Macro Voices · Oct 8, 2026 · 1h 5m · 49m saved
With Brent Johnson, CEO of Santiago Capital
The US government's gold is still carried on the books at $42 an ounce, and Brent Johnson said a Fed and Treasury working together could mark it to market and credit the Treasury's account with about a trillion dollars in a single afternoon.
Most investors spent the summer betting that a new Fed chair would cut rates and the dollar would fall. Johnson had been calling for a stronger dollar for years, and the host said the dollar index closed above 102 on the Wednesday before the episode was produced.
"I've been doing this for 26 years now, and for 25 of the 26 years, I've been hearing that the Fed is out of bullets." — Brent Johnson
Brent Johnson, CEO of Santiago Capital, on Macro Voices, is the author of the "dollar milkshake" theory, which held through years of dollar-bearish consensus that a global debt crisis would send money into the dollar rather than out of it.
The full interview is covered here so you can skip it. 65 minutes of audio, 16 minutes of reading.
Here are the 15 arguments that matter.
Key Takeaways
The dollar broke out because there is nowhere else for capital to go, he said, with Europe, Japan and China all unattractive
A short-term dollar pullback is likely, but he still expects the dollar to go much higher over time
He bought gold for a client the day before the interview, near $4,100, and thinks gold makes a big move within weeks
The Fed has autonomy, not independence, and he expects it to work hand in hand with the Treasury
Treasury Secretary Bessent said "We will work together" when asked about the new Fed chair
Revaluing US gold is an accounting trick that would put new money in the Treasury's account, but he does not expect it soon
The US can absorb higher rates better than smaller countries, which is why he thinks it can win a contest of pain
The late 1940s, not the 1970s, is the best comparison for today: heavy war debt and the start of a cold war
What followed the fall of the Roman Republic was an empire, not decline, and he sees the same path for the US
China is a formidable rival, and the US is not certain to win the AI race
Universal basic income is the likely policy answer to AI job losses, he said, though he is not recommending it
1. Why the Dollar Broke Out
The host said Johnson was the one who called the dollar index's break above 100, and asked why it happened now.
Higher rates under Warsh are one reason, and a lack of alternatives is another
Over the summer many investors expected Kevin Warsh, as Fed chair, to coordinate with President Trump and cut rates, Johnson said. Instead, markets demanded higher rates, and Warsh raised them to establish credibility.
He named three other reasons. Europe has a war on its border, little growth and a political union without a fiscal union. Japan still has problems and is not a safe haven. China's market is largely closed, and there is a trade war between the US and China.
The world still sells goods to the US in dollars, borrows in dollars and stores money in dollars to match its debts to its revenue, he said, and that creates steady demand. The less appreciated reason, which he called a possibility rather than his base case, is that the AI build-out may be persuading bond investors that the economy can grow its way forward, so they demand higher yields.
"But the first decision to be made is to buy dollars." — Brent Johnson
