What’s Next for the Dollar?

Published on
June 16th, 2020
Duration
35 minutes


What’s Next for the Dollar?

The Expert View ·
Featuring Julian Brigden

Published on: June 16th, 2020 • Duration: 35 minutes

The U.S. dollar may be the most important "security" in the world and the cycle of its relative strength is a fantastic indicator of global economic health and the performance of a handful of asset classes. That's why Julian Brigden of MI2 Partners has been using this cycle to inform his outlook for decades. In today's interview, Brigden updates viewers on the dollar cycle and argues that we are entering a period of sustained dollar weakness. He examines dollar charts showing the technical support levels that are dangerously close to breaking, explores correlations with other major indicators, and breaks down the fundamental backdrop of fiscal and monetary excess that all seem to point to a dollar downturn. Filmed on June 10, 2020.

Comments

Transcript

  • VB
    Vincent B.
    18 June 2020 @ 08:44
    I think Julian mixed up cause and effect (12 minutes left in the video) of low yields not attracting enough buyers. Yields or price in that sense are the outcome of supply and demand, not the cause of supply and the demand. Primary dealers scramble for high quality collateral (primary auction prices were consistently higher than the average yield the last years), that is why yields are low. Primary dealers are exclusively obliged to purchase treasuries at auction. Afterwards, they are free to do with them what they want. The question is why do the primary dealers so desperately want to hold on to the freshly issued paper, even as they could sell them at a profit (yields continuously going lower)? Why would anyone pay the government for lending them money? Because treasuries have alternative uses other than investments. Freshly issued treasuries are the highest quality and liquid collateral, used to obtain, sometimes through rehypothecation, additional dollars in the capital markets. The fact that they hoard the paper and yields are low is an indication to me that money/collateral is tight, and interbank trust is low, which points towards a strengthening dollar. The strong dollar theories are more convincing to me, but last months have shown that something (dollar swap lines perhaps?) appear to be effective in aleviating the dollar shortage. Despite this, I am not convinced of either strong/weak dollar theory. It is so incredibly hard to predict and understand.
    • JU
      Jonathan U.
      18 June 2020 @ 15:37
      Agreed, I think Julian is right he's just a few years early imo. For now, the hoarding of dollars shows that the Fed's "flood of liquidity" is a farce.
    • jn
      jordan n.
      20 June 2020 @ 18:28
      Yes. I am an EM PE investor. A company I am looking had its sales significantly drop as its customers based in Africa and Middle East are unable to secure USD domestically to make the purchases
    • DL
      Darryn L.
      26 June 2020 @ 06:06
      I wondered about this as well. How can it be hard to off load when the price is high?
    • sd
      sunny d.
      7 July 2020 @ 16:46
      Even if we believe USD will be weak or strong, Gold and some silver can balance risk much better. If $ has formed peak and going down from here,I can wait with Gold with confirmation on the graph then play it around. Things are too uncertain to stick to a view. Just my thought.
  • NS
    NICHOLAS S.
    23 June 2020 @ 23:41
    Its only a problem in a debt based monetary system. It needs to collapse to regain some semblance of a market that can gauge risk and stop miss allocation of capital.
  • TJ
    Terry J.
    22 June 2020 @ 21:00
    Probably the best and most succinct dollar presentation I have ever seen. It comprehensively covered both the reasons for the dollar's historic price actions over all the decades since it became the defacto reserve currency, as well as how its cycle is heavily controlled by the Fed's monetary actions. A brilliant roadmap for the future. Thank you Julian.
    • AW
      Aaron W.
      23 June 2020 @ 00:59
      Agreed
  • IN
    Ian N.
    22 June 2020 @ 23:34
    I hope you see the reason for COVID in the graph @ 25m22s. Notice the FED balance sheet reaches exactly same value as the global GDP due to COVID 'printing'. The FED printed just enough dollars to sataicate demand for the USD, for a while. The REPO window opened for liquidity. If you cast your mind back it did sound pretty crazy what was happening, it didn't sound sustainable. Now the REPO looks like nothing. The FED needed a reason to further in debt the US & increase the supply of USD. Happy to be proven wrong btw.
  • GC
    Gregory C.
    22 June 2020 @ 11:46
    I appreciate that RV is catering for the US markets and members. This does not exclude others gaining great insight. However, it would be great if a perspective for the none US members could be portraid, even if just a brief summary at the end of each interview. So in this interview, US stocks are the risk, rather look for stocks in the EM. I live in one of the EM. So great, I can buy stocks easy in that market, but how will that fair. If the dollar falls to the Euro, but then say ZAR falls along with the Dollar, is that nuetral. Or is it likely that with the Dollar crashing, ALL EM currencies will appreciate?
  • MK
    Munira K.
    21 June 2020 @ 22:33
    Thank you Julian for the excellent insights as always. Wrt EM countries (I live in South Africa), the havoc caused in this short time by US$ strength, is unlikely to easily/fully reverse even with potential dollar weakness ahead - also, limited government support/stimulus vs most DM economies (weak/indebted economies even pre-covid), means that the rebound is shaping up to be slow, patchy and painful, with permanent loss to the labour market, that will set EM many years back. On shale, there was an old RV video that spoke to the theme that for as long as Fed stimulus is alive, the shale industry's life line continues - so whilst your remarks around the economics lead to your logical conclusion, the arguments for energy independence/free money floating around are hard to discard. Thanks RV for the great content!
