Why you should keep a close eye on the ‘Mar-a-Lago accord’

• The so-called Mar-a-Lago Accord is more of a big, speculative idea than official policy – but its concepts suggest a weaker dollar, a restructuring of US debt, and a trade realignment – all aimed at easing US debt pressures and boosting competitiveness
• The whole package is unlikely to go into effect in full, but parts are likely to emerge. With the US government budget looking strained, it’s worth watching for the appearance of ultra-long bond issuance, increased rhetoric on dollar devaluation, and potential shifts in trade and debt agreements
• Markets could become even more volatile. A weaker dollar could fuel inflation, Treasury restructuring could shake investor confidence, and gold and bitcoin could see big moves.

The "Mar-a-Lago Accord" isn’t an official agreement – it’s more of a concept floating around in policy and market circles. The name, a nod to President Donald Trump’s Florida resort, hints at a major economic shake-up. Honestly, it sounds like a modern-day Plaza Accord (the 1985 deal that devalued the dollar) but with even bigger ambitions. It calls for a sharp dollar devaluation and a sweeping overhaul of US debt, trade policy, and geopolitical burden-sharing. In short, it’s not just about adjusting exchange rates – it’s about reshaping the entire global and economic order.

What are the details of the ‘Mar-a-Lago Accord’?

The actual details aren’t known, since it’s not a signed, sealed, delivered accord. But if you want a glimpse of what a “Mar-a-Lago Accord” could look like, check out the arguments made by Stephen Miran and Zoltan Pozsar – two influential financial policy guys who have the ear of US Treasury Secretary Scott Bessent.

Miran, a former Treasury official, has argued that the US dollar is overvalued and that America’s debt burden is unsustainable. In a November 2024 paper, he laid out a strategy for using tariffs, currency-moving adjustments, and debt restructuring to shrink trade imbalances, while tying economic policy to national security, suggesting that trade and monetary tools should reinforce US defense strategies.

Pozsar, on the other hand, seems to envision a “Bretton Woods III” agreement – a shift toward a financial system where central bank digital currencies (CBDCs) and commodities like gold and oil play a bigger role in global finance, replacing the dominance of the dollar system. His ideas include restructuring foreign-held US debt into ultra-long, 100-year bonds, revaluing gold reserves to bolster Uncle Sam’s balance sheet, and pushing allies to share more of America’s financial burden through bond purchases or increased defense spending.

If a Mar-a-Lago Accord were to take shape, it’d likely draw from both playbooks and include:

• Coordinated currency devaluation. Like the Plaza Accord, this would involve the US working with other major economies to weaken the dollar.
• Debt restructuring. Foreign-held US Treasuries would be converted into ultra-long, 50- or 100-year bonds, reducing the country’s short-term refinancing needs. Some proposals also suggest swapping them for zero-coupon bonds, cutting immediate interest costs by eliminating periodic payments. These conversions could happen at off-market rates, with terms that are negotiated, rather than set by open-market pricing.
• Tariffs as a bargaining chip. Trade barriers could be used as leverage, with import tax reductions offered in exchange for economic or geopolitical concessions.
• A US sovereign wealth fund. Revenues from tariffs and the monetization of government assets could be funneled into key industries to strengthen domestic production.
• Security contributions. Allies might be required to "pay up" for US defense guarantees, potentially via investments in US debt.
• Gold and monetary system tweaks. Speculative ideas include revaluing US gold reserves or integrating the metal into a broader monetary framework that would reshape the global financial order.

Will it realistically happen?

Right now, all of this seems to be more of a thought experiment than a serious policy plan. Even if the White House wanted to push it through, the hurdles would be enormous and would come at the administration from all angles.

• There’d be political resistance. Congress isn’t known for embracing experimental fiscal policies, the Federal Reserve (Fed) wouldn’t be keen on any move that threatens its independence (or fuels inflation), and Wall Street would likely push back against any market distortions.
• There’d also be a global backlash. Foreign creditors won’t take kindly to a US-led financial shakeup that shifts costs onto them. China, in particular, would push back against anything that erodes the value of its US debt holdings (an asset it holds a ton of), so any plan would likely require major concessions to avoid diplomatic fallout.
• And that’s to say nothing of the market reaction. Forcing investors to swap short-term Treasuries for ultra-long bonds at off-market rates could look like a stealth default, potentially rattling confidence in US debt and sending Treasury yields higher.

All that being said, the buzz around these ideas could quickly gain traction. Look, the US is staring down a fiscal crunch, and without bold action, debt pressures could spiral. And this president does have a reputation for making moves that defy convention. What’s more, plenty of voices are arguing that a strong dollar has hurt US manufacturing and fueled trade deficits. So it’s easy to see why some have been pushing the idea: a controlled dollar devaluation and debt restructuring wouldn’t just make American industry more competitive – it could also ease the government’s financing burden when it needs it most.

So while you shouldn’t expect a full-blown Mar-a-Lago Accord anytime soon, pieces of the plan could start falling into place – especially if government spending pressures keep building. Watch for the Treasury testing ultra-long bonds, politicians turning up the heat on the dollar’s value, and global financial summits laying the groundwork for trade and debt realignment.

Also look for potential triggers that could set an actual accord in motion, like a surging trade deficit paired with a soaring dollar, a market scare over US debt that makes restructuring more politically acceptable, or even a geopolitical deal where currency plays a role in a broader US-China agreement.

What are the potential consequences of all this?

If something resembling a Mar-a-Lago Accord were to take shape, it could be a game-changer, much like the Bretton Woods Accord that established the dollar as the world’s reserve currency or the 1985 Plaza Accord agreement to weaken the value of the greenback. Currency markets would likely see major volatility and a weaker US dollar could fuel inflation, complicating the Fed’s job. Interest rates could swing widely as investors reassess US creditworthiness and debt sustainability. Even without a formal deal in place, the mere speculation widens the range of possible outcomes, adding to uncertainty and driving up volatility.

From an investment perspective, gold would likely benefit, since it’s an inflation hedge and safe-haven asset – that’s possibly one reason behind its strong performance over the past year. Bitcoin could also gain traction if financial instability pushes investors toward alternative stores of value. Stocks, meanwhile, could see a mixed impact: a weaker dollar might help US exporters, but rising volatility and inflation risks could create short-term challenges, especially with today’s high valuations leaving little room for error. Bonds, particularly Treasuries, could see a major selloff if markets start to doubt the US government’s ability to manage its debt.

Remember, a well-diversified portfolio is the best defense in uncertain times – that means holding stocks from across different regions, along with some bonds, commodities (gold in particular), and even bitcoin to ensure resilience in various scenarios. Dynamic asset allocation strategies could help you navigate shifting conditions, while option strategies may help you protect your portfolio against more extreme shakeups. And it’s always a good idea to keep some cash on hand so you’re ready to seize the opportunities that will undoubtedly arise.

Stéphane Renevier is a global markets analyst at finimize.

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