The “Dollar Milkshake” Theory

Featuring Brent Johnson

Santiago Capital CEO Brent Johnson rejoins Real Vision with a plethora of predictions that revolve around a strengthening dollar. Johnson believes that a global currency crisis looms, but that there is a bull case to be made for the greenback, gold and U.S. equities. Filmed on May 29, 2018 in San Francisco.

Published on
6 June, 2018
Equities, Gold, US Dollar
34 minutes
Asset class


  • CM

    Chris M.

    28 10 2018 01:31

    0       0

    I find it interesting that the flight to safety hasn’t been very clear. Very transitory IMO. Yen, Bonds, Gold, Silver, No BTC tho, sorry crypto guys and gals. I’ve made some trades against the Aussie dollar, rode the Yen up, used gold as a vehicle to trade long and reverse, and lastly I hit the jackpot on the crude decimation of $4 down in one session.
    I cannot for the life of me understand why the banks are on life support. But my next short that I’ll be in longer term are the REITS.
    THANKS AGAIN for the video. This is great stuff right here

  • JC

    Joe C.

    21 8 2018 22:44

    0       0

    Still one of the best Real Vision videos of all time.

  • PM

    Paul M.

    1 8 2018 11:42

    0       0

    Clearly an interesting view on things but:

    1. The argument for $1-2 trln. global demand for USD to pay interest is flawed since a lot of these issuers are actually getting paid in dollars for their goods. Like, every non-US exporter out there for instance. There is some demand obviously but it's not $1-2 trln. per year.
    2. Repatriation argument is also overstated. US corporates don't hold most of their cash offshore in other currencies primarily for two reasons: no yield in fixed income instruments/deposits and clear lack of instruments (about 80% of Fixed Income market is in $). They will move their cash for tax reasons but they don't need to buy $ on the scale Brent is talking about.
    3. Yield differential (carry) is actually the best reason for dollar strength but the carry difference is not that large, effectively the differential is within annual vol range of Eur/Usd for example. By going into dollars, an investor with a base in anything but dollars is actually taking additional FX risk and it's a big leap for a differential of 2,5-3%.

  • RP

    Ryan P.

    26 7 2018 00:58

    0       0

    Save in gold, spend in $

  • ph

    peter h.

    19 7 2018 12:53

    0       0

    Spot on thus far with the theory. USD continues to be on a roll. Up over 8% since the lows. Let the chaos being!

  • MD

    Marc D.

    19 7 2018 09:16

    1       0

    Great video.

    I understand that USD strength can be predicated on tighter USD liquidity from FED tightening and lowering their balance sheet.

    Just wondering whether some other factors might not mitigate this “tighter USD liquidity”?

    1) For instance it may be that the USD money supply goes down from a lower FED balance sheet and fiscal deficits in the US. But what about the velocity of money? Might that not increase if banks (especially in the eurodollar markets) have gone through balance sheet repair and become ever more willing to “circulate” USD? (Banks are earning good profits again and may have room to releverage)

    1a) Not only commercial banks, but other central banks might facilitate USD funds. BOJ and Bank of China have massive holdings of treasuries. E.g. BOJ has facilitated USD funding to Japanese banks and investors by lending treasuries against JGBs to Japanese banks (that they in turn can repo) to provide USD funding.

    2) If USD starts to strengthen due to liquidity issues, would the FED not react by supplying USD using its swap facility with other central banks (or more precisely foreign central banks request activating fx swaps)? Or perhaps even pause or delay its rate tightening?

    3) The FED has been tightening for a while now and the market is starting to look for where fed funds might top out, (hence a very flat yield curve) while e.g ECB is expected to begin sometime next year. Could that not cause interest rate differentials to narrow over time and thus cause the USD to become less expensive vs the EUR?

    I think your analysis is brilliant and agree with a lot of your expectations. I am just not sure the USD would necessarily go through the roof without having some type of central bank reaction to mitigate some of this.

    Thank you.

  • RD

    Ryan D.

    27 6 2018 23:27

    7       0

    I think what Mr Johnson is trying to say is that the US $ Milkshake brings the EM boys to the yard, and they're like it's better than yours, Trump could teach you, but he'd have to charge.
    Sorry. Couldn't resist.

  • RC

    Richard C.