  • WM
    Will M.
    21 June 2020 @ 15:15
    Excellent video and commentary. Initially, like some I was a bit confused when Raoul and Julian first had this disagreement on dollar strength. Now after 2 months and reading our two advisors here plus listening to Grant Williams, Martin Armstrong, Brent Johnson, Michal Oliver and others I think I see how finely balanced each argument is. Feels like most agree over the med-long term the dollar as it stands shall be toast. The arguments seem to all focus around the short to medium term. I am therefore pining my judgements on some of the critical support / resistance data for the dollar. I haven't taken a negative $ position yet and so am not exposed (other than having most of my wealth in dollars!) but I agree with Julian that over the long term getting investment right based on US$ trend may be the difference between a so-so retirement and a comfortable one.
  • MS
    Martin S.
    17 June 2020 @ 16:41
    Julian's view is very US centric and rather technical in nature. His chart on slide 3 and the comparison to the period 1976 to 2002 could easily be pure coincidental. An equally valid technical case could be made that the current dollar cycle has not finished its run and will test the previous high. The most relevant part of his argument in my view comes towards the end at about 27 minutes into it. And that is the question of geographic allocation of capital. Currencies are a zero sum game. I live in Europe currently and I simply cannot see how Europe would survive a rising Euro or how the European stock market would suddenly start to outperform the US. Structural problems are much more severe in Europe, especially in the south, but also in Germany and France. Unemployment numbers are not comparable due to the very different system, but the harm done by COVID is very comparable. The European banking system is in deep trouble and they are at the epicenter of the corporate debt bubble in Europe. Tourism is a key industry for countries in the south, and it is simply not happening this year. Germany's GDP is 50% export. Should the dollar weaken, the ECB will 'do what it takes' to counteract that. They have just now started to loosen Germany's grip on austerity. And on an additional note, if we are entering an era of de-globalization, the US will import less, not more, and I would predict a decreasing current account deficit. Domestic oil production is a national security interest and no government will let that collapse. EM economies will struggle to export more, including China. And finally, the elimination of the rate differential certainly does not help the dollar. But the carry trade with EM countries no longer works either as either rates declined and / or currency risk increased. The big question really is whether the bond trade as an inverse correlated asset class in a risk parity portfolio still works, or whether bonds in general, no matter in which country, have hit the lower bound.
    • WM
      Will M.
      21 June 2020 @ 15:03
      Good response Martin. I am US based and see pain all round coming in spades. Your comments on Europe (and possible Chinese Yuan devaluation) are exactly what keep me from jumping on the weal dollar bandwagon. It just seems that Europe is in a hole it isn't going to get out from without dramatic action.
  • DH
    Daniel H.
    16 June 2020 @ 19:47
    We should have a battle section, where videos of opposing opinion are clearly identified. I.e. julien bridgen vs brent johnson.
    • AF
      Andre F.
      18 June 2020 @ 04:31
      Daniel H., Your suggestion is stupid and childish. You're just trying to find another way to be spoon fed, but you know it would be repugnant to directly ask to be spoon fed, so in a cowardly vein, you're asking for the spoon feeding in the manner which you just did. Please stop it. Haven't you listened to what the ethos behind starting Real Vision was in the first place? Go plant your ass at CNBC if you want to hear vain and entertaining battles. What are you doing here if you're so committed to remaining unsophisticated? YOU NEED TO LISTEN TO VARIOUS VIEWS AND THEN COME UP WITH YOU'RE OWN TAKE, you need to do your own homework too. Real Vision is not meant to be entertainment. Also, the professionals that come on here have too much respect for their peers and for the nature of the craft that they're all engaged in to have "battles" or be juxtaposed into a framework of battle. But putting that aside, "battles" don't make any sense: investing and investment approaches are often nuanced, sledgehammer thinking or sledgehammer presentations are not the right approach. Alex Gurevitch vs Stanley Druckenmiller? Goddamn that is so disgusting on so many levels, it is so bankrupt on so many levels. Where are people like you coming from? You weren't here a year or two ago. Your comment is truly, truly disgusting and unfortunate, not just unfortunate but disastrous and is so highly indicative of these dumbed down, "everything should be free" [including the act of thinking, it should be outsourced to someone else so I don't have to do it], times that we are living in. "We won't tolerate self promotion, hype, or b.s." That is from the RV 'about' page. Your garbage suggestion falls under hype and b.s., as far as I'm concerned. Like I said before, go plant your ass at CNBC or go watch old tape of Randy "Macho Man" Savage smashing The Undertaker with a chair. I know my comment will be massively down voted: knock yourselves out! "All of humanity's problems stem from man's inability to sit quietly in a room alone." -attributed to Blaise Pascal
    • WM
      Will M.
      21 June 2020 @ 14:55
      Andre, do not disagree with your points here. However I just think there is no need to accuse someone of being "stupid and childish" as a form of personal attack. Please lets keep our tolerance level controlled.
