Thread by @SantiagoAuFund

I’ve answered this many times before and will attempt to do so (somewhat briefly again now).
The milkshake theory basically says there is a supply/demand mismatch with regard to dollars in the world.

My argument has been that this fact, along with others such as the institutionalized effect of the GRC, the design of the dollar payment system, the US military and the largest & deepest capital markets on earth will drive capital flows to the US over next few years.

So on a RELATIVE basis to the ROW, we will be able to weather the storm better than others. I have never said it would be easy, have never said we wouldn’t get hit, never said we wouldn’t fall.

What I’ve said said is that we WILL get hit from time to time, we MAY even fall a few times, it will be TERRIFYING on occasion, but despite these blows we will be the LAST to get knocked out.

The DXY is basically flat over the time period I’ve been talking about it. Mainly due to Euro & Yen. But it has already started cutting off the heads of many other currencies and commodities and stocks. So while dollar hasn’t “broken out” it’s doing it’s job.

I started talking about higher interest rates being driver for dollar strength in late 2016/early 2017. Many didn’t think higher rates were possible. I did. We got 9 hikes when many didn’t think we would get any.

I thought we would get a few more raises before the SHTF than we did. I was wrong. Luke was right on this. I acknowledged being wrong at the time, paid out on our bet and moved on. That was 15 months ago.

I Havent given up on MS bc rates are relative and ours are still the highest. AND it’s NOT ALL about rates. Theres other factors as mentioned above. PLUS, MS says that as other countries fall their rates will RISE on counterparty concerns. So we don’t HAVE to have highest rates.

If you like my theory, great.
If I’ve helped you think through some things over last few years that’s great as well.
If you disagree with me or my theory...that’s ok too.
Either way, I really do not care.
I’m doing this for my friends, my family and my clients.

If it helps a few other people along the way, that would be a wonderful side effect. I have learned a lot from others and I sincerely hope i have been at least a little help to those who have engaged with me over last few years.

The bottom line is this game is not only a long way from being over... IMO It is really just getting started.
It’s a BIG game.
And I’m just a small player in this big game. But I like my chances...
Good luck all.
#peace ✌️