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How Will the Economy Improve?

I heard on NPR that investors usually park their money in bonds when things look unstable. But they did not do that this time.
Where is it?
I've read that the volatility and uncertainty regarding tariffs is making people feel uncomfortable buying or holding bonds. I guess it's time to hide our money inside our mattresses like they did during the Great Depression.

I actually knew someone who discovered about 100K hidden inside the draperies of her parents home, after both of her parents died. It was someone who worked with Mr. Sohy and he told me about it.

https://financialpost.com/investing/why-u-s-bonds-are-falling
 
I heard on NPR that investors usually park their money in bonds when things look unstable. But they did not do that this time.
Where is it?
I've read that the volatility and uncertainty regarding tariffs is making people feel uncomfortable buying or holding bonds. I guess it's time to hide our money inside our mattresses like they did during the Great Depression.

I actually knew someone who discovered about 100K hidden inside the draperies of her parents home, after both of her parents died. It was someone who worked with Mr. Sohy and he told me about it.

https://financialpost.com/investing/why-u-s-bonds-are-falling
Hiding banknotes does nothing to protect them against inflation. The government can steal your savings, while leaving the hidden banknotes completely untouched.

They don't even need to know you've got them, much less where you hid them.
 
Gold is way above projections for 2025. It's not really an investment historically. More of a preservation if things crater. Many people have used it to restart life easier after living through tough times. Cash doesn't increase with inflation. Gold tends to track it. So you don't make money or lose money.

Central banks around the world are buying. Germany is considering pulling it's physical gold held in NY back to Germany. Apparently, some in the government there are starting to view the US as unstable for some reason. They have the second largests reserves and 37% (worth ~$127 billion) of it stored in the US.
 
I heard on NPR that investors usually park their money in bonds when things look unstable. But they did not do that this time.
Where is it?
I've read that the volatility and uncertainty regarding tariffs is making people feel uncomfortable buying or holding bonds. I guess it's time to hide our money inside our mattresses like they did during the Great Depression.

I actually knew someone who discovered about 100K hidden inside the draperies of her parents home, after both of her parents died. It was someone who worked with Mr. Sohy and he told me about it.

https://financialpost.com/investing/why-u-s-bonds-are-falling
Hiding banknotes does nothing to protect them against inflation. The government can steal your savings, while leaving the hidden banknotes completely untouched.

They don't even need to know you've got them, much less where you hid them.
I know that. I know you're no fan of gold, but I've also read that despite it being off it's recent high, a lot of people are buying gold.

A lot of banks crashed during the depression which was another reason why some people hid their cash in their homes. If we didn't have such an idiot in office, this wouldn't be such an enormous problem.
 
A simplistic, but mostly correct, way to explain the U.S. trade deficit is high dollar valuation. If the dollar is "over-valued" relative to other currencies, U.S. consumers will be happy to spend those dollars on foreign-made goods. Conversely, foreigners are reluctant to buy U.S. goods priced in the "over-valued" dollar. (I use quotes on "over-valued" to abstain from a judgement of what the "correct" value of the dollar is.) Seemingly high dollar valuation is due not only to the dollar's special status as a reserve currency, but also due to the high performance of U.S. assets, e.g. profitable corporations.

Thus a dollar devaluation is a logical approach to reducing the trade deficit. Trump does understand this much -- one of his complaints is that countries like China deliberately "under-value" their currency -- and weakening the dollar may be one of his objectives. (Any U.S. politician advocating a weaker dollar is unlikely to say so publicly: It sounds bad!)

The markets seem to understand that a weaker dollar is likely. Bond prices fell when the tariffs were announced, and then continued to fall when Trump made his retraction. I do NOT have any particular predictions to offer, but I will note that the long-term/short-term yield curve is back in "inverted" territory; historically this has presaged recession.
 
I know that. I know you're no fan of gold, but I've also read that despite it being off it's recent high, a lot of people are buying gold.
I have no problem with gold; I just have a problem with people who believe that it has a value derived from some magical "intrinsic" property of the metal, when in fact its value comes from the exact same place as the value of Bitcoin - the expectation that you can find a future idiot to buy it from you.

That's probably true, so it's probably a good investment.
 
The DOW is down over 800 right now. Some people have speculated that Trump was trying to manipulate the market yesterday when he put most tariffs on hold for 90 days. Plus, about 70% of the shit we buy is made in China. Trump is such a moron.
Manipulate? I bet this is going to turn out to be the biggest case of insider trading in history.
 
I heard on NPR that investors usually park their money in bonds when things look unstable. But they did not do that this time.
Where is it?
 
