Trump’s Tariffs Will Trigger a Global Currency Crisis

Summary

Highlights

• Mark Moss discusses the 1985 Plaza Accord's history and its relevance today. 📜
• Trump's tariffs could force a 'Plaza Accord 2.0', leading to economic shifts. 💼
• Understanding historical market cycles helps predict future economic patterns. 🔄
• Currency devaluations led by tariffs could impact global trade and economies. 🌐
• Invest in stable assets and think long-term to endure financial upheavals. 💸

Key Takeaways

• Trump's tariffs might trigger a global currency reset, echoing the 1985 Plaza Accord. 🌍
• Investors should focus on historical patterns to navigate potential economic changes. 📚
• Currency volatility could increase, impacting daily costs and investment strategies. 📈
• Investing in hard assets like gold and Bitcoin may offer security amid currency fluctuations. 🪙
• Thinking long-term and diversifying assets can mitigate the risks of market volatility. 📊

Overview

Chapters

• 00:00 - 00:30: Introduction The chapter titled 'Introduction' discusses the historical context and implications of the Global Currency markets reset in 1985 through The Plaza Accord. It highlights a contemporary plan by Trump to reset the markets again, potentially through economic warfare rather than a coordinated effort. This chapter explores the possible outcomes of a Global Currency Reset and differentiates between the original Plaza Accord and the current economic strategies. The intention is to understand whether the consequences could be beneficial or detrimental.
• 00:30 - 04:00: Understanding Plaza Accord 1.0 The chapter discusses the economic implications of Trump's tariffs and their potential to lead to a new Plaza Accord, referred to as 'Plaza Accord 2.0'. The narrator, Mark Moss, aims to provide insights on how individuals can adapt and benefit financially from these changes. Moss introduces himself as a partner in a tech-focused venture capital fund and the author of a financial newsletter, indicating his expertise in financial strategies. The chapter sets the stage for exploring strategies to navigate and profit from the shifting economic landscape.
• 04:00 - 10:00: Trump's Tariffs and Plaza Accord 2.0 The chapter titled 'Trump's Tariffs and Plaza Accord 2.0' emphasizes the importance of understanding historical events in analyzing current economic situations. The speaker suggests that history books are more valuable than traditional investing books because historical patterns often repeat. By drawing parallels from historical events, like economic cycles, individuals can better anticipate similar outcomes. The speaker uses a metaphor about touching a hot stove to illustrate how learning from past mistakes can prevent future ones, implying that policies like tariffs can have predictable impacts based on historical precedents.
• 10:00 - 15:30: Global Currency Reset and Market Implications The chapter discusses the concept of a Global Currency Reset and its implications on the market. It emphasizes the tendency of history to repeat itself, or at least rhyme, suggesting that by understanding historical financial agreements like the Plaza Accord, we can anticipate similar events in the future. The chapter provides an overview of the original Plaza Accord of 1985, which was an agreement made by the G5 nations at the Plaza Hotel in New York City, aimed at addressing economic imbalances.
• 15:30 - 20:30: Investment Strategies During Volatility The chapter 'Investment Strategies During Volatility' discusses the challenges posed by a strong US dollar on global economies. It mentions how Japan, Germany, France, and the UK coordinated a meeting to address the issue of the US dollar's strength. This 'US dollar wrecking ball' affects international trade by altering import and export dynamics, illustrating the need for strategic investment approaches during times of currency volatility.
• 20:30 - 24:00: Conclusion and Long-term Outlook This chapter discusses the economic strategy taken by the G5 nations in response to large trade deficits, primarily caused by the high cost of U.S. goods affecting international trade. The nations agreed to work cooperatively to devalue the U.S. dollar, allowing other currencies to adjust, as a measure to make U.S. goods more affordable and re-balance trade.

