Brent Johnson, CEO of Santiago Capital, joins Anthony Scaramucci for a deep-dive conversation that reveals the painful realities of de-dollarization and the enduring global power of the US dollar. Brent, renowned for his “Dollar Milkshake Theory,” also shares his insights on Bitcoin, his outlook on China, advice for young finance professionals, and much more.
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Speaker 1 0:00
You cannot have full scale de dollarization without an enormous amount of pain. The path to de dollarization is the dollar going higher. I think the bubble in US equities is going to get even bigger than it is now. Bitcoin comes into conflict with the dollar, and the dollar is kind of the ultimate weapon. And I don’t think the US would ever give away the ultimate weapon.
Anthony Scaramucci 0:29
Welcome to speak up on the wealthion network. I am your host, Anthony Scaramucci, and joining us on Speak Up is Brent Johnson. He’s the CEO of Santiago capital. Brent, you got an unbelievable resume, but you’re running money right now in Puerto Rico. And we all know why you’re in Puerto Rico, Brent. We all know why you want to tell the viewers why no tax,
Unknown Speaker 0:52
because it’s a beautiful because it’s,
Anthony Scaramucci 0:54
don’t start with me. Okay, come on. These are realists. These are authentic people that listen to our podcast, our television show, you’re there because you are very smart, because of $100 comes in to your wallet. Four cents goes to the government. 96 cents goes to you, unlike me here in New York, where I can never find my money, but you previously
Speaker 1 1:14
knows of the funny thing is, is the day we decided to come here was the day in 2021 when I wrote the check to the to the IRS and the state of California on April 15, and I decided it was the worst return on investment in history. And so we started looking for other places to go. And I suggested this to my wife, and, you know, to her credit, she said, let’s give it a shot. You know, three years later, we’re still here, yeah.
Anthony Scaramucci 1:38
And by the way, it’s a beautiful place. I’ve been down there to some of these great enclaves. God bless you guys. So I’m just teasing you. I want to go over the fact that you are best known for the dollar milkshake theory. Okay, now I like this. Okay, you’re arguing that the world is not on the gold standard, but the US dollar standard, and therefore, during a sovereign debt or currency crisis, the US dollar denominated assets will be seen as a safe harbor. I actually believe this. But before I get into my other questions, I want you to take a step back. How did you get this eureka moment? Tell us the synthesis of this analysis, how you came up with the nickname or the moniker for this, and where are we now, as it relates to your dollar milkshake theory. And welcome to the show, by the way, yeah, and you have a nice shirt on. My producer said I look like shit, which I’m a little pissed off about, but you look fantastic. So, so God bless you. Well,
Speaker 1 2:37
thank you for the invite. I’m happy to talk to you, you know, so this, this the the genesis of it actually goes back to coming out of the global financial crisis. So I started in this business 25 years ago this month, for a company called DLj in New York City. I moved to San Francisco with them about a year after I started in credit. Suisse bought us. I was with them for 10 years, and in in 2008 you know, I and coming out of the global financial crisis, I became very disillusioned with Wall Street as a whole. I loved my job, but I was kind of, you know, not happy with the way I thought the firm had treated clients during that time, and I didn’t see any of the other firms treating their clients any better. So I left and I joined a friend of mine, Simon Baker, who had set up Baker Avenue asset management. But the reason that’s important is because at that same time, I kind of had an awakening that perhaps these Wall Street Masters of the Universe weren’t quite as smart as they told me they were. And it was about that time that I started kind of going back and really reading everything I possibly could about how the monetary system actually works, how finance actually works, how Wall Street actually works, and all of the stuff that I just memorized so that I could pass a test in college, I kind of went back to actually understand it. And it was in the middle of that I had always been somewhat interested in precious metals, because my dad had owned, you know, gold and silver when I was a kid, and he had subscribed to a couple newsletters that I remember reading so and he had, he had, I remember he had found this dime that was worth $1,000 and I remember thinking, how can a dime be worth $1,000 and so I was always kind of predisposed to the precious metal side, and it was coming out of the global financial crisis that