The Mar-a-Lago Accords

[Spooky]

I have been reading and hearing a bunch of chatter about the "Mar-a-Lago Accords" and wanted to start a new thread to discuss the economic implications of it. At a high level it is calling for re-writing the rules of the international monetary and financial system similar to the Plaza Accord in the 80s. Thinking through these kind of financial systems issues is definitely not my strong suit so I'm hoping smarter people than me can help us figure out what is going on. I'm also hoping we can steer clear of the political side of this and just focus on the economic side and actual developments - can something like this work and what would be the implications for our investments?

 

Here is a paper written by Miran, the nominee for Chair of the Council of Economic Advisors, when he was a strategist at Hudson Bay Capital: https://www.hudsonbaycapital.com/documents/FG/hudsonbay/research/638199_A_Users_Guide_to_Restructuring_the_Global_Trading_System.pdf

 

Article in the FT: https://www.ft.com/content/1e19165e-1096-4aad-bf08-42132f7a3239

 

Latest Odd-lots podcast: https://www.youtube.com/watch?v=HI0I7zFcfZo

 

A key pillar of the approach seems to be trying to significantly weaken the USD.

 

Edited February 25 by Spooky

[rogermunibond]

Weaken USD

 

Overall I like the idea as laid out by Jim Bianco to reduce US defense spend as a % of GDP and have European nations raise their share as % of GDP to 5% ish.