Trump’s Tariffs Will Trigger a Global Currency Crisis Transcription

• 00:00 - 00:30 in 1985 the Global Currency markets were reset through a historic agreement called The Plaza Accord now today Trump has a plan to do it again only this time it won't be a coordinated effort it'll be economic Warfare and the consequences well they could trigger a Global Currency Reset that changes everything now is this good or bad well both so in this video we're going to break down what the original Plaza Accord was why it's critical to understanding today's
• 00:30 - 01:00 economy how Trump's tariffs are forcing the world toward a plaza Accord 2.0 and most importantly how you can position yourself to not just survive this shift but profit from it real quick my name is Mark Moss I make these videos to help you navigate the world as we're going through right now I'm a partner in a leading Tech focused VC fund I've been writing a financial newsletter for now about seven years called the quantum wave investment report and these are the same things that we're looking at so we can guide our strategies and hopefully it helps you as well so let let's
• 01:00 - 01:30 go all right now the key to understanding what's going on is in the past now I've always used a lot of history in my videos to help you understand this that's why I use cycles and things like that I often get asked all the time like what are the best um investing books that I could read and I'm like well there's not really good any investing books what you really want to read is history books because the reason why is you know if I touch a hot stove I'll most likely get burned now next time I might touch it with my arm or my leg but I'm also going to get
• 01:30 - 02:00 burnt so it doesn't repeat but it Rhymes when you understand these lessons of History you can see how they're starting to shape up again and very similar things could happen again so to understand Plaza Accord 2.0 let's go back just real quick and understand Plaza Accord 1.0 this happened back in 1985 as a matter of fact September 22 1985 and it happened at the Plaza Hotel in New York City now basically what it was it was a group of the G5 Nations so the top five nations in the world that was the of course the United States
• 02:00 - 02:30 Japan Germany France and the UK all coming together in a meeting now this was a coordinated meeting because there was a problem the problem was that the US dollar was too strong when compared to other currencies which we're sort of seeing a strong dollar right now and that's sort of creates what they call this US dollar wrecking ball what it does is it starts to affect other other um economies it changes the way that we can Import and Export goods and at this point the US dollar was way too strong and because of this it caused these
• 02:30 - 03:00 large deficits in trade to be happening and so things started to slow down so what happens is when us Goods started to get too expensive then the other nations couldn't afford them it made it very hard for those other nations to ship goods back to the United States so they all got together the G5 I said hey we got to do something about this so let's coordinate something let's all work together cooperatively and let's all devalue our currencies or really at really is about devaluing the US dollar and letting the other currencies adjust just so that they could fix this
• 03:00 - 03:30 imbalance and at that point the US dollar dropped about 50% you can see this in this chart of What's called the Dixie the dollar Index now this is the dollar compared to a basket of other currencies and you can see this is the point right here in 1985 when this happened this coordinated devaluation and you can see that it's never recovered here we are today I'm sitting right around here and so this is what happened in Plaza Accord 1.0 now a couple things to take note of number one
• 03:30 - 04:00 this was coordinated so it was done in an orderly fashion but even though it was done in an orderly fashion in agreement it led to of course the law of unintended consequences so whenever you work with a or I should say mess with a complex system like the body like the market or like the economy you can't just tweak or turn or twist or manipulate one part of it without having unintended consequences and so some of the things that happened were for example a massive bubble happening in Japan uh more trade imbalances happening
• 04:00 - 04:30 around the world and of course it got even worse now over the next couple videos that I'm going to be doing I'm going to be diving deep into history because we're at a very historical pivotal moment right now and to really understand what exactly is going to be happening here over the next couple of years or this year you have to understand history so we'll be going more into that but in this video right here we're also continuing to talk about the Tariff so we talk about what the Trump Administration is doing and one of the things he's really using is tariffs and really the way that he's using
• 04:30 - 05:00 tariffs is sort of like to maybe force a plaza Corp this time a 2.0 so what are we talking about here so Trump announced tariffs so he basically said hey uh again deficits trade deficits are out of whack so we want to do something about it what I want to do because I want to make America great again is I want to impose tariffs on any of the goods coming in the United States making them more expensive right that way us can compete with that now we see this it's all over the headlines of course this is all over the news I don't want to give you the news you can get that on your
• 05:00 - 05:30 own but you can see markets are in turmoil right so the markets are all upside down manufacturing the economy even the investment markets because Trump kicks off this this trade War and the trade war of course is these tariffs now so far at the time of this recording he's threatened a lot of big tariffs and then sort of walking them back so it's like he's thrown that out there he's gotten what he wanted so for example he threw out massive tariffs against Canada and Mexico well now they both announced that they're going to send troops to the Border they're going to lock the Border down they're going to personally Justin