  • CD
    Christopher D.
    21 June 2020 @ 13:11
    Just why the Current Acct (CA) USD supply needs to go in tandem with global GDP escapes me. First, a good chunk of global GDP is the US GDP itself, and lots of it from consumption of services. Then a CA USD supply to the RoW need not turnover exactly once in the year. In other words a USD leaving the US to roam around the world in January may have turned a few times by December and its velocity be reflected multiple times in global GDP. And as Julian says, there are other ways to get the USD even if that's hot money. Perhaps the CA deficit being more stable gives the long term structural Triffin-like picture, but for the marginal trading of USD dictating inflection points in USD strength, those short term hot money flows contain more explanatory powers. So in summary I can see the graph and it looks like there's something at play, but we havent established any causation behind that correlation.
  • BF
    Brad F.
    19 June 2020 @ 22:26
    RV Fans Slack Channel / Chat Room If you haven’t done already so join the conversation in the free, unofficial RealVision slack: http://bit.ly/slack-RV-fans Currently this is mostly just pro members.
    • CD
      Christopher D.
      21 June 2020 @ 13:01
      hey Brad great idea, and am a fan, but the bitly link doesnt seem to work? and I cant seem to find slack-RV-fans in Slack either... Chris
  • jW
    john W.
    18 June 2020 @ 15:58
    Interesting to see Raoul contradict your point of view Julian. Am I missing something here? @RaoulGMI 6/18/2020 If my hypothesis is right, that the Fed stimulated first which helped drive the dollar lower, but now its time for the ECB, BOE and BOJ to hit their stride and the relative liquidity is much lower, then we should see the dollar gain strength from here.
    • SM
      Sergio M.
      18 June 2020 @ 18:03
      The fact that Julian And Raoul give two different POVS gives Real Vision a good reason to have their higher level tier product! :D
    • NH
      Nathan H.
      19 June 2020 @ 16:59
      Yeah I'm also very confused about this. I'm assuming they have some how found a way to reconcile their differences in opinion. I wish somebody would spell it out for me because I can't figure it out.
    • jn
      jordan n.
      20 June 2020 @ 18:23
      I think it’s timing. Julian is > medium term as the impact of the Fed easing really takes hold. The Sultan is short-term to medium term as the world navigates the economic backlash of the shutdown and pre-covid weakness. Both are correct from my perspective. I am long $ and starting to accumulate commodities
  • TM
    Tyler M.
    18 June 2020 @ 15:41
    I love GMO! I’ve followed their research closely for a long time. Please, please have them back again for more interviews!
  • ND
    Nathaniel D.
    18 June 2020 @ 13:17
    Thank you - I thought it was a very thoughtful video. Curious on the play here in the event the USD decline does take place. I think a few subscribers have briefly mentioned it here, but would a currency hedged ex-US ETF be one way to play this? My first inclination is to think you wouldnt necessarily need the currency hedge as a US based investor who uses dollars
  • JS
    Jon S.
    18 June 2020 @ 10:02
    Thank yo for sharing Julian - I think if Julian would be on plus I would upgrade to plus :)
  • NO
    Neil O.
    18 June 2020 @ 09:43
    Raoul, how is Julian wrong?
  • GL
    Gene L.
    18 June 2020 @ 09:35
    I'm a pro subscriber... But I think we should have more Julian Brigden across all the tiers, both essential and plus.. I think Julian's views have often been very helpful in helping one build a framework and it should be made available for all members. More Julian please!
  • KS
    Ken S.
    18 June 2020 @ 03:36
    I was a strong adherent to the Dollar Milkshake (Brent Johnson) and Global Dollar Short Squeeze (Lyn Alden) camp until I saw Julian's views on the dollar. I'm firmly in Julian's camp now. Very cogent argument and rock solid analysis.
  • JL
    John L.
    18 June 2020 @ 02:19
    I think this is the most valuable video I’ve watched. Thanks.
  • JE
    J E.
    18 June 2020 @ 01:28
    @Julian Thanks so much, you have been on fire with the MI trades, and it’s great to see the dollar thesis in more detail. How does this affect US real estate (residential)? I would think weaker dollar and lower rates means higher prices, but if we are talking about an end to American exceptionalism, higher commodity prices and a shit economy... how do you see this playing out? Thank you-
  • VG
    Viktor G.
    17 June 2020 @ 17:02
    As long as the EURUSD doesn't cross 1.15 it remains in a stable & long term down move. Only after crossing that mark, establishing an uptrend, we can talk about a potential change in direction.
  • ly
    lena y.
    17 June 2020 @ 15:31
    A recent podcast by Grant Williams, The End Game episode 2- The Lord of The Dark Matter, can shed some more light on this US dollar debate. The recent trades by Julian have been brilliant!
  • TY
    Tony Y.
    17 June 2020 @ 05:49
    Which European ETF and Emerging Market ETF, that are NOT denominated in USD, would you recommend?
    • DR
      David R.
      17 June 2020 @ 08:50
      It's not an issue of what the ETF is denominated in, but whether or not it is hedged to the dollar. As the USD and the United States itself declines, you most surely will NOT want to be hedged to USD.
