23 July 2026
Luke Gromen: China’s Quiet Domination During the US’s Middle East Distraction
The Competent Investor
About
Luke Gromen, president of Forest For The Trees, discussed the challenging fiscal and monetary landscape facing the US once again with your host Tom Bodrovics. With national debt at $39.5 trillion and rising rates, Federal Reserve Chair Worsh confronts a constrained choice: allow treasury market dysfunction or weaken the dollar to manage mounting debt. Gromen argued that shifting issuance to the front end, including discussions around stablecoins, effectively cash-finances deficits, which is inherently inflationary. Meanwhile, Treasury Secretary Bessent is embracing Hamiltonian economics—high tariffs, increased domestic production, and a neutral reserve asset—as echoed by other administration officials, though this shift demands massive deficits, higher taxes, and capital controls that threaten dollar reserve status.
The conversation highlighted China’s strategic advantages, including its rapid EV adoption and ability to reduce oil demand during conflicts like the Iran situation, which benefits China by weakening Western economies and pushing global trade toward its systems. Gromen emphasized that US reindustrialization is a costly, decades-long endeavor made harder by a lost manufacturing base and skilled workforce. He pointed to gold as a key beneficiary, noting China’s moves to shift citizens into physical gold and regulatory signals from Western banks, all suggesting a coming significant price rise.
For investors, Gromen recommended buying gold, selling long-dated treasuries, and considering electrical infrastructure equities, Japanese industrials, and gold miners, which offer strong cash flow yields and stand to benefit from prolonged geopolitical and economic restructuring.
Timestamps:
00:00:00 - Introduction
00:01:20 - Fed Choices on Inflation
00:03:18 - Treasury Market Dysfunction Risks
00:05:40 - Stablecoins Financing Deficits
00:07:45 - US China Geopolitical Competition
00:12:01 - Hamiltonian Economics Explained
00:17:47 - Reshoring Costs and Feasibility
00:23:28 - Iran Conflict Oil Impacts
00:35:10 - China Strategic Benefits
00:54:30 - China & Gold Trading
01:02:00 - Equity Valuations
01:05:20 - Bitcoin Thoughts
01:09:00 - Action Items & Wrap-Up
The conversation highlighted China’s strategic advantages, including its rapid EV adoption and ability to reduce oil demand during conflicts like the Iran situation, which benefits China by weakening Western economies and pushing global trade toward its systems. Gromen emphasized that US reindustrialization is a costly, decades-long endeavor made harder by a lost manufacturing base and skilled workforce. He pointed to gold as a key beneficiary, noting China’s moves to shift citizens into physical gold and regulatory signals from Western banks, all suggesting a coming significant price rise.
For investors, Gromen recommended buying gold, selling long-dated treasuries, and considering electrical infrastructure equities, Japanese industrials, and gold miners, which offer strong cash flow yields and stand to benefit from prolonged geopolitical and economic restructuring.
Timestamps:
00:00:00 - Introduction
00:01:20 - Fed Choices on Inflation
00:03:18 - Treasury Market Dysfunction Risks
00:05:40 - Stablecoins Financing Deficits
00:07:45 - US China Geopolitical Competition
00:12:01 - Hamiltonian Economics Explained
00:17:47 - Reshoring Costs and Feasibility
00:23:28 - Iran Conflict Oil Impacts
00:35:10 - China Strategic Benefits
00:54:30 - China & Gold Trading
01:02:00 - Equity Valuations
01:05:20 - Bitcoin Thoughts
01:09:00 - Action Items & Wrap-Up
Guest:
Luke Gromen — President and Founder of FFTT
Luke Gromen began his career in the mid-1990s in Research at Midwest Research before moving over to institutional equity sales and becoming a partner. While in sales, Luke was a founding editor of Midwest's widely-read weekly summary ("Heard in the Midwest") for the firm's clients. He aggregated and combined proprietary research from Midwest with inputs from other sources.
In 2006, Luke left FTN Midwest to become a founding partner of Cleveland Research Company. At CRC, Luke continued to work in sales and edit CRC's flagship weekly research summary piece ("Straight from the Source") for the firm's customers.
In 2014, Luke left Cleveland Research to found FFTT, LLC ("Forest for the Trees"), a macro/thematic research firm catering to institutions and individuals that aggregates a wide variety of macroeconomic, thematic, and sector trends in an unconventional manner to identify investable developing economic bottlenecks.
Luke also provides strategic consulting services for corporate executives. He is a graduate of the University of Cincinnati and received his MBA from Case Western Reserve University and earned the CFA designation in 2003.
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