Speaker 1: In nineteen eighty five, the global currency markets were reset
Speaker 1: through a historic agreement called the Plaza Accord. Now today
Speaker 1: Trump is a plan to do it again, only this
Speaker 1: time it won't be a coordinated effort.
Speaker 2: It'll be economic warfare.
Speaker 1: And the consequences well, they could trigger a global currency
Speaker 1: reset that changes everything. Now is this good or bad?
Speaker 2: Well? Both. So in this video, we're going to.
Speaker 1: Break down what the original Plaza Accord was, why it's
Speaker 1: critical to understanding today's economy, how Trump's tariffs are forcing
Speaker 1: the world toward a Plaza Accord two point zero, and
Speaker 1: most importantly, how you can position yourself to not just
Speaker 1: survive this shift, but profit from it real quick. My
Speaker 1: name is Mark Moss. I make these videos to help
Speaker 1: you navigate the world as we're going through right now.
Speaker 1: I'm a partner in a leading tech focused VC fund.
Speaker 1: I've been writing a financial newsletter for now about seven
Speaker 1: years called the Quantum Wave Investment Reports, and these are
Speaker 1: the same things that we're looking at so we can
Speaker 1: guide our strategies and hopefully it helps you as well.
Speaker 2: Let's go.
Speaker 1: All right now, the key to understanding what's going on
Speaker 1: is in the past. Now, I've always used a lot
Speaker 1: of history in my videos to help you understand this.
Speaker 1: That's why I use cycles and things like that. I
Speaker 1: often get asked all the time like what are the
Speaker 1: best investing books that I could read, And I'm like, well,
Speaker 1: they're not really good at investing books.
Speaker 2: Which you really won't want to read is history books.
Speaker 1: Because the reason why is, you know, if I touch
Speaker 1: a hot stove, I'll most likely get burned. Now next time,
Speaker 1: i might touch it with my arm or my leg,
Speaker 1: but I'm also going to get burned. So it doesn't repeat.
Speaker 2: But it rhymes.
Speaker 1: When you understand these lessons of history, you can see
Speaker 1: how they're starting to shape up again and very similar
Speaker 1: things could happen again. So to understand plaza a chord
Speaker 1: two point zero, let's go back just real quick and
Speaker 1: understand Plaza accord one point zero. This happened back in
Speaker 1: nineteen eighty five, as a matter of fact, September twenty two,
Speaker 1: nineteen eighty five, and it happened at the Plaza Hotel
Speaker 1: in New York City. Now, basically what it was it
Speaker 1: was a group of the G five nations, so the
Speaker 1: top five nations in the world. That was the course,
Speaker 1: The United States Japan, Germany, France, and the UK all
Speaker 1: coming together in a meeting. Now this was a coordinated
Speaker 1: meeting because there was a problem. The problem was that
Speaker 1: the US dollar was too strong when compared to other currencies,
Speaker 1: which we're short of seeing a strong dollar right now,
Speaker 1: and that sort of creates what they call this US
Speaker 1: dollar wrecking ball. What it does is it starts to
Speaker 1: affect other economies. It changes the way that we can
Speaker 1: import and export goods. And at this point, the US
Speaker 1: dollar was way too strong and because of this, it
Speaker 1: caused these large deficits in trade to be happening, and
Speaker 1: so things started to slow down. So what happens is
Speaker 1: when US goods started to get too expensive, then the
Speaker 1: other nations.
Speaker 2: Couldn't afford them.
Speaker 1: It made it very hard for those other nations to
Speaker 1: ship goods back to the United States.
Speaker 2: So they all got together.
Speaker 1: The G five I said, hey, we got to do
Speaker 1: something about this. So let's coordinate something. Let's all work
Speaker 1: together cooperatively, and let's all devalue our currencies. Or really
Speaker 1: it really is about devalue in the US dollar and
Speaker 1: letting the other currencies so that they could fix this imbalance.
Speaker 1: And at that point, the US dollar dropped about fifty percent.