I really kind of, you know, I started looking at the different schools of thought, whether it was Keynesian economics or Austrian school, or free market, or, you know, the mercantilist all the and I just kind of really started educating myself. And I came to the conclusion that, you know, we needed to own gold, and we needed to own it outside the United States, and we need to have it outside the banking system, for all of the reasons that you’ve probably heard many times, because I thought the US was in a lot of trouble. And then over the next three or four, five years, you know, I kept thinking the dollar was going to fall a lot, and it just never really did. It went down a little bit. But if you remember, I think in the at the global financial crisis. I think the d x, y index was around 78 or 79 it was below 80. And then coming out of the financial crisis, or into the financial crisis, you know, it went up a lot, and then they put monetary policy in to weaken it. But despite all of the monetary shenanigans, for lack of a better word that the Federal Reserve was doing, the dollar wasn’t really falling significantly, and gold, at the time, wasn’t really going up a lot. It was just kind of going sideways, and it didn’t really make sense to me, and I couldn’t figure out why. And whenever I would ask somebody in the traditional finance world, they didn’t care. And whenever I asked somebody in the gold world, they didn’t seem to have an answer. And so and so at one point, I think it was in 2015 or 16, or actually, it was in the second half of 2014 and I apologize for this long answer, but I promise you at all I’m
Anthony Scaramucci 5:48
letting you go because it’s fascinating, and the reason why I wanted to have you come on the show, but I think it’s an important for viewers and listeners to hear the thought process that goes into this stuff. It’s just not like, you know, it’s not like an apple hits you on the side of the head and you discover gravity. Actually. Have to understand how things work,
Speaker 1 6:08
yeah, well, so I kind of skipped ahead a little bit. In 2014 a friend of mine, Raul Powell, had he was a goal. He believed in gold the same way I did, and we talked about gold a lot, but he wrote a report saying that the dollar was going to go up a lot. And I remember, this was like April or May of 2014 and I remember thinking, Well, geez, he’s a pretty smart guy, and he thinks gold is going higher. How can he possibly think the dollar is going to go higher? I kind of thought he was wrong. But then, lo and behold, the dollar went on one of its biggest six to nine months to run in history. And I thought, well, what? What does he know that I don’t know? And it turns out he knows a lot that I don’t know. But anyway, that that kind of really got me thinking about this more, and I kind of dug into it, and what I realized I had done, and I think what a lot of people still do is I had done a very deep dive analysis on the United States, and come to the conclusion that only bad things could happen, and this was not going to end well, the problem with doing that is that you ignore the rest of the world, and I don’t think anybody could analyze the United States in isolation and come to a rosy conclusion. But the problem is, is we live in a relative world, and when you do that same deep dive, relative analysis on all the other countries, you realize, holy cow, not only do they have almost all, if not more, of the same problems we have, they don’t have nearly the same number of advantages that the United States has. And just based on the design of the system, over time, the dollar should rise and and that really, you know, you say I didn’t get hit in the head by the app, but I literally did have the light bulb moment when, when, when I when I realized what I had been doing and the mistake I had made, and the mistake I had made was ignoring everything else. When I realized I had been doing that, I kind part of the way I knew I was on the right track is that I hated the answer, because I had invested so much time, energy and emotional, you know, whatever, into the dollar going down and gold going higher, that I had lost focus on the big picture. I didn’t see the forest for the trees, so to speak. And that that really kind of was the genesis of of the belief that gold and dollar could both do well, it didn’t have to be one or the other. I’m
Anthony Scaramucci 8:25
