Jim Bianco on What a 'Mar-a-Lago Accord' Could Mean for the Economy

Jim Bianco (0:02)

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Tracy Alloway (0:18)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

Joe Weisenthal (0:22)

And I'm Joe Weisenthal.

Tracy Alloway (0:24)

Joe, when you hear Mar-a-Lago, what do you think of?

Joe Weisenthal (0:28)

You know what's funny? I don't know what Mar-a-Lago is, actually. I've been meaning to look it up. Is it a house?

Tracy Alloway (0:34)

I thought you were going to say, I've been meaning to go there.

Joe Weisenthal (0:36)

I'd like to go there, too. But is it a house? Is it a country club? Is it a place where someone can just book a room? I actually don't have a great conception of it, except I'm sure it's very 80s aesthetic.

Tracy Alloway (0:51)

Here's one I know. There's Trump. There's golf.

Joe Weisenthal (0:54)

Heard of it.

Tracy Alloway (0:55)

And that's about it. I think the last thing anyone thinks of when you hear the word Mar-a-Lago is the potential for another international monetary accord. No one really thinks that, right?

Joe Weisenthal (1:06)

Did Xi Jinping go to Mar-a-Lago during the first Trump administration?

Jim Bianco (1:09)

I think he did.

Tracy Alloway (1:11)

Right, okay. But there was no new monetary agreement.

Jim Bianco (1:14)

Right.

Joe Weisenthal (1:14)

No, nothing really that big came of it. But we know Trump loves it. It's a Trump esthetics. And I'm sure he'd love to host world leaders at his club, at his house, at his golf course.

Tracy Alloway (1:24)

Well, you know, the funny thing is, if there was going to be a Mar-a-Lago accord, like say it actually happened, then I think it would be the second major monetary agreement that happened in a hotel or a building owned by Trump. Because the first one was the 1985 Plaza Accord.

Joe Weisenthal (1:43)

And did he own it at the time?

Tracy Alloway (1:44)

I think so, yeah.

Joe Weisenthal (1:45)

Well, it's got to happen then.

Tracy Alloway (1:47)

Yeah. For those who don't know what we're talking about, Wall Street analysts, investors are all abuzz over the potential for a Mar-a-Lago accord. The idea being that the US kind of sets out this new monetary system in a similar way to the 1985 Plaza Accord or the original Bretton Woods agreement. And I got to say, this is just interesting from a theoretical perspective. And I think it also points to a lot of important stuff about the way the Trump administration is thinking about not just the economy, but the financial system and I guess the global order itself. So we should talk about it.

Joe Weisenthal (2:28)

No, it really does speak to it. We should absolutely talk about it because there are core tensions within Trumpism that this gets to. And one of the big ones is, I would say, there's two specifically. One is the sort of desire to turn the US into a manufacturing powerhouse and theoretically one aid for that would be a weaker US dollar. And so this idea of the dollar is too expensive and maybe there's some agreement to weaken it could help US manufacturing. And then this question of how influential globally does the US want to be, period, across anything, whether it's military, whether it's finance, whether it's currency, etc. And, you know, one of the ideas of like pulling inward tariffs, etc., changing some questions about the international security relationship is this idea of like an inward turn. And maybe the US doesn't want to be as prominent globally on the stage. It's all kind of wrapped up in the same question.

Tracy Alloway (3:26)

Yep, absolutely. So again, we should talk about it. And I am very pleased to say we have the perfect guest. I can't believe he hasn't been on the show before, but we're going to be speaking with Jim Bianco. He is, of course, the president and founder of Bianco Research. He recently held a presentation for his clients all about the Mar-a-Lago Accord, the potential Mar-a-Lago Accord.

Joe Weisenthal (3:47)

The Mar-a-Lago Accord that doesn't exist.

Tracy Alloway (3:48)

That doesn't exist yet. The hypothetical that we should nevertheless talk about. So Jim, thank you so much for coming on Odd Lots.

Jim Bianco (3:56)

Thanks for having me. And Tracy, to correct you, Trump bought Plaza 1988 and the Sierra Club was 1985

Tracy Alloway (4:03)

Gosh darn it. Okay, well, Jim.

Joe Weisenthal (4:05)

Two hotels that he theoretically at some point was connected to.

Tracy Alloway (4:10)

Jim, why don't we start with the client meeting? What sort of inspired you to have something specifically dedicated to, you know, a hypothetical that hasn't happened yet?