China's people and its central bank are pouring money into gold, and the case is that this is the early stage of a shift that would send gold far higher — good news for gold owners, a warning sign for anyone holding only dollars and stocks.

• Gold is now the biggest fund ordinary Chinese people invest in, beating China's version of the S&P 500 — even as gold's price fell about 30% this year.
• China's central bank has bought gold for 20 months straight, its longest streak in a decade, and central banks worldwide are buying at double their old pace.
• The idea: the US wants to rebuild factories, protect workers, and keep the dollar strong, but it can only pick two — so it likely lets the dollar fall, using gold as the cushion.
• China has quietly pushed since 2009 for a neutral asset to settle world trade instead of the dollar, and gold is the only thing that has ever done that job.
• Some math says gold would need to hit around $38,000 an ounce to balance global trade, and the US is already shipping record amounts of gold to China.

Outlook: This is expected to play out slowly over years, with big price swings along the way, but the direction points to gold rising as the dollar-based system strains.