• 05:30 - 06:00 Trudeau from Canada said he's going to be the new um fentol Zar they're going to stop the flow of drugs and so now Trump said okay we'll we we we'll hold on the tariffs for now so a lot of this is bargaining but a lot of it is is to uh get this to work but we can see that right now the markets are in turmoil we don't know what's going to happen next but some of the world doesn't seem to like this now this is an important piece to understand because we can see here the ECB the European Central Bank would surely bulk at a plaa two idea they'd
• 06:00 - 06:30 bulk at that no way we do that but the funny maybe interesting ironic thing is that the ECB is already in a devaluation phase they're already easing their currency they're already manipulating their currency so it's like no we would never do that we already are uh so we can already see that happening uh we can see here China kind of the same thing China now China is in a different boat China really really needs to ease they really need to start printing money and their wo this is the economic problems that they're having make Plaza cord less
• 06:30 - 07:00 outlandish I mean they'll probably go along with it because they need a massive devaluation on their own so you can start to see where some of these countries are now we can see again when Trump announced these big tariffs on Canada and Mexico exactly what happened so this is the Canadian dollar against the US dollar and look at this massive Spike that happened right here when that was announced so you can see what that could potentially do to the trade Wars with these currency being manipulated
• 07:00 - 07:30 back and forth here's the Mexican peso to the US dollar same thing look at that giant candle that giant Wick there and so as soon as was announced you could already see the market started to react which of course it caused not just currency volatility but then that caused Market volatility especially assets that you buy that are denominated in Fiat currencies that are being devaluated now the thing is about this is as I said I showed you like you know the ECB says well we're not going to do that China says maybe we will but what this is and how this is different is the Plaza chord
• 07:30 - 08:00 was coordinated they all came together and agreed they would do this in an orderly fashion and even still it had unintended consequences what's going on here though is more like a strong arm what's going on here is like a bullying hey you either do what we want or we're going to just force you to do it anyway so you either come together and we'll do this coordinated or we'll just force you to do it now the reason why that's important to understand is in a coordinated fashion it led to unintended consequences what do you think happens when it's done in an uncoordinated
• 08:00 - 08:30 fashion well probably way more uned consequences now one of the things we could be seeing is a complete GCR or a Global Currency Reset now this is what has to happen now China wants it ECB says maybe they don't and the reason why is because each nation is trying to jockey and compete with their own currencies now what the world needs is a major currency realignment or what we really need is to get rid of FIA currency altogether but that's a whole other story uh but what we need is historically we've seen them realign the
• 08:30 - 09:00 currencies in order to stabilize trade in order to rebalance or correct trade imbalances and things like that and so we can sort of all move together but when it doesn't happen peacefully we end up with trade Wars and tariffs so then each country is trying to retaliate you hear that right now um some of the Nations Mexico well I guess all of them Mexico Canada China they're all saying will retaliate against the United States now so that basically means when it's done unilaterally so instead of together coordinated uned now what that leads to
• 09:00 - 09:30 is competitiveness because it's like well you made our Goods more expensive we can't sell as many Goods so then we're going to devalue our goods and we'll make our Goods cheaper but then if you devalue our your currency to make your goods cheaper then we'll just increase the tariffs to make to offset that and then we start competing and we start having a trade war and that causes all these unintended consequences to happen okay so what does that mean for us that's kind of the news but what does that mean for us how do we navigate a Global Currency reset well there's a
• 09:30 - 10:00 couple things that we need to be paying attention to now I like to break this down into the economy and the markets because these are two separate things they used to be the same now the same Co told us that right the whole economy was shut down markets went to New all-time highs so from an economy perspective we have to understand there's going to be a lot of Market volatility so for example tariffs on incoming Goods Commodities steel copper things like that so then maybe auto parts are more expensive so then maybe the cost of new cars goes up right so in the market volatility we
• 10:00 - 10:30 don't know what the price of avocados for Mexico is going to be so maybe the price of avocados is going up and so there's going to be a lot of volatility in the market around prices as this all sort of starts to um sort itself out on top of that this could create what we call inflationary pressures now specifically price inflation but inflationary pressures again avocados goes up cars go up things like that now that means for you and I that means our cost of goods our cost of living goes up our standard of living goes down all right uh as I said like we can see the the cost of imports rise now that's on