    26 6 2018 22:20

    0       0

    Thought provoking commentary. Brent may well be right about the direction and strength of direction of USD, but I suspect that many in the rest of the world will react long before the pain point that Brent thinks it will get to. This reaction will cause pain of its own for those reacting, but whatever moves are made (or is made if there is a concerted response) it will no doubt cause pain for the US , may indeed be intended to cause pain for the US in retaliation. If you believe the world is transactional alone then you have to expect negative feedback for negative stimuli. And at some point when people are pissed off enough they will shoot themselves in the foot if the shot wounds their nemesis at least as badly. Bad leadership is begetting bad outcomes.

  • cd

    chris d.

    23 6 2018 14:14

    0       0

    I’m surprised you did not weave in how the emerging trade war will impact this scenario

  • CM

    Chris M.

    15 6 2018 11:40

    1       0

    So. When you say that gold and the USD will rise simultaneously, is it safe then to say that the “value” of gold will rise, but not necessarily the price (in USD). The rise of gold will be from other currencies collapsing. Thusly, since the USD and gold will rise in value simultaneously the price point should be the same?

    I don’t get how our broader market will rise if, the above happens. Liquidity and CBS I get but the corresponding hyperinflation would price EM out of the market. No?

    Lastly, ECB just came out and said they were gonna start tightening (before y’all filmed this) so “we” will no longer be the only ones creating the money velocity and providing liquidity, does that change your thesis at all?

    Thanks for your time I really enjoyed it, but as a parent didn’t finish it completely, fell asleep watching it in my lap lol....


  • HC

    HJ C.

    14 6 2018 20:53

    0       0

    Great presentation of position and support, really appreciate the openness on the gold issue/last 5 years. Highly valuable to be able to hear alternate perspectives. The equity presentation rings true.

  • PD

    Pat D.

    13 6 2018 10:34

    0       0

    Impressed to see a presenter respond and interact with so many of the comments ....... and humbly.

  • DS

    David S.

    13 6 2018 02:54

    1       0

    The FX market will continue to float on a moment by moment basis as will as all hard assets. We cannot put the FX genie back into the bottle, but we can own some precious metals as a hedge for now and as an investment over time. It is a reasonable bet. DLS

  • CZ

    Cyprian Z.

    13 6 2018 01:49

    2       0

    Great video. Controversial. Thought provoking. Precisely what I signed up for when I subscribed to RV. Less knock on effects, and more milkshakes please.

  • DS

    David S.

    12 6 2018 21:32

    1       0

    Mr. Johnson. Thanks for another interesting discussion. Fiat money/gold/beads/sea shells are used in bartering, therefore all are money. Some traders suggest 5-25% of your assets should be in gold. It would be interesting to hear a short discussion on the percentage of gold one should have from just starting out - low disposable income and needing shelter, food and clothing - to retirement. Do you know of any papers or website that objectively discuss this? DLS

  • WG

    Wade G.

    12 6 2018 18:24

    0       0

    That's a lot to chew on; thank you for a cogent presentation of a really interesting thesis. Curious if there's some nuance regarding foreign investment in U.S. markets under this theme: what portion of such total investments might be currency hedged, and should that portion be viewed as dollar neutral or is it not that simple. Also curious if you have a technical or other view on how much gold might correct on a shorter term basis until it might break the inverse correlation and trade with a strengthening dollar. Again, thanks for sharing a really interesting view; really well presented.

  • LA

    Linda A.

    12 6 2018 17:33

    0       0

    Hey Brent- u may be right on the button. Tudor Jones just said that the "3rd & 4th qtrs. are going to be phenomenal" Brent, u are the bomb -so kind of u to thank viewers and reply back. Much respect to u!

  • FK

    Firoze K.

    12 6 2018 14:50

    1       0

    Really enjoyed this video, hearing a lot to the contrary so it's great to listen to another point of view.

  • zy

    zhang y.

    11 6 2018 21:46

    0       0

    One question Brent Johnson, I don't understand that of if debt is defaulted money disapper, the money that was granted as debt has already disapeared in whatever the borrower spend it, so what does it mean that money disapear?

  • DK

    Daniel K.

