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We are on the Verge of Economic Catastrophe

unapologetic said:
SLD said:
now you’ve got Trump saying maybe we don’t legally have to pay our debts.
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He's got a lot of experience at that.
Swammerdami said:
Can YOU spot the Top?
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I don't even try.
My long term strategy with gold is counter-intuitive. BUY as the price is dropping, and everyone else is selling. And SELL as the price is rising, and everyone else is buying. Don't wait for it to peak. Treat each piece as a separate investment, wait till the price is above what I paid, of course.
No need to max profit on every sale. Just sell more. Long term, gold always goes up. That is how pawn shops do it. Do the opposite of what the customers do.
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I've been a bit of a silver bug in the past. I have not bought any in a long time. Sitting on maybe 100 oz. or less.
I will just sit longer to see where it goes. No big loss/ gain either way.
 
robnisch said:
unapologetic said:
SLD said:
now you’ve got Trump saying maybe we don’t legally have to pay our debts.
Click to expand...
He's got a lot of experience at that.
Swammerdami said:
Can YOU spot the Top?
Click to expand...
I don't even try.
My long term strategy with gold is counter-intuitive. BUY as the price is dropping, and everyone else is selling. And SELL as the price is rising, and everyone else is buying. Don't wait for it to peak. Treat each piece as a separate investment, wait till the price is above what I paid, of course.
No need to max profit on every sale. Just sell more. Long term, gold always goes up. That is how pawn shops do it. Do the opposite of what the customers do.
Click to expand...
I've been a bit of a silver bug in the past. I have not bought any in a long time. Sitting on maybe 100 oz. or less.
I will just sit longer to see where it goes. No big loss/ gain either way.
Click to expand...
The only metal I would consider investing in at this time would be steel in the form of firearms.
 
I heard a commentator say something along the lines of, "Elon Musk says he wants government to operate like a business, but Elon is a business that operates like a government."

Musk has no income, which is convenient when he files his taxes. He uses the stock he owns as collateral and borrows money to pay his living expenses. This is a neat scheme, but only as long as his stock shares maintain their value. In recent weeks, the banks who hold Elon debt on their books have begun selling the paper to institutions who are slightly less risk averse, or may see it as a cheap way to purchase influence.

I'm not worried about Trump or Musk making the US defaulting on the national debt. After all, what's in it for them? Maybe Putin has promised both of them a mega yacht and a Dacha in Crimea. A more likely scenario is a Federal Justice Department that can't pay the light bill isn't likely to bother them in the future.
 
The economy doesn't necessarily collapse in authoritarian governments. Donald Trump doesn't like the stock market going down. Look how quickly he folded on the Mexico and Canada tariffs after the stock market reacted negatively.

There is likely to be economic growth slowdown but I don't see a recession in sight at this point. It is too early to call that.

And remember, Trump wants the debt ceiling removed. Stock market would collapse in case of a US default. I don't see that happening.

There are way bigger things to worry about: the consolidation of Trump's power over the DOJ, military and intelligence agencies and the new U.S. foreign policy of spreading anti-liberalism around the globe.
 
There are too many question marks to be sure how the economy will develop over the next four years. Trump wants to pursue business-friendly policies, but his erratic policies and shifts discourage investment. Demographic trends, mass deportations and rising income inequality all pose obstacles to growth.

With the global economy all linked together, Europe's fate is important to the U.S. How will Germany and other key players respond to the de facto Trump-Putin alliance? What does yesterday's election in Germany suggest? The AfD achieved its largest vote share ever. Will Merz (the new German Chancellor?) fight Russian aggression or acquiesce to fascism? Is it unfortunate but true that embracing Trump-Putin fascism is (at least in the short term) a path to prosperity?

The U.S. economy is due for a slowdown; Trump will resort to tax cuts and other measures to pump it up. Therefore a higher inflation rate is very likely IMHO. If the FedRes responds by increasing interest rates, will Trump act to fill the Fed's Board of Governors with puppets? Probably not: he WILL listen to pro-business advice.

