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Comment by Animats | Hacker News Reader

We're headed for some kind of correction, but it's not at all clear what form it will take. I've been expecting an interest rate spike for years, but that hasn't happened. If we get one, much activity that's been assuming low interest rates will be disrupted. There will be demands for high inflation to relieve debtors.

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Tech is already in a correction: VCs have pulled back on capital, unicorns are dying, and folks in this-is-a-terrible-idea startups are getting laid off. It's happening in slow motion because most of these companies are privately funded and they run out of runway at different points in time.

I'm actually betting that in the broader economy, we get a bubble as Trump's tax plan & infrastructure spending kick in and Yellen doesn't pull back on interest rates hard enough, then a short 1-2 year period of absolute mania as SOX & Dodd-Frank are rolled back and ordinary people can invest in the stock market again, there'll be a massive wealth transfer from poor to rich, and then a very hard crash when they run out of suckers. Then the government will panic at the crash, dump money into the economy, and we'll get hyperinflation. Civil unrest follows, with mass protests, a government crackdown, and the eventual disintegration of the U.S. as a nation-state.

Hard to predict the timing of such an involved sequence of events, though. The tax plan is under works right now, and maybe we'll get infrastructure spending in the first year of Trump's presidency. That'd indicate the bubble beginning around late 2018, reaching crescendo just after re-election in 2020, and popping around 2021.

> Civil unrest follows, with mass protests, a government crackdown, and the eventual disintegration of the U.S. as a nation-state.

This is total lunacy if anyone is taking this prediction seriously. Unrest, protests, sure. The United States isn't going anywhere.

It's entirely possible that there will be more QE events to offset what Trump's presidency will do to the US economy, but the country can withstand all sorts of nonsense.

Reforming the tax code as huge implications in extending prosperity to more americans, not just the super wealthy - if anything, the super wealthy will likely loose out the most, they are best able to take advantage of the myriad of loopholes we have now.

No way this thing lasts that long. The generational demographic bottom hits in 2024. We're already so levered that a sneezing tardigrade might throw planets into collision.

A whole lot of debt (more than was issued in all of human history before 2008) must destroyed, very very soon. The longer it is delayed, the worse the disruption will be. Already, we are set for the largest wealth transfer in history, when the Boomer's checks start bouncing in earnest.

"SOX & Dodd-Frank are rolled back and ordinary people can invest in the stock market again".

Anyone can invest in the US market right now. There are some restrictions on investing in hedge funds and VC pools, but both, as a class, are underperforming the public stock market. You want to pay 2 and 20?

I think you're probably dead on. How do I bet on this?

Long cryptocurrency, precious metals, and South American farm land. Short sovereign bonds + long TIPS. Short financials (especially southern European), REITs, highly levered retail, luxury goods, auto makers.

Most especially, assiduously avoid everyone who sells debt to buyback shares. Long value and utility + short leverage and hype.

I didn't read any further after "long cryptocurrency".

What are the repercussions for individuals? Loss of jobs? If so, why would higher interest rates hurt the job market?

"There will be demands for high inflation to relieve debtors."

@ryanSrich: personal debt, reduced demand in a declining market . If you are in debt at a variable rate and have reduced or no income.

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