going to say it a little bit differently, and I want you to react to it and because I want to explain it to viewers in my language, but also see if I’m synthesizing it correctly. Well, you basically discover five for 5000 years, gold is a store of value, and it goes up, it goes down. It’s not super volatile, but it’s a store of value. People hold it as a inflation hedge. Cotemporaneous to that, the United States has created this very powerful economy, but also this very practical, very predictable legal system, a result of which capital flows into the United States more freely than other countries. It’s interesting, my theory is it’s a decentralized form of government. No one person has super amounts of power. So everybody in the international community is comfortable with that. They don’t send the money to Vladimir Putin or President tree because they know that there’s arbitrary and capricious legal proceedings that happen and their property could be taken from them, but in the United States, it’s been fairly rigorous for hundreds of years, and so therefore there’s a free flow of capital, which is effectively fortified the dollar. The dollar has also become this sort of ancillary storage device. So even though we’re making more dollars, even though we have some inflation, even though we’re printing dollars at the Federal Reserve level, the whole ecosystem surrounding the dollar is a complimentary store of value. Do I have this right? Or am I what am I and if I don’t have it right, what am I missing? I
Speaker 1 9:59
think. I think you do have it right. And what I would say is you have it more right for somebody who lives outside the United States than you do for somebody who lives, of course, the United States. Of course, that
Anthony Scaramucci 10:09
would make sense, because there’s high inflation rates outside the US in Latin America, other places, they can’t rely on their fiat currency of their nation, right? Now this is something I’ve gotten into a debate with people you know President Trump, or if he runs successfully and wins, he’s talking about having the Fed be dependent upon him in terms of interest rate decision making. That’s what Erdogan is doing in Turkey, and that’s what we’ve seen in South America, and it’s caused a full on desecration of things. But we won’t, we don’t have to get into that now. I want to stay on the milkshake theory. This is good for dollar assets and dollar denominated assets. It means there’s always a proclivity internationally for people to run towards our country and run towards our dollar. Is that fair to say? Yeah,
Speaker 1 10:58
and it’s not just because of what you have, I think, very correctly said, as far as a relative store of value, and, you know, rule of law, etcetera, etcetera. And by the way, just I’m going to take an aside. I know there’s people out there saying, well, we don’t really have a democracy. We, you know, and we have just as much corruption here as other places. And I’m not saying that the US is perfect. I think it’s far from it. But again, it’s a relative gain on a relative basis. I think that the world does see the US as the relative safe haven. Now, the other part of it that many people don’t realize is all of the dollar debt. Now, I think because of how big it’s gotten, many people are familiar with the fact that the US owes something like 35 $36 trillion not including, you know, Medicare and Medicaid and, you know, unfunded liabilities. Yes, but what most people don’t know, and even people that I’ve spoken to that you know, have had 3040, year careers on Wall Street, don’t know, is that the rest of the world owes even more in US dollars than the United States does. So this, there’s a Euro dollar market that sits outside the United States, and that is $1 balance sitting in a financial institution, or dollar based credit outside the United States is referred to as a euro dollar. And the debts in the Euro dollar market are, they’re denominated in US dollars, and it’s it adds up to more than the amount that the United States owes. Now, the rest of the world doesn’t have the ability to, you know, quote, unquote, print dollars. So when, when, when things slow down, when money’s not circulating as fast, when there’s some kind of a crisis or a run to safety, they have to rely on the United States to either provide them the liquidity or they have to go buy it on the open market, and that liquidity is in dollars. And so that is why, if you look over the if you look at a chart of the dollar index, and the dollar index isn’t a perfect measure, but if you look at the Dollar versus foreign currencies over the last 25 years, any time there has been either a global slowdown or some kind of a financial crisis, it coincides with a rising dollar versus foreign currencies. Now, whether the dollar rises in reaction to the crisis, or whether the dollar rising causes the crisis, I think, is somewhat open to debate, but the correlation is 100% and so, so I and I don’t think it will be different next time, whenever next time arrives, I think that will be the same way it is because of the design of the system. And I’m going to take people just down a very quick historical path here to get an understanding of it. You know, coming out of World War Two, the United States was, you know, designated as the global reserve currency, which would