Speaker 1: You can see this in this chart of what's called
Speaker 1: the Dixie the Dollar index. Now this is the dollar
Speaker 1: compared to a basket of other currencies, and you can
Speaker 1: see this is the point right here in nineteen eighty
Speaker 1: five when this happened, this coordinated devaluation, and you can
Speaker 1: see that it's never recovered. Here we are today sitting
Speaker 1: right around here. And so this is what happened in
Speaker 1: Plaza Cord One point out a couple of things to
Speaker 1: take note of. Number one, this was coordinated, so it
Speaker 1: was done in an orderly fashion. But even though it
Speaker 1: was done in orderly fashion, in agreement, it led to,
Speaker 1: of course, the law of unintended consequences. So whenever you
Speaker 1: work with a or i should say, mess with a
Speaker 1: complex system like the body, like the market, or like
Speaker 1: the economy, you can't just tweak or turn or twist
Speaker 1: or manipulate one part of it without having unintended consequences.
Speaker 1: And so some of the things that happened were, for example,
Speaker 1: a massive bubble happened in Japan, more trade imbalances happening
Speaker 1: around the world, and of course it got even worse.
Speaker 1: Now over the next couple videos that I'm gonna be doing.
Speaker 1: I'm gonna be diving deep into history because we're at
Speaker 1: a very historical pivotal moment right now, and to really
Speaker 1: understand what exactly is going to be happening here over
Speaker 1: the next couple of years or this year, you have
Speaker 1: to understand history.
Speaker 2: So we'll be going more into that.
Speaker 1: But in this video right here, we're also continuing to
Speaker 1: talk about the tariffs. So we talk about what the
Speaker 1: Trump administration is doing, and one of the things he's
Speaker 1: really using is tariffs. And really the way that he's
Speaker 1: using tariffs is sort of like to maybe force a
Speaker 1: plausa corb this time a two point zero.
Speaker 2: So what are we talking about here?
Speaker 1: So Trump announced tariffs, So he basically said, hey, again, deficits,
Speaker 1: trade deficits are out of whack, so we want to
Speaker 1: do something about it. What I want to do, because
Speaker 1: I want to make America great again, is I want
Speaker 1: to impose tariffs on any of the goods coming in
Speaker 1: the United States, making them more expensive, right that way
Speaker 1: US can compete with that. Now we see this, it's
Speaker 1: all over the headlines. Of course, this is all over
Speaker 1: the news. I don't want to give the news. You
Speaker 1: can get that on your own. But you can see
Speaker 1: markets are in turmoil. Right So the markets are all
Speaker 1: upside down, manufacturing, the economy, even the investment markets because
Speaker 1: Trump kicks off this trade war, and the trade war,
Speaker 1: of course, is these terraffs now. So far at the
Speaker 1: time of this recording, he's threatened a lot of big
Speaker 1: tariffs and then sort of walking them back. So it's
Speaker 1: like he's thrown that out there. He's gotten what he wanted.
Speaker 1: So for example, he threw out massive tariffs.
Speaker 2: Against Canada and Mexico.
Speaker 1: Well, now they both announced that they're going to send
Speaker 1: troops to the border. They're going to lock the border down,
Speaker 1: they're going to personally justin Trudeau from Canada said he's
Speaker 1: going to be the new fentanyls are. They're going to
Speaker 1: stop the flow of drugs. And so now Trump said, okay,
Speaker 1: we'll hold on.
Speaker 2: The tariffs for now.
Speaker 1: So a lot of this is bargaining, but a lot
Speaker 1: of it is to get this to work. But we
Speaker 1: can see that right now the markets are in turmoil.
Speaker 1: We don't know what's going to happen next, but some
Speaker 1: of the world doesn't seem to like this. Now, this
Speaker 1: is an important piece to understand because we can see
Speaker 1: here the ECB, the European Central Bank, would surely balk
Speaker 1: at the plot.
Speaker 2: It's a two idea. They'd balk at that. No way
Speaker 2: we do that.
Speaker 1: But the funny, interesting, ironic thing is that the ECB
Speaker 1: is already in a devaluation phase. They're already easing their currency.
Speaker 1: They're already manipulating their currency. So it's like, no, we
Speaker 1: would never do that. We already are, so we can
Speaker 1: already see that happening. We can see here China kind
Speaker 1: of the same thing.
Speaker 2: China. Now, China is in a different boat.
