Viktor | RockawayX
@viktorfischer
Do not panic. Everything is going according to plan. Which plan? The one written by Stephen Miran, Trump’s chair of economic advisors in what is called the “Mar-a-Lago Accord.” (link below). 🧠 The idea: 🇺🇸 The dollar is structurally overvalued. 📉 It’s killing U.S. industry. 💥 Solution: weaken USD via coordinated or unilateral policy — and use tariffs as leverage. Let me explain 👇
1. Tariffs as strategic instruments Tariffs should be used not just for protectionism, but: • As a source of revenue • As a policy lever to counter currency misalignment • To pressure trade partners to rebalance trade and defense contributions
2. USD devaluation • USD is overvalued due to reserve currency status, harming U.S. competitiveness. • Solution: Intentional dollar depreciation to boost U.S. exports and industry via signaling from FED and Treasury, and via multilateral agreements (à la 1985 Plaza Accord)
3. Trade policy as Foreign policy • Trade and defense should be linked: if countries benefit from U.S. security, they must also accept fairer trade terms. • Tariffs can be used to coerce economic burden-sharing from allies.
4. Offsetting tariff inflation with weaker USD • Tariffs don’t have to be inflationary if the dollar weakens concurrently, reducing import costs in FX terms. • Proposes a calibrated tariff + FX policy mix to avoid stagflation.
⚠️ Market implications: • Weaker dollar • Inflation offset via FX, not rates • Realignment of capital flows + volatility ahead
💸 How to trade this (NFA): 🟢 USD down 🟢 Gold, BTC, industrials up 🟡 Rates stay elevated 🔴 Emerging Markets FX chaos 🔴 Eurozone pain
Here is the link to Stephen Miran's paper: https://www.hudsonbaycapital.c...