    11 6 2018 02:08

    2       0

    Hey RealVision guys and gals. Can one of the presenters bring on a guest to discuss Greece? After six years of recession and 28% reduction in public spending, the GDP growth rate is 2.3%, highest in ten years. Unemployment is falling in every age category and is now at 6 1/2 year lows (still highest in Eurozone at 20.1%). The Manufacturing PMI has been rising, May was 54.2. After bottoming out in 2014 and basing for several years, are there any sectors in the Greek economy worthy of a discussion? I already own silver.

  • CR

    Chris R.

    11 6 2018 00:46

    1       0

    Is there not precedent for this type of activity--did not the call market of the late 1920's suck capital into New York in similar fashion contributing to the melt up in before the crash? Given current rate differentials and especially if US rates continue to rise, it seems plausible...

  • AV

    Alberto V.

    10 6 2018 23:17

    1       0

    Just a thought, and perhaps someone else agrees with me: it would be awesomely nice to have a button to sort comments by most recommended/discussed vs chronological order. This should also prove to be 2x more useful for mobile (outside app) viewers too.

    Thanks for the video btw, great one!

  • JC

    John C.

    10 6 2018 20:51

    0       0

    Brent, First thank you for the presentation. I do agree with the base premise of the idea.
    However, I am concerned that I did not hear in you thesis any substantial consideration regarding changes in U.S. fical policy (I.e. deficit spending/with no ceiling. In particular, I am worried that regardless of what the Fed is pulling out of the IMO through the straw; that the US Treasury is putting back into the IMO enough dollars offset the Fed’s action.

    Thank you regardless. Very persuasive argument.

  • CS

    Christopher S.

    10 6 2018 20:25

    1       0

    I've had a hunch in my thinking that about this scenario playing out for several years now, but I haven't been able to articulate it as well as this. Whenever I'm asked "where should I put my money" I've basically replied something along the lines of 40% USDs, 40% US Equities, and 20% Gold." (With maybe a bit more diversification thrown in as well).

    Higher equities on a higher dollar and higher rates is a contrarian position. Everyone and their dog currently thinks rates go higher and that crushes equities, which causes the fed to unleash more QE...this is another reason why I feel more comfortable with this thesis. What's more, go on any message board, social media, ask your friends and many of them feel confident owning equities?? I'm betting its not too many.

  • DW

    Dave W.

    10 6 2018 16:27

    0       0

    Hi Brent, great exposition of your theory, thanks. Given you expect equities to do well as world liquidity flows into USDs, does that include precious metal miners in USD terms? Or do they languish until gold breaks out?

  • CL

    Chewy L.

    10 6 2018 15:55

    0       0

    The more he says he is wrong and got things wrong in the past the more I like him and gives me more confidence about his convictions going forward. It’s hard to teach humility. Great job Brent

  • RA

    Robert A.

    10 6 2018 13:09

    0       0

    One of my favorite Real Vision presentations ever. As a equities PM, I am appreciative of a simple but elegant thesis with respect to the dollar and its knock on effects. U.S. equities, are certainly acting like his king dollar, inverted yield curve theory are going to come to pass.

  • PP

    Patrick P.

    9 6 2018 16:28

    4       0

    Kudos to Brent !! ..... He read every comment ..(IMO unlike most other presenters) ...Brent also took the time to comment on most of them. That tells me that Brent is interested in hearing all points of view ........that is a sign of an intelligent presenter.

  • RD

    Ravi D.

    9 6 2018 11:04

    2       0

    Hi Brent, interesting view - i like unconventional ideas. Something I try and promote in my team because the fact is, everything I was taught during at university in Economics has been thrown out the window since QE came into effect. My question is - if $ is set to rise and cause chaos around the world and with China one of the largest $ debt holders decides to start reducing its holdings - how will this impact the $ milkshake theory?

  • BJ

    Brent J.

    8 6 2018 20:58

    28       0

    Just wanted to say thanks to everyone who has watched and considered my thesis. Whether you agree or disagree I hope you found it thought provoking and encouraged you to keep an open mind. Best of luck to all.
    Brent Johnson

  • CC

    Carlos C.

    8 6 2018 19:41

    4       0

    This is a brilliant analysis. Very clearly explained. I never put too much weight into any macro analysis as it is fundamentally hard to predict. But the other thing a bullish dollar thesis has in it's favor is sentiment. Maybe it's time to lighten up on gold/silver specs!

