“Mar-a-Lago Accord.” A Real Solution? Or Just Another Ponzi Scheme? You Decide…

By Gregory Mannarino

“Mar-a-Lago Accord.”

A Real Solution? Or Just Another Ponzi Scheme?

You Decide…

By Gregory Mannarino TradersChoice.net

THE WORLD right now today is experiencing a rapidly worsening multi-crisis event, and at the top of the list, there are five interconnected dynamic forces in play. And these are:

1. An inflationary crisis,

2. A currency crisis,

3. A debt crisis, (and this is what the Mar-a-Lago Accord is attempting to address specifically).

4. A liquidity crisis, and

5. A growing inability to pay the interest on US debt. (And this plays right into number 3).

These five simultaneous crisis events listed above are obviously interconnected, and there are real solutions which could be implemented to fix the system. However, instead of addressing these issues head on, Wall Street is getting very excited about the rising possibility of a debt-restructuring proposal called the Mar-a-Lago Accord.

Now, let’s see why Wall Street is getting so excited about the Mar-a-Lago Accord.

Looking at the list at the top of this page, the Mar-a-Lago Accord addresses specifically 2 of the 5 crisis conditions related to servicing US debt.

Moreover, as you read through this, consider for yourself if the Mar-A Lago Accord is a real solution to the debt crisis, or just another Ponzi scheme.

The core premise of the Mar-a-Lago Accord is as follows.

The Mar-a-Lago Accord is a debt restructuring model. An attempt to cause or offer foreign creditors, by and large foreign nations which own large amounts of US debt in the form of long-term Treasury notes, to swap out their long-term Treasury notes for special extra-long-term Treasury’s. Here is how this would work.

Creditors would be offered the opportunity to own, by swapping out the bonds they currently hold, into 100 YEAR, NON-TRADABLE, ZERO-COUPON BONDS. What this means is these 100-year bonds would pay NO INTEREST. (Yes, you read that right).

Instead, these ultra-long 100-year bonds would be sold at a discount to their face value, and the ONLY WAY to recoup the investment in these 100-year bonds would be to hold them to maturity. So, eventually the debt would come due, but not for 100 YEARS.

Obviously, the only creditors who would be interested in holding 100-year bonds would be foreign nations, so what is the perk?

PERK: (The Ability to BORROW Against the Bond in The Form of a Loan DIRECTLY FROM THE FEDERAL RESERVE AT NEAR ZERO INTEREST).

KEY POINT: Indeed, via this mechanism of debt restructuring under the Mar-A Lago Accord, this would absolutely work to reduce interest payments on US debt however, it would NOT prevent the debt itself from expanding.

So, in your opinion.

Is the Mar-a-Lago Accord a real solution to America’s debt crisis?

Or

Just another Ponzi?