    • DB
      Douglas B.
      17 June 2020 @ 15:29
      If the US declines against what, David?
  • AB
    AJ B.
    17 June 2020 @ 14:33
    You have a currency that is considered the safe haven and the financial lubricant of the international monetary system (like it or not), but somehow come to the conclusion that the dollar will substantially devalue against other currencies...it's utter nonsense. You might not like the world we live in and how it works, but the reality is there is not enough people on the planet who understand how the system works and how to change it yet. Therefore it will continue.
  • BP
    Ben P.
    17 June 2020 @ 14:21
    Awesome, reconciles. Only spx etc rallies when dollar falls while we are in this bubble at least. Please use full screen charts, difficult to see on tablet/phone. 🙏
  • JF
    Jim F.
    17 June 2020 @ 13:51
    Excellent presentation. Thank you.
  • LA
    Linda A.
    17 June 2020 @ 13:37
    Julian always comes prepared. Thanks for always making the difficult easily comprehendable. U are an exceptional analyst!
  • DG
    Dave G.
    17 June 2020 @ 12:55
    What Julian says makes so much sense that it probably won't happen in the real market. Sort of like the stock market makes so much sense right now also.
  • SW
    Stephen W.
    16 June 2020 @ 20:25
    Interesting, as a GBP investor what would the story be on Gold with the incoming weak dollar? significant underperformance I would imagine?
    • TW
      Thomas W.
      16 June 2020 @ 22:14
      I have been trying to figure this one out too. Currently I am Short GBP: Long USD because I think there is more upside in the dollar but if I am wrong I think there is at least some more downside in the pound, in the short to medium term.
    • MS
      Matthew S.
      17 June 2020 @ 12:09
      Doesn’t Gold become the purchasing power protection backbone of US investors. Rotate out of USD assets (QQQ, SPY) and into gold (plus other commodities)
  • TG
    Terry G.
    17 June 2020 @ 11:12
    Understand that they need to upsell, but appreciate if there's less shameless plug-in. Otherwise a really good video and useful perspectives.
  • DD
    David D.
    16 June 2020 @ 17:13
    I added this videos to "My Videos" to save for reference... but I'm not sure how to view a list of the saved "My Videos". Is there a link? Thanks
    • EF
      Eric F.
      16 June 2020 @ 17:26
      My List from top right menu.
    • DD
      David D.
      16 June 2020 @ 19:44
      I don't see My List.. maybe Chrome compatibility issue?
    • DP
      Duane P.
      17 June 2020 @ 02:46
      I could be wrong but, if I remember correctly, this is a long know bug that hasn't been fixed. :(
    • DR
      David R.
      17 June 2020 @ 09:09
      There is an obvious need for this website function, which is commonly available elsewhere. As a charter member, I have complained about this bug twice already this year, including on a survey. But NADA all year long. Terrible, as I'd saved some great videos years ago in my list that I can no longer find without it.
  • DR
    Danilo R.
    17 June 2020 @ 02:49
    Err, I don’t see the case for a weak dollar is going to be as simple as in the past. 1st, the US still has the best consumer base in the world despite really draconian and inane government pre election posturing ... this means more relative growth and better interest rates than the other mature markets like Europe, Japan, China and Russia. I also don’t know the ramifications of a weaker dollar, it seems it would lead to more US exports and more US employment, higher oil prices means more speculation in shale ... basically their reason we have the dollar bouncing on the trend line for now, relative uneventful and treading water. Finally the swap lines and myriad of bilateral trade agreements the US has in place which should be favorable for the US current account. Yes, its a game of chicken, will the Euro collapse from Italian solvency issues vs the solvency of US shale vs the ultra leverage of Australia, Brazil and China In a global slowdown.
    • mB
      marc B.
      17 June 2020 @ 04:04
      I’m also interested in which sovereign countries are most likely to default on usd. Also I’m thinking if Democrats win. More free money for lower class and doing more domestic manufacturing. Is us manufacturing increase good or bad for usd? I understand big deficits is bad. Also how do high taxes in us do to usd. We all now rich are ducked w/ democrat in office.
    • DR
      David R.
      17 June 2020 @ 09:01
      You can't call China and Russia "mature" economies, they're emerging economies. In fact, US interest rates are extremely low relative to China, which also, in sharp contrast to the struggling US, has not been forced to engage in reckless money printing, helicopter money, full monetization of sovereign debt, junk bond-buying, and other desperate unconventional policies like in the US. In fact, the chinese central bank hasn't increased its balance sheet at all during this crisis while the Fed has gone full retard. Maybe that's partly why the greats like Dalio, Druck and Yusko have reportedly re-allocated long-term investments away from US into China and region.
