I do really hope the AI bubble will collapse soon. The sooner it blows the less damage it will do. And hopefully we can go back to doing real work without all these leadership guys breathing down our necks to see if we are doing enough of this AI all their shareholders want us to be involved in.
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.
Some sort of an AI crash / bubble bursting is expected to be honest - now if that will take the rest of the US economy as well.... debatable. Any strong opinions on this?
Maximize income and cash flow, when things start to crash, you want to have fresh new money coming in to start buying undervalued oversold assets.
In the meantime, keep investing to avoid eroding the value of your money as the dollar drops in value. It also prepares you for the possibility the crash doesn’t occur for a very long time, long enough to grow your net worth substantially to be better insulated.
Painfully I’ve learnt that you want to work in an industry that is largely recession proof.
Focus on industries that sell things that people need and will try to keep buying right down to their last buck.
Food, utilities, insurance. People don’t like sitting in the dark. People need water. People need to eat. People really don’t like living without insurance cover or to let cover lapse.
They don’t need Netflix, Disney+ or Prime. They don’t need Spotify. They don’t need training or e-learning. They don’t need luxury goods. They don’t need new motor vehicles. They don’t need holidays. They don’t need new iPhones or new computers.
Try and move now to an industry that has some security.
Investment wise diversification is key. Just pray that it doesn’t get so bad that banks start to fail.
Yes, you either marry into extreme wealth or hope that luck doesn't strike you into generational poverty. Anyone saying anything different is lying too you.
No one will ever get the timing right, but if you see the fundamental flaws of the economy, you know a crash is going to come. There were a lot of people who predicted the housing crash, not the timing but the crash. There are several signs that this is happening and the one no one is talking about is gold and silver prices. Don’t worry about the timing, you’ll never get the timing right, just worry about the fundamental economics and the flaws and protect yourself.
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.
> This is the 11th time that tariffs have happened, and it just isn’t surprising anymore.
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 is really obscured by the K-shaped growth, dual economy now. We've reached a stable pattern of a deep underclass serving the wealthy. We won't have a crash or "correction" because the entrenched top 5% has figured out a way extract value from everyone else indefinitely.
Why does the capital have to go anywhere? People just bid less and less for the same assets and prices go down. Margin calls happen and increase seller volume, prices go down further. And so on.
I'm not saying all this will happen. Just that capital doesn't have to "go" anywhere for a crash to occur.
There's quite a few factors here that delayed what should have logically already happened.
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.
> Which is to say that no individual decision make want’s to be the first mover, so the market does not move.
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.
Software sector basically got cut in half just on Claude Code. You have to wonder what is next. I don’t think loss in economics is 1:1 with replacement so it’s not zero sum. Production doesn’t necessarily go up. In fact, net output is going to go down if you think about all the B2B lost too.
Whoever comes into power next better start thinking about universal income fast. We are gonna get there sooner than expected.
Why do people keep espousing such bullshit. Anthropic has terrible subscriber numbers, they are absolutely no where near profitability, a 100k people buying a product that struggles to sell itself is NOT the win you think it is.
If any of these tools did 10% of what their proponents claim they would become trillion dollar companies overnight and not you know... struggle so hard selling the amazing elixirs and perpetual labor machines.
>Software sector basically got cut in half just on Claude Code.
Source?
What you're claiming is completely untrue. There have been claims like this circulating on the internet recently, and they're all based off this one chart:
There are a few major problems with this. First, all of the data comes from one source: Indeed. Indeed SURGED in popularity in the Covid years and interestingly fell off in popularity at exactly the same time as the FRED chart topped. Hey look - the chart for total jobs posted on Indeed looks similar:
Beyond that, the effect is further exacerbated by the fact that tech hiring went absolutely fucking bonkers during Covid as everyone was convinced we would be stuck inside forever and money was literally free to borrow. The FRED chart only shows us the data during Covid. The inability to see realistic developer hiring numbers before that limits your context and gives a false impression. Here's a chart that goes a few years further back (first one on this page) and shows that hiring has simply normalized:
Finally, look at the first chart again. Claude Code was released in May 2025. The chart has actually been RISING since that point.
