Episode summary
Dylan Jovine | Is China Really Pulling the Strings in Iran?
Summary
Dylan Jovine argues that the real story around the Trump-Xi summit is not the public agenda of semiconductors, soybeans, chips, and rare earths, but a deeper contest over monetary power. He says the U.S. is using currency swaps with Middle Eastern countries, especially Saudi Arabia and the UAE, to reinforce dollar dominance in oil markets, while China is trying to pull those same countries toward the yuan.
He also reads China’s purchase of 8 tons of gold in April as a sign that Beijing may be preparing some kind of offshore currency system backed by gold. In his view, the Iran standoff is tied to that larger struggle: he suspects China is backing Iran and encouraging it not to agree to a deal, using the conflict as leverage in talks with Trump.
Jovine frames the whole situation as a “great game” between the United States and China, with major consequences for the dollar, interest rates, and retirement accounts. He says preserving reserve-currency status matters more than short-term political wins and wants Trump to use the summit to protect long-term U.S. financial power.
Key takeaways
- Dylan Jovine says the Trump-Xi summit is really about dollar power, not just semiconductors, tariffs, or rare earths.
- He argues Treasury Secretary Scott Bessent’s currency swaps with Middle Eastern countries are meant to keep oil producers aligned with the U.S. dollar.
- Jovine says China’s April purchase of 8 tons of gold may hint at a gold-backed offshore currency plan.
- He suspects China is using Iran as leverage in the summit and is telling Tehran not to agree to a deal.
- Jovine says losing reserve-currency status would be economically severe, with net worth down 30% and interest rates up 40%.
Notable quotes
“there's this whole great game going on behind the scenes. And you know, really, I follow the Treasury Department here a lot in the Federal Reserve”
“We've been offering currency swaps to countries in the Middle East. And a currency swap is when the US buys another country's currency, giving that country more US dollars”
“China's central bank bought 8 tons of gold in April, which is the most since December 2024”
“My suspicion is that China is really pulling a lot of strings with Iran and is basically saying to Iran, "Don't agree to anything. We got your back”
How the episode opens
Good morning. This is Dylan Jovany with Behind the Markets. Happy Wednesday.
Today is Wednesday, May 13th. What an interesting time it is to be alive. This week, Chinese President Xi Jinping, Trump is flying to China for the summit.
And everybody's talking about the headline issues they're going to talk about. Semiconductors, soybeans, chips, rare earths, all those things. But there's this whole great game going on behind the scenes.
And you know, really, I follow the Treasury Department here a lot in the Federal Reserve. And it's really an interesting little story here that we've been extending currency swaps with these countries. We've been offering currency swaps to countries in the Middle East.
And a currency swap is when the US buys another country's currency, giving that country more US dollars. And the reason the Middle East is so important is because it's a small little playground, but they sell oil. And everybody touches oil.
They have a a global footprint. You have 10 countries, basically, that can determine of what currency becomes dominant, the US or China. Now, of course, China has been trying to woo these countries.
Famously, Saudi Arabia dropped the petrodollar agreement a couple years ago, 2023, which basically allowed them to start pricing their oil sales in China's currency, right? So, right now, China and America are both vying to keep their currency dominant. Well, China's trying to attack us to take our position as a dominant world currency, and we're trying to defend.
So, one of the things Treasury Secretary Scott Bessent's been doing is doing these currency swaps with countries like the UAE. So, not only do they need help dealing with US asset sales, they need these currencies to prop up their country while this war goes on. So, we're using their stress to really push them into our arms so they start using our currency even more, further cementing the US dollar's hold on the very, very important oil countries, oil producing and selling countries in the Middle East.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- us-china currency rivalry
- u.s. dollar dominance
- yuan and gold strategy
- middle east oil producers
- iran geopolitical leverage
Watch the episode
Watch “Dylan Jovine | Is China Really Pulling the Strings in Iran?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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