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Surely the crash of the US economy has to be soon

wilsoniumite.com

621–630 of 697 posts

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

#621
There is so much wrong with this blog post that it is difficult to know where to start. Does he even know that China has placed silver on the rare earths list? Considering they export 60 % of the worlds refined silver and now exports are limited and controlled. Silver markets have sold 200 contracts to every bar of refined silver. Now they are scrambling to fulfill delivery if someones requests it and are forced to buy on the spot market, which incidentally has driven spot pricing higher than contracts.

People are moving out of Bitcoin and into Gold currently. I see this trend continuing (Bitcoin falling).

The markets today are indestructible at the moment as you have witnessed over the last 3-4 years. This year will be similar to 2025 according to many different and smart people. I tend to agree with them and we are still in a bull market.

-not an expert, not investment advice, your mileage may vary.

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

#622

Earlier quoted context omitted.

What if the rise in index funds is a bubble on its own? It's massive and increasing amounts of money that is not price sensitive and keeps growing. There's an underlying bubble message: "the stock market always bounces back, so keep plowing your money into it even when it's down". Apparently passive funds are 60% of mutual funds / ETFs now https://www.avantisinvestors.com/avantis-insights/has-passiv... Even more insi…

I've been invested largely in US index funds for a while now, and I've definitely thought about this. My conclusion is S&P 500 is too big too fail, everyone with various forms of power in the US (economic, political, etc) are incentivized to keep the music going. Sure it feels unsustainable, but there is no way going active can help me—I don't have enough access to the right people, and even if I did, it's better as…

The S&P 500 can and will crash at some point. It has and it will. That's part of the lifecycle of market psychology. We go through cycles of over valuation and under valuation. It's true there are many forces with interest in keeping the markets up but there have always been and it's always crashed because once the psychology changes there is no amount of intervention that can keep the market up.

If you are invested for the long term then just don't think about it. If you want to diversify a little then go for it - slowly. Also keep in mind your US index fund is full of international companies anyways.

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

#623
I asked NOMOS (a system) I built for financial intelligence. These are it's key findings:

Key Answer

As of early 2026, there is no consensus forecast for an imminent crash of the U.S. economy. The prevailing view among major institutions is a period of moderated growth or a "soft landing," not a severe contraction. However, this outlook is balanced against significant and rising risks, including labor market fragility, unsustainable fiscal debt, and persistent inflationary pressures that could trigger a more pronounced downturn. Key Findings

    Consensus Points to Slowdown, Not a Crash. Major institutional bodies like the International Monetary Fund (IMF), Congressional Budget Office (CBO), and large investment banks project modest U.S. real GDP growth for 2026, generally in the 1.8% to 2.5% range. This baseline scenario is supported by expectations of resilient consumer spending, continued investment in technology like AI, and an anticipated easing of monetary policy by the Federal Reserve as inflation moderates. Optimistic forecasts from firms like RSM US and ARK Invest even anticipate a growth rebound to 2.2%, viewing the economy as a "coiled spring" fueled by technology spending.

    Labor Market Fragility is the Primary Downside Risk. Despite a low headline unemployment rate, the labor market shows significant signs of weakness. Analysts describe the current environment as a "low-hire, low-fire" equilibrium, characterized by slowing job growth and concerns over employment quality. A critical warning sign is the growing divergence between strong reported GDP figures and weakening labor market data. Historically, such contradictions are often resolved by downward revisions to economic growth, suggesting the economy may be weaker than headline numbers indicate. Capital Economics highlights that a cooling labor market, if not offset by productivity gains, could initiate a self-reinforcing cycle of lower employment and reduced consumer spending.

    Unsustainable Fiscal Debt Poses a Systemic Threat. The U.S. federal debt has surpassed $38 trillion, exceeding 100% of GDP. Net interest costs are projected to consume nearly 14% of all federal spending in 2026. The Brookings Institution projects this trajectory is unsustainable, with debt potentially reaching $170 trillion over three decades and interest payments consuming over a quarter of tax revenues within a decade. This creates near-term risks, as FTI Consulting warns that "bond vigilantes" could push back against perceived fiscal profligacy, driving up government bond yields and, consequently, borrowing costs for the entire private sector, independent of Federal Reserve actions.

    Stagflationary Pressures Complicate Monetary Policy. The economic environment is characterized by a difficult mix of slowing growth and persistent, albeit moderating, inflation. This presents a stagflationary challenge for the Federal Reserve. Policy measures such as new tariffs are expected to add to inflationary pressures while simultaneously acting as a drag on consumption and investment. This dynamic severely constrains the Fed's ability to stimulate the economy; cutting interest rates aggressively to support growth could risk re-igniting inflation, while keeping rates high to fight inflation could accelerate a downturn.

    Negative Public Sentiment Contrasts with Macro Resilience. While macroeconomic indicators like GDP have shown resilience, public sentiment remains overwhelmingly negative. Polls from Pew Research and YouGov show that a majority of Americans rate the economy poorly, driven by persistent affordability challenges related to housing, food, and healthcare. This sentiment is exacerbated by 2026 policy changes, such as cuts to social programs, which directly impact household budgets. This disconnect between headline data and public experience is a vulnerability, as deteriorating consumer confidence can lead to pullbacks in spending that are not yet reflected in aggregate data.

