Domestic American economy about to get crushed?

[couragewolf]

I can't imagine China wants a kinetic war with the US though. Even if China starts increasing its revenue from other countries (we are its primary customer at present), they have nothing to gain trying to take territory by force. They have access to lots of resources around the world, and our military (and armed citizens) would just cost them a lot of money and human life.

They've won the battle of manufacturing, investment (clean energy, Africa), and tech.

Conventional warfare isn't necessarily something I expect them to pursue but I think that by demonstrating we've got no more than 3 weeks of it in us before we effectively can't stand up a persistent defense without mutually assured destruction I don't think they need to even spend the time or money.

They waved the flag around that they've called our bluff, and now they're reaping the trade deals and dancing around our demands economically basically telling us to Tariff and damage our partners all we want they simply don't care what we do we can't really threaten them militarily.

I'm sure you've heard the phrase "The USD is backed by the full force of the United States Military"... well if the United States military is basically being regarded as a paper tiger in practical terms the USD is backed by hopes and dreams.

An amazing military you can't pay isn't the amazing military you believe it to be.

 

[couragewolf]

Not for the faint of heart, but man it's hard to just hold cash...

I'm getting more and more scared of holding treasuries at this point I wish I'd gone harder earlier and I think 6 months from now I'll say the same thing about this timespan.

 

[star.3d]

scared of holding treasuries

I might be alone in saying this - but I think treasuries still have merits, particularly as treasury ETFs that are nearly as liquid as cash. It really depends what your risk tolerance and financial goals are. Personally, I'd rather see financially illiterate friends of mine move money out of high-yield savings and into 0-3mo T-bills, if nothing else. I wouldn't touch the long bond right now, or not yet at least.

Stocks are overvalued. The top 20 companies on the S&P have a combined market cap equal to US GDP. A pullback is absolutely possible. Don't rule out anything, including treasuries.

 

[NorCALSpeed]

I might be alone in saying this - but I think treasuries still have merits, particularly as treasury ETFs that are nearly as liquid as cash. It really depends what your risk tolerance and financial goals are. Personally, I'd rather see financially illiterate friends of mine move money out of high-yield savings and into 0-3mo T-bills, if nothing else. I wouldn't touch the long bond right now, or not yet at least.

Stocks are overvalued. The top 20 companies on the S&P have a combined market cap equal to US GDP. A pullback is absolutely possible. Don't rule out anything, including treasuries.

Yep. 7 stocks are 40% of the S&P value right now. Wild times. Getting feverish all over but as the dollar loses value people are looking for safe havens. Yikes.

 

[Deleted member 16735]

The P/E ratio has been topsy turny for a long time, like Tesla is 250, historically we said a healthy company is like 20.

 

[Dr.Dre]

My stock investments are between 8 and 11% higher than they were when we had Biden who was suffering from severe advanced dementia and honestly never had any executive experience. Ever wonder why a successful CEO is paid 10s of millions. It’s because their executive skills make the company money .

Trump is a successful executive and I am seeing benefits. That said 4 years of a lawmaker ( Biden ) and 8 years of another lawmaker ( Obama) have caused harm that’s not easy to correct, but it is being corrected.

Need a few bone head moves by Obama that have contributed to the problems Trump is trying to correct?

You're stock investments mean nothing. Your 8-11% can disappear in a nano second. You have no idea what's about to happen. Good luck. The genius who bankrupted multiple companies is now bankrupting the country.

It's funny that during one of his campaign stops he talked about Hoovervilles. We're soon going to have Trumpvilles.

He instituted a value added tax for middle class and poor to make up for the tax cut he gave to millionaires.

 

[star.3d]

The P/E ratio has been topsy turny for a long time, like Tesla is 250, historically we said a healthy company is like 20.

Sure - and obviously tech companies are heavily represented in the top 20, but the average P/E ratio among the top 20 is like 50% higher than the overall market average, which isn't crazy. I consider Tesla and Palantir meme stocks... their price is disconnected from reality. This could change and they make beaucoup bucks (or not), but like humanoid robots and Tesla's robotaxi? Always gonna be just around the corner... Walmart (39), Berkshire Hathaway (17), Meta (26), and Lilly (55) are not meme stocks.

 

[Jimi Jah]

Qualitative easing (printing money) really hurt the dollar since 2021.

Too many dollars chasing too few goods. Sort of reminds me of 1920's Germany.

Weakening the dollar helps lower the debt value but everyone gets a haircut.

I'm very happy about gold rising above $4000 per ounce. I've had gold/silver since 2008. This year is my first required disbursement. I'm holding off as long as I can 'cause it keeps going up.

