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Comment by 29_29 | Hacker News Reader

I recently raided my retirement accounts because we are at the end of a long term debt cycle and I do not believe in the future of the United States (government), the West or the dollar.

I own gold, a farm and I raided the retirement accounts to buy a home.

The only way out of 130% debt to GDP is default through inflation, high taxes, and bail ins.

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Higher taxes is not a default: it's what balancing the budget means

It is impossible to balance a budget with 130% debt to GDP. We crossed the event horizon, every country that has ever crossed this (save Japan which is doing horrible now) has defaulted through very high inflation or out of control deflation [1].

https://static.seekingalpha.com/uploads/sa_presentations/470...

Are you aware that debt is a cumulative metric, and GDP is an annual metric? If you want to compare apples-to-apples, our budget deficit (an annual metric, which measures the delta in debt) was $1.4 trillion in 2022, which is 5.5% of GDP.

It's not impossible to balance a budget with 130% debt to GDP.

If we did it we would be the first country in history to do so [1]

1. https://static.seekingalpha.com/uploads/sa_presentations/470...

We are a country of firsts! USA USA!

Do you have any source to this claim?

The letter that you linked doesn't cite any sources, and doesn't come from a reputable fund (based on a quick SEC search, Hirschmann Capital seems to only managing ~$20m AUM, meaning it's likely a one-man operation)

Not impossible, but it might as well be. Politically, I see it as virtually impossible for 'both sides' to compromise on higher taxes and lower spending. I wish we could do that, but it seems hopeless.

Beyond the "both sides" problem, no State's representation (House and Senate) has any incentive to tangibly reduce spending. Federal money will always be seen as something to maximize for your constituents because it is primarily funded by the rest of the country. Even if you managed to elect some severely stingy representatives, they can only really manage to reduce spending to their own districts. That void would be filled by greedier and less fiscally concerned representatives from other states. Politicians that unilaterally cut spending to their own constituency run the risk of losing the next election to a candidate who has no qualms with bringing in the pork.

Sure it is, especially with long-term (30+years debt) paid at under the rate of inflation. Plus, a lot of that "government debt" is also "government savings" (social security excess must buy t-bonds). The Treasury provides the extremely useful service of being a bank for entities with massive deposits.

It turns out that having a balanced budget is kind of dumb when you're the US government. If people are willing to essentially pay you to give you money (when rates - inflation is negative), you should take that deal.

The persistent debt-ceiling debates are really the only serious risk to the country.

>I raided the retirement accounts to buy a home.

Buying home at the current prices does not sound wise to me. Even if you expect for printing press to go brrr again, it's likely that before that we will see substantial decline in asset prices.

> it's likely that before that we will see substantial decline in asset prices.

Amount of ppl waiting for this to pounce is astronomical . And for that reason this will never happen. FOMO is at all time high atm partly due to peer perssure and social media

Could happen. Could not happen. I don't have a crystal ball.

I need a place to live man. I can't wait forever for prices to come down, I've owned a home before, and even though rates suck, now is a better time for sure. It feels like I can shop.

Build your own home. Just do something simple like a gable roof 20x50 or something small to start you can always add to it.

In the meantime pickup an RV and live on the land. Used RV's should be cheaper right now.

When people say "buy a home", the majority of people are far more concerned with affording the land underneath (or share of a condo building) than the structure itself.

My grandpa built his home and it was a nightmare. Contractors kept going cheap, he had to watch over them, cost overruns, delays, etc. He probably has a better home than one could ever buy, but I don't have that kind of time or money.

sorry for asking the obvious question because i am in the same dilemma. Why not continue renting ?

I just can't tolerate apartment life any longer. I have 2 dogs. They won't live forever, they need a yard. I need stability. Also a home is not an investment, its a liability. I also want a place I own, that I can have paid off. Its a long term decision.

I'm also willing to admit I can miss the bottom price. I could save 15% and wait a year?

Curious how you see this playing out internationally and how you maintain this opinion in the face of Japan (double our debt raio, biggest issue is population decline). Globally, the US debt to GDP ratio is roughly in line with a good chunk of Europe [1]. It seems like for a collapse to happen, the US would have to be worse-positioned than competing countries. Otherwise everyone declines together, which doesn't make much sense.

[1] https://worldpopulationreview.com/country-rankings/debt-to-g...

Are you planning on working (your farm) into your 80s?

That's what the kids are for.

Assuming your kids enjoy living this exact lifestyle, and don't end up leaving, big assumption.

The way things are going, its possible that the farmstead lifestyle will be one of the highest standards of living available to the common man.

The alternative might be living in 800sf apartments in a 15 minute city eating whatever food is on offer. Living through screens all day. Perhaps their kids will enjoy that way of life more than the sun on their face on a May afternoon with birds chirping in a field of grass wet with dew petting their livestock.

I omitted the '/s'.

In all seriousness, I could see the value of that in some idyllic context of a family farm but the days of having children for the sake of cheap labor are over (in the US at least).

> Are you planning on working (your farm) into your 80s?

If you're so pessimistic that you literally sell your conventional assets to buy a farm, your retirement plan must involve children or some community inheriting it and taking care of you in your old age.

But even if it doesn't, you're still probably ahead in your pessimistic scenario (e.g. surviving relatively comfortably until retirement age, instead of dying earlier in some kind of collapse).

>your retirement plan must involve children or some community inheriting it and taking care of you in your old age.

My farmland pays a rent dividend on the order of 2-4%/yr and I don't even have to be there or even show up to collect it.

I bought my farmland because I consider it doing my part to preserve the planet. I'm a big believer in the future of locally produced food and more local communities in reducing emissions and _corporate wastefulness_. As a side benefit it will preserve my standard of living. I thoroughly enjoy steak and so do a lot of other people. Livestock, land, and gold have preserved wealth since ancient times.

If your farmland continues to yield 2-4% when shit hits the fan, I will dump my inflated money into an ETF that holds farmland.

Not a bad time to buy a farm. Prices are coming down; my yield is a little bit different 1/3 of it is wooded/water - but its probably close to 2% plus tax benefits.

I have gold, you have casino chips in a failing empire.

You have a yellow metal that's too soft to even make useful tools to tend to your farm. My casino chips are a stake in the future of the world. If they become worthless, I will take your farm by force because no one will be around to stop me.

> I will take your farm by force because no one will be around to stop me.

Ah, you hit on it. That is the attitude! Problem is everyone has that entitlement. Trillions and trillions of claims.

Someone "claims" their share of equities by selling but someone else buys. Today I'm buying to invest in my future, someone that's in retirement is selling to fund their remaining years. Are you suggesting we won't have new generations that buy?

I've always thought that the people most vocal about preparing for societal collapse seem to be the people least likely to thrive in anarchy. When there is no law and order, we will be ruled by gangs and warlords, not by bootstrapping libertarians hanging on to gold coins and grandpa's shotgun. Nobody is going to care that you have a deed that shows you "own" a farm or that you put a little fence around it.

I have a few acquaintances who consider themselves "peppers". When social distancing and travel restrictions started at the beginning of COVID, they were pretty much the first ones to crack and start complaining on social media about how unfair it was that they couldn't go shopping for khakis. So much for rugged self-reliance!

betting on the collapse of the social order is a bad bet. sure, it may happen eventually, but it is unlikely to happen within an average person's lifetime.

If things get that bad, the only currency will be canned food and ammunition.

Just cool yourself out for a minute bro. We are all friends here.

:thumbs up:

if the empire fails, what are you gonna do with gold?

D'oh!