But the software sector was cut in half by Claude Code. Right. And the false narrative marches on. It's honestly amazing to me how people just soak up false information with literally zero filter and zero critical thought or willingness to do some research.
This isn't a crash, it is something else comming, perhaps the "jackpot", where society/civilisation unravells, climate disaster kicks in with real persistant challenges everywhere, and some third, fourth, fifth effects that break our millenial run to the top of our planets ecosystem as the ultimate apex species.
It has been a good run, but useing the same tacticts as our stone age ancestors, is, I think, about to bite, hard.
And it is literaly this, our strategy is to keep useing the same tacticts.Jackpot.
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?
Is it just me or does this metaphor sound AI generated?
> 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?
> It feels as though all we need is a spark. And yet, many sparks seem to have come and gone. Big market moves, in stocks or yields, that have recovered. Tariff and invasion threats, protests, you name it, they might move the needle but it always seems to move back. So, perhaps we won? Perhaps we built our markets so stable that they are these days impervious
This is a myopic question only considering the values of securities, gold/silver, etc, which are owned in significance by relatively few.
The working class economy has already crashed. People who have to put in hours to get paid are struggling, and consumer spending is dominated by the top 10%.
The media, ever fixated on the economic welfare of the top 1%, spins a story that if the stock market is doing well, the economy is doing well.
Meanwhile there is an quiet bet that authoritarians will protect interests of capital owners over all else (i.e the bailout OpenAI hinted they might need), while suppressing the primary methods the masses have for expressing their discontent: speech, organizing/demonstrating, strikes, and voting.
Real estate prices dropped 30% blowing up most people’s savings. The debt overhang is slowly bankrupting various companies. Growth is an anemic 5% (should be double for a country with China’s per capita income) and means it will never enter middle income status. Unemployment, especially for grads is very high and the lack of babies or immigration means the worker base will shrink while the demand for social services will skyrocket.
Stocks might go down if AI doesn't bring in enough revenue. The real risk seems to be currency depreciation though. The USD is already down 15% this year compared to the Euro. I'm worried about what the next FED chair appointee will do. JPow has stuck to his principles so far.
> The USD is already down 15% this year compared to the Euro.
It's down 12% since a year ago, but that's largely a reaction to the tariffs. It's been fairly stable since July or so and has only seen a small dip (and partial recovery) in the last couple of weeks.
> The USD is already down 15% this year compared to the Euro.
False in every sense possible. For starters, the year is only a month old. Second, it’s been pretty stable for the past 6-7 months, and is only down 12% from a year ago - not 15%.
Is it really seen as “the real risk” if it is something the current elected president very explicitly said for decades he wants to do? He does want USD to go down in value. He said it, repeatedly, openly. He made very clear why he went after Powell (that he himself reappointed).
It’s more, exactly what we should expect than a risk no?
falling usd is a disaster in a consumption economy like ours. fuels inflation. makes investing in usd-denominated assets less attractive. it's not going to boost exports due to tarriff walls. there's no silver lining here.
I know HN always has its fair share of doomers, and generally the HN communities track record anecdotally regarding finance and the market is frankly terrible. Tesla (stock price wrong), Bitcoin (wrong), AI a huge dot com like bubble (wrong in my opinion - TBD though).
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.
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.
I feel like there's some credibility to 'this time it's different'
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.
I think another way to look at the expansion of the capitalist economy is the onboarding of people into entry day jobs and transitions of economies upward..
AI may have relatively little to do with the US' tantrums yet I think it has a lot to do with the end of expansion and a fast contraction of the availability of top jobs as the last economies enter the middle of the funnel can't be good.
The dollar is going down in value right now. Thats the plan. It makes foreign goods more expensive and exports more affordable to other countries. Meanwhile it should have less inflationary pressure on domestically produced stuff like housing.
I dont know if this is going to work or collapse. If it does work IMO they still need to reduce the debt - current actions are because we are backed into a corner, so that needs to be corrected.
> The US economy depends on the country's position of world hegemon
Citation needed? This feels like a retcon. Remember that the U.S. became the biggest economy in the world in 1890: https://www.digitalhistory.uh.edu/disp_textbook.cfm?smtid=2&.... That was half a century before World War II and the military empire that followed.
