PodcastBrent Johnson Milkshakes Pod | Investing • FinanceMark Moss

The US Dollar is not Dying but the System might be...

The discussion weighs the dollar's durability against a broader restructuring of trade, industry, and global finance. The speaker expects weaponization, tariffs, reshoring, and state-aligned central banks to reshape supply chains and capital flows, while acknowledging the risks of volatility, inflation, and future overcapacity. Market implications include a potentially stronger dollar during crises, a DXY carry band of 88–102, higher yields amid industrial growth, and portfolio exposure to U.S. large-cap equities, Treasury bills, gold, defense, natural resources, and the Americas.

CurrenciesGeopolitical RiskTrade PolicySupply ChainsInflationInterest Rates

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Key Takeaways

The U.S. is pursuing reindustrialization through the CHIPS Act, national-security programs, and the Pentagon’s Office of Strategic Capital to rebuild critical-mineral, technology, and defense capacity. The strategy is framed as a response to fragile supply chains, dependence on adversarial countries, and the hollowing out of the American middle class.

The episode presents reindustrialization as potentially supportive of U.S. growth, with Howard Lutnick reportedly discussing 5%–6% GDP growth, although Donald Trump’s reported 15% estimate was described as extreme. Stronger industrial labor demand could also raise wages and protect middle-class purchasing power even if prices increase.

Tariffs are portrayed as a tool to counter subsidized trade and protect domestic industrial capacity, but with unavoidable costs including higher prices, volatility, and economic pain. Foreign companies may respond by continuing to build plants in the United States to avoid tariffs.

The speaker does not expect an imminent wholesale replacement of the dollar as the reserve currency, but argues that weaponizing the dollar can motivate countries to seek alternatives. A longer-term solution for neutral global commerce could be gold, Bitcoin, or another market-selected reserve asset rather than a government-imposed one.

Dollar weakness does not necessarily mean declining dollar influence: the speaker links a falling DXY to expanding global dollar liquidity and credit, while noting that the dollar can appreciate against other fiat currencies even as gold rises. The DXY was described as around 97, versus roughly 10% below its 2018 level.

GEO-POLITICS

Dollar Dominance — The speaker does not believe the dollar is close to losing its reserve-currency status wholesale. However, he argues that weaponization can push countries to seek alternatives and that a weaker dollar could improve the U.S. trade balance.

“I don't think the dollar is anywhere near to be dying right now, right? So, is it is the system expanding? Are other avenues being searched for and tried?…”—

Neutral Reserve — The speaker argues that efficient, peaceful global commerce needs a neutral reserve asset, potentially gold, Bitcoin, or another asset. He says neutrality must be determined by the market rather than imposed by a government.

“But I think for the world to operate efficiently in a peaceful manner, then we need a neutral reserve asset…”—

Tariff Defense — The speaker argues that tariffs can counter subsidized trade that allows one nation to acquire factories and land in another. He acknowledges that tariffs can bring pain, volatility, and higher prices.

“Now doesn't mean there won't be pain involved. It doesn't mean there won't be volatility. Doesn't mean there won't be higher prices, but it will work because it has worked.”—

ECONOMY

Growth Projections — The discussion links reindustrialization, critical-mineral processing, and military capacity to potentially higher U.S. GDP. Howard Lutnick reportedly discussed 5%–6% GDP growth, while Donald Trump reportedly suggested 15%, which the speaker characterized as extreme.

“Lutnik said to Chamath on a recent All-In podcast, I think three, four weeks ago, he thinks that we could see 5% GDP, maybe even 6% GDP, which is like…”—

Wages and Inflation — The speaker argues that wage increases caused by stronger labor demand should not automatically be classified as inflation. Better-paid industrial jobs could protect middle-class purchasing power even if prices rise.

“And so Lutnik in that interview was saying, look, like in certain areas where job demand goes up, wages go up, but that's not inflation.”—

State-Led Risk — The guest believes extensive government involvement in markets could eventually produce China-like overcapacity, excessive borrowing, and weak demand. He places that risk 10–20 years in the future and expects near-term results to be better than expected despite volatility.

