MacroVoices #553 Brent Johnson: Disparate Housewives

Brent Johnson argues that great-power competition could bring closer Fed-Treasury coordination, pointing to Scott Bessent’s expanded role and his statement that the incoming Fed chair and Treasury would work together; the host also says Bessent’s Treasury role reaches wartime policy, including at least consulting on Iran sanctions. Johnson says the Fed has autonomy but is not fully independent from the government, contrasting this with the 2022 period when Powell’s rate hikes and Yellen’s liquidity actions worked at cross-purposes.

Johnson says revaluing U.S. gold from its $42-per-ounce accounting value toward roughly $4,100 could, if the Fed accepted the higher value of gold certificates, credit the Treasury’s account with roughly a trillion dollars—an accounting step he says could put more money into the economy and reduce the value of individual dollars. He does not expect remonetization soon, but sees retaining the capability as insurance; he also describes gold revaluation as a contingency if a rising dollar eventually needs support.

The host proposes that the U.S. could issue a gold-backed stablecoin using its roughly 8,000 tons of gold, alongside dollar stablecoins backed by Treasuries, and suggests the tokens could be used in foreign negotiations while warning of risks. Johnson separately argues that stablecoins could distribute bonds, raise cash, and make payments outside the banking system, potentially reducing the Fed’s leverage over the Treasury.

Johnson sees a renewed Cold War with China potentially lasting years or decades and reversing globalization, and says the post-World War II era is a closer analogy for today than the 1970s. The host points to China’s planned nuclear-power capacity and thorium-reactor research, while the discussion also highlights Chinese AI models and electricity output as competitive strengths; Johnson says the outcome of the AI race is not a given.

Johnson sees AI as a potential long-term productivity tool for white-collar work, comparing its impact to tractors in farming, but expects the transition could bring job losses and disruption. He forecasts that short-term unemployment could prompt universal basic income or an expanded welfare state, while describing AI’s longer-term effects over a 10-to-30-year horizon as beneficial rather than presenting that forecast as a recommendation.