  • IL

    Ian L.

    8 6 2018 13:54

    2       4

    Buy equities one of the highest valuations ever recorded because some guy has a hunch the dollar is going higher. Good luck with that one.

  • GO

    Glenn O.

    8 6 2018 06:03

    2       0

    Very well thought out and well presented. For someone not living in the USA my gold has done its job and protected my purchasing power.

  • AH

    Andreas H.

    8 6 2018 05:52

    0       0

    I am long dollar :-)

  • DG

    David G.

    8 6 2018 05:25

    4       0

    RV is the courtroom. The direction of the dollar is on trial. The RV subscribers are the jury. Expert witnesses have given testimony and the best lawyers have vigorously argued their case. Evidence has been presented and we've heard the closing arguments. The jury deliberates in comments section and it appears they are hung. Judge declares a mistrial. The dollar goes free ... for now. We have no verdict on the direction of the dollar but we are unanimous in a agreement on one point: Gold is money and the dollar is a fraud. Eventually it will get what it deserves and reach its intrinsic value of zero.

  • DR

    David R.

    7 6 2018 21:59

    2       0

    So many dollar bulls. Recently 97% per the DSI sentiment survey. Like Jan 1, 2017 before the dollar collapsed 23% within 12 months. Maybe bet the other way.

  • BH

    Brian H.

    7 6 2018 19:54

    6       0

    Stepping out of the office and going to go get a milkshake.

  • RJ

    Russ J.

    7 6 2018 18:54

    0       0

    The daily spot price of gold and silver is set by five London banks. It’s referred to as the London gold fix. Bankers traffic in paper currency gold:silver (at this time) contrary to banks interest. Gresham’s law in play ,we hoard good money..... as bankers set prices. RJ Sarasota, FL

  • RK

    Robert K.

    7 6 2018 16:38

    1       0

    Scary but in a nice way ;)
    Well done - do more like this!

  • TC

    Timothy C.

    7 6 2018 16:37

    1       0

    Wouldn't a very strong dollar drive higher imports thus benefiting the countries that export to the US? I understand a strong dollar might mitigate the benefit of those returns for US investors. I am not sure if he is saying do not invest outside the US if you are a US investor or just focus more on US assets. This is also a very out of consensus view, which I love, but just being out of consensus does not mean you are correct.

  • SS

    Sam S.

    7 6 2018 14:38

    3       0

    Hey Brent, everyone gets the timing wrong as some point or another. So no worries and you admitting it does in fact set us free. I don't see Gold as a currency but more as an asset. Same with Bitcoin. If Gold holds up in value when things "end badly", I see it as selling the Gold for US dollars and buying all the distressed assets at the bottom, therefore profiting from the Gold asset spread. I hope I'm thinking of this right. Well done presentation.

  • GT

    Gerardo T.

    7 6 2018 14:05

    0       0

    I thought QT was removing liquidity from US/DM and moving capital flows to Asia. Which is right?

  • GS

    Geoff S.

    7 6 2018 13:17

    1       0

    Thought provoking.
    I would add that a protectionist trade policy in the US would add fuel to this fire by further increasing the USD supply/demand imbalance.

  • sm

    stephane m.

    7 6 2018 12:44

    9       0

    Seems like Brent met with Martin Armstrong... Strong U.S.$ into 2020-21, rates going up, stock market going higher. Maybe RV should invite the real guy behind these predictions, not a repentant gold bug (just like me by the way!!).

  • RB

    Richard B.

    7 6 2018 11:31

    1       7

    I stopped watching as soon as he said the the FED wouldn't do QE again

  • AH

    Ahmed H.

    7 6 2018 11:06

    0       0

    Great interview.. agree with everything Brent says. For me, what Brent says plays out if nature is allowed to take its course - but we all know that seldom happens..think international financial stability is now well in truly in Fed's mandate - over the last 48 hours we've seen RBI (india) and BI (indonesia) governors reach out to the Fed via op-eds and press confnc's - this noise will get louder - and i do not think Fed can ignore it - case in point is China at time of taper tantrum - china deval'd - equties came off- taper took a back seat. As an aside - the longer eM suffers due to dollar liquidity issues the sooner they look for alternatives - we have putin, china and india all talking about usd being used too often to undermine em economies - this just solidifies their case. I think the way out of this probably somethign as simple as giving EM c. bank USD swap lines - But i think we are still a way from that - and agree with u, usd can and probably does rally!!

