America's Giant Straw is Sucking Up Everyone's Money (And They Can't Stop It)

While many businesses are solving problems at lightspeed, their payroll systems seem to stay stuck in the past. Deel's free Payroll Toolkit shows you what's actually changing in payroll this year, which problems hit first, and how to fix them before they cost you. Because new compliance rules, AI automation, and multi-country remote teams are all colliding at once.

Check out the free Deel Payroll Toolkit today and get a step-by-step roadmap to modernize operations, reduce manual work, and build a payroll strategy that scales with confidence.

Download the Toolkit for free today

Hey everyone,

Today we're talking about the Dollar Milkshake Theory—which sounds like something a stoned college kid invented at 2 AM, but is actually one of the most accurate predictions about global money flows in the last decade.

Brent Johnson, CEO of Santiago Capital, came up with this thing back in 2018. And love it or hate it, the dude's been right about almost everything.

Let me explain.

Imagine the global economy is a milkshake shop. Every country has its own little cup of milkshake—that's their money, their assets, their economy.

Now imagine America walks in with the biggest straw on the planet and starts slurping.

That's the Dollar Milkshake Theory.

Here's how it works: When the US raises interest rates (which it did aggressively), it creates a vacuum. Suddenly, American assets look way more attractive than whatever your country is offering. So money flows into the US.

The result?

Meanwhile, poor countries with dollar-denominated debt are sitting there like "cool, so now we owe MORE money in our own currency to pay back the same dollar amount."

It's financial Darwinism. And America is the apex predator.

Ah yes. The headlines. "BRICS is replacing the dollar!" "China and Russia dumping USD!" "Dollar hegemony is OVER!"

You've seen them. Your weird uncle has forwarded them to you at least twice.

Brent Johnson's response? It's mostly cope.

Here's the reality: 99% of stablecoins are backed by US dollars. Not euros. Not yuan. Not whatever digital currency Putin's been working on in his spare time.

Why? Because when you give people a choice—an actual, real choice about which currency to hold—they keep choosing the dollar. No guns required. No government mandates. Just pure market preference.

A guy in Argentina with hyperinflation? He wants dollars. A tech worker in Nigeria? Dollars. A small business owner in Turkey watching the lira implode? You guessed it.

Stablecoins are just making this easier. Now you don't even need a bank account. You don't need permission from your government. You just buy USDT or USDC and boom—you've "opted out" of your local currency and "opted in" to the dollar.

It's dedollarization in reverse. And it's happening on iPhones.

Speaking of stablecoins, the US government saw what was happening and said, "Yeah, we should probably control this."

Enter the Genius Act (also called the Stablecoin Act). It's basically America going, "Hey private sector, nice monetary technology you built there. We'll be taking that now."

Think about it: Why would the US fight dollar-backed stablecoins when they literally extend American financial dominance into every smartphone on the planet?

They're not fighting it. They're weaponizing it.

Every stablecoin transaction is another tiny vote for the dollar. Every country that fails to stop its citizens from holding USDC is another country whose capital controls are basically useless.

America didn't build the stablecoin market. But they're absolutely going to run it.

Now for the less fun part: What's the Federal Reserve going to do?

According to Johnson, the market is overdue for a correction. Part of the reason we haven't seen one yet is hilariously dumb—the government shutdown delayed the release of labor statistics. Without data, markets didn't know which direction to panic.

That's right. The market might have crashed, but the government forgot to publish the instructions.

On rate cuts: Johnson thinks the Fed will probably cut in December. But he doesn't see them going crazy with 4-5 cuts unless things get ugly. They're in wait-and-see mode, which is Fed-speak for "we have no idea what's going to happen either."

The bigger risk? Deflation, not inflation.

I know, I know. Everyone's been screaming about inflation for three years. But here's the thing about debt-based systems: If credit contracts, asset prices fall. When asset prices fall, people lose jobs. When people lose jobs, they spend less. And suddenly you're in a deflationary spiral that makes 2008 look like a practice round.

The Fed stopped Quantitative Tightening (QT) because they saw liquidity drying up in the repo markets. Translation: They got scared.

Alright, here's where it gets interesting.

Johnson's big call: 2026 is going to be huge.

Why? Because America is finally, officially, getting divorced from China.

Not metaphorically divorced. Actually divorced. The kind of divorce where you divide up all the assets and promise to never speak again except through lawyers.

The US has decided it cannot depend on China for "covered technologies" and "critical minerals." Semiconductors. Rare earth metals. The stuff that makes your iPhone work and your fighter jets fly.

The Pentagon's Solution: The Office of Strategic Capital

This is essentially a 21st-century Manhattan Project, but instead of building nukes, they're trying to rebuild America's entire supply chain from scratch.

Here's the wild part: The government is going to partner with private equity funds, matching their capital dollar-for-dollar to invest in strategic companies.

We're talking Intel. MP Materials. The boring industrial stuff that nobody talks about on TikTok but absolutely determines who wins the next century.

If you want to know where the money is going to flow, follow the Pentagon's shopping list.

Johnson's advice is refreshingly honest: Be prepared for terrifying drawdowns.

US assets are going higher. Probably. Eventually. But the path there is going to be violent. We're talking 20-30% corrections that make you question every life decision you've ever made.

After a year where crypto ripped, gold ripped, and stocks ripped, Johnson says it's time to focus on not losing money.

That's not sexy advice. It won't get engagement on Twitter. But sometimes the smartest thing you can do is just... lock in your gains and wait.

The milkshake isn't going anywhere. America's straw is still the biggest. But even apex predators need to digest sometimes.

See you tomorrow, Trade the Times

Finance is absurd. We explain it.