Summary: Economic growth will slow. Inflation will rise, perhaps a lot, with wages not keeping pace. Well-connected billionaires and businesses will get richer. The stock market will muddle along, with 10+% corrections but probably no crash unless there is major stagflation and high interest rates.
 
unapologetic said:
SLD said:
now you’ve got Trump saying maybe we don’t legally have to pay our debts.
Click to expand...
He's got a lot of experience at that.
Swammerdami said:
Can YOU spot the Top?
Click to expand...
I don't even try.
My long term strategy with gold is counter-intuitive. BUY as the price is dropping, and everyone else is selling. And SELL as the price is rising, and everyone else is buying. Don't wait for it to peak. Treat each piece as a separate investment, wait till the price is above what I paid, of course.
No need to max profit on every sale. Just sell more. Long term, gold always goes up. That is how pawn shops do it. Do the opposite of what the customers do.
Click to expand...
That is not a bad play. I would not thought of this. If you just held the gold you would do no better than inflation but by buying and selling you are likely beating inflation and (unlike the stock market) with very low risk.
 
Axulus said:
The economy doesn't necessarily collapse in authoritarian governments. Donald Trump doesn't like the stock market going down. Look how quickly he folded on the Mexico and Canada tariffs after the stock market reacted negatively.

There is likely to be economic growth slowdown but I don't see a recession in sight at this point. It is too early to call that.

And remember, Trump wants the debt ceiling removed. Stock market would collapse in case of a US default. I don't see that happening.

There are way bigger things to worry about: the consolidation of Trump's power over the DOJ, military and intelligence agencies and the new U.S. foreign policy of spreading anti-liberalism around the globe.
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It is hard to know whether Trump folded on the tariffs or whether he was just playing Mexico and Canada for other considerations.

We actually need an economic growth slowdown of sorts at least enough to get asset prices like homes back to normal.

Unfortunately, Trump has never paid a price for excessive borrowing and I agree with you he will do his best NOT to reign in debt.
 
jonatha said:
Same chart for gold. People who bought at the peak in 1980 are still underwater...

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Gold and precious metals are a decent store of wealth across time and location. Not something to get rich over unless you find it buried somewhere.

Use them as a liquid stop loss hedge right before you would lose everything.

For example, if the currency or the banking system collapses and you can't get out bank funds to pay property taxes, it might get you through a couple years without losing the farm (your home) to bank and tax foreclosures. Like what happened in the 1920s. Cash on hand would lose value, PMs will likely break even with inflation over time.

In a currency collapse scenario, gold and silver have been currencies long before fiats existed, and have maintained value as paper has come and gone. If you bought gold with Confederate money or war time Nazi Duetschmarks it would still be worth something. We just assume the dollar will always be there, but history shows us there are no guarantees. When the dollar uncoupled from silver, silver dollars have actually kept up decently with inflation compare to the paper's purchasing power.

It's really portable if you need to flee a country for some reason. A familly of 4 could easily carry enough gold coins to rebuild in another country compared to hauling cash. And gold is likely accepted everywhere fiat currency is used.

Crypto may be taking up some of the PM slack now. But having something physically in your possession is good.
 
ImGod said:
In a currency collapse scenario, gold and silver have been currencies long before fiats existed, and have maintained value as paper has come and gone.
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In a currency collapse scenario, tinned food likely increases in value far more than gold, has greater liquidity than gold, and has direct utility if it is not used in trade.

It's also less likely to attract thieves in the period when you are waiting for the collapse to happen.

Admittedly, it's less portable than gold, but if the economy has collapsed, where are you planning to go?
 
ImGod said:
jonatha said:
Same chart for gold. People who bought at the peak in 1980 are still underwater...

Click to expand...

Gold and precious metals are a decent store of wealth across time and location. Not something to get rich over unless you find it buried somewhere.

Use them as a liquid stop loss hedge right before you would lose everything.
Click to expand...
Wouldn't that need to be physical metals. Having something invested in a Gold tracker on the DOW wouldn't do much good.
ImGod said:
It's really portable if you need to flee a country for some reason. A familly of 4 could easily carry enough gold coins to rebuild in another country compared to hauling cash. And gold is likely accepted everywhere fiat currency is used.
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It costs a good deal to buy physical metals... the cash is paying fees, not buying metals. And if you have lots of gold on you after a currency collapse, best not let anyone know.
 
bilby said:
ImGod said:
In a currency collapse scenario, gold and silver have been currencies long before fiats existed, and have maintained value as paper has come and gone.
Click to expand...
In a currency collapse scenario, tinned food likely increases in value far more than gold, has greater liquidity than gold, and has direct utility if it is not used in trade.