  • MW
    Max W. | Real Vision
    16 June 2020 @ 20:14
    Markets exist because two or more parties either have different views or time horizons on an asset. Those asking “how do I square this with Raoul’s theory or Brent’s theory” seem to be missing that. They could both be right on different time horizons? They could also both be wrong. One of them could be right but get the mechanics wrong. The dollar could go sideways for years. I could go on forever but simply put I’m trying to say that no one has a crystal ball. Many of the best investors/traders of all time aren’t even right more than 50% of the time. They make their money through risk management pressing winners and cutting losers. I don’t have a strong view on the dollar but I do have strong views on how you should consume financial research/media, especially if you haven’t done the research yourself and especially if you aren’t experienced. And that is with a simultaneously open and skeptical mind. I watched Real Vision and did tons of homework outside of RV for over 3 years before I ever invested a dime and I know I still have a long way to go.
    • JI
      Jose I.
      16 June 2020 @ 21:21
      I do not think that it is about being “right” or “wrong”. That is not the way to think about it. I believe we all here share the view that no one has a crystal ball, that we can all be wrong, and that with the current high uncertainty nobody knows. It is indeed about understanding the scenarios, continuously fine-tuning the thinking by looking for potential weak aspects in the frameworks or identifying cracks in the narratives. And to this end, challenging how different views square is highly valuable.
    • MW
      Max W. | Real Vision
      16 June 2020 @ 22:26
      @Jose I agree with your statements. Maybe "how does this square" is the wrong way to put it, as comparing opposing views is exactly what I'm getting at. I'm addressing comments I've seen that read like disbelief to the point of perturbation at the possibility that two cogent arguments on the direction of the dollar existed. Opposing views are something that I feel are so intrinsic to the nature of a functioning market that the tone confuses me. I am perhaps reading too much into the natural frustration and uncertainty that comes from seriously considering a counterpoint to a strongly held belief.
    • TS
      Thomas S.
      17 June 2020 @ 00:31
      Jeff Snider was also have a different perspective
    • Am
      Alex m.
      17 June 2020 @ 02:56
      Max - RISK MANAGEMENT great topic for some content!!
    • TM
      Tony10 M.
      17 June 2020 @ 06:49
      Yes more risk management content please
  • VW
    Voytek W.
    17 June 2020 @ 06:20
    Brilliant interview, and a logical counter point to the strong dollar theories. Certainly, a well thought out thesis worth considering. I think were Julian’s assumptions are wrong is how weak EU is - both politically and economically (eg so what if the Germans didn’t loose the jobs, if nobody’s buying their cars). It will take one Greece or one Thailand financial crisis scare to send everybody fleeing back to USD (and you can see a taste of that with any hint of COVID coming back). And in the world that is not traveling, not trading, and not spending, such scare is more likely than not. Would be great to see discussion between Julian and one of the strong dollar guys - eg. Raoul or Brent Johnson.
  • GT
    Gene T.
    16 June 2020 @ 18:20
    Julian's dollar decline call is founded upon the belief that the 'napalm run' is over; THAT is the question, isn't it? Are we to believe the most economically destructive event since the Great Depression will have no further risk-off panics? The risk of a prolonged 2nd COVID-19 wave is far from insignificant, and if that does happen the market can kiss the 'V' recovery goodby, and with it the current risk-on, FOMO, reflation trade. Hard to see the dollar begin a significant decline in such an environment, but that's what makes markets...
    • JB
      Julian B. | Contributor
      16 June 2020 @ 20:22
      Gene, a second run in the dollar is always possible. Perhaps, triggered by a second CV-19 spike. But the Fed has made it perfectly clear, that together with their peers overseas and the IMF, they don't want to see further dollar strength. They are cognisant of the risks and the Fed has an unlimited ability to provide $s. I don't want to fight that combo.
    • mB
      marc B.
      17 June 2020 @ 04:18
      Is usd weakness good or bad for middle class us residents? Seems like the weaker dollar higher inflation is ducked for lower & middle class. What if the central banks started doing things that were good for our weakest players or is that too humane to think.
  • MM
    MARTIN M.
    17 June 2020 @ 04:13
    Outstanding!
  • IP
    IDA P.
    16 June 2020 @ 13:47
    Thank you so much
    • IP
      IDA P.
      16 June 2020 @ 14:09
      I admit, I still don't understand why Raoul Pal still sees a dollar shortage while J. Brigden doesn't
    • DB
      Douglas B.
      16 June 2020 @ 15:49
      Maybe because they have two different brains?
    • IO
      Igor O.
      16 June 2020 @ 17:11
      Or simply nobody knows
    • PB
      PHILLIP B.
      16 June 2020 @ 17:55
      @ IDA P, Raoul sees a shortage of dollars in the international dollar system, the Eurodollar. Global trade is down, and approximately 65% of international trade is in USD. Covid impact decreases business revenue for international firms. For firms that borrowed in USD, while their cash flow is decreasing, they still have to service their debt. They try to raise USD and are competing with other firms who are also trying to raise USD. A possibility that would be a great topic on RV is if swap lines are used by the CBs who received them to fund the banks that have the USD loans. The banks would use the USD from the swap lines to roll forward the debt that these companies have. Keep the USD flowing to meet the demand, keeping a lid on the USD exchange rate.
    • MC
      Michael C.
      17 June 2020 @ 01:08
      How can "Thank you so much" be a hotly debated topic? LOL
    • IP
      IDA P.