  • PD

    Paul D.

    7 6 2018 08:52

    1       0

    The gold angle seems extraordinarily tenuous. Take a look at a DXY chart and a Gold chart. They have been negatively correlated for almost the entirety of the past 50 years.

  • SP

    Sat P.

    7 6 2018 08:32

    4       0

    This was very insightful. His predictions were either completely opposite to what I was thinking, or, he gave much better reasoning why things would happen such as Gold increasing in price which I have also been thinking for a while. This is the kind of content I love on RV. This is not the kind of discussion I will get with people at my work!

  • PB

    Pieter B.

    7 6 2018 05:37

    1       0

    Thanks a lot Brent!

  • GO

    Gary O.

    7 6 2018 05:34

    2       0

    Never a dull moment with Brent. Were wondering were you went, but like everyone, back to Real vision!

    Thank you!

  • jd

    john d.

    7 6 2018 04:40

    2       0

    Thanks Brent. I really enjoyed your presentation and have followed your work for some time. I think that we're all struggling with understanding how this all fits together and I was impressed with your openness and ability to change your thesis and roadmap ... a process that RV has been very helpful with.

  • SG

    Sophie G.

    7 6 2018 03:47

    3       1

    Love the hypothesis of the Milkshake theory. Agreed that EU & euro is a mess. I would like to ask Brent if China's increasing trade based diplomacy with EM, Russia Africa (CNY tdebt & trade in oil & goods) would actually take some of the heat out of the dollars rise over time. Hence, the US fiscal weakness will ensure dollars weakness, with gold becoming the main beneficiary of fiat currency devaluation and potential mayhem leading to new SDR based global trade currency.

  • LA

    Linda A.

    7 6 2018 02:52

    1       0

    Brent, I really enjoy hearing your views. U are open-minded & smart. It feels like we got that huge blow-off top after Trump got elected & when China printed trillions just before Pres Xi got re-elected for life. Not sure of a coming blow-of top due to the Fed & Euro tapering. I thought it takes more & more debt to keep mkts propped up- law of diminishing returns. Wouldn't strong dollar kill off US companies with intl' exposure, thus squeezing their earnings & sales. I am not a Macro analyst but I believe in the strong dollar scenario. Trump made a mistake with repatriation at the end of a cycle. US has to provide dollars to the world. I feel mkts. are crash prone due to the Euro break-down, over leverage, massive debt & DB. Draghi ruined the bond mkt in Europe just like crazy Kuroda in Japan. Bring back Brent & Schiff for a part 2 interview.

  • TH

    Thomas H.

    7 6 2018 01:02

    1       0

    He kept saying "we got that wrong." I will continue to follow the charts instead of guessing.

  • AC

    Alessio C.

    7 6 2018 00:39

    1       0

    I need to watch this again. He said, "Rates are going higher and equity too". I'm having a hard time to picture it.

    The long-term trend for bond and equity is in the same direction - what did we have in the last 40 years? Short term negative correlation has been used for parity portfolio construction but usually works in downturns i.e. equity down, rates down and not vice-versa, equity up, rates up.

    I do believe in the dollar getting stronger. The only refrain I have is in Trump / Fed / etc. killing it before getting started. Let's say gets to parity with Euro. What happens next? What will Trump's administration do? More tariffs to lower the trade deficit? Maybe more fiscal stimulus and deficit spending. Is that bullish for the dollar as it sucks liquidity? Maybe. Do I want to buy a currency whose government is running 1 trillion dollars deficit each year? Maybe not.

    Let s see Europe. Choas. Euro down. Equity down. Rates up? Huge surplus? Who's buying? China more Mercedes or BMW? Will Americans be pilling more debt?

    I have a feeling that the next big one will be brought about by something which is outside the control of governments or central banks. While I do feel that FX fiat currencies can be controlled to lower their value (not so much to get their value up when they start to go down). The dollar bubble may be nipped in the bud. That's why I see gold (physical) as the killer. It's outside their control and cannot be stopped when started unless with the use of coercion.

    I'll watch this again.

  • FM

    Faris M.

