The Great Unwinding

he Great Unwinding scenario showing US institutional collapse and China emerging as global stabiliser.

The Great Unwinding (2025–2035)

In this scenario, the United States unravels under the weight of deep institutional breakdown and financial collapse. Having tried and failed to contain China’s rise, Washington turns inward — and its systems begin to fail. By 2035, China emerges as the new global stabiliser, while the U.S. retreats into irrelevance.

What The Great Unwinding looks like

This pathway assumes a collapse of U.S. constitutional order: mid-term elections are blocked or ignored, and the 2028 presidential vote is contested without resolution. Beginning on 1 October 2025, a government shutdown becomes permanent — courts, agencies, and federal services cease operations. The presidency rules by decree, deploying federal and militarised forces domestically. States refuse to send tax revenues or comply with federal mandates; some consider secession.

On the financial front, China intensifies its exit from U.S. Treasuries, moving aggressively into gold. This upends confidence in U.S. debt: Treasury yields explode into unsustainable territory, and default becomes inevitable. The dollar’s status as safe haven erodes, and global capital flows invert.

This scenario is most sensitive to the collapse of U.S. institutional legitimacy and to China’s coordinated financial strategy — Treasury divestment plus gold accumulation. For detailed assumption probabilities across all scenarios, see the master assumptions table.

The decade unfolds

2025–2027: Shutdown and fracture
On 1 October 2025, the federal government lapses into shutdown. Courts, IRS, and regulatory functions shut down. The White House rules by executive orders and emergency powers. ICE, National Guard, and federal forces are deployed in cities under the guise of “order maintenance.” Some states refuse collections and block federal enforcement; secession discourse enters mainstream debate. Meanwhile, China accelerates Treasury divestment and buys gold in volume; the World Gold Council reports surging global demand.

2028–2031: Constitutional implosion
The 2028 election is unresolved. The MAGA-aligned faction refuses to yield power. U.S. institutions no longer command legitimacy: court orders are ignored, budgets remain unfunded, and state governments act independently. The U.S. formally defaults on obligations. China exploits the distraction: Taiwan is blockaded and reintegrated with minimal resistance, Belt and Road partnerships deepen, and yuan settlements expand. Europe and India hedge toward Beijing, while the U.S. loses credibility as an ally.

2032–2035: Irrelevance and replacement
By the early 2030s, the U.S. is reduced to fragmented authority. States like California, Texas, and New York act independently on climate, trade, and immigration. The federal government remains paralysed. Internationally, BRICS and the SCO consolidate as governance hubs. The yuan and gold dominate global reserves. Canada gains leverage as a food and energy exporter, replacing U.S. supply. China, presenting itself as stabiliser, proclaims the dawn of a new global order.

TL;DR: in 2035, the United States has ceased to function as a global hegemon — disintegrated internally — while China steps in as the stabilising hegemon.

How do we position capital in The Great Unwinding scenario?

In this world, gold becomes the core hedge as U.S. Treasuries lose safe-haven status. Trade and financial flows shift toward yuan and gold frameworks. Chinese infrastructure, renewable energy, and manufacturing firms dominate global flows. Canada and Australia gain leverage in energy, food, and critical minerals. Europe and India attract capital as alternative stabilisers aligned with but not subordinate to China.

The most important signals: whether the 2025 shutdown resolves or becomes permanent; whether Treasury yields continue to rise alongside gold; whether the 2028 election ends in stalemate; and whether secession threats and China’s gold purchases intensify. For positioning detail, see our Scenarios overview and the Core Investment Hypotheses.

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