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Comment by mcv | Hacker News Reader

I think this is mostly about the US, right? Most countries haven't invested all that much in AI. Even if all this new AI would completely vanish overnight, I'm pretty sure most of the world wouldn't care one bit. Of course many AI companies and investors would be bankrupt; they'd be the real losers here. Many other companies and organisations would have wasted a lot of money on nothing, but they'll write it off and move on. If it bankrupts Microsoft, that would have a tremendous impact on many companies using Microsoft products of course (maybe MS should hurry up with that EU-US cloud split, so the EU branch would survive the crash).

But on the whole, I'm not too worried.

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Well, last few times the US had a big recession, they took down the whole world with them. The biggest recession led almost directly to WWII, and that was before the US centralized that much power or money.

I don't live in the US, but I'm rather worried.

That's true. But thanks to Trump's tariffs, much of the world is working to make itself less dependent on the US. There's talk that the Euro could become the new reserve currency. Maybe the Renmibi.

It's quite possible that the American Century will end with a massive crash, and outside of the US, Europe will probably suffer quite a bit of damage too if we don't detach ourselves more from the US, but I still think most of the world will be fine. Though I will admit that could be partially wishful thinking.

On the Oct 10 drop, I made a list of a bunch country specific ETFs to see who is and who isn't so correlated with the US.

                         oct 10 drop    yield           ytd total return
    mchi    china       -5.73           2.19            28.48  
    ewh     hong kong   -4.22           3.54            23.05  
    qqq     nasdaq 100  -3.47           0.46            12.4  
    argt    argentina   -3.34           1.39           -16.04 currency problems
    ech     chile       -3.2            2.18            24.8  
    ewz     brazil      -2.98           5.42            26.49  
    spy USA: s&p 500    -2.69           1.08             9.15  
    epu     peru        -2.62           3.5             52.16 metals
    norw    norway      -2.44           4.06            22.77  
    ews     singapore   -2.38           3.59            28.19  
    ewn     netherlands -2.31           1.91            25.28  
    ewx s&p emerging    -2.08           2.81             8.58  
    ewa     australia   -1.75           3.02             9.26  
    enzl    new zealand -1.65           2.25            -0.59  
    eww     mexico      -1.65           4.07            35.96  
    ewi     italy       -1.6            2.7             38.21  
    tur     turkey      -1.59           1.83            -9.71 currency problems
    ewq     france      -1.44           2.79            19.85  
    ewc     canada      -1.32           1.69            20.96  
    divo    usa cc      -1.07           4.58             8.43  
    ewp     spain       -0.68           2.68            52.85  
    ewd     sweden      -0.59           4.28            24.82  
    eden    denmark     -0.52           1.83             1.93  
    ewl     switzerland -0.275          3.63            20.78  
    efnl    finland     -0.21           3.97            31.54  
    pin     india        0              2.09            -4.03

(Edit: here are a few more)

    btc     bitcoin     -3.72                           19.71
    aaau    gold         0.97                           48.3
    dxy     dollar      -0.69                           -2.91
    ashr    CSI-300     -4.0            .95             22  (domestic China)
    fltw    taiwan       -4.8           1.34            23

They are all correlated- even if the countries are different, it's the same set of investors. But if you have to pick one... Finland? Switzerland, Sweden and Norway have low debt / gdp.

Very nice!

Interesting that Chile and Brazil went further down than S&P, but I guess it's noisy.

Quick q what does "yield" mean here?

Also, in which currency are these returns? Because forex shifts (which for sure happened on oct10) mess up the observed returns quite a bit

It's what E-Trade lists for dividend yield or SEC yield. I have no idea if it's before or after exchange to USD. The total return is from totalrealreturns.com, it accounts for USD inflation and includes yield (at least I think), but probably didn't include the Oct 10 drop itself.

That being said, even if for some reason your money is invested in Finland (or somehow safe from the next collapse), that won't be sufficient to save your entire community.

> Even if all this new AI would completely vanish overnight, I'm pretty sure most of the world wouldn't care one bit.

If the economic chaos in the US was sufficiently large (I still think this is _kinda_ unlikely, because exposure is pretty concentrated, but with the massive debt raises it's maybe less contcentrated than it used to be), there would likely be contagion.

> If it bankrupts Microsoft, that would have a tremendous impact on many companies using Microsoft products of course

It won't; in terms of publicly traded companies, it's probably mostly Oracle and Nvidia in the firing line. MS has plenty of money.

Europe is playing catch with a 200b investment

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