      17 June 2020 @ 04:02
      to Philip B,: yes I am aware of the dollar shortage reasoning, I listen to Jeff Snider as well, but J Brigden says it's solved, and yet this doesn't convince Raoul Pal, so why are we supposed to be convinced ? I respect Pal and Brigden, but they can't convince each other really, I wish this divergence would get solved, I don't think I'm the only one
    • IP
      IDA P.
      17 June 2020 @ 04:03
      to Douglas B: yes we all have different brains, but data is data
    • IP
      IDA P.
      17 June 2020 @ 04:04
      yes mine is a hotly debated topic while Michael above wrote the same thing and got 16 likes!
  • DP
    Duane P.
    17 June 2020 @ 03:01
    It's nice to hear a view different from Raoul's that has some nuance. Interestingly you can be against Raoul's thesis but still not a US equity bull. This is the deep analysis that a think a lot of the US equity bulls on RV lately are sorely lacking.
    • mB
      marc B.
      17 June 2020 @ 03:59
      Also once global assets start performing well more dollars will head there & they will sell tech to do so.
  • mB
    marc B.
    17 June 2020 @ 03:57
    I agree w/ usd going down. And am bullish on emerging markets but feel their is more pain ahead as I feel q2 & q3 earnings globally are going to be way worse than the market is pricing in. Hypothetically if I were to buy say the India I shares etf on a us exchange will I still get the upside of the usd being stronger now or will I have to buy and index fund on the Indian exchange to get the true value.
    • mB
      marc B.
      17 June 2020 @ 03:58
      Also would it make sense now to start buying emerging markets simply on a thesis that the usd is stronger now and even if they sell off 15% the currency strength makes it moot.
  • OA
    Olivier A.
    17 June 2020 @ 01:13
    I have a hard time wrapping my head around the shale effect on the US current account. It makes sense that the crash in US production would deteriorate it, but: 1. The US was still a net importer in 2019, and 2020 consumption is expected to decline more, in volume, than US production - so unlikely to lead to the US importing a lot more oil (https://www.eia.gov/outlooks/steo/report/us_oil.php) 2. Even if we don't believe the EIA on production, surely the 12% expected decrease in demand alone puts pressure on the need for imports 3. Add to that the fact that at the current rate oil prices should be down 25-30% this year vs the average of 2019, and it's hard to see the US imports in value move significantly I'm sure I'm missing something here, but I'm not sure what :)
    • OA
      Olivier A.
      17 June 2020 @ 01:14
      Sorry, I should have started with that: super interesting piece, I thoroughly enjoyed listening to it.
    • DP
      Duane P.
      17 June 2020 @ 02:51
      I think it is as simple as demand is not going to be fully offset by the decline in domestic production.
  • JK
    Jay K.
    17 June 2020 @ 02:30
    Time to buy EM?
  • jW
    john W.
    17 June 2020 @ 02:21
    Thank You Julian. It does sound opposite to Raul's view for a stronger dollar first, before "eating itself".
  • BE
    Benjamin E.
    17 June 2020 @ 02:18
    I finally figured out who the GEICO lizard is.
  • MC
    Michael C.
    17 June 2020 @ 02:04
    Thanks for putting your views clearly out in the open Julian, and well done on your recent trades. You briefly touched on the USD swap lines which is really about calming the huge Euro$ (offshore USD) funding markets. You didn't spend much time on this. Why? If the supply of Euro$'s is not an issue we should see USD swap lines being reversed as funding markets calm - but they are not. Swap lines are being maintined at crisis levels while foreign holders of US treasuries have been selling billions in USTY to access USD. Don't Euro$ funding markets play a much larger role in supplying the world with USD than the US Current Account Deficit? And isn't the main reason why the Fed resorted to using interest rates as their main monetary policy tool decades ago (ie changing the price of money not the quantity of money) because they could no longer clearly define what a USD is? And before someone says to look at M2, to show that the quantity of money has increased, its all Bank Reserves which sit at the Fed (inside the US) doing nothing (ie its not bank credit - high powered money). Can RV please do some digging and run a series on the Euro$ system? Its the elephant in the room that is missing on this platform. And as a Pro subscriber I expect it to be covered in detail even if Jeff Snider has done an awesome job with his Euro Dollar university series (which is all free by the way). You could put more context around it and discuss practical implications. Thanks again. RV is great.
  • RG
    Rob G.
    17 June 2020 @ 01:09
    thanks Julian. So clearly this is bullish AUD, CAD, NZD?
  • lm
    luke m.
    17 June 2020 @ 00:28
    As a dollar milkshake believer this was a very fascinating interview. I thought Raoul was on the dollar bull side in the short run though ... ??
  • BS
    Bevyn S.
    16 June 2020 @ 23:55
    Too early.....
  • Md
    Matthew d.
    16 June 2020 @ 22:23
    This is a FASCINATING interview. Thanks RV for such incredible content!
  • WD
    Wim D.
