Is The US Dollar REALLY In Danger? Maybe Not | Brent Johnson

Dire headlines predicting the end of the US dollar as the world's reserve currency have dominated the news in recent weeks.

BRICs countries are announcing more and more trade deals that will settle currencies other than the dollar.

How serious a threat is this REALLY to the dollar? And on what kind of timeline?

For answers, we head to the dollar expert himself, Brent Johnson CEO & Portfolio Manager at Santiago Capital, and developer of the Dollar Milkshake Theory -- which was hands-down one of the most powerfully-explanative frameworks that defined the action in global currencies in 2022.
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[gunfupanda]

I LOVE trolling and criticising Brent on Twitter, but every time I watch his interviews I really can’t fault his logic. Even if you don’t agree with him, he absolutely has to get your brain thinking. Exceptional interview. Excellent questions Adam.

[ptupy]

“If the US gets pissed, it will start to play dirty.” It’s already pissed and playing dirty. It engineered the war in the Ukraine and now is on course to engineer another one in East Asia. The problem is that global control based purely on coercion is very costly and never lasting. Eventually you overextend yourself, others find ways to defect, the costs pile up, and the existing system collapses. And the US already has severe domestic problems (interracial tensions, social unrest, crime, homelessness, migrant crises, massive debt and deficits, etc.) that get deeper and deeper.

[ericmckinney]

Brent has his head on straight. I appreciate that he's honest about what he can know, and doesn't assume he's figured it all out.

[Hellraizorr]

First time having heard from/of this guest.

He’s got a strong point to make about de-dollarisation and argues convincingly & logically with some good examples.

Excellent discussion 💪

[brandon-hhjf]

The main issue of course is not when are the final days of the US WRC, it's the first 20% percent of trade not done in USD that creates a glut of USD and UST oversupply.

[randallolgers]

Great interview Adam and perfect timing to have Brent Johnson back on your show. He's a great thinker, but reading through some of the comments I suspect quite a few people need to go back and watch it again.

[sunburnfm]

How can the world be more dollarized, as Brent said, if the percentage of trade in dollars is less than in the past? He never addressed that point.

[geonote]

While I have had great respect for both Adam and Brent, there are many "fluffy" assumptions in this assessment. Do not underestimate the willingness and ability of nations to endure hardship to achieve an important objective: The majority of the world population lives outside North America, and is already well-acquainted with socioeconomic struggle.

[jamesgardner]

‘Best looking horse in the glue factory’ 🤣🤣

Love that one, I’m stealing it proudly.

[ats]

The Dollar Milkshake Theory is very impressive, but Brent needs to learn to say Zeitgeist....

[aak]

Dedollarization is not all bad. If we get a weaker dollar, it will make foreign goods more expensive, but it will also make manufacturing in the US and exporting things viable again.

[whacked]

Excellent interview. Finally someone who does not say the sky is falling from de dollarization and can explain his position!

[TauLim]

I just had a quick search on the net about this Dollar Milkshake Theory by Brent Johnson. One of the reasons given is that central banks around the world are also printing their own currencies in order to counter the dollar printing by the US. I cannot find any evidence of this.
Recently Japan sells it US bonds in order to get enough USD to counter the rapid outflow of the USD to the US (because of the Fed raising interest rates).

Currently there is no alternative to the USD (Swift, no exchange control in the US, muscless etc). China is too cautious to allow the Yuan to be freely available outside of China.
I see the own-currencies trade to grow. Until a world reserve currency alternative comes out, the dollar will remain strong.

But the de-dollarisation trend will continue. It wil be gradual.

Agree with Brent that the US global reserve currency status to the US is a "power" policy (i.e. geopolitical) policy rather than economics policy. Ultimately, economy drives the amout of power you have. When the US economy gradually slides this power will erode too.

[umarjongi]

This American's petulance is exactly why we are going to replace the dollar.

[nastasiaj]

Adam, I love that you brought Brent on at this moment in time. He's such a great contrarian voice to the mainstream view of the dollar's demise.

[chinaandtheworld]

Brent said “If the US gets pissed, it will start to play dirty.” He does not realise US has already played very dirty, but the rest of world is not scared anymore. There is a bigger guy in the school ground called China, the others are siding with China, and the US can do nothing about it apart from saying bad things about the new big guy.

US "allies" and colonies like Japan, S Korea would have no choice but to continue to settle in US dollar. But many others would choose to settle in their own currencies or establish new regional currencies, most likely backed by gold and other precious metals as BRICS already made known.

De-dollarisation does not mean the end of US dollar right away, it means the end of US hegemony and the progressive demise of US dollar. How fast the demise would be depends on how US would continue to piss off its allies -- like how it screwed the EU in Ukraine war.

[massonh]

Thanks for inviting 3 phenomenal guests this week Adam!

Hoping for PENTO & D DM Booth soon. 😊

[cocosocialistrat]

American exceptionalism is one powerful drug 😂

The US will just keep doubling down accelerating its own downfall and this is what Brent is missing. The fall of the US just keeps accelerating at an ever faster pace and this isn’t going to stop.

I do agree it with Brent and it will take years not months for this process to happen.

The real problem is the US is ignoring this can happen and isn’t pivoting to working with the rest of the world instead of fighting against it 😢

[Indoor-Cyling-Revolution]

As a retired stockbroker, who is fortunate enough to get out relatively young… Adam, I’m only about two years older than you- I will say, I agree with Brent, however, I do see the dollar dying of its own strength. Not because the BRICS nations get together With an intention of sinking the dollar, but rather the dollar diluting itself to the point, where emerging markets can no longer afford to service their dollar denominated debt, and one by one (which we are seeing now) emerging markets begin to topple as the euro-dollar shortage causes the dollar to spike, which begins to choke off developed nations that then begin to fall, until the run on the dollar flames out the value of the dollar like a supernova, which finally collapses the established economic system as well as the dollar and the U.S. Like when Hemingway was asked how he went bankrupt, his response was, “very gradually, then all at once.” so will be the feet of the US dollar. The fact that everyone needs it to survive means that when demand begins to spike for the dollar, the weak ones will slowly die off until some bigger ones begin to die, and then finally, as if overnight, the entire system comes crashing down. This is how it will happen. This is how history shows it always happens, it is in our nature, we cannot avoid it, it is an inevitability axiomatic. An immutable truth.

[jayboegs]

You know the dollar is ok when every chump on twitter and youtube says it’s toast