271–280 of 697 posts
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But cares about something that has zero effect on them? Trans? How many of them know a single trans person? Like somehow that's a huge thing for Trump voters but a crashing economy is not?
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I don't see 30%. Maybe 12% from the very recent top, back to wherever it was just a few weeks ago.
it was at 120 and now it's at 85. yes it's back to where it was a few weeks ago
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> Should the US become an unfriendly power to the rest of the western world, it will find the demand for its currency plummeting, which I don't want to outline is a big issue. Right now this is much more of a maybe, possibly, eventually, over a long enough time horizon. As of the end of 2025, USD still made up 57% of foreign reserves vs 20% for the Euro and 3% for the Chinese renminbi. Nearly all commodities are stil…
>demand is still there today Not all demand the same. There are broadly 2 types of USD buyers 1. price insensitive: sovereign banks, who buys for liquidity/storage 2. price sensitive: hedge funds, private buyer who buys returns Type 1 buyers are bailing out of treasury. Type 1 are marginal buyers, the close auction regardless or rate, this keeps rates low -> debt servicing low. They artificially depress yield to non…
And not just to the United States but to other nations, as well. South Africa owes US dollars to Australia, Australia owes US dollars to Brazil, Brazil owes US dollars to Argentina, etc.
These nations are hungry for every dollar we print. Even if every trading partner dropped the dollar for trade tomorrow, and if everyone who owned Treasuries all sold them at once, there would still be demand for US dollars to repay their loans.
The IMF made them an offer they couldn’t refuse, and spun a sticky web of a debt trap as a result.
Three minute video: https://m.youtube.com/watch?v=_SaG9HVXMQg&pp=ygUQZG9sbGFyIG1...
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Still, he'll be gone one day and I am going to be all in on that day. It'll all be hockey-sticks from that moment on.
How much of America’s growth since the 40s is attributable to its hegemony, stability, and the emergence of USD as the reserve currency of the world? And where other developed, stable nations started dropping in population, the US continued growing thanks to immigration and its center as a research Mecca. All of those are being unwound as we speak, and it’ll take decades to prove to the world that any trade policy an…
The US was quite isolationist up until the end of WW2, so I’d argue global hegemony isn’t that important when it comes to economic performance.
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How would prepayment penalties lower interest rates ? I really do not see how.
Your lender definitely wants to get paid back, but they don’t necessarily want to get paid back right now. Because then they have a pile of money and they need to find something to do with it. Consumers have a tendency to pay loans back early when the bank doesn’t have any more profitable alternatives. Consumers also have a tendency to NOT pay loans back early when the bank does have more profitable alternatives. But…
Demand for mortgage varies over time, regulations change. It's a long term product, banks like to know with high certainty that when someone signs up it will be X earned over a period, not maybe X minus we don't know over an unknown period.
They are in the business of capital efficiency. Lack of control makes capital less efficient, or at least more expensive to keep efficient.
Overpayments (in the UK) are often not allowed, when they are, the borrower needs to arrange it when the loan is taken, and for a fee.
Refinancing is a right, but the fine prints told borrowers at what penalty.
Maybe simultaneous with the crash of the Chinese economy, which was predicted for 40 years now
Real estate prices dropped 30% blowing up most people’s savings. The debt overhang is slowly bankrupting various companies. Growth is an anemic 5% (should be double for a country with China’s per capita income) and means it will never enter middle income status. Unemployment, especially for grads is very high and the lack of babies or immigration means the worker base will shrink while the demand for social services will skyrocket.
Doesn’t seem great to be honest.
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Assets traditionally used for such hedge are already massively inflated (look gold an silver price charts), so I'm not sure it's worth it. This all depends on what timelines you work on, how many assets you are trying to protect. Alternatively you protect yourself by lowering your dependence on steady income.
Prices of investments will also go down - stocks certainly, although precious metals were traditionally recession proof, we've never had such a bull run on gold/silver in anticipation of recession. My guess is that it won't hold - I've heard that jewelers already refuse to take precious metals at anything near market value.
Ads from the World Gold Council are becoming very frequent, targeting consumers. That must mean something (looking for exit liquidity)
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Crap, I was wrong. Bill Ackman is trying to convince Bessent to do it. So while it may happen, it isn’t coming from inside the admin. One argument is that it could allow for lower rates, BTW. (This is true, it very well could). And also, if it happened it would be for newly issued mortgages. Existing mortgages have language in the contract that you couldn’t just unilaterally change
How would prepayment penalties lower interest rates ? I really do not see how.
If you look through the bond market you will sometimes see bonds issued by the same company or agency both as callable and non-callable, the callable bonds are usually .5-1% lower even when issued on the same date.
I feel like there's some credibility to 'this time it's different' The US economy depends on the country's position of world hegemon - the US dollar is the world's main reserve currency, the US enforces international order and trade rules via its military strength, it dominates technology and culture through 'US defaultism'. I dont think AI even factors in to this. The US economy is priced for global reach - if it ma…
A reasonable scenario right now; rest of the world intentionally collaborates to isolate US, destabilize US, act as a forcing function for US to reassert internal control by swiftly deflating buying power of useless rich[1]. The world is sick of US CEOs who do little but jiggle values in spreadsheets. Sundar and many others have said CEOs are likely a very easy job to automate away; useless pageantry. There is rapidly growing domestic and overseas will to depose those non-contributors.
Fastest way to stem the collapse of reality for 10s of millions of Americans with a lot of guns too.
[1] Americans buying power has been deflated by 300% since 1980... I am sure it is purely coincidence Boomers have run the world for most of it.
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The rest of the Republican Party is completely devoid of charisma, especially the kind that drew so many voters to Trump. There is no drop-in replacement. Lots of money will be spent trying to manufacture a replacement, though. That will be fun to watch. If you thought the last-minute rally around Kamala was tough to watch…
But what the republican party has, is a lot of isolationist voters who cannot be moved by appeals to markets or international trade. They don’t care about that stuff. Sure, the republicans will look hilarious trying to replace Trump for a while … but those Americans aren’t going anywhere and will gladly vote for the next Trump whenever they show up, same as they voted for Reagan and Bush II. The American attitude dri…
That being said, I just don’t buy into the notion that the strategy of the party from 2016-2024 (maybe 100 Trump rallies per year?) can carry over into the late 2020s / early 2030s.
If anything, this is me saying everyone is aware that the current window for reactionary politics in America is closing as Trump loses his vigor and gets closer to being too old to do what he did between 2014 and 2024. The reactionaries in the government and behind the scenes may make one last desperate grab at maintaining power.