The US economy depends on the country's position of world hegemon - the US dollar is the world's main reserve currency, the US enforces international order and trade rules via its military strength, it dominates technology and culture through 'US defaultism'.
I dont think AI even factors in to this.
The US economy is priced for global reach - if it manages to lose that through a combination of credible competitors, and loss of goodwill - it's going to be in heaps of trouble.
The looming US debt is also a great question - a lot of economists have argued that since most US debt is good. It's mostly in forms of treasuries purchased in USD that pay in USD - this means the indebtedness creates a huge amount of dollars abroad that foreigners have to then spend on US services, driving demand.
Should the US become an unfriendly power to the rest of the western world, it will find the demand for its currency plummeting, which I don't want to outline is a big issue.
All said, I think if the US continues down the political path it currently seems to be pursuing, 'this time it's different' actually will be.
In Europe, people hold cash at negative interest rates because they have so few new ideas and so little innovation to invest in. Where exactly do you think the money will go?
If you insist on believing the US economy will crash without a well thought out thesis, I think that’s a beautiful thing. When you sell your positions on US companies, I’ll gladly be on the BUY side of that order.
1 Online shopping market in the range of 5 trillions 2 Electricity and energy price raise 3 Impossibility to lower interest rates 4 Tech market also in the range of multi Trillions 5 Global education and power expansion ...
Meaning that a % of all this money flow goes private pockets destroying medium class, which gets poorer.
It is like a memory leak that keeps sucking resources while growing exponentially until the system crashes. The real question for an economist is how much ram has the system and how much the memory has leaked?
This Legendary site is interesting: https://usdebtclock.org/index.html Especially when combined it´s data with AI.
What do you think he will do, given he's one of 12 votes?
Whoever comes into power next better start thinking about universal income fast. We are gonna get there sooner than expected.
Of course it's very disruptive for people that lose their jobs, but many of them will get similar new jobs, and the overall impact is higher output.
Their biggest problem seems to be they're too good at building stuff, whenever a new category of product pops up, they quickly build up both volume and drive down prices through competition so that they saturate their internal markets (see: housing, EVs)
There are tariffs everywhere, all the time. Canada just dramatically cut its 90% (or something) tariff on Chinese cars. Tariffs haven't just started happening because someone you don't like did them.
This neglects the scale, cost, and unpredictability. His tariffs are far from being the usual seen elsewhere. Of course, you should already understand this.
> Tariffs haven't just started happening because someone you don't like did them
Nobody said they have, throwing ridiculously high ones with your allies and trading partners is new though.
Sure, it might have been used as a delicate lever previously but in its current brazen form is just bad diplomacy.
- I'm genuinely a lot more pessimistic than is accurate around what is and isn't a bubble - Bubbles are just slower to burst than I expect
Possibly some combination of both. But even ignoring AI which is relatively new, it seems "obvious" to me, that whatever value Bitcoin has, investment in the asset is detached completely from that value. I'd have expected to see Bitcoin crash a long, long time ago, and have been thinking it's "just around the corner" for years and year.
And yet, the bitcoin price as a whole, although it's dipped recently, and is clearly volatile, still remains something like 10x what it's value was 5 years ago[0].
It will suck even for us in europe due to shortsighted pension funds having invested in AI as well. But we'll just have to deal with it. I'm sure it will happen sooner rather than later.
PS: I'm not an AI hater as such. It definitely has its usecases where it shines. The problem is like with all hypes; it's not good at everything and it won't be all golden mountains tomorrow like the investors expect. This overhyped investor circlejerk is what screws up technology. It happened to blockchain, it happened to metaverse. All things that have their merits but somehow investors thought it would change the world overnight and make them insta-rich. Obviously didn't happen and it won't happen now.
I don't think AI is comparable to these technologies.
AI had a real impact on certain daily activities, such as search, coding, etc. While the metaverse was just a fantasy with no tangible benefit other than Zuck trying to create his own platform to take on Apple and Google.
Blockchain had some potential in certain fields, but it wasn't user-friendly or usable by many people.
Only to a very small degree and systems like Germany THANK GOD do not have any AI exposure at all.
