The Whiskey Theory - how the dollar may collapse

According to the "Dollar Milkshake Theory", which was created and popularized by the analyst Brent Johnson from Santiago Capital, the dollar cannot collapse, and the BRICS nations are unable to de-dollarize. The reason for that is that about half of the $300T worth of debt across the world is denominated in dollars, and corporations must constantly acquire dollars in order to service this debt. Since we are living in a debt based system, any attempt to pay down this debt will reduce the supply of dollars in circulation, and make them more valuable.
Personally, I have struggled with this theory for quite some time. On one hand, I couldn’t argue with its reasoning. But on the other, it seemed extremely counterintuitive. How could it be that no matter how hard foreign countries tried, they could not rid themselves of the US dollar? How could it be that no matter how many dollars the Federal Reserve created out of nothing, the world had no choice but to take them, and exchange them for valuable goods and services?
And then it dawned on me. There was another variable in the equation, that Mr. Johnson may have failed to consider. Inflation is not only determined by the quantity of dollars in circulation, but also by their VELOCITY. The velocity of money is simply the average number of times it exchanges hands during a single year. In order to generate inflation, a central bank not only needs to print the currency, but to also inject it into the economy, so that it may circulate and bid up the prices of goods and services. Economists tend to ignore the velocity of money, and assume that it is a constant. But I believe that this is a grave mistake.
I argue that the driving force behind a hyperinflation is the increasing velocity of the money, rather than the increasing supply. Take that into account, and the picture suddenly changes. If the velocity of dollars across the world is increasing at a higher pace than business owners are paying down their dollar-denominated debt, then the value of these dollars can diminish, even as their supply is falling. This is the way in which the world can break away from dollar, and its value can collapse. Another scary fact to consider, is that during such a process, all the dollars that were exported by the US over the past decades will find their way back home, generating the worst inflation we can possibly imagine. This is how I came up with he name “The Whiskey Theory”. This thought made me so nervous, that I had to pour myself a stiff drink in order to relax.

In this interview with ‪Mountain Bullion‬ we discuss "The Whiskey Theory", and try to debunk Brent Johnson's "Milkshake Theory".
Listen to the full interview here: https://youtu.be/cnu49tBv1x8?si=R0pYfytaaS1c1jpC

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Music: Michael Kobrin - The Introvert
https://youtu.be/UufcCic_lQQ?si=N6QbyVJg4QAN1z5q

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