be backed by gold. So that set off, you know, a lot of people using the dollar. But in addition to that, despite the fact that the US, you know, broke the gold standard in 72 you know, a few years prior to that, in the 60s, and really in the 70s, and then, especially after the oil for dollars deal between Saudi Arabia and United States, this euro dollar market really, really grew. And so, you know, because people needed dollars to, you know, service, to satisfy that Euro dollar debt, and because they needed dollars to buy energy. And because there’s not an economy in the world that can run without energy, everybody needed dollars. And so you kind of had this, you know, vicious cycle, or benign cycle, where dollar, you know, people using dollars be got more people using dollars. And it really created the biggest network in the history of the world, you know, think about, you know, Twitter or Facebook. You know, these are networks. This is where everybody goes to communicate. Well, the dollar is the way businesses communicate with each other around the world, and it’s a standard way to do it, so that not everybody has to, you know, figure out their own little. System. And, you know, it was the most liquid, it was the most demanded. And as a result, the dollar and the 10 year treasury kind of became known as the risk free rate. And as a you know, and and every security in the world is essentially priced off of the risk free rate. And so that, you know, and this went on for years and decades, and that is the way, over time, the rest of the world became hooked on, or dependent on, or however you want to define this, addicted to US dollar liquidity. And they can’t move on unless they satisfy the debt. And they all have very big debts and so that, and that is already not effective. It’s a Gord. That’s the mother,
Anthony Scaramucci 15:48
get away from the dollar, but you can’t get away from the dollar because you’ve already relied on the dollar, and you’ve got your own debt that you got to pay back in dollar denominated assets, and you can’t make dollars, so you’re stuck with the dollar so, so when Vladimir Putin gets out there with she and others, and they want to de dollarize the earth, and they want to come up with a sort of brick currency, or a brick transfer of value, if you will. Can they do that? So
Speaker 1 16:18
yes and no, I’m going to put a qualifier on this. Anything is possible. So can they do this? Yes, they can do it. Can they do it without pain? No, they cannot do it without pain. And this is the point that I’ve tried to make to people, is it? Listen, it’s not that the dollar can’t go down. The dollar can absolutely go down, but you cannot have, based on the design of the system, you cannot have full scale de dollarization without an enormous amount of pain. And so if the rest of the world were to decide that they are going to take on all of that pain of de dollarization, because remember, money, this is where it starts to get a little complicated. I know I’m jumping around a little bit, but it’s important to understand this the way. Understand this the way money is created. The way money is created, it is loaned into existence. That is why the Euro dollar debts have gotten so big, and why the US dollar debts have gotten so big is because as the monetary system expands and as the as economies expand, they have to take on more debt to do it, because that’s the way the system is designed to increase the supply of money. And so if you’re going to go away from that, if you’re going to decrease the amount of dollars in the system, then you are going to have to deleverage. By definition, you are going to have to deleverage. And deleveraging is a very painful deflationary environment. I don’t know any global leaders who run on a platform of, we are going to have a horrible deleveraging. We’re going to have a depression, but trust me, in 15 years, we’re going to be better for it. And that is why it’s very difficult to do. And the other thing I would say is the countries that can de dollarize to a greater extent, and I would argue that no one can fully de dollarize, but the ones that can de dollarize to a greater extent than others, again, is like someone like Russia, because Russia has a lot of commodities and a lot of energy. The rest of the world doesn’t have the same advantages that Russia has, right? And so the idea that the whole world can just de dollarize, just because of five politicians get up on stage and hold hands and say, we’re going to create a new BRICS currency? Yeah, they could do it, but it’s going to it’s going to crush their economies in the process. And so my point has been de dollarization. The path to de dollarization is the dollar going higher. If the dollar goes lower, that just perpetuates the current system, because the dollar going lower provides liquidity. If the dollar is going lower, there’s no need to have to pay off all the debt. You’ll actually take on more debt. And as the dollar goes lower, more liquidity is added to the system. So de dollarization is deleveraging, and in deleveraging, the price of the dollar goes higher. So I think we will ultimately have a forced deleveraging. I think the market will force it on the world. And when that happens, I think the US, on a relative basis, will be better off than the rest of the world. That doesn’t mean it’s going to be a party. It’s