Speaker 1: China really really needs to ease, they really need to
Speaker 1: start printing money, and they're woes. This is the economic
Speaker 1: problems that they're having. Make plasea accord less outlandish. I mean,
Speaker 1: we'll probably go along with it because they need a
Speaker 1: massive devaluation on their own. So you can start to
Speaker 1: see where some of these countries are. Now we can
Speaker 1: see again when Trump announced these big tariffs on Canada
Speaker 1: and Mexico exactly what happened. So this is the Canadian
Speaker 1: dollar against the US dollar, and look at this massive
Speaker 1: spike that happened right here. When that was announced, So
Speaker 1: you can see what that could potentially do to the
Speaker 1: trade wars with these currencies being manipulated back and forth.
Speaker 1: Here's the Mexican peso through the US dollar, same thing.
Speaker 1: Look at that giant candle, that giant wick there, and
Speaker 1: so as soon as it's denounced, you could already see
Speaker 1: the market starting to react, which of course it caused
Speaker 1: not just currency volatility, but then that caused market volatility,
Speaker 1: especially assets that you buy that are denominated in fiad
Speaker 1: currencies that are being devaluated.
Speaker 2: Now, the thing is about this is as I said,
Speaker 2: I showed you like you know, the ECB says, well,
Speaker 2: we're not going to do that. China says, maybe we will.
Speaker 1: But what this is and how this is different is
Speaker 1: the Plaza cord was coordinated. They all came together and
Speaker 1: agreed they would do this in an orderly fashion, and
Speaker 1: even still they had unintended consequences. What's going on here, though,
Speaker 1: is more like a strong arm.
Speaker 2: What's going on here.
Speaker 1: Is like a bullying Hey, you either do what we
Speaker 1: want or we're gonna just force you to do it anyway.
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Speaker 1: The reason why that's important to understand is in a
Speaker 1: coordinated fashion, it led.
Speaker 2: To unintended consequences.
Speaker 1: What do you think happens when it's done in an
Speaker 1: uncoordinated fashion, Well, probably way more unintended consequences.
Speaker 2: Now, one of the.
Speaker 1: Things we could be seeing is a complete DCR or
Speaker 1: a global currency reset. Now, this is what has to
Speaker 1: happen now, China wants it.
Speaker 2: ECB says, maybe they don't.
Speaker 1: And the reason why is because each nation is trying
Speaker 1: to jockey and compete with their own currencies. Now, what
Speaker 1: the world needs is a major currency realignment, or what
Speaker 1: we really need is to get rid of your currency altogether.
Speaker 2: But that's a whole other story.
Speaker 1: But what we need is historically we've seen them realign
Speaker 1: the currencies in or to stabilize trade in order to
Speaker 1: rebalance or correct trade imbalances and things like that, and
Speaker 1: so we can sort of all move together.
Speaker 2: But when it doesn't happen peacefully, we end up with
Speaker 2: trade wars and tariffs. So then each country is trying
Speaker 2: to retaliate.
Speaker 1: You hear that right now some of the nations Mexico, well,
Speaker 1: I guess all the Mexico, Canada, China, they're all saying
Speaker 1: we'll retaliate against the United States. Now, so that basically
Speaker 1: means when it's done unilaterally, so instead of together coordinated UNILID. Now,
Speaker 1: what that leads to is competitiveness, because it's like, well,
Speaker 1: you made our goods more expensive, we can't sell as
Speaker 1: many goods, so then we're going to devalue our goods
Speaker 1: and we'll make our goods cheaper. But then if you
Speaker 1: devalue our your currency to make your good cheaper. Then
Speaker 1: we'll just increase the tariffs to make to offset that,
Speaker 1: and then we start competing and we start having a
Speaker 1: trade war, and that causes all these unintended consequences to happen.
Speaker 2: Okay, so what does that mean for us? That's kind
Speaker 2: of the news.
Speaker 1: But what does that mean for us?
Speaker 2: How do we navigate a global currency reset? Well, there's
Speaker 2: a couple of things that we need to be paying
Speaker 2: attention to.
Speaker 1: Now. I like to break this down into the economy
Speaker 1: and the markets, because these are two separate things that
Speaker 1: used to be the same. Now the same COVID told
Speaker 1: us that right the whole economy, we shut down markets.