Simple solution; raise taxes. Been saying that will be the outcome eventually as the olds continue to die and the youth feel zero obligation to senile pants shitters and corpses. GenZ fucking hates Boomers and a whole lot of GenX (that insurance CEO? GenX. Epipen price hiking CEO? GenX. Whole lot of tech CEOs of note? Yup, GenX) Generations beyond Z will never experience Boomers and 1900s American life. They won't care about an arbitrary line in the sand. GenX ain't getting any younger, won't have Boomer support.
A reasonable scenario right now; rest of the world intentionally collaborates to isolate US, destabilize US, act as a forcing function for US to reassert internal control by swiftly deflating buying power of useless rich[1]. The world is sick of US CEOs who do little but jiggle values in spreadsheets. Sundar and many others have said CEOs are likely a very easy job to automate away; useless pageantry. There is rapidly growing domestic and overseas will to depose those non-contributors.
Fastest way to stem the collapse of reality for 10s of millions of Americans with a lot of guns too.
[1] Americans buying power has been deflated by 300% since 1980... I am sure it is purely coincidence Boomers have run the world for most of it.
This time is not different in the sense that at some point crazy valuations get a reality check. But that's not "the crash of the US economy", that's a stock market crash, and those will happen (tell me when - I'd also like to know) and they also tend to crash all around the world.
The US economy has had ups and downs and I'm sure will still have but despite the wishful thinking of Marxists it's still the least worst economy around in perhaps the least worst country. It still attracts talent and money. It still leads in many areas. It's still very productive. There are huge ecosystems and a cultural base. It's still the world's largest economy. Where will the balance tilt? China? India?
Anyways, be careful of what you wish for, if the power shifts to China we are going to have a very different world, and not in a good way. I don't think it's even in China's interest to see a large decline of the US, after all they're a big customer.
Get in power, enrich themselves, kick the can down the road to Democrats, then blame the Democrats for poor economy.
This is why ironically Trump cancelling elections and installing himself as a 3d term president would actually be good. People need to see that no matter how bad they think things were under Democrats, it can get much much worse. Say goodbye to your house value and 401k plans for retirement, you gonna be a wage slave well into your 60s, but hey, at least we fixed "wokeness"
> 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.
Strangely enough, this is exactly the opposite of how it works. The dollars abroad tend to stay abroad, as either a more stable alternative to local currencies, or a reserve currency. Likewise, treasuries held abroad tend to stay there as reserves. This is how the US is able to run both a huge debt, and a huge trade deficit. If the dollars were being repatriated, the trade deficit would close, and the influx of money would cause hotter inflation. Same with treasuries, yields would spike as demand fell.
There are lots of second order effects there, good and bad, but, basically, those dollars not coming home has funded America for quite some time.
> The US economy depends on the country's position of world hegemon
Unfortunately, the data doesn't back this up. The US economy is actually one of the least trade-dependent nations in the world.
27% of GDP is trade-oriented (The value of imports and exports as a function of GDP), while the global average is 63%. The US is so developed, that even if the country was completely cut off from the world and operated as an internal economy it would still remain the world's largest.
> 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.
You got it wrong (I'm sure most economists don't get it wrong and you just misread/misquote). USD is the default reserve and settlement medium for many countries. They buy US treasuries mainly to satisfy the demand of USD itself, not to buy goods and services from the US. That's why the US has such a huge trade deficit. The US doesn't point a gunpoint at other countries to force them buy treasuries[0]. It can lend so much money because the other countries want treasuries.
[0]: Ironically the US tends to do the opposite - forcing other countries to buy US goods and close trade gap.
Economic crashes are hard to predict. In the end stock markets are a bit irrational. They don't crash just because there are good rational reasons. And then some irrational thing triggers a mass panic when you least expected and the whole thing crashes.
The circumstances and timing (it's been a while) suggest we are probably closer to a crash happening.
From a loan/interest point of view, the dollar de-valuating a bit is actually not a bad thing for the US. It stimulates exports and inflation. And at the same time that reduces the value of the debt (and that is paid in dollars). The downside is that inflation going up usually also means interest going up. And Trump resisting that because he wants to accelerate the economy might not be a good thing.
