Julian was correct about this. I wonder if his call on a top in the USD in 2020 will be correct too. I think it depends on if we get a second recession after COVID: https://www.realvision.com/shows/the-expert-view/videos/whats-next-for-the-dollar

I'm dense...but how do you get that $400bn annual shortfall from the US Current Account deficit at ~ 119b USD to the Global GDP figure?

One of the best macro presentation. All dots connect logically.

Great stuff! Right so far. Love to see a follow up on this one! Watched it twice so far.

Robert O. It takes time for the Fed to realize that shortage, and the market would have moved. And then, the chain of movements in the eurodollar market are not automatic. Maybe it's not a crash different from 2016 with China, but it could be a crash anyway. Think about it, if an Irish bank looses 10 b $ of cash from Apple. How fast could you replace this same amount in the eurodollar market? almost impossible without an strong increase in IOU (currency swaps), which implies a huge hole in the reserves parked in the FED. very informative.

When the time came for the dollar shortage to start causing trade problems, why wouldn't the fed just open a swap line of Dollars for Euros, trading expensive Dollars for relatively cheap Euros and just wait a year or two to unwind this trade for a profit?

Bring Julian back soon again.brilliant presentation

Brilliant!

At 16.08, Julian brings up his Broad Real Trade Weighted Dollar Index chart . Julian goes onto say that this chart is "Un-Tradable" because it is inflation adjusted. Why is this chart not tradable. Why do we not simply draw a line across the 3 peaks and draw a possible implication that we are currently at the top of the 3rd leg dollar upswing? Julian does explain the bottom solid line as something the dollar has bounced off of - excepting the effects of QE2 on the third leg down.

Thanks a lot Julian, great presentation :)

The more I listen to these the more ignorant I feel. Wow. Make me think I just got lucky in 2016

Is it just me or does he look slightly like an older version of Daniel Craig? Anyway he's the James Bond of macro in my opinion.

Who could possibly give this presentation a thumbs down!?! Perhaps went over their heads? Don't get how else. Thank you Julian !! Really just so grateful!

very good presentation!! Julian , Thank you very much!!

Brilliant presentation! But got lost on the last phrase about being the dollar push so far his status reserve can be challenged by the rest of world.... how is that so?

Julian's call back in 2Q16 on inflation and USD was prescient. His inflation model works more times than not. Would love to see a panel discussion / interview with all of the Salomon Bros. alumni

Excellent video as his last ones. Do you think that Trumps administrations suggested tariffs on Chinese imports will offset any dramatic USD rally as shown in your slide during the first HIA baring in mind the potential HIA 2 could exceed $2.4T considerably bigger than the first HIA?

@Sam B & KLENDATHU C., as I understand it the Fed doesn't have swap lines with China. Perhaps this will be used as a financial weapon to push the Chinese economy over the edge as the dollar appreciates?

Love this series! This man is so smart & suave. Love how Julian ends off every presentation on a light note. XOXO

This is so good, I would recommend it to an Martian. Profound implications.

WOW I have a man crush on Julian. His ability to take complex thoughts and simplify them is amazing. Julians content by itself is worth the yearly fee real vision charges. I must have listened to this video 4 times by now, super imformative. Thank you to Julian for his time and thank you real vision for this platform.

Excellent content.. This is why we're on Realvision! Fantastic insights. Thanks Julian

And that is why we subscribe to RVTV

@JOHN C... my guess is the main feature of QE4 will be unlimited dollar swap lines, but unlike 2008, they'll be transacting with all central banks, not just the developed markets. However, much like 2008, I'd also wager that the Fed won't do anything until after China devalues and eurodollar liquidity has severely tightened... and we have a full blown crisis on our hands. It's possible that unlimited swap lines could halt a rising dollar, I doubt the Fed employs them before a huge amount of damage has already been wrought.