    7 6 2018 00:23

    12       0

    This is what an analysis should sound like. Spoken with humility to admit ones mistakes and be contrarian not for the sake of it but because the empirical evidence points that way. Well done.

  • ns

    niall s.

    6 6 2018 23:08

    0       0

    Sounds like a very persuasive guy , however if you do the math , Nixon took the dollar off the Gold standard in 1971 at a rate of 1 oz gold= 35 $ . If you go to and check what 35$ in 1971 is worth in today's dollars you get this :

    Inflation Results
    $35 in 1971 equals $216.79 in 2018.

    Am I missing something ? Could well be, as I have been working nights for ten weeks at its 2000 am right now , so if anyone can explain why Gold should be even worth 1300$ an ounce today I am all ears .


  • JS

    Jason S.

    6 6 2018 21:45

    0       0

    Excellent food for thought!!

  • NH

    Neil H.

    6 6 2018 19:28

    6       1

    someone has to be very wrong as the story changes every day on the dollar depending on who you are listening to. either way great video.

  • HO

    H2 O.

    6 6 2018 19:21

    5       0

    Some very interesting ideas, and this is worth a second view. But I don't agree with the Fed reaction function if there is a debt crisis. If the problem is corporate debt, they will have no choice to deal with corporate debt, just like they did mortgages and everything derivative to that. If that happens, the expectation of another round of QE should be much more bullish for gold (or anything that is liquid and supply inelastic in the short-term) than it is for the dollar. As for buying equities because everything else is bad, this doesn't make sense given the reality that the biggest risks now are from corporate debt markets. With valuations and debt levels both high, expected future returns should be dropping, not to mention that you don't want to get crushed at the bottom of the capital structure.

  • SS

    Steven S.

    6 6 2018 19:16

    5       0

    Don't forget the unofficial government debt via HUD - identified first by Catherine Austin Fitts and then officially 'peer-reviewed' & validated by a team of graduate students in a survey of DOD and HUD financial reports for fiscal years 1998-2015 by University of Michigan's Dr. Mark Skidmore.
    The result? The amount of documented “undocumentable adjustments” at just HUD and DOD alone surpassed the size of the official outstanding debt of the United States that Brent mentions - MSU Scholars find $21 TRILLION - with a "T" in additional unauthorized Government debt.

  • BP

    Bob P.

    6 6 2018 19:11

    15       0

    I'd like to see him debate Juliette Declerq. I'd actually pay to hear the debate.

  • AA

    Aymman A.

    6 6 2018 19:09

    4       0

    We are assuming that the dollar will follow the RID (real interest rate differential) or growth rate differential model. The IMF model for currencies is based on budget and trade deficits. Often it is developing countries that have currency blow ups due to these twin deficits. We are assuming that the IMF model cannot apply to any of the G7 countries or at least the .reserve currencies.


    This Milkshake Theory is based on the implicit assumption that interest rate differentials will remain the driving force for reserve currencies. What if the dollar weakens because the regime has shifted and interest rate differentials are no longer the driving force?

  • KJ

    Keith J.

    6 6 2018 19:03

    1       0

    Any chance of an audio download?

  • AK

    Alek K.

    6 6 2018 18:35

    4       0

    fantastic piece, will have to check out his previous RV content --

    side note i hope RV brings back adventures in finance alongside their new podcast, it's what turned me and several other people i know onto RV. Was a great first step into what RV is attempting to do with financial media

  • TM

    Thomas M.

    6 6 2018 18:08

    6       0

    Brent.....Great thought provoking piece.

    I believe the dollars will continue higher as long as interest rate rise. Until we see a break out of Gold on high volume, I am having a hard time positioning even though I continue to want to own it badly for the last two years. If the market goes higher for stocks from here, so be it. Trying to buy at these P/E valuations on a new position has too much risk and scaling back on size and positions up at these levels after such an incredible run makes sense to me. I can understand your thought process and thank you for the insight and thesis. This is just my humble opinion and I look forward to seeing how these markets play out over the next coming year. It's fun to see great comments from so many people that are very different from each other. It makes you think outside your comfort zone. It provides you a chance to see which thesis is playing out better and to adjust to market conditions. Great job to RV, Brent and other subscribers.

  • PO

    Paul O.

