The Mar-a-Lago Accord, or the Plan to Crash the US Economy

Hi! How’s everyone? Gather ‘round, because today we’re going to discuss something serious.

They’ve begun to call it the “Mar a Lago Accord.” It’s Trump’s larger economic policy and vision. 

A document that details what it’s about, in exacting detail, has been circulating amongst the world’s better economists. There aren’t that many of them left. And they are bewildered, shocked, and deeply worried. And so am I.

I told you guys (many of you in sessions, which have been amazing, what a delight to meet so many of you in person by the way) that I'd warn you if things got even worse than I expected, go ahead and chuckle. Consider this the warning.

The “Mar a Lago Accord” answers the question “why”—why are they doing this?

I’m going to break it down for you. Along the way, you’re going to wonder: is this for real? It’s going to sound crazy, because it is. It’s going to appear delusional, because it is. This isn’t economics, this is the equivalent of anti-vaxxing for economics, maybe, although probably far worse.

The plan is to crash the economy. I know what I sound like when I say that, but believe me, this is no conspiracy theory, this is what’s bewildering and shocking the world’s best economists. This is...as real as it gets. Why would anyone want to do that? I’m going to get to that.

The Plan to Crash the Economy

MALA, the “Mar a Lago Accord,” goes like this

—Tariffs on the world, to the tune of trillions. That’s what “Liberation Day” is about, and we’ve discussed that. But it gets far, far worse from there.
—Attempting to devalue the dollar, or crash it.
—And finally, defaulting on the US debt.

Now. Why would anyone want to do this? The answer is: they think this is how to save the American economy.

They want to build an export-based economy again, which is fine and nice, but you can’t do it like this. It’s obvious and trivial to say that if you crash an economy, sure, maybe “exports get cheaper.” But the larger problem is: what’s going to be left?

You see, we are talking now about macro-scale risks of the most disastrous order, really, that can be imagined. They include many, if not all, of the following.

—People lose their purchasing power, savings, and retirement funds.
—Stock markets crash, and people’s life savings go poof
—Bond markets crash, and people’s life savings go poof
—The dollar crashes, and people face sudden price shocks
—Entire industries get wiped out as a result
—And as a consequence, we have a mega-scale banking crisis, because people and businesses go broke, and can’t make good on their payments

Maybe you’re getting the picture here. This is crackpot stuff.

Let me warn you again, and this time put the point up front. 

The plan is to crash the economy. So what’s yours?

“Liberation Day,” or How to Destroy the Stock Market 

We discussed “Liberation Day,” (Orwell, roll over in your grave) recently. That’s April 2nd, when tariffs are set to hit the world. But of course that’s not accurate, because it’s Americans who pay the tariffs. 

So what will happen over the coming weeks and months is that Americans will face higher prices. Sharply higher prices.

The point here is that MALA explicitly tells us that none of this is “just a threat” or a “ploy.” They really mean it. They want to do it like this: they put tariffs in place, and then “revoke” them for those who fall into line, which in this case means putting money into America, or just handing it over to these guys. 

But that’s not going to work. Because of course what tariffs do is cause the economy to shrink. So they’re trying to force people to…invest…by creating a shrunken, collapsing economy. Does that make any sense? 

Imagine you’re the CEO of a massive corporation, and your choice is: fall into line, and throw some money at these guys, or walk. But if you throw the money in, it’s wasted, more or less, because the economy is going to shrink anyways.

See the problem here? It’s elementary, only these guys don’t understand it, and that’s important, because it tells us just how foolish they really are. They don’t grasp the basics of econ 101.

Now, that’s why Trump is already trying to walk back Liberation Day a little bit, because even big capitalism’s reacting in horror. That’s because stock markets are already sliding. They’re sliding because of course higher prices mean lower profits, and lower profits mean lower share prices. That is what "a smaller economy" is—smaller markets for everything.

So even this first part of the plan isn't going to "work." What is going to do is make millions of people's life savings vanish, and they're not going to understand why or how until it's too late. Don't be one of them.

Don’t Hold On, Get the Hell Out of the Way

I’m going to interrupt discussing the MALA plan for a moment to give you some advice, because you’re already probably pretty freaked out.

“The market” hasn’t priced in how ruinous the effects of the MALA plan will be yet. And so Wall St portfolio managers are in deep denial, mostly telling people like you to “hang on.”

That’s extremely dangerous advice. I’ve been telling you that, but now it’s about as dangerous as it gets. We’re at a new level of risk here, not just because of “Liberation Day,” but because…

If you hold on as all the elements of this plan come together, you will be wiped out. There’s very little doubt about that, and I’ll explain why as we discuss the rest of the MALA plan. Just ask yourself: would you want to hold on as stock markets, bond markets, and the dollar all crash in tandem? That’s like holding onto a dumpster fire, and at some point, you’re going to go up in flames.