Anthony Scaramucci 19:26
fascinating. But it also means that whatever potential the specter of a debt crisis is not as and you know the mark, people always say to me, Well, you know the market, there’s a debt crisis looming, and the market doesn’t price it in, but you just explained through the dollar milkshake theory why it’s not priced in, because it’s going to take a long time to get there. And there are corrective measures that the US can take. And one of the surprising things about the US is growth. We could end up with wild amounts of growth and innovation. That surprises everybody, and a result of which we have a even more elongated situation where our economic growth is higher than expected, and therefore our percentage of debt to GDP is actually being diminished by the growth. So a lot of different things can happen. Can a Trump administration who is calling for a weak dollar. Can they weaken the dollar? So
Speaker 1 20:25
they can, but I but I think it’s important to understand at what cost and what they would have to do to do it. And so what I mean by that is, if Trump comes out and just, if he even just says, I want the dollar lower, the dollar is going to sell off on the news initially, right? The market will react to that, but then that would have to be followed up with some kind of concrete measures that last more than a day or two now. So what can they do? So he can pressure the Federal Reserve to lower rates, which perhaps the Federal Reserve will comply with and do that. The problem though, is that both Trump and Vance have both kind of adamantly said, we’re going to put tariffs on goods coming into the United States from abroad. And if you think about what that actually means, it’s not all that different than a rate hike for the rest of the world. Remember, the rest of the world gets dollars in one of two ways. They either trade with the United States, they send us goods. We send them dollars, or they borrow them. Those are the two sources, right? But if, if, if we’ve put if, if they’re selling goods to us, but now they don’t get as much in return, because there’s a 50% tariff or a 30% tariff or an 80% tariff, then the amount of dollars flowing back to those other countries decreases, and if the if the liquidity flowing back to those other countries decreases, but remember, they still have all that US dollar debt that they have to service. That puts pressure on those economies, and it puts pressure on the Euro dollar market. It pushes up the price of the Euro dollar, which is linked at par to the US dollar. So it’s not that it can’t happen. It’s just that some of Trump’s policies offset each other, right? And so the one thing that the US has going for it, or they have many things going for it, well, one of the biggest things that they are the market that the whole world wants to sell into right the rest of the world. If they could no longer sell their product into the United States, they would have to sell it somewhere else. Now, they could sell it somewhere else, but not for the same level of price that they sell it to the United States, but they would still have all that US dollar debt that they have to negotiate and they have to service, and they ultimately have to pay off, so one way or another, they have to get dollars. And so, you know, this idea that Trump can just lower the dollar and there and put on tariffs and there won’t be any problems external to the United States, I think is wrong. But the other thing I would say is, if he is able to lower the dollar and kind of consistently keep it lower, and the global economy grows as a result, then that is not de dollarization. That’s fine, and that could happen, but that’s not de dollarization again. De dollarization means taking on less US dollar debt, and it means trading in less US dollars, but you still have before you can move on to another system. You have to satisfy the debt. And my contention is we cannot transition from the current system to a new, non dollarized system without great upheaval and great volatility. And I don’t know whether that great upheaval and volatility will last a week, a year or 10 years, but I think during that great volatility, it will see the dollar rise, not fall.
Anthony Scaramucci 23:51
Okay, so this is bullish
Unknown Speaker 23:55
for the US. Yeah,
Anthony Scaramucci 23:58
yes. How does Bitcoin fit into this.