The big picture here is oil. The world is slowly moving away from oil as the key driver for economies and paying for it in dollars. China is well on its way electrifying large parts of its economy. To the point where it is starting to import less diesel. And they border on Russia with whom they trade in Yen, not dollars. A world that is going to trade less and less oil is going to be less dependent on dollars.
I'm not an economist though. But planning for some kind of crash/correction seems prudent.
I wanted to add that since the last threat of Trump in Davos where he didn't even know the difference between Iceland and Greenland and accidentally threatened another sovereign country, almost all social insurances of EU countries have started to liquidate/sell their US bonds and assets.
If that is not a red sign to BlackRock, then I don't know...
>> 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.
For those who want to return the US to the haydays of manufacturing, the days of cheap steel and people working in mills, a rock-bottom dollar is a necessary first step. To sell widgets, the US dollar needs to be low. And to get workers into low-wage mill jobs the population needs to be hungry.
> if the US continues down the political path it currently seems to be pursuing, 'this time it's different' actually will be
You’ve set no time bound so what you say here is essentially irrefutable. It boils down to “on this path we will eventually have a big bust.” You’re right if it happens in 1 year or 30.
You’ve also not defined the bounds of the path. Paths can weave. So essentially that part of it becomes meaningless because anyone can draw a line that starts with today.
Tech has a long history of boom bust cycles. Some busts are much more mild than others. Some upend the whole economy for protracted periods. In reality no one knows when AI will bust and how bad it will be. Those are the key questions, not whether there will eventually be a tech (or broad) bust. Of course there will be if you’re looking out to infinity days from today.
Most economic commentary is like this including the linked article: so poorly defined as to be low worth as even speculation.
If the US debt gets to the point that interest on debt can't be paid, the US will just print enormous sums of money. Debt is in $, not in valued or devalued currency.
Sure, the end result will be a deprecation of the dollar. But the interest will be paid.
So the real downside to debt is not-overly apparent. Look at how much money was printed for COVID payments, and the like? And at other economic downturns? I do wonder, when will the merry-go-round stop?
I feel like one of the following is true (and I don't know yet which is the case):
- 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].
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[ 2.6 ms ] story [ 88.8 ms ] threadIt 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.
In the meantime, keep investing to avoid eroding the value of your money as the dollar drops in value. It also prepares you for the possibility the crash doesn’t occur for a very long time, long enough to grow your net worth substantially to be better insulated.
Painfully I’ve learnt that you want to work in an industry that is largely recession proof.
Focus on industries that sell things that people need and will try to keep buying right down to their last buck.
Food, utilities, insurance. People don’t like sitting in the dark. People need water. People need to eat. People really don’t like living without insurance cover or to let cover lapse.
They don’t need Netflix, Disney+ or Prime. They don’t need Spotify. They don’t need training or e-learning. They don’t need luxury goods. They don’t need new motor vehicles. They don’t need holidays. They don’t need new iPhones or new computers.
Try and move now to an industry that has some security.
Investment wise diversification is key. Just pray that it doesn’t get so bad that banks start to fail.
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.
If you know it's coming but don't know when then you don't know anything. Certainly not enough to bet on.
Everyone knew there was a bubble. People began to get impatient for what obviously was going to happen, as you say.
If the market go up 80% before dropping 20% then you want to have bought in.
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.
Results are not the same.
I'm not saying all this will happen. Just that capital doesn't have to "go" anywhere for a crash to occur.
1. Market crash
2. AI bubble bursting
3. Year of the linux desktop
Have I missed something?
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.
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.
Whoever comes into power next better start thinking about universal income fast. We are gonna get there sooner than expected.
If any of these tools did 10% of what their proponents claim they would become trillion dollar companies overnight and not you know... struggle so hard selling the amazing elixirs and perpetual labor machines.
Source?