 

[ikeo1]

Qualitative easing (printing money) really hurt the dollar since 2021.

Just to clarify it started in 2020, when the world shut down during the last crysis.

Silver just hit all time high now too $50+.

The debasement will continue and the only way to ride it out temporarily is in assets. I just don’t see how prices of these assets are expected to come down if the printers are just warming up..

M2 money supply continue to run higher and with additional stimulus checks being talked about I don’t see any reason for the dollar to get stronger in the short term. This is not new, DXY has gone all the way down to 78 which is another 20% ish but now there’s stronger global competition. The US also has a superiority complex which seems to be driving away foreign investment along with more rules creating higher barriers.

I’d love for the dollar to gain strength but man. Aside from the monetary safe havens and AI the only other play I can see right now is rare metals mining and refining.

 

[couragewolf]

Just to clarify it started in 2020, when the world shut down during the last crysis.

Silver just hit all time high now too $50+.

The debasement will continue and the only way to ride it out temporarily is in assets. I just don’t see how prices of these assets are expected to come down if the printers are just warming up..

M2 money supply continue to run higher and with additional stimulus checks being talked about I don’t see any reason for the dollar to get stronger in the short term. This is not new, DXY has gone all the way down to 78 which is another 20% ish but now there’s stronger global competition. The US also has a superiority complex which seems to be driving away foreign investment along with more rules creating higher barriers.

I’d love for the dollar to gain strength but man. Aside from the monetary safe havens and AI the only other play I can see right now is rare metals mining and refining.

9 months before the Covid pandemic Trump stretched the balance sheet almost a trillion dollars to prevent repo market lockup during an incredible yield curve inversion so tbh the Covid stimulus is the only thing that kept this whole thing from crashing much sooner than 2020.

 

[star.3d]

DXY has gone all the way down to 78

? what am I missing

I’d love for the dollar to gain strength but man.

Imo, dollar strength ≠ controlled inflation. Global currencies are all debasing, so the question (for me) is one of relative strength. For sure, part of this is the COVID stimulus (which was not restricted to the US), but also changing world economies. Anyway... it's painful for the individual, but here's DXY today. $100 would imply the dollar is equally valued relative to major world currencies. Sorry for sounding pedantic - this is directed more to panic in the room as opposed to you, specifically. But yes, wealth preservation is very high priority for me right now.

 

[couragewolf]

? what am I missing

Imo, dollar strength ≠ controlled inflation. Global currencies are all debasing, so the question (for me) is one of relative strength. For sure, part of this is the COVID stimulus (which was not restricted to the US), but also changing world economies. Anyway... it's painful for the individual, but here's DXY today. $100 would imply the dollar is equally valued relative to major world currencies. Sorry for sounding pedantic - this is directed more to panic in the room as opposed to you, specifically. But yes, wealth preservation is very high priority for me right now.

View attachment 101347

I think this statement was relative to gold a lot of folks are starting to refer to gold basis as the real valuation relative to stock market values. It's a fair take if you're not going to base relative to USD I think.

I think your perspective here is entirely relevant and scientifically approached but the question isn't what we've observed to date this is a matter of "it continues to follow this trend until it doesn't" since we're following a reserve currency.

The real comparison is against other historical reserve currencies referencing the current state of global trade and interdependencies.

So the perspective you're giving makes perfect sense and is rational, simultaneously taken alone out of the broader macro context it's devestatingly optimistic.

The reality is a cliff exists somewhere where paying police, firefighters, and the military becomes impossible. We can all poke at when that breaking point hits, but it's no longer a question of whether or not we're headed toward it rapidly.

 

[Tere_Hanges]

I dont really understand how physical gold is such a great investment if our financial system collapses. If our system collapses, I dont think having a bunch of physical gold stored in your home is going to help you much. It would be an apocalyptic situation where day to day survival is probably the priority. If there arent any public safety services like a fire department, your home could go up in flames. What are you going to do with that gold then? Carry it around with you? Sounds like a great way to get robbed.

If there is a financial collapse, all "digitally" stored assets could be wiped out and "physical" assets could just be stolen by someone or some group bigger and badder than you.

The only real value anyone ever has is what they know and what they can do. So invest in yourself and you'll come out on top no matter the situation.

If/when people start making millions on crypto, they are going to get taxed to oblivion. And everyone who didnt "invest" in crypto is going to be voting for that. So it will all balance out in the end.

