Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Surely the crash of the US economy has to be soon

wilsoniumite.com

Post reply on HN
Print view View original

441–450 of 697 posts

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

#441

Post by pyrale »

jillesvangurp wrote: post #437
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…

Economic crashes are hard to predict. In the end stock markets are a bit irrational. They don't crash just because there are good rational reasons. And then some irrational thing triggers a mass panic when you least expected and the whole thing crashes. The circumstances and timing (it's been a while) suggest we are probably closer to a crash happening. From a loan/interest point of view, the dollar de-valuating a bi…

> Economic crashes are hard to predict.

Some of them are, some of them aren't. An economic crash is pretty much guaranteed if international relations break down in such a way that international partners believe trading with the US is a liability. Dollar going down won't stimulate exports if the cause for it was an aversion to buying US products in the first place.

Whether or when that will happen, and to which extent, is another story, all we can say is that the momentum created by the current US administration moves us closer to that point. Will they come to their mind before that happen? Will they be able to restore trust? Will the lingering effect from the damage already done subside? These are hard questions.

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

#442

Post by raffraffraff »

ActorNightly wrote: post #358
zahlman wrote: post #222

> Here’s the current price of silver. Not shown on the chart (and which couldn't have been predicted at the time of writing) is today's crash of almost 30% in that price. Speculative bubbles happen. The narrative of people losing faith in currency made no sense, because that should pump the prices of durable commodities as well, if not instead of precious metals.

Once the supreme court decision about Trump went out, I took all of my investments and put into a savings account. When a dip happens, I simply take 10% of the money, buy the dip, then sell when the price hits pre dip. So far Ive netted significantly more than any of my peers that actually do investing.

So if you had a pension mostly in all world indexed funds, you'd switch them over to "boring" investments like cash.

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

#443

Post by carbonguy »

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…

> I, a foreign entity, have sold something to an american and now have 10 dollars and zero treasuries.

Or you sold something to a non-American entity in a dollar-based market, eg. oil. The dollars do come from America to begin with, but once they get "out there" they work as a medium of exchange for whoever wants to use them for that purpose.

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

#444

Post by AnthonyMouse »

Braxton1980 wrote: post #374
YZF wrote: post #351

Earlier quoted context omitted.

What you're missing is that America was always like that. And it's been extremely successful. For sure there have been some changes in social dynamics, not just in the US, but worldwide. But the recipe that made the US successful has not changed much. Market economy, geography, attracting talent, innovation, freedom.

>Market economy The recent massive increase in the US governments direct and indirect involvement in business decisions changes things. Trump is pushing/forcing countries and companies to invest in the US. He's added more restrictions on who they can sell their products. New significant widespread tariffs also exist that forces businesses to decide on how they can handle it while being pressured not to raise prices.…

> Government involvement in business decisions, even if indirect, is not a market economy. In a true market economy supply and demand should determine prices and businesses and consumers make the decisions on their respective side.

This is true but not a novelty. The US has been doing all kinds of things to harm its markets for decades, e.g. artificially constraining the housing supply, using tax incentives and manipulating interest rates to goose consumer spending and in the process drive up consumer debt, and let's not even get into all the ways it molests the healthcare market.

That isn't to say that they're good -- those markets are very messed up -- but things like this are bad, not new.

> Trump raised the fee for H1Bs, blocked student visas from 19 countries, and revoked 100k visas for people who were here as students, business reasons, vacation, and other.

The H1B program has been widely abused for a while now and in general the US is in need of significant immigration reform. Many of the things Trump does are stupid, because of course they are, but the general premise of "hey wasn't this supposed to be for researchers and scientists rather than mechanic-level IT work" seems to have something to it here.

You can't say we're importing the best and brightest while also doing everything possible to make it so that someone who is a doctor in another country with a world-class medical system has to basically start over from scratch in order to be a doctor in the US.

And then people will have much to criticize about what Trump is doing. But okay then, so do something better instead of all the doing nothing that was happening before.

> It's justified to cut waste as government spending is a problem but speed and extent of the cuts makes it questionable if a proper assessment was done.

It clearly wasn't. The problem is we need some kind of structural reform -- a system that doesn't allow wasteful programs to accumulate and increase in number over time -- but that would require a functioning Congress, which has instead been doing everything it can for decades to abdicate their role to the executive branch. Which has term limits and therefore the attention span of a goldfish for those kinds of structural problems, and then we end up back in the situation where either no attempt is made to fix it or the attempt is amateur hour because it's attempting a contextual fix to a structural problem.

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

#445

Post by ulfw »

PlanksVariable wrote: post #383
ulfw wrote: post #252

Earlier quoted context omitted.

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?

Crashing the economy? In the past year the S&P 500 rose 14%, unemployment is at 4.4%, and inflation is around 2.7%. There are many things to criticize Trump for but the economy has not actually crashed.

The S&P 500 rose 1.04% in EUR terms only. That's basically nothing.

Of the 14% in USD terms 13% evaporated because he crashed the dollar compared to all other currencies (EUR, GBP, CHF, AUD, whatever)

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

#446

Post by RGamma »

dwoldrich wrote: post #428
panarky wrote: post #270

Earlier quoted context omitted.

The international "rules-based order" is a good idea when most nations play by the rules most of the time, and when the most powerful at least pretend to follow the same rules as everyone else. A world order based on rules makes it possible to live at a much higher level of abstraction. Abstractions like rule of law, democracy, government currencies and stock exchanges are intangible and imaginary. They're mostly jus…

[flagged]

What do you propose instead? Why don't the things that you condemn in "liberal democracy" happen there?

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

#447

Post by willtemperley »

SllX wrote: post #152
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…

> 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…

> USD still made up 57% of foreign reserves

Yes, but that's the lowest it's been since 1994, in percentage terms. In dollar terms it's been largely flat for the last decade:

https://wolfstreet.com/2025/12/26/status-of-the-us-dollar-as...

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

#449

Post by throwaway132448 »

mistersquid wrote: post #88
carabiner wrote: post #18

This is really obscured by the K-shaped growth, dual economy now. We've reached a stable pattern of a deep underclass serving the wealthy. We won't have a crash or "correction" because the entrenched top 5% has figured out a way extract value from everyone else indefinitely.

> This is really obscured by the K-shaped growth, dual economy now. We've reached a stable pattern of a deep underclass serving the wealthy. We won't have a crash or "correction" because the entrenched top 5% has figured out a way extract value from everyone else indefinitely. Apologies for quoting all 3 sentences of parent, but the poorly-drawn conclusion depends on the full sequence of seemingly rational statements…

I used to think along these lines. But now I think the truth is - does it matter if the economy grinds to a halt? Perhaps the ruling class can still keep enough Americans comfortable enough, and fearful of losing more, doing largely pointless jobs, to stay passive - and that’s all they need to do to completely bifurcate the society such that they face no threat to their own position.

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

#450

Post by dgellow »

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…

This time is already different. It's way past the point where the US is unfriendly towards the western world
Post reply on HN