Why A Strong Dollar Is Bad For Everyone & Your Portfolio
Adam Taggart | Thoughtful Money® Jul 8, 2026
Summary
Japan defends the yen near 160 per dollar by selling dollar reserves, but each intervention drains finite reserves and only delays a potential crisis.
An excessively strong dollar wrecks America's export customers, which is why the guest expects eventual coordinated intervention, a "Plaza Accord 2.0", to weaken it.
Dollars are lent into existence: every bank loan creates new dollars that are simultaneously a liability, locking in permanent future demand for the currency.
That structural bid explains why the dollar trades in a range rather than collapsing, regardless of interest rates or safe-haven demand.
Adam Taggart's takeaways
- Top takeaway As host, Taggart frames the Short around Gammon's case that Japan's struggle to defend the yen could become one of the biggest macro stories to watch and lead to a 'Plaza Accord 2.0'.
- He closes by directing viewers to his Substack notes with the key takeaways from the Gammon interview.
George Gammon's takeaways
- Top takeaway Argues an excessively strong dollar is destroying America's trading partners and customers, hurting U.S. exports, and could soon force policymakers into a 'Plaza Accord 2.0'-style intervention because a dollar at 105, 120 or higher is bad for everyone.
- Warns that Japan's defense of the yen — selling dollar FX reserves every time the pair nears 160 (around 162 as of this July 2026 video) — works only until reserves run out, at which point Japan risks a currency 'death spiral'.
- Says the dollar is structurally hard to break lower because dollars are lent into existence: every bank-created dollar is simultaneously a liability, so repayment obligations create a constant bid that has kept the dollar trading in a range (bottoming near 96-97) rather than falling back to 80-85.
- Offers this asset-liability duality as the one takeaway he believes gives investors an edge in understanding the dollar and currencies — a liability represents constant demand for dollars.
- Illustrates the mechanics with a mortgage example: the bank creates brand-new dollars that never existed, and the borrower's obligation to repay the loan is a standing future bid for dollars.