    16 June 2020 @ 12:36
    Great overview, although I really have difficulties seeing ex. Europe outperforming the US anytime soon. I'm afraid Europe is in quite a bad place as well, and with respect to people losing their job, my guess would be that Europe/Germany will be catching-up to the US mainly due to company bankruptcies rising (causing mass layoffs at once).. European companies/economy is not nearly as performant as the US one, very little innovation , mostly 'old economy', and all that combined with the EU that want to regulate everything (EUSSR ..). Add demographics to that, and to me Europe really isn't a story for the next 10y to me ... GB if they manage to leave the EU disaster behind they might very well be, .. but my guess would be that they have another couple of hits to their economy to go as well .. With the trade tensions between CN and the US ,.. I also have difficulties seeing a rebound in China.. in the relatvie short term.. Maybe the next decade becomes the decade of Latam again ? Several countries/economies look like their at rock-bottom (again) ...
    • PB
      PHILLIP B.
      16 June 2020 @ 17:59
      Re Latam, Peter Ziehan's recent book discusses the prospects for both Brazil and Argentina. Pretty interesting narrative and worth the read. And while at it, pretty interesting chapters on many other of the players and their longer-term prospects.
    • AD
      Antonio D.
      16 June 2020 @ 21:31
      The suggestion of Lyn Alden (Twitter @lynaldencontact) is to look at EM and invest very specifically in those countries with low USD debt, high USD reserves (incl. treasuries) so that they avoid the dollar milkshake/wrecking ball theory. - Bad: Argentina, Turkey, Chile, Indonesia
    • KJ
      Karl J.
      16 June 2020 @ 22:15
      Very true.
  • jg
    jesse g.
    16 June 2020 @ 22:12
    awesome insight! Thanks for sharing Julian!
  • SP
    Stanley P.
    16 June 2020 @ 22:04
    Bless you! I was pulling my hair out trying to understand the relationship between energy, the dollar, interest rates and the current account and fit it all into a narrative. Very educational 30 minutes for me--thank you again! S. B. Parvin
  • TS
    Tarun S.
    16 June 2020 @ 19:30
    But what about the dollar milkshake theory . Raoul’s been pretty bullish on the dollar. This seems to suggest the beginning of dollar weakens. All in all very insightful
    • KJ
      Karl J.
      16 June 2020 @ 21:45
      I think the $MS applies for the next 6-18 months, the $ weakness comes after that and runs for 5-10 years, but really who knows? :)
  • HB
    Harijs B.
    16 June 2020 @ 06:33
    Can you publish a transcript with charts.. the video quality is awful and the charts are unreadable
    • JS
      Juraj S.
      16 June 2020 @ 16:34
      Transcript is there and the video is very clear in the highest quality.
    • AD
      Antonio D.
      16 June 2020 @ 21:32
      Indeed, may be local bandwidth issue. Video and sound is good.
  • RM
    Rohin M.
    16 June 2020 @ 17:18
    Thanks for this. Very interesting. Raoul - does this alter your outlook/assessment of the USD? Thank you.
    • MM
      Monies M.
      16 June 2020 @ 17:29
      Raoul is not going to respond to this...
    • RP
      Ronald P.
      16 June 2020 @ 19:00
      Raoul is maybe not going to reply, but I agree that this video states the opposite of other video's with Raoul with regards to the dollar. Would love to see a video where the two discuss their different views, rather then more videos with only people in that video that already agree.
    • AD
      Antonio D.
      16 June 2020 @ 21:19
      Raoul has mentioned in prior videos that they form their theses independently so as not to bias one another. I don't think Raoul/Julian will comment on one another's viewpoints.
  • wj
    wiktor j.
    16 June 2020 @ 19:27
    And dont forget eu or euro is not ONLY germany. Take a look at italy etc.
    • JB
      Julian B. | Contributor
      16 June 2020 @ 20:16
      That's why the last chart includes not just the DXY, which is mostly EURO but also a slightly broader TWI
  • CD
    Christopher D.
    16 June 2020 @ 18:54
    Wouldn't it be the case that reshoring and a contracting world trade will create more dollar scarcity abroad, leaving more room for fed balance sheet expansion without USD depreciation? I am unsure how much usd assets are held by foreign hands but the Fed could buy from these hands, thereby supplying the necessary usds (without any need for reimbursement) and furthering the deglobalisation trend. Reshoring of production, reshoring of ownership, and geopolitical recession from the retiring policeman of the world.
    • TS
      Tarun S.
      16 June 2020 @ 19:31
      Had assets held by foreigners is around 40 trillion usd. Lyn Alden has covered this pretty well on twitter.
  • wj
    wiktor j.
    16 June 2020 @ 19:13
    I still dont see how swap lines and and treasuries pledge help this. All i see is the can being kicked half a year. And fed is actually buying treasuries and other securities back. This means they are taking them out of the system. How will the dollar be repaid this year? Feds qe is creating bank reserves. New us debt paper will come out soon and agian more dollars are going to be sucked into usa.
  • MS
    Michiel S.
    16 June 2020 @ 06:56
    @Julian, do I conclude correct that the conclusions in this video actually also further back up your Silver call and makes it even stronger?
    • JB
      Julian B. | Contributor
      16 June 2020 @ 19:11
      Yes Michael But tactically the dollar and silver (18.5-19) are both at major levels. So time to be a bit cautious and not press risk until key levels are breached.