Speaker 1 24:01
So I have a little bit nuanced view on Bitcoin. There’s a lot of people who think that I’m anti Bitcoin, and the reason they think I’m anti bitcoin is I’m not crazy bullish Bitcoin. In other words, Bitcoin, I have found to be a very polarized little group of people. You either love it or you hate it, but I don’t love it or hate it. I personally think that Bitcoin is a pure play on global liquidity. If there’s plenty of global liquidity, it’s a great speculation. You know, it’s limited supply. A lot of people want it, and so Bitcoin goes up in price. But I believe that in a minute, the minute liquidity starts to disappear, or we get into a downturn of some kind where liquidity is not as prevalent as it is right now, then the price falls. And I think history shows that. And so I am somewhat indifferent to Bitcoin, and I know that’s kind of a hard thing for people to take, but I you know my. Personal opinion is that when Trump got up on stage, I think it was in Nashville, and said, you know, maybe we will own some bitcoin. To me, that’s pandering to potential voters, right? Those same people, if they had been viewing another conference where a bunch of people out in the audience were looking up at a president, and the President said, I’m going to do this for your industry. They would say that’s political pandering. But when it happens to their industry, they love it, right, right? And so, you know. And the other thing is, without, I mean, we could go down a very deep rabbit hole on this one, but ultimately, ultimately, Bitcoin is in conflict with the state. Now, maybe at this level, it isn’t, but if you follow it to its logical end, then Bitcoin comes into conflict with the dollar, and the dollar is kind of the ultimate weapon. And I don’t think the US would ever give away the ultimate weapon. It’s kind of like the one ring in The Lord of the Rings. You know, everybody says they would use it for good purposes, and everybody says they would give it up if it was for the great of the overall world. But how many people would actually give away the ring if they held it in their hand? And I just don’t think the US will do it.
Anthony Scaramucci 26:14
Okay, look, I think it’s a fair comment. I mean, I’m more in the Michael sailor camp that I think this is a digital store of value, because it, for me, checks boxes of something like Professor Neil Ferguson would say, but I understand your point of view, and that’s what makes a market. And also, Bitcoin is so young from a saturation perspective, you know, we’re talking about four or 5% market saturation, and so that would put it in web one terms, back in 1999 imagine if we were, imagine if we’re right about Bitcoin, and it is 1999 think of some of these great companies, like Amazon and where they are today versus where they work. But, but we, we, we don’t have to debate that. I, I think your, your your premise is a bullish one. And it’s also a one that signals liquidity, it flashes liquidity, which means, I do think, based on your theory, that would be good for Bitcoin, more liquidity is good for Bitcoin. So
Speaker 1 27:15
ultimately, I think it, well, it depends on how far we go down the road, right? I think you know, if we get into a world where much central banks turn the spigots back on and we have a lot of liquidity, I would expect Bitcoin to do very well in that world.
Anthony Scaramucci 27:29
Okay, so before we go to the outside audience, what is something actionable right now that you could put on my viewers and listeners, listening in saying, all right, super smart guy. What is he working on right now that I could put in my portfolio?
Speaker 1 27:47
Well, the the best thing I think somebody could put in their portfolio right now is the most simple thing in the world, and that is cash. We are at all time highs in just about everything. Bitcoin is within what, 10% of its all time high, 15% of its all time high. You know, gold’s at its all time high, the s, p is at its all time high. Everything is really high right now. And so I am.
Anthony Scaramucci 28:11
Cuts are not going to help asset prices. You don’t think they’re just going to, well, solidify asset price. They’re not going to make asset prices go up more?
Speaker 1 28:18
I don’t think so. Not it not, not the one I think a lot of them are already priced in. And I think, I think for the Fed to provide an liquidity to really send the market higher, they would have to have some kind of a external stimulus or event that allowed them to turn the spigots back on in a way that they could do that. So in this potentially, kind of gets into kind of where I see the markets at right now, I think the markets are due for a another correction, perhaps similar to what we saw four weeks ago. You know, we saw a pretty hard draw down, let’s call it the last two weeks of July, 1 week of August. I think the market would need to see something like that, if not even more dramatic, to allow the Fed to really turn the spigots on. Now, they’ve already basically said they’re going to cut in September, and I think that they probably will, but I don’t think a 25 basis point cut really makes that much of a difference, you know. And to go back to something like QE, then they need to have some serious pain, you know, show up, that allows them to do that, right? And so that’s kind of where, but that’s kind of what I think is going to happen. I think sometime in the next six months, perhaps as early as the next, you know, two or three weeks, we’re going to have another hard drawdown. And then I think probably that allows the Fed to, you know, provide the liquidity that everybody thinks thinks is coming.