What you're claiming is completely untrue. There have been claims like this circulating on the internet recently, and they're all based off this one chart:
https://fred.stlouisfed.org/series/IHLIDXUSTPSOFTDEVE
There are a few major problems with this. First, all of the data comes from one source: Indeed. Indeed SURGED in popularity in the Covid years and interestingly fell off in popularity at exactly the same time as the FRED chart topped. Hey look - the chart for total jobs posted on Indeed looks similar:
https://fred.stlouisfed.org/series/IHLIDXNEWUS
Beyond that, the effect is further exacerbated by the fact that tech hiring went absolutely fucking bonkers during Covid as everyone was convinced we would be stuck inside forever and money was literally free to borrow. The FRED chart only shows us the data during Covid. The inability to see realistic developer hiring numbers before that limits your context and gives a false impression. Here's a chart that goes a few years further back (first one on this page) and shows that hiring has simply normalized:
https://www.dallasfed.org/research/swe/2024/swe2406
Finally, look at the first chart again. Claude Code was released in May 2025. The chart has actually been RISING since that point.
But the software sector was cut in half by Claude Code. Right. And the false narrative marches on. It's honestly amazing to me how people just soak up false information with literally zero filter and zero critical thought or willingness to do some research.
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.
> 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 is a myopic question only considering the values of securities, gold/silver, etc, which are owned in significance by relatively few.
The working class economy has already crashed. People who have to put in hours to get paid are struggling, and consumer spending is dominated by the top 10%.
The media, ever fixated on the economic welfare of the top 1%, spins a story that if the stock market is doing well, the economy is doing well.
Meanwhile there is an quiet bet that authoritarians will protect interests of capital owners over all else (i.e the bailout OpenAI hinted they might need), while suppressing the primary methods the masses have for expressing their discontent: speech, organizing/demonstrating, strikes, and voting.
Real estate prices dropped 30% blowing up most people’s savings. The debt overhang is slowly bankrupting various companies. Growth is an anemic 5% (should be double for a country with China’s per capita income) and means it will never enter middle income status. Unemployment, especially for grads is very high and the lack of babies or immigration means the worker base will shrink while the demand for social services will skyrocket.
Doesn’t seem great to be honest.
It's down 12% since a year ago, but that's largely a reaction to the tariffs. It's been fairly stable since July or so and has only seen a small dip (and partial recovery) in the last couple of weeks.
https://finance.yahoo.com/quote/USDEUR=X/
False in every sense possible. For starters, the year is only a month old. Second, it’s been pretty stable for the past 6-7 months, and is only down 12% from a year ago - not 15%.
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.
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.
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.
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.
I think another way to look at the expansion of the capitalist economy is the onboarding of people into entry day jobs and transitions of economies upward..
AI may have relatively little to do with the US' tantrums yet I think it has a lot to do with the end of expansion and a fast contraction of the availability of top jobs as the last economies enter the middle of the funnel can't be good.
I dont know if this is going to work or collapse. If it does work IMO they still need to reduce the debt - current actions are because we are backed into a corner, so that needs to be corrected.
Citation needed? This feels like a retcon. Remember that the U.S. became the biggest economy in the world in 1890: https://www.digitalhistory.uh.edu/disp_textbook.cfm?smtid=2&.... That was half a century before World War II and the military empire that followed.
A reasonable scenario right now; rest of the world intentionally collaborates to isolate US, destabilize US, act as a forcing function for US to reassert internal control by swiftly deflating buying power of useless rich[1]. The world is sick of US CEOs who do little but jiggle values in spreadsheets. Sundar and many others have said CEOs are likely a very easy job to automate away; useless pageantry. There is rapidly growing domestic and overseas will to depose those non-contributors.
Fastest way to stem the collapse of reality for 10s of millions of Americans with a lot of guns too.
[1] Americans buying power has been deflated by 300% since 1980... I am sure it is purely coincidence Boomers have run the world for most of it.
The US economy has had ups and downs and I'm sure will still have but despite the wishful thinking of Marxists it's still the least worst economy around in perhaps the least worst country. It still attracts talent and money. It still leads in many areas. It's still very productive. There are huge ecosystems and a cultural base. It's still the world's largest economy. Where will the balance tilt? China? India?
Anyways, be careful of what you wish for, if the power shifts to China we are going to have a very different world, and not in a good way. I don't think it's even in China's interest to see a large decline of the US, after all they're a big customer.