 

[star.3d]

I think this statement was relative to gold a lot of folks are starting to refer to gold basis

If we divide all global currency values by $4000/oz, we'll still get the same percentages in DXY. If we reference everything to gold, I think it'll highlight that gold is not purely acting as an inflation hedge right now. Same conclusion from my statement elsewhere that groceries, gas, and real estate are at all time lows, relative to gold. Because gold is high. I don't take that as an indicator of global instability per se - I do take this as anticipating inflation (globally).

For sure, there are many things I am not optimistic about. But if there's one thing more powerful than the president, it's the US economy.

I dont really understand how physical gold is such a great investment if our financial system collapses.

Fundamentally, gold is a 'sovereign' and portable asset. You could buy 1oz gold Eagles and they'd be recognized around the world for the rest of our lives. Security is a real issue. Also, the US gov't confiscated American's gold in the 1930s - you don't want that! Some very wealthy gold investors will pay to buy/store/audit physical gold through foreign companies. One other thing to keep in mind is that physical gold is not taxed/reported to the IRS the same way as other investments, or even gold ETFs.

I sure sound like a gold bug... but I hold zero physical gold. For now. Only holding copper jacketed lead

 

[Tere_Hanges]

If we divide all global currency values by $4000/oz, we'll still get the same percentages in DXY. If we reference everything to gold, I think it'll highlight that gold is not purely acting as an inflation hedge right now. Same conclusion from my statement elsewhere that groceries, gas, and real estate are at all time lows, relative to gold. Because gold is high. I don't take that as an indicator of global instability per se - I do take this as anticipating inflation (globally).

For sure, there are many things I am not optimistic about. But if there's one thing more powerful than the president, it's the US economy.


Fundamentally, gold is a 'sovereign' and portable asset. You could buy 1oz gold Eagles and they'd be recognized around the world for the rest of our lives. Security is a real issue. Also, the US gov't confiscated American's gold in the 1930s - you don't want that! Some very wealthy gold investors will pay to buy/store/audit physical gold through foreign companies. One other thing to keep in mind is that physical gold is not taxed/reported to the IRS the same way as other investments, or even gold ETFs.

I sure sound like a gold bug... but I hold zero physical gold. For now. Only holding copper jacketed lead

I didnt mean i dont understand your reasoning. But it doesnt make sense to me if you have to physically protect it or carry it with you or even use it to conduct a face to face business transaction.

 

[couragewolf]

I dont really understand how physical gold is such a great investment if our financial system collapses. If our system collapses, I dont think having a bunch of physical gold stored in your home is going to help you much. It would be an apocalyptic situation where day to day survival is probably the priority. If there arent any public safety services like a fire department, your home could go up in flames. What are you going to do with that gold then? Carry it around with you? Sounds like a great way to get robbed.

If there is a financial collapse, all "digitally" stored assets could be wiped out and "physical" assets could just be stolen by someone or some group bigger and badder than you.

The only real value anyone ever has is what they know and what they can do. So invest in yourself and you'll come out on top no matter the situation.

If/when people start making millions on crypto, they are going to get taxed to oblivion. So it will all balance out in the end.

I think this is a very localized perspective.

Americans are 300 million people(attempting to cut that number down alot I guess) but we're talking about quality of life for Americans relative to everyone else.

When the UK ACTUALLY lost the staying power of their global reserve status we didn't see mad max. We saw a single government TV station, a rapidly shrinking military and economy, and people warming their hands over trash fires and eating jellied river eels and beans to get by for a few decades before slowly normalizing and then eventually catching the globalization wave and building up some economic uplift and then headwinds.

America isn't going to suddenly lose the internet or become a balkan wasteland. It's going to jack up it's taxes massively and then slowly accept the reality it can't play world police anymore and start closing foreign bases while slashing boomer entitlements like social security and robbing it to keep younger people from rioting in the streets as much as possible.

In the end all the inertia trump has implemented will be doubled down upon to police and ultimately eliminate anyone and everyone that makes noise about this new lower standard of living as the dark decade turns into the next former glory foreigners buy real estate in because it's so cheap relative to their growing new reserve currency holdings as they step into the global policing role.

Holding physical gold is one thing, tokenized gold will be far more liquid and globally redeemable. KYC will be required for on and off ramps but very sophisticated washes will continue to exist.


Knowledge may have been power at one point but I think that era is ending most hands on jobs for smart people are not so difficult to wrap their heads around they'd mostly just rather not have to and circumstances flip that scenario on it's head. The government won't be taking away my local AI model or anything.

