\n<\/iframe>\n<\/div><\/figure>\n\n\n\nJohnson conveys what many of us see as a truth that haunts fiat currencies. This is rooted in the fact that when the value of a currency falls, a country and its central bank cannot save both its currency and its bonds. In his “slightly edited” words;<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n“The problem is you cannot, and this is for every country, the US included, again, there\u2019s a progression in how it\u2019ll go, but you cannot save both the bond market and the currency market because they work at cross purposes. Whatever you do to save the bond market hurts the currency. Whatever you do to save the currency hurts the bond market. And every central bank in history has promised they won\u2019t sacrifice the currency, and every central bank in history has ultimately sacrificed the currency.<\/em><\/p>\n\n\n\nAnd the reason they always choose the currency over the bond or the reason they always choose to sacrifice the currency over the bond market is for two reasons. One, the currency affects the citizens more than the government, and the bond market affects the government more than citizens. So they\u2019re going to bail themselves out before they bail the citizens out. And the second thing is if the bond market blows up and the banking system blows up, there is no longer a distribution system for the government to raise money.<\/em><\/p>\n\n\n\nSo they can\u2019t let the bond market blow up because then they can\u2019t get money anymore. And then if they can\u2019t get money, they can\u2019t operate. So this is a very long way of saying that I understand why the market moved the way it did. I think maybe in the short term it makes sense, but in the medium to long term, it doesn\u2019t make any sense to me at all. Again, kind of watch what they do, not what they say.”<\/em><\/p>\n\n\n\nHe later added “The problem, as we\u2019ve kind of figured out and found out that it\u2019s very hard to just get four for four or 5% inflation. It goes from 2% to 12% pretty quickly. They don\u2019t have as much control as they think they do, right? And the problem with four or 5% inflation, you can kind of get away with it because it\u2019s annoying and it is frustrating, but it\u2019s not totally ruining your life. But with 8, 9, 10, 12, 15, 80% inflation, that starts to ruin the pledge life, as you mentioned. And that\u2019s when they start to push back from a political perspective. And that\u2019s what central banks and governments don\u2019t want. They don\u2019t want the populace revolting” <\/em><\/p>\n<\/blockquote>\n\n\n\nWhen you think about the true motivators driving this “system,” it is logical the government and central banks would throw the populace under the bus. This is about their survival. As to the question of equal pain, those in power justify taking raises to offset the impact of inflation under the idea we “need them” to steer things forward for the “greater good.” <\/p>\n\n\n\nWhile Johnson’s remarks were aimed at what is most apparent in the actions of Japan, this truth is problematic to all fiat currencies. For more on the Dollar Milkshake Theory see; <\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-embed-handler wp-block-embed-embed-handler wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe title=\"Brent Johnson Explains the Dollar Milkshake Theory\" width=\"580\" height=\"326\" src=\"https:\/\/www.youtube.com\/embed\/PWVRWUkm54M?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<a href=\"https:\/\/www.zerohedge.com\/s3\/files\/inline-images\/2023-01-11_07-51-25.jpg?itok=IkN_50dh\"><\/a><\/p>\n\n\n\n<\/p>\n","protected":false},"excerpt":{"rendered":"Zero Hedge featured one of the Week Ahead episodes on their own discussion about bond and the currency market. This is with Brent Johnson and the $300 crude, bullish housing, and Japan recession discussion. <\/p>\n","protected":false},"author":1,"featured_media":43093,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[66],"tags":[469,471,504,1110,1116,1249,1255,1610,1699,1761,1862,1877,2021,50,2427,2637,3255,3432,4070,4174,4461],"class_list":["post-43091","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-articles-print-web","tag-bond","tag-bond-market","tag-brent-johnson","tag-currency","tag-currency-market","tag-dollar","tag-dollar-milkshake-theory","tag-fiat-currencies","tag-forex","tag-future-price-of-oil","tag-global-recession","tag-gold","tag-housing","tag-inflation","tag-liquidity","tag-milk-shake","tag-recession-2023","tag-santiago-capital","tag-us-dollar","tag-usd","tag-zero-hedge"],"_links":{"self":[{"href":"https:\/\/completeintel.com\/wp-json\/wp\/v2\/posts\/43091","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/completeintel.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/completeintel.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/completeintel.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/completeintel.com\/wp-json\/wp\/v2\/comments?post=43091"}],"version-history":[{"count":1,"href":"https:\/\/completeintel.com\/wp-json\/wp\/v2\/posts\/43091\/revisions"}],"predecessor-version":[{"id":43571,"href":"https:\/\/completeintel.com\/wp-json\/wp\/v2\/posts\/43091\/revisions\/43571"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/completeintel.com\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/completeintel.com\/wp-json\/wp\/v2\/media?parent=43091"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/completeintel.com\/wp-json\/wp\/v2\/categories?post=43091"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/completeintel.com\/wp-json\/wp\/v2\/tags?post=43091"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}