So: the principle here is, don’t hold on, get the hell out of the way. When you’re faced with collapse like this? The first rule is simple: get out of the way.

Crashing the Dollar, Or How to Financially Ruin Millions

The second element of the MALA plan is to devalue the dollar. Now, how do you do something like that? It’s very, very difficult.

Let me explain to you why they want to do this. In their theory, the dollar is “overvalued.” That’s not much of a theory. It’s true that China, for example, manipulates its currency a bit here and there, to keep it low, and boost exports, but that doesn’t explain America’s stagnation.

If the dollar is “overvalued,” then America doesn’t have an export problem. It’s just not exporting goods and services, it’s exporting….capital. Dollars. If you have something so precious that the entire rest of the world will buy it forever, and you don’t even have to work to make it? Then you’re sitting pretty. You can use that to fund whatever you want, like, for example, Social Security and Medicare and Medicaid for everyone, or even beyond that.

But America, and too many Americans, don’t understand this. There is no problem here, quite the opposite, there is a solution. But that solution is politically off the table, no matter how much sensible figures like Bernie or Liz Warren or AOC or who have you try to offer it and push for it. Americans are kept in the dark about how economics really works, and they suffer tremendously as a result.

The only real way to devalue the dollar is to go on…with the MALA plan. That is, to alienate the world, start trade wars, and break up with allies, to the point that the rest of the world stops trusting America, and capital flight ensues. It’s already starting, and the dollar is beginning what’s going to be probably a long, terminal descent.

But what happens as the dollar falls? To you? Price rise, again. Tariffs cause explicit price rises, as in, they go up. A falling dollar means that your money buys less. You have less purchasing power. That’s a double whammy. Those effects are not the same thing, they’re different from each other, but lead to the same consequence, which is that people and society get much poorer, fast.

Imagine that all the stuff America imports, which is everything, skyrockets in price, as a result of tariffs, and then again, because the dollar is falling in tandem. See how bad this is getting?

The consequence of that is of course that people begin to miss payments, and at the end, there’s a banking crisis. Meanwhile, stock markets continue to plummet, because of course, now Americans have less purchasing power, and that means that big capitalism takes a big, big hit in its profits.

And as the markets slide, of course, everybody’s savings go poof.

This is a much bigger problem than most people still understand. Let me explain just how big it is.

It’s not just Americans’ savings and retirement funds that are invested in the stock market. European pension systems, too, are invested heavily in the American stock market. The mechanism’s different—in Europe, unions or the state control the funds, but they hand it over to money managers, too, whereas Americans do that individually. So it’s the same kind of thing, only at a different scale. 

So now imagine that European public and social goods are at risk, because the devaluation of the dollar is making the American stock market slide, stutter, crash. What happens then? Then we are in 1930s level territory. We enter a great global upheaval. And then there is no easy safe haven, either.

For Americans, crashing the dollar will wreak absolutely catastrophe. Those on fixed incomes will face price rises of a startling degree. Those beginning their careers and professional lives will find the job market shut down. And so on. At the end of the day, capital flight out of the dollar will make it that much more difficult to fund what few public goods America has, like Social Security, Medicaid, and Medicare, which are already under serious attack.

By the way, I’m not saying to those of you I’ve already advised: “get out of Europe!” Not at all. We’ll come back to advice at the end, I’m just trying to help you understand how serious and incredibly dangerous this all is.

But we haven’t gotten to the really scary part yet, which is…

Defaulting on the Debt, or How to Destroy an Economy For Good

The scariest part of the MALA plan is that it explicitly wants to default on the US debt. This is “the scariest” because never before in modern history have we seen something not just so stupid, but so openly stupid.

The way they want to do it is this. They want to tell those who hold US debt, like 10 or 30 year Treasury bills, to “exchange” it. For what? For a new kind of debt, which is a “Century Bond.” 

So imagine that you’re running another country, or its wealth fund, or one of the world’s largest corporations or banks. 

Along come Donald Trump and JD Vance. And they say, sorry, we’re not paying you back. But you can have this other thing, which is a new kind of debt, and we’ll pay that back. In…a hundred years.

Go ahead and chuckle.

Who in their right mind would trust that? Who’s going to take them up on that offer? I’ll tell you who, because I think we can all guess the answer: nobody. Nobody, at least, who doesn’t have to. If the choice is: we’re not going to pay you back, or we’re going to pay you back in a hundred years, just trust us, The Trump Guys…is it really a choice at all?

The entire world is going see through this thinly disguised spectacle in about two seconds flat. And call it what it is, which is a US debt default. They will sell off US bonds at record rates. 

