The Hong Kong legislation passed unanimously in the U.S. Senate on Tuesday, and 417-1 in the House on Wednesday. President Trump is expected to sign the bill.

Some are claiming the Act's passage is a huge game changer, calling it "one of the most monumental events of the entire decade," further claiming that as a result, "relations with China were just destroyed."

Quite dramatic.

But these observers also state that, at the least, American actions deeply offend the sensibilities of the Chinese, insulting "their national honor," as the Chinese "take matters of internal security very seriously." They view the U.S. measure as "inciting a revolution in Hong Kong," and as "essentially an assault on China itself."

So are these merely the rants of doom-and-gloom gold bugs, seeing the end of the world in everything, to encourage the purchase of precious metals? Or do their words have resonance?

Consider China's financial and monetary situation.

China has a closed capital account system. The CCP (Chinese Communist Party) controls virtually everything domestically. But since China's currency, the yuan, represents less than 1% of all global transactions (because so few will accept yuan), China needs lots of dollars to finance things like the raw materials used in its production sector.

China has been using Hong Kong for this purpose -- as a window to the outside world to help provide continued access to dollars. Hong Kong has also been instrumental in China's evading U.S. export controls and sanctions.

So in this regard, it could be said that the U.S. holds all the cards in the ongoing tariff/trade issue, and perhaps in general, with China.

China's economic growth has recently begun to subside according to the provider of independent (from the CCP) Chinese financial data, China Beige Book International.

Moreover, as one of the most levered countries in the world, it's a guarantee that Hong Kong will experience a banking crisis soon, as it too heads towards recession.

As the Chinese ironically say, may you live in interesting times.