America faces a Trumpian economic slowdown
economist.com
economist.com
These people are birds of a feather and they are flocking together.
- Selling American assets to billionaires to exploit
- Gutting anything that helps average Americans so as to create justification for lower taxes for the rich.
- Gutting Ukraine so as to cut spending so as to provide tax cuts for the rich.
- Restricting any freedom of speech so that no one may complain about anything.
I am not sure if you feel the second point follows on from the first or stands on its own? I will respond to it as a separate issue and I take it to mean the economy as a whole and not just residences. That being said I agree it is the goal of companies to move that way as they will always push for more control and recurring revenue, but that’s just corporate incentives at play, not global a shadowy plan imho. If we the consumers push back and demand our DVD's and CD's (yes I still use those) there will be players who come forth to take our money for them.
Day to day spending pressure is what tanks. Economy depends on money flow. Most of that flow is necessities (shelter, food)
This is not necessarily the case, due to leverage. For some, it can be "oh, no, my assets went to -200M down from 100M". In particular, it's somewhat common for rich people to fund their lifestyles, and sometimes fund business ventures (this is really playing with fire, but it happens) by borrowing against the stuff they own, which is usually mostly equity. In a really big crash, this can unwind rather messily, as some overstretched super-rich discovered in the previous financial crisis.
If wealth is a function of ownership why would you care if your $500m went down to $100m if the purchasing power you cratered is well below what you lost in 'value' while your ownership increased?
That would only work if they have large cash reserves, we have data that shows most billionaires/millionaires don't their wealth is tied up in assets.
Because of that if the market does crater their businesses/assets may in fact get wiped out.
The rich don't want volatility or crashes, it rarely benefits them.
If the global economy shrinks by 80% (using your numbers) then their relative wealth can remain the same. If the US economy shrinks by 80%, then their global wealth has substantially declined while the wealthy in other countries do not suffer as much.
My best guess is that Trump and Musk are led by an intense hatred of everything the "old government" stands for, and acting emotionally, ignoring long term consequences.
“ The top five purchasers of U.S. goods exports in 2022 were: Canada ($356.5 billion), Mexico ($324.3 billion), China ($150.4 billion), Japan ($80.2 billion), and the United Kingdom ($76.2 billion). U.S. goods exports to the European Union 27 were $350.8 billion.”
Which are, for the record, the four biggest trading partners, and over half of all the US's international trade.
At this rate the US will be threatening Moldova to give it good trade terms or else it'll huffily take its business elsewhere to Montenegro.
Trust Buffett and buy BRKB?
Try to weather the storm with VOO?
Buy treasury bonds?
In other words, don't be like those poor Enron employees who had all of their company 401k tied up in Enron stock.
If your nest-egg craters but you have a job, you can sustain yourself and wait for market recovery. If your job vanishes, strong investments won't get hurt too much if you sell to cover the gap. However, if both happen simultaneously...
The old adage "be greedy when others are fearful" holds true, backed by market history.
More money has been lost trying to time the market than simply staying invested. If this is long-term savings/investing, staying in the market is almost always the best move.
If it’s short-term money, it shouldn’t be in stocks anyway. For short-term capital, treasuries and cash-equivalents are safer plays.
Democrats: why aren't you more engaged with this?
Republicans: How did lowering grocery prices turn into dismantling the services of our government, kissing Putin's rear, and daydreaming about Trump Hotel Gaza?
Also, let your friends, family, and loved ones know how you feel.
They have minorities in both houses, and the Republican majority is currently refusing to impeach the president for seizing unconstitutional powers to do things that they want to see done.
This has shattered any sane legislative process: Even if legislators reach a compromise and pass a new law, Republicans will just ignore the parts they strongly dislike. Again.
My R house rep hasn't held a town hall in his district since 2017.
Fortunately there are still a lot of alternatives. Don't think they can keep papering over it for 4 or even 2 years.
They all insisted on voting for Trump "for the economy".
When you opt-in to a controlled media ecosystem, you can be convinced of anything.
It would be very unlikely to see another double digit gains year in a row.
That being said, it could also crash hard and not recover to these levels for a decade. There is lots of historical precedence for that - especially at these valuations.
I’m chiefly concerned about tariffs, housing market weakness, labor market weakness, and reversing global liquidity flows (maybe by the end of the year).
Just chilling in mostly gold and treasuries is looking very attractive on a risk adjusted basis.
I would say it's bad to lose an ally like the US, especially for defense, but what about trade?
The problem is that american hegemony also bother some people, and those people dislike Trump but are they still happy for the US to be less strong?
I would bet there are some europeans who are happy about the US slowing down, but I don't think there are many.
I thought that americans would be able to impeach him or congress/senate/judges to stop him, but it seems nothing will stop him.
Maybe american democracy is flawed and russia managed to crack it.
The Republican party holds the majority (barely) in both houses of Congress. In order to impeach, a majority in the House of Representatives has to vote for it (unlikely) then the Senate becomes the jury for the trial, and needs a two-thirds majority (extremely unlikely) to convict. The only way an impeachment is likely to happen is post-2026 elections. If the Democrats (there is no other party, unfortunately) gain the majority in both houses and a supermajority in the Senate (or the remaining Republicans are more centrist, unlikely), then an impeachment and conviction could happen.
One arguable pro for Europe from all of this is that it _does_ seem to be strengthening Europe as an institution a bit.
We'll be lucky if he and his ilk are out of power sometime in the next decade.
This is not difficult. There are so many ways to broach the subject. Some examples that I feel: I thought Trump was going to lower grocery prices. Who put Elon in charge of dismantling the US government? Why does Trump want a hotel in Gaza of all the ridiculous things you could possibly want?
>>This is not difficult
Right! It is impossible not difficult.
(The point being, his active support is probably not quite so high as 1/2 the country)