In nineteen eighty five, the global currency markets were reset through a historic agreement called the Plaza Accord. Now today Trump is 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 economy, how Trump's tariffs are forcing the world toward a Plaza Accord two point zero, 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 Reports, and these are the same things that we're looking at so we can guide our strategies and hopefully it helps you as well.
Let's 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 investing books that I could read, And I'm like, well, they're not really good at investing books.
Which you really won't 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 burned. 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 a chord two point zero, let's go back just real quick and understand Plaza accord one point zero. This happened back in nineteen eighty five, as a matter of fact, September twenty two, nineteen eighty five, and it happened at the Plaza Hotel in New York City. Now, basically what it was it was a group of the G five nations, so the
top five nations in the world. That was the course, The United States 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 short of seeing a strong dollar right now, and that sort of creates what they call this US dollar wrecking ball. What it does is it starts to affect other 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 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 G five 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 it really is about devalue in the US dollar and letting the other currencies so that they could fix this imbalance. And at that point, the US dollar dropped about fifty percent. 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 nineteen eighty five when this happened, this coordinated devaluation, and you can see that it's never recovered. Here we are today sitting right around here. And so this is what happened in Plaza Cord One point out a couple of things to take note of. Number one, this was coordinated, so it
was done in an orderly fashion. But even though it was done in 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 happened in Japan, more trade imbalances happening around the world, and of course it got even worse. Now over the next couple videos that I'm gonna be doing. I'm gonna 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 tariffs. 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 tariffs is sort of like to maybe force a plausa corb this time a two point zero.
So what are we talking about here?
So Trump announced tariffs, So he basically said, hey, 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 the news. You
can get that on your 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 trade war, and the trade war, of course, is these terraffs 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 Trudeau from Canada said he's going to be the new fentanyls are. They're going to stop the flow of drugs. And so now Trump said, okay, we'll hold on.
The tariffs for now.
So a lot of this is bargaining, but a lot of it is to 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 balk at the plot.
It's a two idea. They'd balk at that. No way we do that.
But the funny, 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, so we can already see that happening. 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 they're woes. This is the economic problems that they're having. Make plasea accord less outlandish. I mean, we'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 currencies being manipulated back and forth. Here's the Mexican peso through the US dollar, same thing.
Look at that giant candle, that giant wick there, and so as soon as it's denounced, you could already see the market starting 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 fiad 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 cord was coordinated. They all came together and agreed they would do this in an orderly fashion, and even still they 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 gonna just force you to do it anyway. A small business owner, are you buried in all types of work keeping you from the real thing that makes you money. Well, that's where just Works comes in. They're the all in one platform that supports small business growth.
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To unintended consequences.
What do you think happens when it's done in an uncoordinated fashion, Well, probably way more unintended consequences.
Now, one of the.
Things we could be seeing is a complete DCR 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 your currency altogether.
But that's a whole other story.
But what we need is historically we've seen them realign the currencies in or 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 some of the nations Mexico, well, I guess all the Mexico, Canada, China, they're all saying we'll retaliate against the United States. Now, so that basically means when it's done unilaterally, so instead of together coordinated UNILID. Now, what that leads to 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 good 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 couple of 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 that used to be the same. Now the same COVID told us that right the whole economy, we shut down markets.
With the 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, steal 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 there's volatility. We don't know what the price of avocados from 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 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 living goes down.
All right, As I.
Said, we can see the cost of imports right now. That's on 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 living. On the good side, though, as investors, we want to be very careful of what we're invested into. The 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, I could be owning an asset like let's say the stock market in Turkish lira, for example, and it could be showing that it's going up, but it could be going down and purchasing power. So how do we protect ourselves from a Well, one, you would own assets nominated and 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 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 doctor Copper. Copper would sort of be.
The canary in 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 all time 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 trade wars and
all of those things. And instead of owning assets and in different currencies and not knowing which ones are going to be suffering the faith through the law of.
Understand the 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 all time highs. Now. I 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 hire breaking out to new all time highs right now. So get out of assets that are denominated in currencies and think about 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's 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 about this and not doing anything here.
I got bad news for you.
It's gonna get worse Okay, now what does all this mean. Well, it means that instead of most people think the world is linear, really the world is all about trade offs, 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 payss, the cost of me paying people goes up and down wildly because of the currency volatility.
Again, I showed you the Mexican paysos spiking right now.
So if you need to deal with that, you need to think a little bit longer term to 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 currency, stronger currencies like the dollar, or even better hard assets like
golden bitcoin, commodities, things like that. The other thing is that we need to think about the allocations that we have.
Now.
Over the weekend, we saw the markets crash. The cryptocurrency markets just absolutely plunged thirty forty percent. I got a text message from a buddy. I was out there on a Sunday night, and he said he sent me a screenshot of his like his account and like everything was like major red. And he said, 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 our allocations, so we don't if you are anxious.
About what's going to happen, we're stressed out.
That means you have the wrong allocation. So I told him, 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 allocation there in bitcoin. You know, he had allocated to a bunch of smaller all coins. I don't recommend that, and so he's seeing 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 invested? So in his case, he had too much of his money that he needed short term invested. So put some in that you can leave there for a year 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 long term 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 gonna talk about in some other videos about how really the hand is already played like the hand will be forced. But we need to get on the other side of this, maybe a first quarter or two. It's gonna be volatile, So think.
Longer term, at least a year out.
All right, that's what's going on. I'm gonna keep you up to date on the play by plays and not giving you the news.
You can 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, can we thumbs up if you like it's footed. If you don't, you can give me thumbs down, that's okay, but at least tell me why either way. All right, that's what I got to your success.
I'm out