It's also less likely to attract thieves in the period when you are waiting for the collapse to happen.

Admittedly, it's less portable than gold, but if the economy has collapsed, where are you planning to go?
Click to expand...

Well you need that too. Hedging is all about spending or foregoing extra money up front to limit downsides. I have stocks, bonds, 401ks, savings accounts that keep up with inflation, liquid savings that doesn't keep up, ground and property, food stores, gardening supplies, heirloom seeds I grow year to year, parts stored up, guns/ammo, PMs, etc, etc.

Each serves a different purpose and has grown as I age. PMs are either to barter/trade with people that don't want any of my stuff or to hold off the tax man. Last case, grab and go if the city is burning.

I don't expect any of that to be needed, so it's a small percentage. Smaller than my money market and savings accounts for sure. Can't eat those in an emergency either.
 
bilby said:
ImGod said:
In a currency collapse scenario, gold and silver have been currencies long before fiats existed, and have maintained value as paper has come and gone.
Click to expand...
In a currency collapse scenario, tinned food likely increases in value far more than gold, has greater liquidity than gold, and has direct utility if it is not used in trade.

It's also less likely to attract thieves in the period when you are waiting for the collapse to happen.

Admittedly, it's less portable than gold, but if the economy has collapsed, where are you planning to go?
Click to expand...
The mormons have large food storage rooms, so you've got something there. Fuel, guns/ammo, non perishable food, liquor and anti-biotics will have high value. By weight though, precious gems and gold will likely far exceed that value in barter.
 
Tesla is down 17% YTD and is dragging down the markets. Branding issues tied to Musk.

I didn't realize Tesla self driving cars used cameras instead of LIDAR.

https://longportapp.com/en/news/229363720

I read several banks are offloading Musk debt. Billionares don't pay taxes because they borrow against their share value to pay for living expenses and pay the debt back with rising share prices. Their huge life expenses are actually debt not income.

So if Tesla value drops Musk has a harder time borrowing against it or paying back loans. So banks sell his debt and his future loan interest increases.
 
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ImGod said:
Tesla is down 17% YTD and is dragging down the markets. Branding issues tied to Musk.
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Tesla is wildly overpriced at the moment. It inflated to irrational levels above the already existing irrational levels post Trump win. It was a shame Tesla lost that fake $400 million contract for "armored" vehicles.
ImGod said:
I didn't realize Tesla self driving cars used cameras instead of LIDAR.
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That was a bad idea, I think. I think they shifted back to some sensors. Regardless, Tesla is so behind the curve on self-driving. Not quite cold fusion bad, but others are much further along.
 
Axulus said:
bilby said:
ImGod said:
In a currency collapse scenario, gold and silver have been currencies long before fiats existed, and have maintained value as paper has come and gone.
Click to expand...
In a currency collapse scenario, tinned food likely increases in value far more than gold, has greater liquidity than gold, and has direct utility if it is not used in trade.

It's also less likely to attract thieves in the period when you are waiting for the collapse to happen.

Admittedly, it's less portable than gold, but if the economy has collapsed, where are you planning to go?
Click to expand...
The mormons have large food storage rooms, so you've got something there. Fuel, guns/ammo, non perishable food, liquor and anti-biotics will have high value. By weight though, precious gems and gold will likely far exceed that value in barter.
Click to expand...
There is this bizarre idea that surviving Armageddon is a good thing.
 
ImGod said:
In a currency collapse scenario, gold and silver have been currencies long before fiats existed, and have maintained value as paper has come and gone.
Click to expand...
The nearly $3k price of gold reflects the insecurity plaguing people who are seeing what is being done to our economy.
I estimate that almost 2/3 of that price is a “security premium”.
 
The $1.5 billion project I'm working on is looking into tariff and duty risks for parts, steel, aluminum, etc. Those may add 10-15% unbudgeted increases to the project construction costs.

I talked with a friend who has put his consulting business expansion plans on hold because he couldn't commit to a more expensive 5 year lease for new space. He was going to hire more people, but that's on hold too. Uncertainty.
 
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