The Collapse That Will Change A Generation ?

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Flybytheseat

Registered User
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449
Interesting bearish take on what's happening with the US Economy, Dollar, Gold, Tariffs and how it might play out. Not sure he's right but certainly worthy of consideration and debate. He does make a living selling gold and gold mining stock funds so possibly has a vested interest in talking those assets up.

https://www.youtube.com/watch?v=vDrUxXJYAKE
 
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The present day drama of Trump tariffs is a distraction from the elephant in the room which is that world economies, not only America, are living beyond their means. Stock market returns too are juiced by unsustainable patterns of consumption which will need to change for fiscal, demographic and environmental reasons. When/If this change happens the whole world economy will grow less, funding for public services will fall, pension funds will perform less well etc.. Every effort will be made to preserve the status quo as long as possible until something big forces a change.
 
I thought the headline of the thread related to climate breakdown, or the 'pensions time bomb'. Given our lack of action to date in addressing these existential/economic threats, I remain more worried about them.
 
The main issue is that countries like the US have built up large trade deficits which are financed because it sells its government debt which have been bought by countries like Japan, China and some European countries that have those trade surpluses with US, which has kept the dollar strong. Some European countries like Germany also have large trade surpluses with US so I'm not sure you can just lump them in with the US as all being the same. And European stock markets and Asian markets definitely have not been juiced up because so much money had left in order to invest in those us tech stocks and treasuries.

Also if China etc exports less to US and consumes more itself that is going to lead to more consumption and environmental pressures. In fact alot of the environmental pressures are due the arrival of large populations of Asians and others to the middle classes over the last 3 decades and that is not going to reverse .
 
When you think about it Joe take just a small part of adapting
We need to move and rebuild all the housing already built in low lying areas,

Around where I live the best place to be sure of getting planning and where houses are being built is in low lying areas in fact most are no more than dried up rivers that have being raised a few feet so they do not flood for the time being,
 
JoeRoberts said:
Climate change won't be changed by any significant amount so the sooner the world and especially the Eu wakes up to that the better. We just need to adapt.
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I just don’t get this “sure what about it” attitude? At what point do you think humanity should take steps to limit runaway climate change? Because eventually, it’ll change so much so fast as to make large swathes of the earth’s currently inhabited landmass unliveable. Then what?

bkenn14 said:
When you think about it Joe take just a small part of adapting
We need to move and rebuild all the housing already built in low lying areas,
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I don’t think you understand the risks of climate change. It’s not just a little rise in the sea-level that we can move a few households away from. It has already seen once-in-a-lifetime weather events like droughts/heatwaves, forest fires, flash floods, hurricanes/storms, massive snowfalls/freezes occurring globally with frighteningly frequent recurrence.

JoeRoberts said:
Climate change won't be changed by any significant amount
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To return to this point, the IPCC has laid out the path to limit global average temperatures. The science is well understood, and there’s a vast array of ready-to-go technologies that can make a huge difference if deployed at scale. I’d suggest we’d do far better to get on with this job rather than admitting defeat and eventually having to pay the piper anyway!
 
I think many people are missing the point of this OP. It's not about climate change. It's about the fact that the US national debt is 125% of GDP putting them on course for an Argentinian type default within the next three years. They have no levers to come back from the brink and they are adding 2-3 Trillion dollars a year to their >36 trillion national debt. They are up there with all the bananna republics. There has to be a reset in the world economy with the US declining to insignificance and the emergence of eastern economies as the world's economic powerhouses. Capital is rightly fleeing US stocks and bonds. There is practically nothing the US can do to stop it as they have passed the tipping point. The US will restart QE or money printing as they have no alternatives meaning the dollar will tank over the coming years and US inflation will be rampant.

All those with their pensions 100% invested in global equities (as per the advice on these forums) will have to take a >30% haircut due to the fact they are overconcentrated in US investments. The dollar is collapsing and will be insignificant within the next 5 years. The world is rightly fleeing US investments of any kind and the dollar is dead as a central bank reserve. The genie is well and truly out of the bottle so there is no going back. The world is dumping the US dollar as a reserve as indicated by the massive increase in central banks upping their gold and Euro reserves and the dollar decline of 10% in the past month.

Surprises me that despite all the above which is obvious and clearly happening the consensus opinion of AAM seems to be stay the course invested >70% in the US as it will pass. That's very wishfull thinking and delusional in my opinion.

I've been dumping my US assets since November. Unfortunately the fund choice of my Oc Pension is heavily US focussed so I have very few alternatives.
 
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Grand so.

Personally, I’m going to stick with my global equity index fund and I’ll let the market decide how much is allocated to US equities.

You may well be right in your analysis but I’m afraid I don’t share your ability to accurately predict the future.
 

It is true that the US public debt has risen a lot, yes.

Flybytheseat said:
There has to be a reset in the world economy with the US declining to insignificance
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The USD has risen over the past ten years. Its recent fall still leaves it well above levels seen during 2016-2020.

 
Well I cant see the Chinese or Japenese being net buyers of US treasuries in the next year. I think the trend of both countries dumping US treasuries will continue for the forseeable future so the only way is down. BTW latest figures have the dollar index below a hundred so your graphs are out of date.
 
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You’re still predicting the future…

I’m afraid I don’t have that ability.

I will let the market decide.
 
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