion.

[00:04:24]That's $600 billion that won't be flowing into Western assets, including US bonds. It will be flowing into Chinese stocks and debt instead.

[00:04:33]Now, Hong Kong's assets under management grew by 10.7% last year.

[00:04:37]And they're expected to grow at 9% annually all the way until 2030.

[00:04:43]The US, by comparison, only holds $1.6 trillion today and is growing at just 6% annually at best. America's losing the global wealth race, and they're losing it quite badly. And why? Because sanctions, the risks, and the consequences of sanctions are all blowing up. We just need to go back to the sanctions regime from Biden's era.

[00:05:06]And the damage has really done to Western financial credibility.

[00:05:10]Now, Switzerland was always supposed to be neutral, but they followed G7 orders and froze Russian assets anyway.

[00:05:17]Today, frozen Russian assets in Switzerland has actually increased in value. They've risen by 1.6 billion Swiss francs to over $8 billion.

[00:05:25]Now, most of it is private wealth belonging to individuals and companies.

[00:05:30]The legal situation is very murky and it's quite damaging for Switzerland's reputation.

[00:05:35]Now, under Swiss law, there's no legal basis to confiscate or redistribute the frozen money. Now, that's true, but it kind of doesn't matter. Frozen assets means you lose access completely. You can't use them. You can't move them away. You can't even touch them. They just get sit there locked away indefinitely.

[00:05:55]And for many wealthy investors around the world, they're watching this disaster play out. The message is kind of loud and clear. If you store your assets in the Western system, doesn't even matter if it's outside the US, even if it's in Europe, you end up on the wrong side of Washington, your money could disappear forever, maybe forever.

[00:06:17]Now, even trying to escape into crypto doesn't solve the problem.

[00:06:20]Back in April, the US Treasury froze funds held across two crypto wallets and they immobilized over $300 million in digital assets. Now, as long as you operate anywhere near the Western financial system, the confiscation risk is very real.

[00:06:37]And it's the core reason why Hong Kong is rising so fast as a global wealth hub.

[00:06:43]Wealthy Chinese mainlanders, they're increasingly wary of holding assets overseas in Western countries.

[00:06:50]Now, rich investors across the world, especially the global south, they feel the exact same way.

[00:06:56]It might be Russia today, it might be us tomorrow. And Hong Kong offers a credible alternative with Chinese legal protections behind it.

[00:07:06]But it's not about safety from sanctions, not just about that. China to Hong Kong is also a more exciting place to put money right now. The IPO market there has absolutely exploded.

[00:07:18]Now, China went from three to five listings per month to over 20 listings in December last year alone, all in Hong Kong. And these aren't boring utility companies. These are cutting-edge technology firms in AI, semiconductors, and clean energy.

[00:07:35]Now, the scale of these listings is staggering as well.

[00:07:38]CATL, they raised over $5 billion in a single IPO last May.

[00:07:44]That's more than the next two biggest IPOs from Japan and the US combined.

[00:07:49]Investors, they see the depth of the market, they see the momentum, and they want in. So, they're shifting their money from the west all the way to the east.

[00:07:59]Now, China's also the world's dominant export engine.

[00:08:02]Whether it's in chips, batteries, or AI systems, the world is going to be buying more Chinese products.

[00:08:09]Smart investment money, they recognize this, so they're positioning ahead of the reality right now.

[00:08:15]And despite all this happening in plain sight, US leadership is still in full denial. Bessen is still out here trying to sell a rosy picture to global investors.

[00:08:27]>> Despite Iran conflict, GDP growing at 2% annual rate, the Atlanta Fed GDPNow is predicting 4.3% for this quarter.

[00:08:37]>> He's claiming that GDP has risen by 2.7% and the Atlanta Fed's GDPNow model does show the US economy growing by over 3% in Q2. And on the surface, those numbers does sound indeed solid. But here's the problem, that growth is being fueled entirely by insane deficit spending.