    6 6 2018 16:34

    6       0

    The more I listen to this scenario the more I come around to agreeing with it. It is similar theory to what Daniel Want presented last year in - A New Lens on Market Dynamics.

    "The funny dynamic, or at least a scenario that could unfold in the world in the future, is that
    this bull market could actually continue as stresses in the rest of the world continue to drive
    this demand in the US dollar, or demand for US dollar, liquidity at the same time as we're
    having these problematic banking system issues and problematic capital fire sort of issues in
    different parts of the world, causing this to persist, causing that P/E multiple expansion to
    persist. So we very conceivably could have a continuation in this bull market to much, much
    higher levels driven by P/E multiple expansion whilst earnings realistically probably continue
    to deteriorate, or at least surprise on the downside, for the next few years. "

  • AH

    Andrew H.

    6 6 2018 15:21

    8       2

    Fine opinions. I generally disagree, and put a slight probability that the USD is in a bear mkt rally (60/40 or 70/30%) and will begin to weaken again. I am concerned that we have previously seen the flow of funds into the US over the past ten years, and that we may see those flows reverse in the near term(especially if the US stops raising rates). There fore looking to get flat US equities, build positions in EM(hopefully after some good damage) and commodities. My time frame, 2-4 months(ish) for the set up and then ride those trades if my thesis plays out. I will react accordingly based on the actual direction of the USD, JMHO

  • TB

    Tim B.

    6 6 2018 14:27

    5       0

    To Brent (and anyone else who cares to respond)

    Great thought piece. A question...

    You said, "As we lift up our interest rates, that sucks liquidity into the U.S. markets"

    Ok, but as you yourself noted, liquidity in the past has flowed into some assets (real estate, stocks), but not others (gold etc.). So while I understand how higher rates could pull in liquidity to the U.S., higher rates also serve as a disincentive to own stocks, no?

    Why would someone buy a high risk asset, when a lower risk asset offers better returns?

    Am I missing something here?

  • SS

    Steve S.

    6 6 2018 13:50

    4       0

    He expects Gold to hit 5000, Where does he expect Equities to go? And what about Bitcoin?

  • AG

    Amir G.

    6 6 2018 13:41

    8       0

    I wish this was a bit longer and more in depth. I'm fine paying for a subscription that gets me only one of such videos per week and nothing else.

  • CS

    Charles S.

    6 6 2018 13:41

    2       0

    Very interesting, thanks. The cycles and technicals support your narrative on gold, equities and bonds

  • EL

    Elizabeth L.

    6 6 2018 13:08

    2       0

    Thank you Brent. Brilliant. Appreciate your thorough analysis.

  • JM

    Jim M.

    6 6 2018 13:00

    16       0

    This is REAL VISION at its best. Brent ought to be included in the select circle of RV's "rock stars".

  • MM

    Mike M.

    6 6 2018 12:56

    1       0

    What would Peter Schiff say?

    Mike M.

  • KH

    Kavi H.

    6 6 2018 12:48

    47       1


    So If I get this correct:

    Brent Johnson: US Dollar Up, Treasury Yields Rise, US Equities Up

    Juliette Declercq: US Dollar Down, Treasury Yields Peak then Fall, European Equities Outperform US Equities

    Alex Gurevich: US Dollar Up, Treasury Yields Fall, Global Equities Collapse

    Raoul Pal: US Dollar Up, Treasury Yields Fall, Global Equities Collapse

    Felix Zulauf: This one was the most complicated but also detailed:
    Stage 1-> US Dollar Weakens (It already has since his interview, to some extent), China put the breaks.
    Stage 2-> a) If US Dollar Strength causes Too much pain due to debt... Which also felt like it happened (Turkey, Argentina). Central Banks will ease or at least put the breaks on the tighting (But didn't Europe just announce they would start Tighting earlier than expected)? Markets will rally for a final leg and US dollar weaken and there would be an extended commodities boom classic late cycle. FANG would be the stocks to own in this last phase.

    B) US Dollar strength continues for longer in which case China putting breaks will cause another commodities downturn which will reset the commodities bottom to 2019.

  • SW

    Scott W.

    6 6 2018 12:46

    5       1

    I love that Johnson is able to say "I'm wrong and here's where I was wrong". I love too that he discusses counter arguments to some of his positions. I contend that the quality of any deep-dive discussion would higher were more of the presenters to adopt that model. Because, as alluded to herein it's complicated - far far more so than "if A then B".