I know that. I know you're no fan of gold, but I've also read that despite it being off it's recent high, a lot of people are buying gold.
I have no problem with gold; I just have a problem with people who believe that it has a value derived from some magical "intrinsic" property of the metal, when in fact its value comes from the exact same place as the value of Bitcoin - the expectation that you can find a future idiot to buy it from you.

That's probably true, so it's probably a good investment.

It's magical intrinsic properties are;
1. It's pretty
2. It's sorta rare so hard to devalue
C. It doesn't degrade over time so if you bury it, or dump it in the sea, in 500 years find it later it is still 1oz. So it doesn't auto dilute over time like other metals or fiat.

That's why it was popular as money for thousands of years.

Fiat currencies, bonds, stocks are generally the same. Holding only value we assign sort of arbitrarily. Like Tesla stock.
 
I know that. I know you're no fan of gold, but I've also read that despite it being off it's recent high, a lot of people are buying gold.
I have no problem with gold; I just have a problem with people who believe that it has a value derived from some magical "intrinsic" property of the metal, when in fact its value comes from the exact same place as the value of Bitcoin - the expectation that you can find a future idiot to buy it from you.

That's probably true, so it's probably a good investment.

It's magical intrinsic properties are;
1. It's pretty
2. It's sorta rare so hard to devalue
C. It doesn't degrade over time so if you bury it, or dump it in the sea, in 500 years find it later it is still 1oz. So it doesn't auto dilute over time like other metals or fiat.

That's why it was popular as money for thousands of years.

Fiat currencies, bonds, stocks are generally the same. Holding only value we assign sort of arbitrarily. Like Tesla stock.
Exactly. Gold is good for money, because it's intrinsically worthless.

Like Tesla stock ;)
 

And it didn't have to be this way. The right wing narrative would have you believe this had already occured or was inevitable. A bunch of lies that they turnrd into a reality with their horrific world view and terrible policy. Just 5 months ago the economist declared the US economy the envy of the world. Growth was comparatively strong, at the top of the industralized world. Economic production was the highest in world history for a nation, wealth had never been greater, productivity was strong and also in the top tier on the world stage. Production, wealth and high productivity expand the solution set to handle problems, both domestic and international. And it was all thrown away based on lies, disinformation, and the cult of one deranged, psycopathic, narcissistic rapist.

In your wordview, how does the US project strength when our military can not even source drones with parts not made in China?
These particular parts do not compromise national security directly (they aren't something that would allow China to spy or sabatoge the drone itself) and it wouldn't be that difficult to either work with our allies to develop alternative sources for these parts or pass a law subsidizing our own production or strategically tariffing those particular parts if they are critical to national security. This really is a minor issue that isn't too hard to solve in a few years time.

In your worldview how does the exceptional US project power and leadership when it can not source antibiotics or masks for its own population during a pandemic?
You mean a once in a 100 year pandemic, whose planning teams Trump completely destroyed and was underinvested in by previous administrations? How about we learn from our mistakes and make investments in better planning and preparedness in the future and also take into account how to handle public resistence, disinformation, failures of communication by the government and medical community, and find a more equitable balance between personal freedom vs public safety. The invesment would be fractions of pennies on the dollar for a 30 trillion economy.

I will also note as an aside that each state handled the pandemic differently. Some states stayed shut down for longer periods of time, kept schools closed longer, while others opened up much more quickly, and there was much public debate about the right approach. There were not edicts coming from the federal government forcing states to do one thing or another. That is how our federalist system works and I think that is the right approach. Each state needs to also have it's own investment in planning for future pandemics as well.

Your view of the US looks like some beautiful well appointed house but the reality is there are some huge flaws in the foundation and the living room is starting to list sideways now. And everyone except you knows this.
The flaws aren't nearly as foundational as you make it seem. What we need is much stronger reforms to address the problems in our economy and institutions than had been done in the past, along with rational policies to address them.

The biggest problems as I see it are as follows:

-Unsustainable federal debt that needs a long-term solution. A federal deficit in the 2%-3% range of annual GDP is fine, 5%+ during peacetime is not. Tax increases are absolutely required here but they do not need to be overly dramatic as some on the progressive left would like them to be in my view. How the hell people believing the party of tax cuts for the rich was the right direction to go here, I have no idea. That will make it so much worse. And yes, cuts to federal spending seem wise as well. Maybe means test social security to some extent. Negotiate better prices for Medicare. Cut back on the federal bureauocracy in careful ways, and dial back defense spending (plenty of actual waste, fraud and abuse there. A 10% cut here cutting that does not seem unreasonable).