[00:08:57]This year's deficit to hit $2 trillion.

[00:09:01]That's over 6% of GDP.

[00:09:03]Bessen himself has set a target of 3% deficit to GDP. He's running at literally double his own target.

[00:09:11]And at the interest rates we have today, that deficit doesn't just stay at $2 trillion, it's going to balloon. It's going to snowball into something much worse very quickly.

[00:09:22]But the deficit denial is almost tame compared to what Bessen is saying about inflation.

[00:09:29]He has called higher prices transitory.

[00:09:32]>> In terms of prices, I believe the prices are transitory. Oil will be lower than pre-conflict levels when this ends.

[00:09:40]Natural gas is already down as you men- mentioned. Drug and pharmaceutical prices, they are plummeting and rent is down.

[00:09:50]>> That is the exact same word or term Janet Yellen and Jerome Powell used right before inflation exploded and the bond market collapsed. And that's the same word that destroyed the credibility and cost millions of people around the world, not just Americans, their purchasing power. Now, Basil just used it again like it has never happened before. Like we all forgotten that movie. We've all seen that same movie before, guys.

[00:10:18]Yes, prices are still up nearly 50% compared to pre-war levels. And in certain states, drivers are paying over five or six dollars a gallon. That is not transitory. This is the daily reality for everyone in the US every time they fill up the tank.

[00:10:35]And higher energy prices don't just stay contained to the gas pump. They eventually work their way through the entire economy.

[00:10:43]Transportation costs, they're going to rise. Food costs, they're going to rise.

[00:10:47]Manufacturing costs, they're going to rise. Every business that uses energy, they're going to eventually pass the cost downstream to consumers. And who are the consumers? You and me.

[00:10:58]Now, that process has officially shown up in core inflation.

[00:11:02]Core inflation rose by 20 basis points in April alone. It is now sitting at 3.3% for the year.

[00:11:09]And core inflation is the number the Federal Reserve watches most closely when they are making their interest rates decisions. And the higher core inflation climbs, the closer and closer and closer we get towards a rate hike.

[00:11:25]And a rate hike today is going to devastate this entire future market.

[00:11:30]Now, if the Fed does hike rates, the consequences is going to ripple out everywhere. Bond yields across the entire curve is going to rise further.

[00:11:39]US bond values, they're going to fall further. So, more investors, they're going to walk away. And where's the money going to go? It's going to flow eastwards towards Hong Kong even more.

[00:11:49]Now, the US Treasury auction results just from the last 3 days tells us the story.

[00:11:54]Besson sold a series of Treasury notes ranging from 2 to 7-year durations, and none of them attracted strong demand.

[00:12:02]The most recent 5-year auction priced at 4.18% and back in April, the same auction cleared at just 3.95% yields. That's a very significant jump in a very short time. Anyone who bought US bonds at the April auction is now sitting at a loss. You have lost money.

[00:12:22]And that's why buyers, they're walking away. That's why money is moving to Chinese markets and assets. Not because investors suddenly love China, but because the alternative, holding paper, US paper, is really, really risky. So, Besson is trying to manage perception while reality is really showing him the cracks. Claiming GDP growth is strong is not really revealing the true picture. Nothing really changes the math here. Foreign Treasury holdings are at their lowest since 2012. And the deficit keeps running at double target today.

[00:12:59]The global financial world is really making their verdict known through all the capital flows going around. And the flows are now pointing away from the US and they're towards Hong Kong and China.

[00:13:10]And the pace is accelerating very, very quickly.

[00:13:14]So, let me know what you think in the comments below. Will Hong Kong keep snatching private wealth from Western financial hearts until even Switzerland becomes irrelevant? And how much longer can Besson keep denying the inflation problem before the bond market implodes?

[00:13:31]Let me know what you think in the comments below. Stay safe, smash the like button and subscribe as we navigate through these insane times.