The Investor's Podcast (We Study Billionaires) - The Investor’s Podcast Network TIP397: The Dollar Milkshake Theory Update w/ Brent Johnson
Nov 19, 2021
Brent Johnson, Founder of Santiago Capital, is known for his provocative Dollar Milkshake Theory, which posits that the dollar could strengthen during a currency crisis. He discusses how this theory has evolved since COVID-19, the significance of supply shocks on the dollar, and provides a watch range for the DXY. The conversation also dives into the performance of Bitcoin and other assets amid changing monetary policies, and the implications of potential financial resets and geopolitical dynamics on investments.
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Opportunities in Dislocation
- A rising dollar could create opportunities in dislocated markets like Australian and Canadian real estate.
- Asymmetric bets on these events, like a small Bitcoin allocation, can yield high returns if they play out.
China's Digital Yuan
- China's digital yuan aims to bypass the dollar system, challenging its dominance.
- De-dollarization is complex; countries hold dollar reserves and benefit from lower dollar borrowing rates.
Monetary Reset and Military Power
- A monetary reset likely involves a basket of currencies, potentially including gold and oil, but the US dollar's military backing remains significant.
- Historically, reserve currency changes accompany shifts in global military power.