-Income and wealth inequality: GOP obviously doesn't give a shit about that. Tax cuts for billionaires, cuts to Medicaid, SNAP, etc. If you care about this then Democrats are the only choice that make sense.

-Better job opportunities for those in areas disrupted by globalism and technology. There are no magic bullets here. Capitalism is going to leave some people behind. But once again, Democrats were able to pass bipartisan bills to try to address this such as the CHIPS act and the infrastructure bill. In what way has Trump or MAGA or GOP done anything in this regard other than Trump's insane tariffs, which he is doing in a _completely_ unserious way. If your goal is to bring economic opportunity to these areas hit hardest by globalism and technology, tariffs could be part of that plan (although I think there are much better options than tariffs to do this), but it would need to be done in a very careful, precise well planned way targeting very specific industries.

-Reducing money in politics. Once again, Democrats have been the ones taking this far more seriously than the GOP.

-Tackling corporate abuse. Once again, can you with a straight face claim MAGA/GOP is better than Democrats on taking this issue seriously? Democrats are always better here with things such as negotiating drug prices, consumer protections, etc. Still more to do of course.

There has been fustration with the Democrats but, let's be honest, they have faced constant political oppositon on these issues. If these issues are important to the public then what needs to happen is that we need the current right wing to have little political influence by losing control of government for a sustained period of time, which would then, ideally, get us to a situation where we have two political parties: a progressive leftist party (filled with bernie sanders, Tim Walz and AOC types) and a right of center party (filled with your more centrist democrats like Jared Polis, Amy Klobuchar, Tim Kaine, Josh Shapiro, and your more centrist/principled Republicians like Susan Collins, Chris Christie, Michael Bloomberg, John McCain).

Imagine what kind of country we would be if that was our political landscape. But to get a country like that would take a different voting public that is not captured by right wing extremism. Unfortunately that is not the world we live in.

Doing nothing at all is simply not an option at this point. It would be nicer not to lose what little honor we have left but pretending there are no problems does not make them disappear.

What foundational problems are you seeing that I didn't address above, and wouldn't my vision for a better political landscape take those problems more seriously?
 
Maybe means test social security to some extent.
This is already done in a roundabout fashion.

I looked into more straightforward means testing several years ago. IIRC at that time if you completely eliminated Social Security payments to the top income quintile (decile?) you wouldn't save all that much (some tens of billions per year, I think).
 
It would be nicer not to lose what little honor we have left
You've gotta be drunker than a Defense Secretary to believe Trump is restoring US honour amongst the world.

By the way, doing nothing is infinitely better than putting out a fire with gasoline.
According to key performance indicators, doing nothing is worse than doing something now. China is ascending and the US is descending rapidly so if our "home foundation" doesn't get fixed now it never will.
 

And it didn't have to be this way. The right wing narrative would have you believe this had already occured or was inevitable. A bunch of lies that they turnrd into a reality with their horrific world view and terrible policy. Just 5 months ago the economist declared the US economy the envy of the world. Growth was comparatively strong, at the top of the industralized world. Economic production was the highest in world history for a nation, wealth had never been greater, productivity was strong and also in the top tier on the world stage. Production, wealth and high productivity expand the solution set to handle problems, both domestic and international. And it was all thrown away based on lies, disinformation, and the cult of one deranged, psycopathic, narcissistic rapist.

In your wordview, how does the US project strength when our military can not even source drones with parts not made in China?
These particular parts do not compromise national security directly (they aren't something that would allow China to spy or sabatoge the drone itself) and it wouldn't be that difficult to either work with our allies to develop alternative sources for these parts or pass a law subsidizing our own production or strategically tariffing those particular parts if they are critical to national security. This really is a minor issue that isn't too hard to solve in a few years time.

But it never gets solved in a few years time because there are structural problems causing capitalism not for this to work. Especially with normal politicians (unlike Trump)who won't do what is necessary because it is unpopular.

Even if with our current heavy military complex police state, they are made weak because of lack of manufacturing, drones, and AI. We have to build our own stuff or the military is weak no matter how much the military spends, because once the hot war starts it is the side that can REPLACE the hardware that has been destroyed that wins. The side that wins is also the side that can MANUFACTURE the drugs to heal their soldiers.

The north won the civil war because they had the manufacturing capability. And the US women are actually who won WW2 because they are ones who built all the planes and tanks.
 
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The flaws aren't nearly as foundational as you make it seem.
China is a big cheater and someone with courage and bravery has to stand up to them.

 
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