The world’s monetary system does not have a reverse gear if it contracts or slows down. It breaks, and the system begins to collapse…
Tom welcomes Brent Johnson of Santiago Capital back to the program to discuss his controversial “Dollar Milkshake Theory.” The name for this theory comes from the concept of extracting oil from a neighboring property by “drilling” a longer straw. The United States has this magic straw and regularly uses it to suck up the world’s capital. His theory’s controversial idea is that US equities are going to go to all-time highs along with a stronger US dollar at the expense of most foreign currencies.
Brent believes there will be a pullback in equities around the election or early next year; his theory has yet to play out but will eventually, but he is prepared to be wrong. If the US provides dollars to the rest of the world, then his thesis will be invalid; however, he doesn’t believe that will happen.
He explains why the world’s monetary system does not have a reverse gear if it contracts or slows down, it breaks, and the system begins to collapse. That is why central banks have to re-collateralize the system regularly. They are just trying to keep the system afloat, as debt-based currency is being created, it’s also being destroyed.
If you own gold or have US dollars, you will do well in the coming storm.
Time Stamp References:
0:40 – The Milkshake Theory
3:30 – Recent update, equities higer and timing.
7:50 – Confidence and being open to being wrong.
12:30 – Two different dollar markets – Eurodollars.
15:30 – Betting with Peter Schiff.
17:00 – New dollars vs. more dollars.
20:00 – Why the Fed is printing dollars.
22:30 – Currency swaps how they work.
26:45 – Hedging in this environment.
29:30 – Miners and foreign currencies.
32:30 – Why people need dollars.
35:00 – Alternative investments.