Skip to main content

Posts

Showing posts with the label dollar milkshake

The Dollar Milkshake Theory | Extremely Thought Provoking

 The Dollar Milkshake Theory was popularized around 2018 by Brent Johnson, CEO of Santiago Capital, during interviews and presentations. The theory seeks to explain the dynamics of the global financial system, focusing on the U.S. dollar's unique role as the world’s reserve currency and its impact on global markets, especially during times of crisis. What is the Dollar Milkshake Theory? The Dollar Milkshake Theory likens the global financial system to a "milkshake," with the U.S. dollar acting as the straw that siphons up liquidity from the rest of the world. It builds on two main ideas: U.S. Dollar as the Reserve Currency : The U.S. dollar is the primary currency used in global trade, debt issuance, and financial reserves. Many countries and corporations outside the U.S. hold dollar-denominated debts and require dollars for international transactions. Global Liquidity Dynamics : Following the 2008 financial crisis, central banks worldwide injected massive liquidity int...