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America faces a Trumpian economic slowdown

economist.com

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Re: America faces a Trumpian economic slowdown

#41

Post by DamnYuppie »

MarcelOlsz wrote: post #37
DamnYuppie wrote: post #15

Earlier quoted context omitted.

Well rich people already own most assets. Why would they want their holdings to lose value? Market crashes hurt HNWI's the most, as they have the most exposure. I am not sure if you feel the second point follows on from the first or stands on its own? I will respond to it as a separate issue and I take it to mean the economy as a whole and not just residences. That being said I agree it is the goal of companies to mo…

>Well rich people already own most assets. Why would they want their holdings to lose value? If wealth is a function of ownership why would you care if your $500m went down to $100m if the purchasing power you cratered is well below what you lost in 'value' while your ownership increased?

If I understand your argument it is that the rich should want to crater the market because even if they lose money, their purchasing power increases?

That would only work if they have large cash reserves, we have data that shows most billionaires/millionaires don't their wealth is tied up in assets.

Because of that if the market does crater their businesses/assets may in fact get wiped out.

The rich don't want volatility or crashes, it rarely benefits them.

Re: America faces a Trumpian economic slowdown

#42

Post by MarcelOlsz »

jokoon wrote: post #16

I am european, and I don't really know if it's really a bad thing for europe. I would say it's bad to lose an ally like the US, especially for defense, but what about trade? The problem is that american hegemony also bother some people, and those people dislike Trump but are they still happy for the US to be less strong? I would bet there are some europeans who are happy about the US slowing down, but I don't think t…

I hope to see before I die a united Europe with zero dependance on the USA, culturally or economically.

Re: America faces a Trumpian economic slowdown

#45

Post by orwin »

Terr_ wrote: post #5
bognition wrote: post #4

I’m seriously concerned that the market is going you crater in the next year, do what is the rational investment strategy? Trust Buffett and buy BRKB? Try to weather the storm with VOO? Buy treasury bonds?

I'm just a humble index-fund-liker who tries to avoid checking things more than once a month, but I'd like to add an observation: Employed people should consider their own job-sector as something to diversify against. In other words, don't be like those poor Enron employees who had all of their company 401k tied up in Enron stock. If your nest-egg craters but you have a job, you can sustain yourself and wait for mark…

Weirdly, if you work in tech, that would be energy companies I guess?

Re: America faces a Trumpian economic slowdown

#46

Post by Jtsummers »

MarcelOlsz wrote: post #37
DamnYuppie wrote: post #15

Earlier quoted context omitted.

Well rich people already own most assets. Why would they want their holdings to lose value? Market crashes hurt HNWI's the most, as they have the most exposure. I am not sure if you feel the second point follows on from the first or stands on its own? I will respond to it as a separate issue and I take it to mean the economy as a whole and not just residences. That being said I agree it is the goal of companies to mo…

>Well rich people already own most assets. Why would they want their holdings to lose value? If wealth is a function of ownership why would you care if your $500m went down to $100m if the purchasing power you cratered is well below what you lost in 'value' while your ownership increased?

Because it's not just the US economy and USD. If a billionaire is over-invested in the US and USD, then a decline in the US economy and global hard and soft power (what we're seeing now) will lead to a decline in their wealth relative to global wealth.

If the global economy shrinks by 80% (using your numbers) then their relative wealth can remain the same. If the US economy shrinks by 80%, then their global wealth has substantially declined while the wealthy in other countries do not suffer as much.

Re: America faces a Trumpian economic slowdown

#47

Post by orwin »

jokoon wrote: post #16

I am european, and I don't really know if it's really a bad thing for europe. I would say it's bad to lose an ally like the US, especially for defense, but what about trade? The problem is that american hegemony also bother some people, and those people dislike Trump but are they still happy for the US to be less strong? I would bet there are some europeans who are happy about the US slowing down, but I don't think t…

Honestly I don't have any fingers on the pulse right now, but the people still close to watchdog orgs I was once part of seems pretty happy with the effect Trump had in the last week, after a few stressful months. It seems that now, Le Pen will support Macron's government to avoid triggering new elections for sure, as they're now unsure of the effect the US news have on their electorate.

Re: America faces a Trumpian economic slowdown

#48

Post by Jtsummers »

orwin wrote: post #45
Terr_ wrote: post #5

Earlier quoted context omitted.

I'm just a humble index-fund-liker who tries to avoid checking things more than once a month, but I'd like to add an observation: Employed people should consider their own job-sector as something to diversify against. In other words, don't be like those poor Enron employees who had all of their company 401k tied up in Enron stock. If your nest-egg craters but you have a job, you can sustain yourself and wait for mark…

Weirdly, if you work in tech, that would be energy companies I guess?

Diversify for a potential tech sector decline would not mean investing in energy companies. The investment in energy companies is largely driven by the tech sector. If you think the tech sector (particularly the AI portions and possibly cloud hosting depending on what foreign companies and other nations do) are at risk, then so are their investments in the energy sector.

Re: America faces a Trumpian economic slowdown

#49

Post by subsection1h »

galimalint wrote: post #20
MarcelOlsz wrote: post #3

The goal is to destabilize and crater the economy then have the rich scoop it up for cheap right? With the goal of moving closer and closer to a pure rentier economy?

[flagged]

> The bureaucracy is all encompassing; it's in the military industry, healthcare industry, education industry, the consulting industry, and of course, the government.

I wonder why you didn't mention the energy industry. Hmmm.

https://www.opensecrets.org/industries/summary?cycle=2024&in...

Re: America faces a Trumpian economic slowdown

#50

Post by yongjik »

MarcelOlsz wrote: post #3

The goal is to destabilize and crater the economy then have the rich scoop it up for cheap right? With the goal of moving closer and closer to a pure rentier economy?

I don't think cratering the economy actually helps Trump, Musk, or their billionaire friends. Billionaires need a functioning economy to continuously make money. Economic implosion might bring a period of horrible instability after which a few of them may end up at the top, but it's with a non-negligible chance of things like "We triggered a war and all my investment has burnt down" or other nice stuff.

My best guess is that Trump and Musk are led by an intense hatred of everything the "old government" stands for, and acting emotionally, ignoring long term consequences.

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