• 10:30 - 11:00 the economy side this is the good and the bad of this so when the cost of my life living my life goes up that's typically bad I have to work more to have the same standard of living on the good side though as investors we want to be very careful of what we're invested into there's massive opportunities here but there's also a lot of pitfalls so for example we want to be careful invested into assets that are denominated in devalued currencies so for example could be owning an asset
• 11:00 - 11:30 like let's say the stock market in Turkish L for example and it could be showing that it's going up but it could be going down in purchasing power so how do we protect ourselves from that well one you would own Assets denominated in stronger currencies like the dollar but number two we'd want to own Assets in appreciating currencies like the dollar or ones that are free floating around the world this would be Commodities okay so we can have assets like us listed stocks in US dollars or we could have
• 11:30 - 12:00 Commodities that could freely trade around the world now this is exactly what this chart has been telling us it used to be copper was called Dr copper copper would sort of be the canary and the coal mine it would be it would tell us what was going on in the global economy the health of the global economy and today we have gold and what this chart is showing us right here with this price literally breaking out making new alltime highs right now is showing us exactly what's happening we are going into a new Financial system we are going into currency Wars and
• 12:00 - 12:30 trade Wars and all those things and instead of owning assets and in different currencies and not knowing which ones are going to be suffering the Fate through the law of un consequences we might want to own gold instead now there's a lot more going on with gold than just this but this is one of the things you can see that breaking out to new alltime highs now remember I said Commodities like gold but we can see this here's a usci this is a ETF this is a basket of Commodities and you can see the same thing higher higher higher breaking out to new alltime High right now so get out of assets that are
• 12:30 - 13:00 denominated in currencies and think about uh Global stores of value like Commodities of course here's a chart of my favorite commodity in the world which is Bitcoin and you can see the exact same thing sitting here at all-time highs now this is telling us that this shift is underway the smart money is already moving to that now the good is that this is an opportunity to make a lot of money the bad is that my cost of living goes up now as long as I take advantage of this I can offset the damage of this but if you're worried
• 13:00 - 13:30 about this and not doing anything here I got bad news for you it's going to get worse okay now what does all this mean well it means that instead of most people thinking the world is linear really the world is all about tradeoffs and as a matter of fact things can be good and bad at the same time what we can expect is to have a lot more currency volatility so for example I built a house down in Mexico so when I go down there and I have to pay people in pesos the cost of me paying people goes up and down wildly because of the
• 13:30 - 14:00 currency volatility again I showed you the Mexican peso is spiking right now so if you need to deal with that you need to think a little bit longer term you need be able to plan that out a little bit better also we need to think about remember assets don't buy assets that are subject to a lot of volatility in the currency specifically depreciating currencies think about at least appreciating currencies stronger currencies like the dollar or even better hard assets like gold and Bitcoin Commodities things like that the other thing is that we need to think about the
• 14:00 - 14:30 allocations that we have now over the weekend we saw the markets crash the cryptocurrency markets just absolutely plunged 30 40% I got a text message from a buddy I was out there on a Sunday night and he said he sent me a a screenshot of his like his account and like everything was in like major red and he said uh I'm stressing out and I said why why are you stressing out I knew why because everything was plunged but why did that matter to him you see we want to think about adjusting allocation so we don't if you are
• 14:30 - 15:00 anxious about what's going to happen or stressed out that means you have the wrong allocation so I told them I said look think long term think a year or more right and then think about your asset allocations now for me I have most of my um allocation there in Bitcoin you know he had allocated to a bunch of smaller altcoins I don't recommend that and so he's seen massive volatility so think about putting your money where the assets are stronger and less money in more risky assets that have more volatility and then think about your allocations overall do you have too much
• 15:00 - 15:30 invested so in his case he had too much of his money that he needed shortterm invested so put some in that you can leave there for a year or more get on the other side of this and think about those allocations and then adjust your time frames like I said really you should be thinking about longterm in this market this Market is going to be extremely volatile especially through the first quarter of this year potentially even through the second quarter of this year I think once we get on the other side of this we're going to talk about in some other videos about how really the the hand is already played like the hand will be forced but
• 15:30 - 16:00 we need to get on the other side of this maybe a first quarter or two it's going to be volatile so think longer term at least a year out all right that's what's going on I'm going to keep you up to date on the playby plays and not giving you the news you can go read that on your own but what it means to you and what we could do be doing about it let me know what you think about this down in the comments down below of course give me a thumbs up if you like this foot if you don't you can give me thumbs down that's okay but at least tell me why either your way all right that's all we got to your success I'm out