Surely the crash of the US economy has to be soon • Hacker News Board

Re: Surely the crash of the US economy has to be soon

#501

Post by eduction » Sat, Jan 31, 2026, 1:49 PM UTC

torginus wrote: post #84

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…

> if the US continues down the political path it currently seems to be pursuing, 'this time it's different' actually will be

You’ve set no time bound so what you say here is essentially irrefutable. It boils down to “on this path we will eventually have a big bust.” You’re right if it happens in 1 year or 30.

You’ve also not defined the bounds of the path. Paths can weave. So essentially that part of it becomes meaningless because anyone can draw a line that starts with today.

Tech has a long history of boom bust cycles. Some busts are much more mild than others. Some upend the whole economy for protracted periods. In reality no one knows when AI will bust and how bad it will be. Those are the key questions, not whether there will eventually be a tech (or broad) bust. Of course there will be if you’re looking out to infinity days from today.

Most economic commentary is like this including the linked article: so poorly defined as to be low worth as even speculation.

Re: Surely the crash of the US economy has to be soon

#502

Post by matwood » Sat, Jan 31, 2026, 1:52 PM UTC

yomismoaqui wrote: post #160

If you predict a crash every month and it happens after 2 years... can we call you a visionary?

Timing is obviously always the issue. When Greenspan talked about irrational exuberance '96 in regards to the .com bubble, the Nasdaq proceeded to go up almost another 4x in price and it didn't crash for 3 more years.

Re: Surely the crash of the US economy has to be soon

#503

Post by throw__away7391 » Sat, Jan 31, 2026, 1:52 PM UTC

wahern wrote: post #432

raincole wrote: post #427

Earlier quoted context omitted.

> The looming US debt is also a great question - a lot of economists have argued that since most US debt is good. It's mostly in forms of treasuries purchased in USD that pay in USD - this means the indebtedness creates a huge amount of dollars abroad that foreigners have to then spend on US services, driving demand. You got it wrong (I'm sure most economists don't get it wrong and you just misread/misquote). USD is…

He's not wrong in his conclusion, just not accurate in why. If countries start moving away from depending on the trade imbalance with the US, the demand for USD will dry up. And they are trying to move away from it because of politics, specifically because of US bullying. But more importantly, the US is increasing trade barriers in a naive attempt to reduce that trade imbalance, which is the biggest reason everybody…

> the size of the US economy relative to the global economy is shrinking

This is not true, not at all, it dipped as China grew initially, but looking at the past few years this trend had reversed and the US was again growing as a percentage of the global economy, going from a low of about 21% in 2011 to nearly 27% today. It seems certain now that Trump has put a bullet in this growth, but it was hardly inevitable. In 2024 the US was in an incredibly strong position relative to the rest of the world.

Re: Surely the crash of the US economy has to be soon

#504

Post by cbdevidal » Sat, Jan 31, 2026, 1:54 PM UTC

AnthonyMouse wrote: post #425

maxglute wrote: post #370

Earlier quoted context omitted.

>They must be repaid in US dollars IMO this one of those cases where dollars is ultimately benchmark than requirement, IOU/settlement forms can always be restructured/renegotiated if USD is no longer lender of last resort, i.e. alternative payment systems enables take it or leave it deals in medium/long term. USD/reserve status snowballed because US controlled techstack postwar which US leveraged (along with military…

> If alternate techstack/payment systems pops up and reach tipping point, country A can just say to country B who only wants USD (due to alignment or whatever), I don't have enough USD, here's RMB & cips/Brics+ & mbridge basket of equivalent value. Alternate payment systems aren't even required for this. If other countries are trying to divest US dollars and country B is owed "US dollars" and country A wants to pay i…

> The real reason those sorts of debts result in stability is that all the countries owed a lot of US dollars are going to do what they can to prevent the US dollar's value from declining.

That’s the crux of it. Nations can proclaim they are ready to dump the dollar—and indeed, it is happening slowly—but politicians still have a strong appetite for USD-denominated loans.

I am not optimistic for the dollar in the long run, but I no longer fear waking up tomorrow to see hyperinflation.

Re: Surely the crash of the US economy has to be soon

#505

Post by i2km » Sat, Jan 31, 2026, 1:59 PM UTC

bborud wrote: post #201

mschuster91 wrote: post #132

Earlier quoted context omitted.

> Yes, they want Taiwan, but that’s a silly national pride thing. It would not really benefit them to take it by force. We thought the same about Putin, and yet he went and invaded Ukraine. We thought the same about Trump, and yet he went and abducted the president of a sovereign country. Never underestimate nationalist BS or outright mental deficiency.

The difference is desperation. Putin was facing instability and was afraid of ending up like Khadafi. He needed a war. Xi is not facing those challenges. He wants Taiwan, but the Chinese play long games so he can wait.

> but the Chinese play long games

And yet they got themselves into a demographic death spiral

Re: Surely the crash of the US economy has to be soon

#506

Post by bborud » Sat, Jan 31, 2026, 2:01 PM UTC

mschuster91 wrote: post #456

bborud wrote: post #201

Earlier quoted context omitted.

The difference is desperation. Putin was facing instability and was afraid of ending up like Khadafi. He needed a war. Xi is not facing those challenges. He wants Taiwan, but the Chinese play long games so he can wait.