Speaker 2: With the new all time highs.
Speaker 1: So from an economy perspective, we have to understand there's
Speaker 1: going to be a lot of market volatility. So for example,
Speaker 1: tariffs on incoming goods, commodities, steal copper, things like that.
Speaker 1: So then maybe auto parts are more expensive, so then
Speaker 1: maybe the cost of new cars goes up. Right, So
Speaker 1: in the market there's volatility. We don't know what the
Speaker 1: price of avocados from Mexico is going to be, so
Speaker 1: maybe the price of avocados is going up, and so
Speaker 1: there's going to be a lot of volatility in the
Speaker 1: market around prices as this all sort of starts to
Speaker 1: sort itself out. On top of that, this could create
Speaker 1: what we call inflationary pressures now specifically price inflation, but
Speaker 1: inflationary pressures.
Speaker 2: Again, Avocados goes up, cars go up, things like that.
Speaker 1: Now that means for you and I, that means our
Speaker 1: cost of goods, our cost of living goes up, our
Speaker 1: standard living goes down.
Speaker 2: All right, As I.
Speaker 1: Said, we can see the cost of imports right now.
Speaker 1: That's on the economy side. This is the good and
Speaker 1: the bad of this. So when the cost of my
Speaker 1: life living my life goes up, that's typically bad. I
Speaker 1: have to work more to have the same standard living.
Speaker 1: On the good side, though, as investors, we want to
Speaker 1: be very careful of what we're invested into. The massive
Speaker 1: opportunities here, but there's also a lot of pitfalls. So
Speaker 1: for example, we want to be careful invested into assets
Speaker 1: that are denominated in devalued currencies. So for example, I
Speaker 1: could be owning an asset like let's say the stock
Speaker 1: market in Turkish lira, for example, and it could be
Speaker 1: showing that it's going up, but it could be going
Speaker 1: down and purchasing power. So how do we protect ourselves
Speaker 1: from a Well, one, you would own assets nominated and
Speaker 1: stronger currencies like the dollar.
Speaker 2: But number two, we'd want.
Speaker 1: To own assets in appreciating currencies like the dollar or
Speaker 1: ones that are free floating around the world. This would
Speaker 1: be commodities. Okay, so we can have assets like US
Speaker 1: listed stocks in US dollars, or we could have commodities
Speaker 1: that could freely trade around the world. Now, this is
Speaker 1: exactly what this chart has been telling us.
Speaker 2: It used to be.
Speaker 1: Copper was called doctor Copper. Copper would sort of be.
Speaker 2: The canary in the coal mine.
Speaker 1: It would be it would tell us what was going
Speaker 1: on in the global economy, the health of the global economy.
Speaker 1: And today we have gold, and what this chart is
Speaker 1: showing us right here, with this price literally breaking out
Speaker 1: making new all time highs right now, is showing us
Speaker 1: exactly what's happening. We are going into a new financial system.
Speaker 1: We are going into currency wars and trade wars and
Speaker 1: all of those things. And instead of owning assets and
Speaker 1: in different currencies and not knowing which ones are going
Speaker 1: to be suffering the faith through the law of.
Speaker 2: Understand the consequences. We might want to own gold instead.
Speaker 1: Now there's a lot more going on with gold than
Speaker 1: just this, but this is one of the things you
Speaker 1: can see that breaking out to new all time highs. Now.
Speaker 1: I remember I said commodities like gold, but we can
Speaker 1: see this. Here's a USCI, this is a ETF, this
Speaker 1: is a basket of commodities, and you can see the
Speaker 1: same thing hire breaking out to new all time highs
Speaker 1: right now. So get out of assets that are denominated
Speaker 1: in currencies and think about global stores of value like commodities.
Speaker 1: Of course, here's a chart of my favorite commodity in
Speaker 1: the world, which is bitcoin, and you can see the
Speaker 1: exact same thing sitting here at all time highs. Now.
Speaker 2: This is telling us that this shift is underway. The
Speaker 2: smart money's already moving to that now.
