Thoughtful Money · Nov 8, 2026 · 1h 45m · 92m saved
With Brent Johnson, CEO of Santiago Capital · Mike Preston, Founding Principal of New Harbor Financial
Photo via santiagocapital.com
The dollar index stood at about 102 when Brent Johnson, CEO of Santiago Capital and creator of the Dollar Milkshake Theory, spoke to Adam Taggart on Thoughtful Money. That is 3 points below the level where, in his framework, the global financial system starts to break.
Most dollar bears warn about a collapse in the currency. Brent worries about the opposite: a dollar that rises too far, too fast.
"If the dollar stays between approximately 90 and 105 on a relative basis, the whole system can kind of work... But if the dollar breaks out to the upside of that band, that's when bad things start to happen, and we're getting relatively close to where that is now." — Brent Johnson
Brent has invested for 26 years through several booms and busts, and his firm publishes research on the dollar, sovereign debt and stablecoins. The interview was taped live on Thursday, November 5, as stocks sold off hard.
The full episode is covered here so you can skip it. 105 minutes of audio, 13 minutes of reading.
Here are the 12 arguments that matter.
Key Takeaways
A dollar above its 90–105 band is the real danger, not a dollar collapse
Brent puts the dollar at about 102 and sees an upside break as more likely than a downside one
In a liquidity event "asset prices fall, but debts do not", so even gold and silver get sold
Cash is what keeps an investor in the game long enough for compounding to work
Europe faces a slow shave, not a collapse: financial repression and capped yields
The midterm blue wave does not change a decades-long trend toward a decoupling world
The US and China "will weaponize compute if needed", and Europe, Africa and Southeast Asia lose
Stablecoins are speeding re-dollarization, not de-dollarization
1. The Dollar's 90–105 Band
Brent restated the framework he has used for years. Every country runs two carry trades, borrowing cheaply in one place to fund assets elsewhere: one in dollars, which it has to service, and one in its own currency.
Brent Johnson says the system works while the dollar index stays between about 90 and 105
"I think the dollar is like at 102 or something. So it's not there yet, but it's getting kind of close... the likelihood that it breaks out to the upside is higher than the likelihood that it breaks to the downside." — Brent Johnson
His base case for next year is a dollar between roughly 100 and 110, with a test of the top of that range at some point. A break lower would be welcome, because it would mean the system is working as designed and riskier assets are probably fine.
"It's when the dollar rises significantly the bad things start to happen... if it goes down, then I'm probably in pretty good shape." — Brent Johnson