Get in power, enrich themselves, kick the can down the road to Democrats, then blame the Democrats for poor economy.
This is why ironically Trump cancelling elections and installing himself as a 3d term president would actually be good. People need to see that no matter how bad they think things were under Democrats, it can get much much worse. Say goodbye to your house value and 401k plans for retirement, you gonna be a wage slave well into your 60s, but hey, at least we fixed "wokeness"
Strangely enough, this is exactly the opposite of how it works. The dollars abroad tend to stay abroad, as either a more stable alternative to local currencies, or a reserve currency. Likewise, treasuries held abroad tend to stay there as reserves. This is how the US is able to run both a huge debt, and a huge trade deficit. If the dollars were being repatriated, the trade deficit would close, and the influx of money would cause hotter inflation. Same with treasuries, yields would spike as demand fell.
There are lots of second order effects there, good and bad, but, basically, those dollars not coming home has funded America for quite some time.
It won't happen quickly because no-one would want to tank the market while they're selling.
[1] https://tradingeconomics.com/united-states/foreign-treasury-...
no it doesn't.
it's much closer to "you need the best economy to be a hegemon"
Unfortunately, the data doesn't back this up. The US economy is actually one of the least trade-dependent nations in the world.
27% of GDP is trade-oriented (The value of imports and exports as a function of GDP), while the global average is 63%. The US is so developed, that even if the country was completely cut off from the world and operated as an internal economy it would still remain the world's largest.
You got it wrong (I'm sure most economists don't get it wrong and you just misread/misquote). USD is the default reserve and settlement medium for many countries. They buy US treasuries mainly to satisfy the demand of USD itself, not to buy goods and services from the US. That's why the US has such a huge trade deficit. The US doesn't point a gunpoint at other countries to force them buy treasuries[0]. It can lend so much money because the other countries want treasuries.
[0]: Ironically the US tends to do the opposite - forcing other countries to buy US goods and close trade gap.
The circumstances and timing (it's been a while) suggest we are probably closer to a crash happening.
From a loan/interest point of view, the dollar de-valuating a bit is actually not a bad thing for the US. It stimulates exports and inflation. And at the same time that reduces the value of the debt (and that is paid in dollars). The downside is that inflation going up usually also means interest going up. And Trump resisting that because he wants to accelerate the economy might not be a good thing.
The big picture here is oil. The world is slowly moving away from oil as the key driver for economies and paying for it in dollars. China is well on its way electrifying large parts of its economy. To the point where it is starting to import less diesel. And they border on Russia with whom they trade in Yen, not dollars. A world that is going to trade less and less oil is going to be less dependent on dollars.
I'm not an economist though. But planning for some kind of crash/correction seems prudent.
If that is not a red sign to BlackRock, then I don't know...
For those who want to return the US to the haydays of manufacturing, the days of cheap steel and people working in mills, a rock-bottom dollar is a necessary first step. To sell widgets, the US dollar needs to be low. And to get workers into low-wage mill jobs the population needs to be hungry.
You’ve set no time bound so what you say here is essentially irrefutable. It boils down to “on this path we will eventually have a big bust.” You’re right if it happens in 1 year or 30.
You’ve also not defined the bounds of the path. Paths can weave. So essentially that part of it becomes meaningless because anyone can draw a line that starts with today.
Tech has a long history of boom bust cycles. Some busts are much more mild than others. Some upend the whole economy for protracted periods. In reality no one knows when AI will bust and how bad it will be. Those are the key questions, not whether there will eventually be a tech (or broad) bust. Of course there will be if you’re looking out to infinity days from today.
Most economic commentary is like this including the linked article: so poorly defined as to be low worth as even speculation.
Sure, the end result will be a deprecation of the dollar. But the interest will be paid.
So the real downside to debt is not-overly apparent. Look at how much money was printed for COVID payments, and the like? And at other economic downturns? I do wonder, when will the merry-go-round stop?
Your premise depends on that being true, and you stated that like it's a fact. It's an unsupported opinion.
The US economy was the world's largest before 1890, without anything remotely resembling the global reserve currency or superpower military.
- 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].
[0] https://charts.bitbo.io/price/