“I am of the opinion and I've said this for a long time that I think that where we are headed will end very very badly because I am a…”—

MARKETS

Dollar Liquidity — The speaker argues that a falling DXY can reflect expanding global dollar liquidity and increased dollar credit rather than reduced dollar influence. He also expects foreign companies to continue building U.S. plants to avoid tariffs.

“But the issue that I've tried to explain with the dollar is that as the DXY falls, that means that the dollar is becoming more entrenched in the world because…”—

Dollar Strength — The DXY was described as around 97, roughly 10% above its 2018 level, despite stimulus and policies intended to weaken the dollar. The speaker also says the dollar can rise against fiat currencies while gold appreciates.

“Since, you know, the DXY is at like 97 right now, which is high 90s. Which is up probably 10% from when I first started talking about this in 2018…”—

Dollar and Crises — The speaker says dollar appreciation has coincided with virtually every financial, global, or regional crisis over the past 25–30 years. He leaves open whether dollar strength causes crises or results from them.

“If you look at every financial crisis or really even any global regional crisis over the last 25 or 30 years, it has always coincided with the dollar rising versus…”—

FORECASTS

Dollar Crisis Path — The guest predicts that a future loss of the dollar's global status would initially produce chaos and volatility, driving the dollar higher rather than causing a smooth decline through the 80s, 70s, and 60s.

“I think what's more likely is we'll see a bunch of chaos, a bunch of volatility during which the dollar will go higher and then what comes next perhaps will…”—

Industrial Rates — The host argues that successful U.S. reindustrialization could generate strong GDP growth and push bond yields higher. Accommodating that growth may require a weaker dollar.

“If that happens, then that would push bond yields higher…”—

Dollar Strength And De-Dollarization

The speakers argue that a falling DXY can reflect expanding dollar liquidity, while true de-dollarization may arrive through crisis, weaponization, and an initially stronger dollar.

Fiat Purchasing Power Debate

They distinguish the dollar’s declining purchasing power from its continued dominance among fiat currencies and emphasize that DXY measures relative value rather than absolute stability.

Why Dollar Direction Matters

The discussion explains why exchange-rate movements matter to businesses and global operators, especially if foreign demand for dollars and Treasuries weakens.

DXY Carry Band

The guest describes a global two-currency carry problem and estimates that a DXY range of 88 to 102 is relatively stable, while moves beyond it can trigger crises.

Neutral Reserve Asset

They debate whether global trade requires a neutral reserve asset, with gold and Bitcoin presented as possibilities that should ideally be selected by markets.

Tariffs And Economic Function

The conversation argues that tariffs and less efficient trade can still function, even while producing higher prices, volatility, and reduced access to inexpensive goods.

U.S. Reindustrialization Push

The host frames the Chips Act, reshoring, and national-security investment as forces that could raise domestic growth, bond yields, and pressure on the dollar.

U.S. Growth And Fiscal Spending

The guest favors U.S. investments on a risk-adjusted basis and argues that fiscal spending, relatively high rates, and reshoring can support growth and asset prices.

Industrial Policy And Inflation

They examine critical minerals, defense production, fiscal stimulus, and whether higher wages in expanding industries should be treated as damaging inflation.

Tariffs And Strategic Competition

The speakers defend tariffs as a response to subsidized foreign production and overcapacity, arguing that unrestricted trade can transfer ownership and industrial power abroad.

American Industrial Resilience

The guest argues that rebuilding U.S. industry and defense may succeed despite major challenges, citing American competitiveness, risk-taking culture, and national capacity.

Defense And Natural Resources

The guest describes a portfolio centered on U.S. large-cap equities, Treasury bills, gold, defense, natural resources, and expanding Western Hemisphere supply chains.

State-Aligned Central Banks

The discussion concludes that central banks have never been fully independent and may become more explicit tools of national strategy as geopolitical competition intensifies.

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Important Disclaimers

Not Investment Advice: For education only — not financial, tax or legal advice.

AI-Generated: Made by AI from source transcripts and may contain errors.

No Guarantees: Past performance does not predict future results; investing carries risk.

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