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Surely the crash of the US economy has to be soon

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

#511

Post by rayiner »

t-3 wrote: post #342
rayiner wrote: post #268

Earlier quoted context omitted.

> The US economy depends on the country's position of world hegemon Citation needed? This feels like a retcon. Remember that the U.S. became the biggest economy in the world in 1890: https://www.digitalhistory.uh.edu/disp_textbook.cfm?smtid=2&... . That was half a century before World War II and the military empire that followed.

The trillion dollars a year pumped into the military support the stock prices of quite a few highly-valued companies. A sudden collapse of hegemony would be bad for "the market", but that seems unlikely unless WW3 actually kicks off instead of a few more rounds of opportunistic snatching and bullying by the big countries, and in that case few people would care about the stock market.

That seems like an application of broken windows fallacy.

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

#512

Post by locknitpicker »

BobbyJo wrote: post #388
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…

> 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…

> 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.

I think you have it backwards. The US dollar can be handled as a more stable alternative only if it's actually stable. As soon as the US government starts to deteriorate goodwill and outright be hostile towards the world, not only does the US dolar lose its value as a stable alternative but foreign governments start to be motivated to dump their assets, which further tanks its value. In the past couple of weeks we started seeing countries outright dump their investments in US dolar to derisk their portfolio, and they did it at the tune of billions of dollars. You also started to see political pressure for foreign governments to demand their gold reserves are pulled out of the US, which means this pressure goes way beyond US dollars.

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

#514

Post by DangitBobby »

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…

> Presumably i now either repeat the cycle or use my winnings to spend on us output.

What you are missing is that these dollars can be circulated indefinitely in the global economy without ever repatriating, because they are valuable and useful as actual currency. They may never come back to the US.

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

#516

Post by mikkupikku »

junto wrote: post #229
SchwKatze wrote: post #8

I'm kinda new into economy crashes, was a kid in 2008, is there a way to protect of it?

I’ve been through several recessions. Painfully I’ve learnt that you want to work in an industry that is largely recession proof. Focus on industries that sell things that people need and will try to keep buying right down to their last buck. Food, utilities, insurance. People don’t like sitting in the dark. People need water. People need to eat. People really don’t like living without insurance cover or to let cover…

Broadly agree, but I'd bet on Spotify being safe (unless overtaken by a competitor.) The workers in all the robust industries you mentioned are all listening to Spotify to get through their workdays. This is one of the last things they'll give up, normies need music like they need alcohol (and/or weed.)

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

#517

Post by lotsofpulp »

hypeatei wrote: post #467

> It feels as though all we need is a spark. And yet, many sparks seem to have come and gone. Big market moves, in stocks or yields, that have recovered Yes, in a five year span we've had three 20% drawdowns in the stock market that have all recovered which is unprecedented. IMO, anyone who thinks we're going to crash and have a lost decade is not looking at the bigger picture. The Federal Reserve exists to allow the…

> What this means is that people need to work to keep up, and that asset prices will continue to go up as people try to protect their wealth from inflation.

Poorer people and younger people need to work. People with assets and benefactors can rest easy.

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

#518

Post by ghtbircshotbe »

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.

Obvious problem - stock market could keep going down. Obvious improvement - stop limit sell orders. Obvious flaw in the story - many common stocks like Google have doubled in the past year.

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

#519

Post by dgellow »

tock wrote: post #69

Stocks might go down if AI doesn't bring in enough revenue. The real risk seems to be currency depreciation though. The USD is already down 15% this year compared to the Euro. I'm worried about what the next FED chair appointee will do. JPow has stuck to his principles so far.

Is it really seen as “the real risk” if it is something the current elected president very explicitly said for decades he wants to do? He does want USD to go down in value. He said it, repeatedly, openly. He made very clear why he went after Powell (that he himself reappointed). It’s more, exactly what we should expect than a risk no?

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

#520

Post by deadbabe »

edm0nd wrote: post #364
deadbabe wrote: post #272

Earlier quoted context omitted.

Why do people say this… ok so you buy at 120 and now it’s back at 85, no big deal that’s the same as a few weeks ago!?

yes, that is correct. most people are long on silver and gold. who cares if there was a slight correction. I bought the bulk of my silver in the $20-30 range and am still buying. I bought on the way up, I bought at $120, I'll buy at $85. The price at the time I buy really doesnt matter to me. Only when I sell will it matter. I hope to cash out and buy ~150 acres of land with it to hunt on and live on.

So it can just go back to the price it was 8 months ago and stay there, there’s no reason for silver to be so high. The companies using it for industrial purposes get it straight raw from the mines they aren’t buying bullions on the silver markets.
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