The real problem is that when the US sniffs, Europe gets a full blown cough. We are way too dependent on the US, we have seen that 2007ff, and we haven't changed a single darn thing.
Now, when I say live like you're poor, I mean do it smart. Don't grocery shop at a gas station, do your necessary purchases in bulk (actually poor people can't or won't, but would be better off if they could.). Don't but the cheapest boots, but rather the best value. But when choosing how many vacations to take, maybe pick camping locally more often than exotic vacations. Eat simple foods, don't order out fancy stuff and get accustomed to such luxuries. Don't automatically buy the latest consumer toy just because it looks fun. Don't move into a nicer apartment just because you got a raise. You get the idea.
The person saying gold and mining stocks may or may not be correct - it's still a risky position. Precious metals could be in a commodity bubble right now (or not). It's had to predict anything with perfect accuracy, which is why diversification matters.
You probably shouldn't be jumping completely in or out of anything because that requires timing, which is also not easy to do. What you can do is change he weights withing your portfolio. For example, reducing your US equity exposure to increase your bond exposure. Or reducing your US growth exposure to increase your US value and Eurozone dividend exposure. It's best to listen to several financial companies reports to weigh what to do.
(This might sadly be rhetorical given what I hear of '08, but perhaps there are new channels open to take advantage of. Or at least old channels to raise awareness of).
Have you considered applying?
They plummeted to next-to-zero, and in addition to the injury I had to endure the insult of the people who hadn't seen it coming gloating about their low standard variable rates.
Ofc I clearly didn't have much real economic understanding but I guess I am saying that beyond normal common financial sense (the lack of which at scale leads to these situations) which you should be using anyway, we don't really know which way the wind is blowing, and what the exact consequences will be.
This all depends on what timelines you work on, how many assets you are trying to protect.
Alternatively you protect yourself by lowering your dependence on steady income.
That sort of rules out an easy or known way to predict and avoid bubbles. That said, it's worth noting our current historic period marked by being post financialisation (taking out a bunch of investment regulation) of markets in the 80s exhibits a lot more economic crashes (the real reason we should car about bubbles) than most of history (although most of history also does not exhibit any economic growth, so be careful what you wish for).
In particular, the period between around 1930-1975 showed extremely high growth with almost no bubbles or market crashes[1].
So my semi-knowledgeable but definitely not expert view is that: - Bubbles and crashes are not easy to predict, and therefore avoid - That said, our existing market rules have effects on the number of crashes/bubbles we see (but there's debate around whether you actually would want an economy with less crashes/bubbles if that meant left growth)
[0] https://www.hbs.edu/ris/Publication%20Files/Bubbles%20for%20...
[1] You can find this discussed a bunch of places but Ha-Joon Chang's Economics: The User's Guide talks about this very fluently.
Edit: I think your question might actually have just been about personal protection again bubbles, rather than protecting the economy as a whole. In which case, having margin in your spending so you'd be able to live if things were some portion more expensive against your earnings is probably the only sane suggestion.
But, keeping both feet on the ground, I'm tempted to think that if the economy collapses I'd not be very interested in buying precious metals. I'd be looking for food, a roof to live under and safety.
My grandfather lives in a great depression in Manhattan. He told me some crazy stories, but you know what most people made it through. I think this time our system is more fragile, but I have no doubt that human survival is much stronger than me think as well as human socialism.
For instance, I am homeless living with schizoaffective disorder and I’m not worried so why should you be?
Holding asset yourself (gold) causes logistical issues and massive buy/sell split on your side, but it has some advantages too.
I happen to agree just because of golden silver prices that it’s going to happen sooner than later, regardless if war breaks out with Iran.
As for whether it is better for everyone, that question became a lot harder in just the last year. Who is «everyone»? And what do we mean by «better»?
With the US wanting to annex territory from its NATO allies, and engaging in extortionate tariffs, it is harder to argue that the US is good for Europe. Which is why Europe has already started to look eastward. Starting with a comprehensive trade deal with India.
What’s happening is good for Russia and China. Not so much for the rest of the world.