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

#624

What is different about this time is how much a crash is expected, which is reflected in the run up in the gold price, for one. It’s also reflected in the public discourse about the high probability of a crash - as with this post and many others over the past couple years. 2008 was sudden and unexpected by most. The dot com crash was sudden and unexpected by most. If we crashed today it would have been expected by mo…

What if the rise in index funds is a bubble on its own? It's massive and increasing amounts of money that is not price sensitive and keeps growing. There's an underlying bubble message: "the stock market always bounces back, so keep plowing your money into it even when it's down". Apparently passive funds are 60% of mutual funds / ETFs now https://www.avantisinvestors.com/avantis-insights/has-passiv... Even more insi…

I think the almost opposite is the case.

Passive, (especially global) index funds doing so well and outperforming the vast majority of actively managed, general funds () is not a given, but they point to a different problem.

It means that most actively managed funds are still overpriced (fees), don't deliver efficient price discovery, and in some cases destabilize the market by making consistently wrong bets.

That's not the fault of index funds. In fact they make it easier for high performing investors who have deeper insights.

There are plenty of funds that don't compete on just on beating the index, but have other goals.

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

#625
post #62

Earlier quoted context omitted.

> It happened to blockchain, it happened to metaverse. I don't think AI is comparable to these technologies. AI had a real impact on certain daily activities, such as search, coding, etc. While the metaverse was just a fantasy with no tangible benefit other than Zuck trying to create his own platform to take on Apple and Google. Blockchain had some potential in certain fields, but it wasn't user-friendly or usable by…

Not really, there are good applications for metaverse tech, they just need time to mature. However I don't really see it in the realm of social media. It's not something that's for everyone, at least not yet. I don't understand what meta was thinking there. It's amazing for gaming though, and for architecture, 3D product design collaboration. I use it a lot daily and I have 5 headsets (plus two AR ones) but I also kn…

Metaverse as originally described (no idea what it's become since) was a really bad Second Life, which was already more than a decade old if I remember right.

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

#626

What is different about this time is how much a crash is expected, which is reflected in the run up in the gold price, for one. It’s also reflected in the public discourse about the high probability of a crash - as with this post and many others over the past couple years. 2008 was sudden and unexpected by most. The dot com crash was sudden and unexpected by most. If we crashed today it would have been expected by mo…

" different about this time is how much a crash is expected, which is reflected in the run up in the gold price"

Isn't this an indicator of a coming crash, not a counter point.

Doesn't Gold go up, specifically as people buy it as a hedge against a crash.

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

#627
post #579

Earlier quoted context omitted.

I'm well aware Carney also says it never really existed. So I don't think there's an "unwittingly" here. My issue with Carney is that he's whining about it.

He's the first world leader I've seen who publicly tells other leaders to stop complaining that the false thing is false, that pretending the false thing is true hurts everyone except the hegemon at the top. Taking concrete action to build a replacement system it is kinda the opposite of whining.

He is simply negotiating with the US. That's it pretty much. He's trying to get the best deal for Canada. That's always been how things work. It's just politics. There is really nothing new here other than perhaps the more aggressive and public approach of the Americans. What used to happen in closed rooms is just getting a bit more light and the current US administration thinks that it can/deserves to get a larger share of the pie.

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

#629

What is different this time? Maybe: 1 Online shopping market in the range of 5 trillions 2 Electricity and energy price raise 3 Impossibility to lower interest rates 4 Tech market also in the range of multi Trillions 5 Global education and power expansion ... Meaning that a % of all this money flow goes private pockets destroying medium class, which gets poorer. It is like a memory leak that keeps sucking resources w…

> 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. Tariff and invasion threats, protests, you name it, they might move the needle but it always seems to move back. So, perhaps we won? Perhaps we built our markets so stable that they are these days impervious

This is a myopic question only considering the values of securities, gold/silver, etc, which are owned in significance by relatively few.

The working class economy has already crashed. People who have to put in hours to get paid are struggling, and consumer spending is dominated by the top 10%.

The media, ever fixated on the economic welfare of the top 1%, spins a story that if the stock market is doing well, the economy is doing well.

Meanwhile there is an quiet bet that authoritarians will protect interests of capital owners over all else (i.e the bailout OpenAI hinted they might need), while suppressing the primary methods the masses have for expressing their discontent: speech, organizing/demonstrating, strikes, and voting.

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

#630

What is different this time? Maybe: 1 Online shopping market in the range of 5 trillions 2 Electricity and energy price raise 3 Impossibility to lower interest rates 4 Tech market also in the range of multi Trillions 5 Global education and power expansion ... Meaning that a % of all this money flow goes private pockets destroying medium class, which gets poorer. It is like a memory leak that keeps sucking resources w…

Is it just me or does this metaphor sound AI generated? > It is like a memory leak that keeps sucking resources while growing exponentially until the system crashes. The real question for an economist is how much ram has the system and how much the memory has leaked?

"... how much ram has the system" is a typo or an ESL mistake, so not an LLM.
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