The STRENGTH Of The US Dollar Will SEND STOCKS MUCH HIGHER

0:00The demise of the United States dollar has long been promised by the doomers. The idea was that countries around the world, they got nervous about the United States. They didn't want to be our friend anymore. And they would start dropping the dollar for other currencies or other coalitions like the BRICS. We've actually seen the exact opposite happening, though. The U.S. dollar is about as popular as it has ever been. Treasury Secretary Scott Besson, he recently went on CNBC and he was talking about the dollar strengthening because the strength of the U.S. economy is improving as well. Take a listen right here, Scott.

0:30Again, you can have a strong dollar when rates are being cut because the U.S. economy is accelerating. You can have a strong dollar because the rate interest rate differential is high. But mostly I think we're going to have a strong dollar because our economy is pulling away from the rest of the world. Look at the way our economy has performed during the Iranian conflict. The rest of the world has gone negative to zero, plus or minus, point something percent. And the U.S. economy, because we went into this on very strong energy footing, on very strong CapEx cycle from both the AI and the tax bill, the U.S.

1:10economy has really performed. And we're going to get to the other side of this conflict, as you were just showing. Energy prices are coming down. Inflation is going to drop. And the economy, I think, is going to be accelerating on a non-inflationary basis. Now, Scott Besson said, I think we're going to have a strong dollar because our economy is pulling away from the rest of the world. Pulling away from the rest of the world is good for the Americans who want to see the U.S. economy continue to strengthen. Now, it isn't only Besson who understands this. Lance Robert recently highlighted that although everyone kept saying the dollar is screwed, people are going to dump it.

1:48They're going to leave. We now see that foreign inflows into U.S. assets, a.k.a. the dollar, remain very robust. Now, you can clearly see this in the capital rotation into U.S. stocks as well. Adam Kobase shows that foreign holdings of U.S. equities jumped more than$2 trillion in the month of April. That is a record$23.2 trillion. That figure has more than doubled since the 2022 bear market. Foreign investors, they want U.S. dollars and U.S. assets. Now, another reason for the strength of the U.S. dollar is the rise of stablecoins. There are lots of people who simply believe stablecoins must be some fairytale dream of the crypto industry.

2:25Those weirdos on the internet keep talking about them, but I don't use them. But here's the truth. Stablecoins have become very popular globally. Tom Lee recently showed that daily stablecoin volume already beats Visa, and it's only continuing to grow aggressively, and it's going to leave Visa in the dust. We're already seeing the future. There's more stablecoin transaction volume than Visa today. and in the future there's the belief that you could have as much as 300 trillion dollars tokenized in securities markets and that's going to be tokenizing real estate fixed income equities derivatives land and gold and you can see the tokenized market today is absolutely tiny right here so what's the point of all this why should you as an investor care about a strong dollar Why should you care about what's going on in the U.S.

3:19economy? Well, the thing is about a strong dollar, if it's strengthening for the right reasons, it's going to help your portfolio. Think about what Scott Besant said on CNBC. He claims that the U.S. is on a path to reaching 3 % GDP during the current administration's term. If that happens in a sustainable way, there are millions of Americans who would be very happy. Take a listen right here. So 3-3-3, the three components where we could have 3 % growth, I think we might have been growing at four in February. I think we're going to get back and we can have something with a three in front of it this year.

3:51As I said, the underlying economy has been strong. The other one of the other threes is three million more barrel a day equivalents. So crude and net gas export LNG, which we're well on our way to. We've never produced so much energy, never exported so much. And then deficit to GDP of 3 percent. What we didn't get any credit for in 2025 was we had a fiscal contraction. So when we came in 2024, deficit to GDP was about 6.8 percent. Democrats, as they always do, blew out spending in the fourth quarter to unsuccessfully get Vice President Harris elected. So that was the highest when we haven't had a recession, haven't been at war, 6.8.

4:39We brought it down to 5.5, 5.4 for calendar year 2025. And I don't know if we're going to make progress this year, but I think by the end of the president's term, we can be at something that looks like it could have a three in front of it. Now, maybe you believe, Scott, or maybe you don't. But one thing has become very clear to me. Other economic policies like tariffs, they are definitely giving the U.S. an advantage in trade negotiations. Listen to Besson explain how the trade deals have swung in our favor. I hadn't heard this before, but it makes sense once you hear it. Take a listen. The president used IEPO, which was a very efficient way to put on tariffs.

5:20We have rebooted the tariff program right now. We have something called Section 122 tariffs, which is a 10 % global tariff. Currently, USTR Ambassador Jameson Greer is doing studies for Section 301s. And if those studies are successful, and I have no reason to believe they won't be, but we don't know until they are, then the tariff rates are going to go back to exactly where they were. I would say the good thing about having used IEPA in 2025, it allowed us very quickly to get to tariff deals or trade deals that we never would have gotten to before. The EU is going to pay us 15 percent, and they are going to charge us zero.

6:06So we have had a big, they are rebalancing there. And they're bringing down their non-tariff trade barriers, many of their unfair financing practices. And it's the same around the world, whether it's Japan, Korea, our allies, whether it's China. So I think it's been a big success. So my big takeaway from all this is that the U.S. economy is accelerating and we now have global interest in the dollar and U.S. equity markets at a rate and a size that we've never seen before. That's going to be a big tailwind for investors over the coming years. And you have to remember that quite literally, a strong dollar, especially when it is due to economic productivity rather than the Fed raising rates, that strong dollar is going to push stocks and investment assets higher and higher.

6:51And so investors like you and me, we're going to keep winning for the foreseeable future as long as we hold on to U.S.-based assets like stocks or even things like Bitcoin. And at the end of the day, I think the big misconception of the U.S. dollar's best days are behind. We're seeing in the data. We're seeing in the anecdotes of those that are negotiating trade deals or implementing economic policy. The U.S. dollar continues to win. And so my analysis is that actually the dollar is going to strengthen. Things like Bitcoin and gold are going to strengthen. And it's all of the weak fiat currencies.

7:24Those are the ones that are suffering. So don't listen to the doomers. The dollar is not going away. In fact, I think that the dollar and these stores of value, those might be the only two things that people want to hold when they're not investing in equities or other types of investment assets. So the GDP report, that was the big surprise here. And it pushed through the slowdown in the economy because of the Strait of Hormuz. Now, the GDP was up 2.1 % in the first quarter. This revises a surprise last estimate that was under 2 % growth. Now, remember, now the Strait of Hormuz is open and oil prices are dropping, and that should boost GDP and will also reduce the pressure on inflation.

8:06That's it for today's show. Thank you guys so much for watching. Please remember to subscribe on YouTube. Remember, my goal is to get to 1 million subscribers, so hit that subscribe button. You'll help us out and I'll see all of you live from the desk of Anthony Pompliano tomorrow.