China alone has a higher population than Europe and the USA combined. I'd say that even if things got worse for Europe, to humanity it still constitutes a net benefit. Lives aren't of less value just because they're in a (gasp) communist country.
New things need new words to describe them, I know people love to call bad guys "nazis" or "communists" and that everyone seems stuck with 1939 lingo but come one. 1950s china isn't 1980s china which isn't 2026 china, yet they're all ""communists""
This goes for Asia in general. Korea, Japan, and China spent centuries fighting and making them the de facto super power makes it easy to resume the Korean war or try to overtake the (military wise) crippled Japan should they be emboldened by the faltering/collapse of NATO.
The lines are still being drawn, but its doubtful one single power will emerge.
Even with a "return to normalcy", the trade and military agreements being forged are permanently diminishing America's influence. Especially given that we're never more than 4 years away from this happening again.
But as a trade partner? China, markets love reliability and stability. Not every 4 years wondering if there will be another trade war for reasons unknown.
You'd be very surprised the amount of malicious behavior countries will ignore to allow trade. Look at Saudi Arabia.
Cooperation among the rest of the world is rapidly progressing in response.
Which faction that emerges as a dominant ever says "Oh no! We better stop using our advantage to improve our condition".
Make of that what you will. Power isn't always tanks and soldiers. Sometimes its bureaucracy and contracts.
Yes, they want Taiwan, but that’s a silly national pride thing. It would not really benefit them to take it by force.
Apparently their worst offence so far was calmly outgrowing and out competing their peers while benefiting global consumers with he fruits of organized labor of their own society.
And I was just speaking of what I think about China, not saying the current US administration is any better. I don't think it will be there forever though.
- At points, AI investment has actually seen more spending that US consumer spending[0], there's some debate on this[1] but if true, that leads to a narrative of the US being 'propped up' by AI investment.
- US GDP growth was strong last year, but behind quite a lot of other similar countries like the UK, Germany and Japan, which doesn't suggest a comparatively strong economy.
- The US is actively increasing it's borrowing substantially (Big Beautiful Bill) while lowering it's currencies value through trade wars and unpredictability (see bond market). That reduces its ability to use its wealth to borrow its way out of a financial crash (like with the 2008 crash, or Covid).
This could be a little overblown and is hard to tell, the US is definitely an extremely wealthy country, even if its less wealthy comparatively that a few years prior.
[0] https://fortune.com/2025/08/06/data-center-artificial-intell...
[1] https://www.cnbc.com/2026/01/26/ai-wasnt-the-biggest-engine-...
In the grand scheme of GDP, the US hasn't done much growth in anhtjjg else this decade, all while massively increasing spending to prevent post COVID recessions.
It certainly doesn't look good. But this was being setup for 30 years as we outsourced our strong manufacturing wing to make the top brass richer in the short run. So I do think the house of cards falls if AI does.
The sad part is that we may have been able to whether the storm under the right leadership. But that sure isn't the leadership in the White House right now.
Besides, basically every company had been desperately shoving AI into all their products. Throwing all of that out when the bubble pops won't be pretty.
USD Currency futures have already collapsed.
World trade will move to (not a good idea) RMB or (mistakenly) crypto.
Euro is the only real option left and it’s beautifully positioned in the center. Great leadership too.
You know that the reason things bubble and burst is because speculation outpaces reality at too high a rate, ie : too much "capital" is make up of hopes and dreams.
When reality hits and the numbers make sense, all that hope and dreams go pop.
Scotty doesn't know!
If every idiot (I'm including myself in this) on HN/Reddit/Youtube/Tiktok/mainstream news/etc. thinks we're in a bubble and is crazy pessimistic and thinks economic collapse is near...it means we're not actually in a bubble.
When the bitter, frustrated pessimists on HN shift their tone to being neutral or even mildly optimistic, then I will start worrying. Because that will mean the general public must be reaching 1999 levels of euphoria for a hint of optimism to show up here.
That seems to have happened around 2023 or so as people chose to laud over AI instead of understanding the underpinnings of society coming undone in real time.
So, should I be worried?