> Xi is not facing those challenges. He is facing other challenges, a lot of chickens are coming home to roost - chiefly the demographic collapse, the inevitable result of the one-child policy, but also the rise of wages leading other countries to be the outsourcing target, decades of selling out nature / the environment, a crashing real estate sector, brain drain...

You have to look at the likelihood of these problems leading to a violent regime change. The reasons why Xi is much more safe than Putin are structural.

Xi controls the politburo standing committee which is packed with loyalists. Loyalty is centralized and based in ideology. The state, functions as the embodiment of Xi’s ideology. There exists no independent power base. Military or otherwise. And this is the most important reason Xi is pretty safe. China’s elite is deeply invested in the system (wealth, family, careers). They lose everything if the party fractures. So the choice for those who don’t like Xi is between Xi and chaos.

In Russia power is split. Between oligarchs, security services, military and regional elites. All of which represent a threat to Putin’s power. Just look at Prigozhin’s mutiny: armed forces hesitated, elites stood back to see who would win, system didn’t close ranks. Institutions are hollowed out with no clear loyalty. And loyalty itself is highly transactional. Never ideological. There is zero cohesion in the elite. Zero.

It is also important to look at the histories of China and Russia respectively. In Russia power has _always_ been fragmented. Even under Stalin, considerable power was in the hands of criminal organizations and the communist regime had to co-exist with the criminal classes. In fact, during Stalin, they actually got a worse as the harsh political climate forced them to become more resilient.

Re: Surely the crash of the US economy has to be soon

#507

Post by tokioyoyo » Sat, Jan 31, 2026, 2:05 PM UTC

edm0nd wrote: post #366

ahartmetz wrote: post #197

Earlier quoted context omitted.

The Chinese economy is indisputably strong and real, but rumor has it that its reported growth numbers have been inflated in the last couple of years. And why wouldn't they be - there is an autocratic government whose justification is that what they are doing is increasing economic success. No success is not an option.

Yeah basically every single academic and economist knows the Chinese government lies about its GDP numbers and pumps out fake stats. Its the Chinese way.

People say this, but it’s also not the exact reality. You can verify a lot of things, like import/export data. Basically import stats from one country should match China’s export to that country stat and so on.

People just have trouble understanding the complexity of China, and assume nothing they say can be true. It has a lot of problems, but progress and ability to make money isn’t one.

Re: Surely the crash of the US economy has to be soon

#508

Post by Forgeties79 » Sat, Jan 31, 2026, 2:08 PM UTC

throw__away7391 wrote: post #503

wahern wrote: post #432

Earlier quoted context omitted.

He's not wrong in his conclusion, just not accurate in why. If countries start moving away from depending on the trade imbalance with the US, the demand for USD will dry up. And they are trying to move away from it because of politics, specifically because of US bullying. But more importantly, the US is increasing trade barriers in a naive attempt to reduce that trade imbalance, which is the biggest reason everybody…

> the size of the US economy relative to the global economy is shrinking This is not true, not at all, it dipped as China grew initially, but looking at the past few years this trend had reversed and the US was again growing as a percentage of the global economy, going from a low of about 21% in 2011 to nearly 27% today. It seems certain now that Trump has put a bullet in this growth, but it was hardly inevitable. In…

> In 2024 the US was in an incredibly strong position relative to the rest of the world.

The GOP did a fantastic job of blaming all the shockwaves from Covid on Biden. Don’t get me wrong, his admin made some pretty poor choices, but he did inherit the Covid economy and basically got blamed for it. Whereas Obama inherited the recession and wasn’t blamed for it in the same way.

They also did a good job of making it look like all of these problems were only happening here and hiding the fact that other countries were actually in far worse shape. Relatively speaking, as bad as it all was, we did better than most economically speaking.

Re: Surely the crash of the US economy has to be soon

#509

Post by [deleted] » Sat, Jan 31, 2026, 2:12 PM UTC

CraigJPerry wrote: post #438

BobbyJo wrote: post #388

Earlier quoted context omitted.

> It's mostly in forms of treasuries purchased in USD that pay in USD - this means the indebtedness creates a huge amount of dollars abroad that foreigners have to then spend on US services, driving demand. Strangely enough, this is exactly the opposite of how it works. The dollars abroad tend to stay abroad, as either a more stable alternative to local currencies, or a reserve currency. Likewise, treasuries held abr…

I, a foreign entity, have sold something to an american and now have 10 dollars and zero treasuries. I purchase a treasury. I have zero product, zero dollars and one treasury. At some point in future i have zero product, maybe 12 dollars and zero treasuries. Presumably i now either repeat the cycle or use my winnings to spend on us output. GP’s version checks out, your assertion about dollars staying abroad doesnt tr…

[deleted]

Re: Surely the crash of the US economy has to be soon

#510

Post by b112 » Sat, Jan 31, 2026, 2:15 PM UTC

torginus wrote: post #84

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…

If the US debt gets to the point that interest on debt can't be paid, the US will just print enormous sums of money. Debt is in $, not in valued or devalued currency.

Sure, the end result will be a deprecation of the dollar. But the interest will be paid.

So the real downside to debt is not-overly apparent. Look at how much money was printed for COVID payments, and the like? And at other economic downturns? I do wonder, when will the merry-go-round stop?