Anthony Scaramucci 29:44
Oh, look, drawdowns are to be expected. I mean, that’s one of these we know about the market. So, yeah, all right, let’s go to question. I
Speaker 1 29:50
say one thing, Can I say one thing before I before I figure, I think this is, I think this is important for people to get because I think a lot of people who have heard me talk about the dollar milkshake there, especially. They’ve only heard me talk about it once. They think all it all. The theory is, as it says, The dollar goes higher, but it’s, it’s, that’s, that’s, that’s part of it, and that’s kind of the trigger, but it’s really a framework for how I think markets play out in some kind of a a risk off scenario. And I think we will have a risk off scenario due to all of the debt in the world. But essentially, when I first started talking about this, what I said was that we will enter a period of time where the 40 year bond bull market will come to an end, and as a result, interest rates will rise. When interest rates rise, then the dollar will rise. And as the dollar rises, I think that will cause problems all over the world. But you know, perhaps unexpectedly, I think US equities will go higher even though the dollar is going higher. I think gold will go higher even though interest rates are going higher and the dollar is going higher. And on a relative basis, the US is going to be the place where you want to put your capital. That’s the theory. That’s the framework now. And I also said, while all those things I think will happen, there will be, you know, it’s not going to be a straight line. There will be runs, and there will be drawdowns along the way. And if you and when I first started talking about this in 2018 19, you know, since that time, the dollar’s gone higher. Gold has gone higher. Interest rates have gone higher. US equities have gone higher. Now, I don’t claim to have called it perfectly, because I certainly haven’t, but as a framework for understanding how the markets work, it is really helped me navigate what I think has been a relatively there’s been there’s been periods of great calm, but there has been punctuated by periods of great volatility, and having the framework has allowed me to kind of navigate all that. So if there’s one thing I could pass on to people, is just understand the framework, as opposed to just thinking it’s the dollar going higher. Okay,
Anthony Scaramucci 31:58
let’s take questions. I agree with you, and I think it’s a fascinating theory and explains a lot of what’s going on in the macro environment. Let’s take some questions from the audience. Are current stock valuations sustainable, or we in a bubble? This is Steven from Illinois,
Speaker 1 32:17
so I’ll give a two part answer. I think we are in a bubble. I don’t think they’re sustainable. I think we’re going to have our correction, but then I think the bubble in US equities is going to get even bigger than it is now. So I think the bubble will grow, but I think the bubble will get smaller before it gets bigger. All right, let’s
Anthony Scaramucci 32:34
go to the next question. Brian, what are your thoughts on the gold standard? Should we return to it? Patrick from Pennsylvania, so
Speaker 1 32:43
this is a tough one. So I am actually as much as I possibly. I try to be as neutral on all this stuff as possible, and just try to figure out what’s actually going to happen as opposed to what I want. But I’m a free market believer. So my my, if I, if I had the ability to just snap my fingers, I would say, let the free market choose. And if the free market chooses gold, great. If the free market chooses something else, that’s fine, too. I that that, having said that, my personal view is I’m actually an advocate for hard money or sound money, however you want to describe that. So if my personal predilections were allowed to to prevail, then I would probably go back to something like that. Having said that, I don’t think a gold standard, or a Bitcoin standard, some kind of hard money standard, I don’t think that would solve all the problems in the world the same way that other people think that that would. I think, I think you’re always going to have problems whatever standard you’re on. Perhaps the gold standard would be a little bit more fair to the everyone, but I don’t think it would be, you know, the the medicine that cures all, all financial evils, yeah,
Anthony Scaramucci 33:45
and it’s also, it gives less central bank flexibility, which we’ve, we’ve also learned, but Okay, let’s keep going. What’s your take on the current state of China’s economy?