  • MR
    Marco R.
    16 June 2020 @ 09:27
    @Julian: Do you expect a final Dollar squeeze, because of the Dollar shortage from debtor nations, before the Dollar starts its downturn decade cycle?
    • JB
      Julian B. | Contributor
      16 June 2020 @ 19:09
      Marco see comments above. Bottom line, its possible we get one more squeeze. The good news is central banks understand the risks and the Fed's response has been unprecedented in its speed and breadth. Their repo and swaps lines should go a long way in preventing a really big squeeze and I'm not willing to fight then.
  • JL
    James L.
    16 June 2020 @ 17:05
    Julian, I read your Insider report last night, as well. However, is it not probable that the DXY spikes higher near-term if driven by a second Covid19 spike before your call on its collapse occurs? I believe you and Raoul both see a collapse ahead, but timing matters! Which asset class makes sense to move toward first assuming the DXY collapse happens before year end?
    • JB
      Julian B. | Contributor
      16 June 2020 @ 19:04
      James as I mention at the end of the video, we are key levels. Thus far, all the $ has done is retrace its March funding squeeze. A move we suggested MI clients play. What happens next is critical. Do we break key levels or bounce? Our bet is ultimately, we break but these are big levels. Hence, why we have tightened stops on our dollar shorts.
  • DY
    Dmitry Y.
    16 June 2020 @ 17:34
    Good observations, but in order to put them in use, it is crucial to identify what dynamics in markets, economy, flows, etc. cause reversal the the tipping points... Also, in general good observation and theory, but kills Raoul's bet that we are at the possible end of the dollar cycle with dollar exploding higher, potentially killing the dollar system. So, Unfolding thesis is at question actually.
  • JI
    Jose I.
    16 June 2020 @ 16:05
    Good video! ...but it left me confused. Maybe some of you could help me and comment: 1. How does Julian’s view that “the dollar’s top is in….that the dollar is about to enter a multi-year decline” square with Raoul’s view that “dollar shortage” will drive the $ significantly higher? Is Raoul’s view just a short term move and Julian’s view a long term? 2. I imagine that a dollar decline trend implies a risk-on environment, how does this square with Raoul’s and Ed’s views that we are ahead of tough times? 3. A dollar decline would probably increase inflation, how does this square with the expected deflationary times ahead? Thank you for your comments.
    • PS
      Parminder S.
      16 June 2020 @ 16:37
      All good questions!
    • RL
      Remmelt L.
      16 June 2020 @ 17:12
      @real vision, could you answer these questions? Or put in a daily brieving would be very informative
  • JA
    John A.
    16 June 2020 @ 17:09
    Hey, the filmed on date is back. I very much appreciate that.
  • MW
    Max W. | Real Vision
    16 June 2020 @ 16:38
    Here is the link to the interview Julian mentions in this piece: https://www.realvision.com/shows/macro-insiders/videos/how-i-use-the-dollar-cycle-to-my-advantage
  • RW
    Richard W.
    16 June 2020 @ 15:26
    Really good. Can you add a link to the previous show that Julian mentioned at the end, please.
    • MW
      Max W. | Real Vision
      16 June 2020 @ 16:37
      https://www.realvision.com/shows/macro-insiders/videos/how-i-use-the-dollar-cycle-to-my-advantage
  • RC
    RUBEN C.
    16 June 2020 @ 16:17
    Thank you very much for giving the option to Plus subscribers to listen to Julian
    • MW
      Max W. | Real Vision
      16 June 2020 @ 16:35
      This is technically on the Essential Tier so it is available to all Real Vision subscribers. As a rule of thumb, Julian appears on an approximately quarterly basis on the Essential Tier.
  • VP
    Veselin P.
    16 June 2020 @ 16:13
    Being EU based, I would have loved some commentary on the EU idios. risks. And, as always, timing is key to everything
  • ar
    andrew r.
    16 June 2020 @ 15:44
    Great presentation!
  • MS
    Mark S.
    16 June 2020 @ 14:27
    Julian what's your support line on UUP?
  • AA
    Aymman A.
    16 June 2020 @ 14:14
    Incredible analysis!! This is why I subscribe to RV. Thx
  • DM
    Dom M.
    16 June 2020 @ 13:52
    The dollar will continue to be strong until the monetary crisis is over (2021-22),
  • MK
    Mohit K.
    16 June 2020 @ 13:17
    i will subscribe your PRO membership also...since i am from INDIA i cant trade in everything whatever you recommend in that
  • MK
    Mohit K.
    16 June 2020 @ 13:14
    After listening to your conversation i think US Dollar index will top @ 112 in this dollar cycle. lets see...although real vision help us to understand the very complex macro picture n the history of finance...real learning
  • MS
    Michiel S.
    16 June 2020 @ 06:52
    An impressive and highly informative video and it makes me lean more towards Julian's rather than Raoul's view on the USD. Thank you
    • PC
      Petros C.
      16 June 2020 @ 10:50
      I agree, Julian is in Yale's Stephen Roach camp: https://www.fxstreet.com/news/yales-stephen-roach-calls-a-35-drop-in-the-us-dollar-202006160209