And when that happens, the following will ignite, like a chain reaction. Bonds will plummet. Right now, still, your average money manager is telling you to hold about 40% of your portfolio in…US government bonds. When this part of the MALA plan happens? On that day, millions of Americans are going to have their life savings vaporized.

Simultaneously, interest rates will skyrocket. And what happens as a consequences of that? Everyone in America will suddenly be paying catastrophically more for everything, because Americans live in debt as a way of life, I’m not judging, just observing. Credit card payments, car payments, mortgages, are going to skyrocket. Meanwhile, businesses will face debt crises too. And as a result of that, it’s all but certain there will be a mega-scale banking crisis.

That will be a permanent effect, by the way. This happened in Britain, so don’t think it can’t happen. There, Liz Truss, who was the shortest lived Prime Minister in history, unveiled a plan so disastrous, it caused effects like the above. That was years ago. And Brits are still paying the price of higher rates for everything. That is because it destroyed international trust in Britain as an arbiter of good, sound financial decision.

And that is what will happen here. America’s name will be ruined. There is nothing, no asset, more valuable than a name, a reputation, and that isn’t my opinion, that’s actually a fact of financial and economic research. Once you lose that? You’ve lost everything.

The Endgame, or Kamikazenomics

So. The MALA plan’s goal is to “revive” the American economy. To make it an export based economy again.

But the effects are going to precisely the opposite. How can you have an export based economy when the world…hates you? Is it really going to buy stuff from you? In what universe are cripplingly higher interest rates, after you’ve defaulted on your debt, going to spur investment? If the dollar’s crashed, sure, exports may get “cheaper,” but so what, if Americans’ life savings, careers, and what’s left of the social contract have all been destroyed? You see, even in that scenario, it’ll take generations to rebuild the level of wealth that’s been destroyed, if it’s possible at all.

I really want you to understand all this, so please, bear with me. 

The “MALA Accord” is grandly named, as if the world’s leaders are going to jet in, and just agree to all this. Imagine it. There you are, arriving on your country’s, company’s, bank’s, jet. And there are Trump and Vance, and they offer you the following “deal.”

—We’re going to crash your stock price
—We’re going to tank the whole stock market
—We’re going to wipe out the life savings of your customers and consumers
—And, by the way, we’re not going to pay you back.

Who’s going to—go ahead and laugh with me—take that “deal”?

What Trump is saying, and maybe he doesn’t even know it, because he’s being advised by seriously crazy people at this point, is this. I’m going to blow up my economy, unless you agree to my terms.

That’s why the world is baffled. That’s not a deal any sane person would “take,” because it’s just Kamikazenomics. 

Hey, if you want to blow up your economy, the world will say, go right ahead, I guess. What does that have to do with us?

Kamikazenomics aren’t going to work.

Sinking With the Ship, or, Don’t Underestimate How Much Risk You’re At

These guys aren’t just gambling anymore. Now we know the answer to “why are they doing this,” and the answer is as bad as it gets. There is a strategy here. Only it’s a Kamikaze strategy. And it might even work, but only in the way that Kamikaze strategies do, which is suicidal.

Don’t underestimate all this. When I warn you that millions of people will be wiped out, I’m not kidding. Most Americans (or Europeans, for that matter) only have access to typical money managers, who aren’t good economists, let alone at that level at all, and they’re completely bewildered, and giving people awful advice. Advice that is going to get them blown up, because again, the plan is to crash the economy.

You guys have access to me, my advice is: use it. I know the calendar’s booked up way in advance, what you can do if you need to chat sooner is just book a session, send me an email, and usually I try to fit you in in the next week or so. For those of you I've already advised, I told you I'd warn you if things got worse, here's the warning. I encourage you to please check back in, because now the risk level has skyrocketed way, way up again, and many of you should be adjusting more aggressively right now. I say this for your sake, not mine, and I'm trying to help as many of you as I can as fast as I can. I care about you guys and I’m here to help you.

I’ve tried to give you what general advice I can. The basic rule is: when the plan is to crash something, get out of the way. That’s going to be different for everyone’s personal situation and circumstances. So think carefully about what I’ve tried to teach you here, which is how the consequences of all this will unfold, if left unchecked. Don't panic, just sit with it, reason it through, re-read the explanations I've taught you if you need to. Right now, you should absolutely take steps to minimize your exposure to this.

When I used to say: Don’t Sink With the Ship, I expected something along these lines. This is how social collapses. But if I’m honest, only in my most extreme scenarios did I foresee this level of crazy, foolish, stupid, and bad. This is off the charts level stuff, which is why mega alarm bells are going off for the world’s best economists. Take it seriously.

When the plan is to Sink the Ship? You had better find a lifeboat, fast.

Lots of love,

Umair (and Snowy!)

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