Speaker 1 33:57
Well, I think, I think everybody has kind of come to the realization that it’s not as great as they maybe previously thought it was. You know, the Chinese real estate market is really just a disaster. There’s really no better other way to say it. Their economy has slowed dramatically while the US has been raising interest rates. And just until recently, you know, they have had to loosen monetary policy and do a number of bailouts. And despite all that, I think the Chinese economy is actually in worse shape than many people believe it is. I and I think that’s something that we will have to deal with over the next year or two, because, you know, we now live in a global market. It’s not something China having a difficult time in this market is not something that that we can just ignore, because it will have global ramifications.
Anthony Scaramucci 34:43
Okay, so we agree there, and I also think that they have gone away from capitalism. This sort of stringent political control has caused a flight of international capital, which is hurting their economy. Let’s go to the next one. You have any advice? For young professionals entering finance, and so I’m going to start Brent. I would just say you have to read everything. Make sure you’re on top of the Wall Street Journal, even old school things like Barron’s focus on at least one or two financial books a month. Start with the psychology of money. Morgan Hassel has been on this show. He’s an amazing guy, and work your way through some financial books, but read and ask questions and do what you’re doing right now, which is joining us here on the wealthion network. What can you add to that? Brett,
Speaker 1 35:34
I think I’d add a couple things. The first thing I’d say is, I know when you’re young, you always kind of want to prove yourself, make a name for yourself, and that’s how you kind of get ahead. But I would focus on keeping an open mind, rather than always trying to be right, especially when you’re young. Like To your point, read as much as you can, listen as much as you can, go into every single meeting and just sit there and listen that you possibly can. It might take 15 or 20 years before you realize the benefit of doing that. But if you do that, it will be a benefit. And then the second thing I would say is, even though you listen to everybody else, even though you read everybody else, you have to have your own opinion. You have to think for yourself, and you have to be able to back those up. So if you do those, if you keep an open mind, but think for yourself, I think you’re going to be ahead of most people. All right,
Anthony Scaramucci 36:21
let’s go to the next to the next one. Anthony, what are you moving to Puerto Rico to get some sunshine and save some dough? This is Mario in the control room, who said, Brent looked great, and I look like shit when the show started. It’s unbelievable the type of stuff that these people, you know, it’s, let me tell you, Brent, it’s Italian on Italian crime. Okay, this kid is a lovely Italian kid, but he’s just bashing me hard. But the truth of the matter is, I’m a New Yorker. I applaud you for saving the tax dollars, and you live in a very, very beautiful place, and it’s very close to the US. It’s got a lot of great advantages. But I am a dyed in the wool New Yorker, and as I said to Spike Lee, you and I may have to shut the lights out on this city, but I’m going to be here to lean so that’s just me. And you know, what can I tell you? I mean, it doesn’t mean I don’t like Puerto Rico. I think it’s one of the most beautiful places in the world. Any any final
Speaker 1 37:19
you know, I lived in New I lived in New York 25 years ago. And I think New York is hands down, the greatest city in the world. I’m taking my son there this weekend. We’re going to go to the US Open. All right, there you go. See that under the lights. Even
Anthony Scaramucci 37:33
Puerto Ricans. Even transplanted Puerto Ricans can’t get away from New York. Well. Brent Johnson, incredible theory, incredible investor. I love the map behind you, by the way. That’s, is that France and Spain? What is going on back it’s France
Speaker 1 37:48
and Spain. So it’s a map of the Camino de Santiago, which I hiked the Camino de Santiago 25 years ago before I started my career. So that’s, that’s actually where the name of my company comes from as well. Okay, I
Anthony Scaramucci 37:59
love it. Alright. Well, God bless Santiago capital and you. And for all of our viewers and listeners out there, thank you for tuning in. If you like this video, you’ll like this video as well. Check it out. You