Good stuff...but like other viewers I'm wondering how China might play out here and when their devaluation comes, and also what QE4 or more would do to stop dollar strength once the SHTF say mid-to-late 2017

as always Bridgen is brilliant. thanks for having him, let's see more as the year progresses

Good analysis BUT you did not discuss the inflationary effects of the trump proposal . Let me remind you that in 1976 june-july 1980 the dollar dropped- 20.9% while interest rates boomed because of rising 8.9% inflation.

Great piece from Julian, got to be one of the best presenters on RV, looking forward to see his next update and how it pans out

you have to wonder at what point is all this dollar bullishness already in the price. for me, the economist cover was proof that most of this is already in the price

Fascinating stuff!! Will China, Russia try and launch a gold-backed competitor to the dollar?

Great presentation Julian, thanks. Your comments on shale and BIS reminded me to watch Brent Johnson's Step Into Liquid again.

Brilliant analysis Julian. This is setting up for an Oct 2017 surprise in which the dollar surge destabilises Europe and China. Dollar rallies coincide with tops /weakness in commodities, metals, Oil and Precious Metals. Julian did not speak to the deflationary impact of the dollar rally and a possible response from the Fed. ie. QE4, 5 or 6. How else can they stop the dollar from derailing Trumponomics. What will replace the dollar Julian?

Great piece Julian

Great presentation! Klendathu's points are as good. Elephant in the room is China and what higher dollar will do for U.S. earnings. Might be more dangerous in H1 than many think

Outstanding

Bravo Julian! Bravo RV! And Bravo to all those smart/brilliant commentators as well! I am blessed!!!

The part towards the end about corporate offshore dollar repatriation should be the biggest takeaway here. Personally, I think it's clear that eurodollar supply is contracting regardless of whether US corporates can repatriate dollars or not. However, if that bill is actually passed, the flight of dollars from overseas back to the US would mean a massive incremental reduction in eurodollar supply. DXY would go up, but more importantly LIBOR would spike and currency basis swaps would blow out, yielding a genuinely big mess for anyone short dollars (i.e., China). Zoltan Pozsar touches on this in Global Money Notes #8... Jeff Snider and Paul Mylchreest are also all over the eurodollar and the relevant indicators to look towards. Getting Pozsar on here would be huge btw...

Excellent report analysis! There are certainly some wild cards for 2017 outside of this analysis that could change everything; China, War and Trump Tweets to name a few. Fasten seat belts for some real world action dead ahead! Quite an eventful market and world events in our future.

Great video, Julian.

Brilliant analysis. Thank you, Julian. Thank you RV. I side with Klendathu in wondering if Julian's analysis sufficiently captures the risks facing China, Europe, etc. Julian clearly has an amazing grasp of business and currency cycles. My concern is that secular forces (debt and demographics) trump (I love doing that) cyclical forces. Thanks again!

Julian's views are worth the price of admission alone. Thanks for bringing him back! A somber ending, but well reasoned as usual.

Great video!

Awesome job Real Vision. You guys are the shit

Another goodie. If you combine Julian's wonderfully illuminate case for a top in US growth in Q1, with the likes of the restaurant recession you can see how a resurgent US shale industry could hide the underlying weakness in the US consumer. And if the US consumer isn't there to support a widening trade deficit then the global economy is in real trouble. But once again, I wish Julian would mention or discuss the elephant in the room that is China. He clearly has done amazingly well without it, but there is a certain point where it will not be ignored. We've already seen significant pressure these past few weeks as the two largest economies in the world have tightened together. More liquidity is no longer an answer because it translates into higher inflation and more capital flight both of which push interest rates higher. Short term funding issues are increasingly becoming a problem. The Chinese authorities may have the markets fooled with their massive counter offensive last winter, but not me, and certainly not the laws of gravity. So if the dollar does rise, how much more pain can they truly take? They are walking an atomically thin line and the case Julian outlines is one that should terrify the Chinese technocrats to their very core. Once again, I am not as sanguine about the risks that China presents to the rest of the world.

Just brilliant and really helpful to understand where we stand in the USD cycle. Great RV moment.