Speaker 1: The good is that this is an opportunity to make
Speaker 1: a lot of money. The bad is that my cost
Speaker 1: of living goes up. Now, as long as I take
Speaker 1: advantage of this, I can offset the damage of this.
Speaker 1: But if you're worried about this and not doing anything here.
Speaker 2: I got bad news for you.
Speaker 1: It's gonna get worse Okay, now what does all this mean. Well,
Speaker 1: it means that instead of most people think the world
Speaker 1: is linear, really the world is all about trade offs,
Speaker 1: and as a matter of fact, things can be good
Speaker 1: and bad at the same time. What we can expect
Speaker 1: is to have a lot more currency volatility. So for example,
Speaker 1: I built a house down in Mexico. So when I
Speaker 1: go down there and I have to pay people in payss,
Speaker 1: the cost of me paying people goes up and down
Speaker 1: wildly because of the currency volatility.
Speaker 2: Again, I showed you the Mexican paysos spiking right now.
Speaker 1: So if you need to deal with that, you need
Speaker 1: to think a little bit longer term to be able
Speaker 1: to plan that out a little bit better. Also, we
Speaker 1: need to think about remember assets, don't buy assets that
Speaker 1: are subject to a lot of volatility in the currency,
Speaker 1: specifically depreciating currencies. Think about at least appreciating currency, stronger
Speaker 1: currencies like the dollar, or even better hard assets like
Speaker 1: golden bitcoin, commodities, things like that. The other thing is
Speaker 1: that we need to think about the allocations that we have.
Speaker 2: Now.
Speaker 1: Over the weekend, we saw the markets crash. The cryptocurrency
Speaker 1: markets just absolutely plunged thirty forty percent. I got a
Speaker 1: text message from a buddy. I was out there on
Speaker 1: a Sunday night, and he said he sent me a
Speaker 1: screenshot of his like his account and like everything was
Speaker 1: like major red. And he said, I'm stressing out. And
Speaker 1: I said, why why are you stressing out? I knew
Speaker 1: why because everything was plunged, but why did that matter
Speaker 1: to him? You see, we want to think about adjusting
Speaker 1: our allocations, so we don't if you are anxious.
Speaker 2: About what's going to happen, we're stressed out.
Speaker 1: That means you have the wrong allocation. So I told him,
Speaker 1: I said, look, think long term, think a year or more, right,
Speaker 1: and then think about your asset allocations. Now, for me,
Speaker 1: I have most of my allocation there in bitcoin. You know,
Speaker 1: he had allocated to a bunch of smaller all coins.
Speaker 1: I don't recommend that, and so he's seeing massive volatility.
Speaker 1: So think about putting your money where the assets are stronger,
Speaker 1: and less money in more risky assets that have more volatility,
Speaker 1: and then think about your allocations overall. Do you have
Speaker 1: too much invested? So in his case, he had too
Speaker 1: much of his money that he needed short term invested.
Speaker 1: So put some in that you can leave there for
Speaker 1: a year more, get on the other side of this
Speaker 1: and think about those allocations and then adjust your time frames.
Speaker 1: Like I said, really you should be thinking about long
Speaker 1: term in this market. This market is going to be
Speaker 1: extremely volatile, especially through the first quarter of this year,
Speaker 1: potentially even through the second quarter of this year. I
Speaker 1: think once we get on the other side of this,
Speaker 1: we're gonna talk about in some other videos about how
Speaker 1: really the hand is already played like the hand will
Speaker 1: be forced. But we need to get on the other
Speaker 1: side of this, maybe a first quarter or two. It's
Speaker 1: gonna be volatile, So think.
Speaker 2: Longer term, at least a year out.
Speaker 1: All right, that's what's going on. I'm gonna keep you
Speaker 1: up to date on the play by plays and not
Speaker 1: giving you the news.
Speaker 2: You can read that on your own, but what.
Speaker 1: It means to you and what we could do be
Speaker 1: doing about it. Let me know what you think about
Speaker 1: this down in the comments down below. Of course, can
Speaker 1: we thumbs up if you like it's footed. If you don't,
Speaker 1: you can give me thumbs down, that's okay, but at
Speaker 1: least tell me why either way. All right, that's what
Speaker 1: I got to your success.
Speaker 2: I'm out