1. All the tarriff reactions cause US companies to import a huge amount of stuff for 2025. From what I understand, we're about to exhaust all of those imports.
2. The unemployment reports (especially the U3 numbers) hide quite a bit of turmoil going on under the hood of the job market.
- If you lost your job and switched to Uber/Doordash, you're not unemployed.
- If you are riding on severance pay instead of filikg for unemployment, you're not unemployed.
- If you got tired of throwing out hundreds of apps only to get automated rejections and take a break a month, you're not unemployed.
- If you just graduated into this hellscape and can't qualify for any unemployment, you're not unemployed (you're technically not part of the workforce yet).
There's a lot of these small shifts in how jobs work that make U3 less reliable in reflecting reality. And I only touched the surface of these issues.
3. Continuing on the U3 with a point worthy of its own bullet: the unemployment appears flat, but the makeup of what's happening per industry really lays down the reality. The only industries growing are hospitality (aka food service and similar sorts of duties) and health care. And to top it off these "growing" industries shift more and more to fractional work. Pretty much every other industry is down. So people are getting laid off/fired and moving to part time work to get by. "Stable" by unemployment numbers, but very unstable on the day-to-day. Add in the recent congressional bills for healthcare subsidies and we're throwing more gas on rhe fire.
4. I'm sure it's been said so much by now, but AI in the US is the only thing holding up the GDP. Without that massive investment, the GDP would be at best, dead flat. The US isn't growing in a way that reflects actual yields to anyone outside of a select few shareholders. We're not building more houses, mining more materials (on the contrary, we've resumed ransacking others'), manufacturing more machinery, nor even producing more service value for customers and businesses. We're putting all hedges on one thing with an uncertain outcome. If that industry declines, so does the rest of the US.
5. The K shaped economy. I have to check these numbers again, but I believe that spending is indeed up, but the makeup of spending per income band is more stark than ever. The too 10% income households makes up half of US's spending. But there are signs that even many high income houses add also starting to hunker down on spending.
----
That was a lot and it still only scratches the surface. But the TLDR version is that there's a lot of statistics massaging over the real struggles of life and many industries reaching a breaking point they did a good job putting off. But by this point it will only take a needle to break this camel.
Apologies for quoting all 3 sentences of parent, but the poorly-drawn conclusion depends on the full sequence of seemingly rational statements.
The context this sequence is missing is that approximately 70% of the US economy depends on consumer spending. [0][1] If the lower stroke of the K-economy diverges too much from the upper, the economy is going to grind to halt.
Consumer spending of the bottom 90% cannot (easily?) be replaced by the top 10%.
[0] https://govfacts.org/money/broader-economy/economic-indicato...
[1] https://www.npr.org/2025/11/23/nx-s1-5615222/consumer-spendi...
1. Market crash
2. AI bubble bursting
3. Year of the linux desktop
Have I missed something?
Uh, that's not accurate. Hathaway is sitting all cash because of it and so far they have been the one losing. Even if you assume (and correctly I think) that the market is overvalued, their stock pile of cash is eroding: https://newzsquare.com/warren-buffett-warns-of-fiat-currency...
> A year ago there were a few signs. Right now, it feels like everything is primed to blow. Is that new?
The market is unhealthy. Too unhealthy that I think it can no longer self-heal the usual ways (recession/crash/etc.) and we'll instead move to more advanced stage of hyperinflation, global war, etc.
I’m optimistic on the US. We could realistically print a 5 handle GDP, oil at rock bottom prices, lower federal income taxes this year. As far as Gold and Silver I just see it being propped up by speculators. Silver spot is down 15% this mornings and gold down 8%.
I predict double digit gains in the S&P by end of year and strong financial conditions with mag 7 continuing their lead. Tesla also will be a big winner.
Ignoring everything else in terms of oredictions: the US simply doesn't have that spending buffer anymore to really outspend yet another crash. Its at what, 37 trillion right now? And it's only rising more and more by the month.
The only thing worse than a crash would be the US defaulting on that. And then we'd be screwed in ways that we don't recover from in any of our lifetimes. Nearly a century of trust and soft power completely down the drain.