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Brent Johnson is the CEO of Santiago Capital. He has been creating and managing comprehensive wealth management strategies for the personal portfolios of high-net-worth individuals and families since the late 1990s.
In this exclusive, Brent talks about Dollars & Gold and how he believes that only one currency will be left. Brent believes that the strength of the dollar will destroy the monetary system.
Is the dollar losing demand? Brent believes there are many reasons that the demand of the dollar using debt service alone, there is 40 Trillion of dollar debt.
The US dollar is still the biggest funding currency in the world and no country can walk away from the dollar until they pay it off.
The supply of the dollar can be expanded except with new trade policies the US is making it harder to get US dollars and to get dollars
Here are the ways that the US is in control of the dollar payment systems:
Treasury
Federal Reserve
Chips & Swifts Systems
The Dedollarisation trend is real however and countries are fed up with the US Dollar.
Some of the top pretenders are the Euro, The Yuan, and Bitcoin.
But there is no distribution system for any other currency in the world other than the dollar.
Dollar Milkshake at 12:08
The dollar milkshake theory is one where the dollar appreciates in value relative to other currencies because the US is sucking up all the stimulus from other countries that are heavily using quantitative easing.
Over $200 billion dollars of debt must be paid by emerging markets over the next 24 months and since most emerging markets currency is struggling this will only make the dollar even stronger.
Instead of paying off a depreciating dollar these economies have to pay off an appreciating dollar and their aren't enough dollars to go around. There is no place else for capital to go.
There is no place for the money to go - international bonds have too much negatively yielding interest. International stocks are also risky.
Gold is the only place for all the money to go to. And the leverage ratio in gold is actually much less than the leverage ratio of dollars.
As money flows into the US from around the rest of the world, a short squeeze will happen and the liquidity will decrease but the US dollar will reign supreme. The dollar will go to the all time high, euro yields will double, and gold will go lower in the short term.
US stocks will have a massive blow-off top and hit amazing all-time highs.
But the world financial industry cannot survive on a dollar that is too strong.
In the long term, gold will win out over the dollar.
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