  • PD

    Peter D.

    6 6 2018 12:15

    20       0

    Brett Johnson is part of the Real Vision's 1% (of top thinkers).

    His "Step into the Liquid" presentation from a couple of years back provides an excellent metaphor as to how difficult decision-making is in the current environment.

    This particular call - that equities and USD are going higher - is bold and way "out of the box."

    But it's worth considering.

  • DH

    Dennis H.

    6 6 2018 11:37

    3       0

    Sure? You don't think a strong dollar will be looking for value around the globe?

  • GM

    Greg M.

    6 6 2018 11:31

    4       0

    The interview had good pacing and a well thought out thesis. I agree with his end game analysis. Time will tell how this pans out. This thoughts about dollar strength reminded me of Jeff Snider talking about the problems of the Euro dollar funding in 2008.

  • LN

    Lucy N.

    6 6 2018 11:13

    3       0

    I love this Dude

  • NG

    Nick G.

    6 6 2018 10:44

    8       2

    Interesting theory. I am not sure I agree, I probably disagree, but that is fine. I appreciate being told how the other side thinks, therefore I am glad I listened to Brent and will have him in the back of my mind if I see developments in DXY that I cannot explain.
    That is exactly why RV is good, as far as I am concerned: the "double check" against my own opinions. And the ability, in future, to adapt to whatever is working. If he is right and I am wrong, I will be more than happy to jump on his bandwagon, now that I understand it.
    Since his theory is so interesting and has so many implications for bonds, currencies and equities, why spend 1/2 the interview talking about an asset class that is as minor as gold?

  • AM

    Artur M.

    6 6 2018 10:36

    2       1

    Comment to QE. We and other CB were tricked by FED to think it's money printing. It never was, it was a way to increase inflation expectations only as the QE ended just as an entry on banks balace sheet which was later deposited at FED and gave banks free interest on that money. It was a way to prop up the banks.

  • AM

    Artur M.

    6 6 2018 10:36

    2       2

    Comment to QE. We and other CB were tricked by FED to think it's money printing. It never was, it was a way to increase inflation expectations only as the QE ended just as an entry on banks balace sheet which was later deposited at FED and gave banks free interest on that money. It was a way to prop up the banks.

  • AM

    Artur M.

    6 6 2018 10:36

    4       0

    Comment to QE. We and other CB were tricked by FED to think it's money printing. It never was, it was a way to increase inflation expectations only as the QE ended just as an entry on banks balace sheet which was later deposited at FED and gave banks free interest on that money. It was a way to prop up the banks.

  • TJ

    Terry J.

    6 6 2018 10:18

    13       0

    Wow! Brent sure knows how to totally unsettle my market view! I am going to have to watch this a couple of times to really absorb all of his reasoning. I certainly can’t agree (yet) with everything he is saying especially on the direction of bonds and equities, but of course since 1971, the trend direction of the dollar as Brent suggests, so often determines the key direction of all markets, so I am going to sit down and really think about his theories which are not a million miles away from Jeffrey Snider’s I guess, in terms of if you can discern what is going to happen in the euro dollar market, and the direction of the greenback, you are ahead of the game. One argument made by Brent that I totally agree with is his argument on gold. To my mind, anyone who does not hold some physical gold in her or his portfolio purely as “fiat currency blow up insurance”, either has not properly understood history, or is a true speculator who enjoys “swimming naked” and I say good luck to them, but remember the risk piper will eventually come calling. So humbling to hear Brent and virtually every investment great RVTV has had on in recent months admit they mistakenly thought QE would prove inflationary in the global economy as opposed to simply in risk assets. It makes me realise the complexity and difficulty of making the right investment calls at the macro level, as well as how much I still have to learn to get anywhere near as good as these guys! Brilliant to see Brent back on RVTV.

  • PU

    Peter U.

    6 6 2018 10:01

    9       0

    Like he said, not all of us will agree with 100% of what he says, but what he said was well considered and different. Well done!

  • AM

    Artur M.

    6 6 2018 09:57

    2       0

    Agree 100%.

  • FH

    Fai H.

    6 6 2018 09:45

    4       0

    Insightful with thought provoking views. BUY COURAGE SELL everything else ; )