Physical gold isn't for trading, it's for sitting on long enough to extract your resources from the devaluing reserve into whatever comes next. Most people with enough resources to make this shift also have enough resources to do so in such a way that they can vault it possibly offshore(tokenizing will accomplish the same thing easier and faster).

 

[couragewolf]

If we divide all global currency values by $4000/oz, we'll still get the same percentages in DXY. If we reference everything to gold, I think it'll highlight that gold is not purely acting as an inflation hedge right now. Same conclusion from my statement elsewhere that groceries, gas, and real estate are at all time lows, relative to gold. Because gold is high. I don't take that as an indicator of global instability per se - I do take this as anticipating inflation (globally).

For sure, there are many things I am not optimistic about. But if there's one thing more powerful than the president, it's the US economy.


Fundamentally, gold is a 'sovereign' and portable asset. You could buy 1oz gold Eagles and they'd be recognized around the world for the rest of our lives. Security is a real issue. Also, the US gov't confiscated American's gold in the 1930s - you don't want that! Some very wealthy gold investors will pay to buy/store/audit physical gold through foreign companies. One other thing to keep in mind is that physical gold is not taxed/reported to the IRS the same way as other investments, or even gold ETFs.

I sure sound like a gold bug... but I hold zero physical gold. For now. Only holding copper jacketed lead

I'm sympathetic to all of these sentiments, but I think the US economy is measurably weak and will continue to weaken significantly from 2025-2026.

Wealth accumulation in an isolated group of people is very bad for liquidity and we're seeing that faster than ever now. Just the supply shock of the tariffs announcement alone (as the president joked his friends made a LOT of money) was TRILLIONS of dollars extracted from the 20% upper middle class to the .1% in the know of that trade.

We are squeezing the lemon for all it's worth right now and it's most certainly about to run dry. Loan delinquencies, credit card debt, private debt in the trillions now, tuition delinquencies, all of these things are clear indicators imo.

 

[couragewolf]

I didnt mean i dont understand your reasoning. But it doesnt make sense to me if you have to physically protect it or carry it with you or even use it to conduct a face to face business transaction.

I would personally rather carry a mesh network device with an NFC enabled wallet and trade tokens validated to represent a gold holding and tap to pay than carry ounces of gold around personally.

No internet required, trustless transactions, known values, seems inevitable to me even if the majority of people will take some time to wrap their heads around why everything I've described is true.

 

[ikeo1]

I didnt mean i dont understand your reasoning. But it doesnt make sense to me if you have to physically protect it or carry it with you or even use it to conduct a face to face business transaction.

It’s not so much about a physical apocalypse as much as it’s a financial one.

These are stores of value. Prices keep moving up for goods but certain assets track with money supply. When the printers are turned on there’s just more money in circulation. People raise prices as value decreases.

1 oz of gold bought you a nice suit back in the days and 1 oz can do more than that now. So if you have a savings having it stored in 1 oz at $1800 back then is better than the bank. You could have it in equities too that’s fine to grow.

The main point is to put your $$ in things that will hold its value. Equities by that are profitable or assets that are generating income or assets that keep the value you paid for it.

There’s a lot of good growth stocks now. But man it’s a bit crazy.

 

[Sloat]

I dont really understand how physical gold is such a great investment if our financial system collapses. If our system collapses, I dont think having a bunch of physical gold stored in your home is going to help you much. It would be an apocalyptic situation where day to day survival is probably the priority. If there arent any public safety services like a fire department, your home could go up in flames. What are you going to do with that gold then? Carry it around with you? Sounds like a great way to get robbed.

If there is a financial collapse, all "digitally" stored assets could be wiped out and "physical" assets could just be stolen by someone or some group bigger and badder than you.

The only real value anyone ever has is what they know and what they can do. So invest in yourself and you'll come out on top no matter the situation.

If/when people start making millions on crypto, they are going to get taxed to oblivion. And everyone who didnt "invest" in crypto is going to be voting for that. So it will all balance out in the end.

This isn't really a thread on apocalypse prepping, so I don't want to get too far afield, but in general, gold is a good choice in fraught situations because a small amount can be easily carried, can be worth a lot, and it's recognized as having value worldwide.

Most of the value in non-apocalypse scenarios is just the custody. Do you want to invest in GLD/GDX or physical bars? Both give you access to the same thing, just in a different format.

And people are already making millions on crypto. More money was spent by crypto groups than any other sector except for oil in the 2024 elections. We all know how this goes - none of us can even vote on what tax laws for crypto are going to be, they're already buying all the politicians. https://www.citizen.org/article/big-crypto-big-spending-2024/