At what point does money become irrelevant?

[AAAgent]

Are you aware of what hyperinflation even is? Hyperinflation is 50% inflation month over month. Right now the government has put us at maybe 4-5% year over year. Unless I'm retarded I don't see how 4-5% year over year is anywhere close to 50% month over month.



This doesn't make any sense. Interest rate hikes are designed to increase the cost of lending and subsequently force companies to lay people off (which reduces the consumer's discretionary spending) to protect their profits as well as reduce corporate spending which ultimately circulates money out of the economy to slow down inflation.

Hyperinflation:

You are only interpreting the public data that is pushed by mainstream. Our dollar supply continues to increase YoY. Why have we never experienced inflation in the past on the levels that we are now? Because of USD holds the global reserve currency status and trade is pegged to the dollar. Thus anyone that wants to participate in global trade, must hold dollars or some dollar derivative asset. This part most already know but still most don't understand why/how we are losing reserve currency status and what that will do to US purchasing power.

When the west removed Russia from the SWIFT financial payment system, expecting this to crush Russia's economy and cripple them economically and militarily, this backfired. Russia found a way to circumvent these financial sanctions and created an entirely new system with its trading partners. Trading partners realized that not only can they conduct reasonable trade without the dollar, that the dollar hegemony is to their detriment, as it could be used as a weapon against them if you did not do what the US/West wants. With Russia and China leading the way, and China offering growth to join this new system of trade which they are saying will be backed by gold, while the US dollar hegemony offers trade backed by dollars and threats of war and toppling your government if you don't join, many are wising up. The West/Ukraine is losing the war horribly. The US can't economically support another war front outside of Ukraine without crashing the economy definitively, many countries see this weakness as an opportunity to not pay homage to the US and exit our system and join the BRICS. The demand for the dollar has only managed to keep inflation under control until recently through military extortion, forcing all these countries to trade in dollars. Even with forcing all this demand throughout the world, we are still experiencing inflation now.

"The current BRICS five now contribute 31.5% of global GDP, while the G7 share has fallen to 30%. The BRICS is expected to contribute over 50% of global GDP by 2030, with the proposed enlargement almost certainly bringing that forward."

"The latest report indicates that the countries ready to join the BRICS alliance are Afghanistan, Algeria, Argentina, Bahrain, Bangladesh, Belarus, Egypt, Indonesia, Iran, Kazakhstan, Mexico, Nicaragua, Nigeria, Pakistan, Saudi Arabia, Senegal, Sudan, Syria, the United Arab Emirates, Thailand, Tunisia, Turkey, Uruguay, Venezuela, and Zimbabwe."

The BRICS Has Overtaken The G7 In Global GDP - Silk Road Briefing

By Chris Devonshire-Ellis The India-based Megh Updates platform, one of the world’s largest online informational platforms in terms of views, has stated that BRICS countries have officially overtaken G7 in share of world PPP GDP, and that this trend can be expected to continue. The BRICS...

www.silkroadbriefing.com

.

More than 30 countries want to join the BRICS

South Africa’s representative to BRICS Ambassador Anil Sooklal has hinted that the grouping is set to grow bigger this year with more

moderndiplomacy.eu

This doesn't even include the surprise of France.

France says Macron hopes to attend BRICS summit

French President Emmanuel Macron hopes to attend a BRICS summit scheduled for August, his foreign minister said Tuesday, a meeting to which Russian leader Vladimir Putin has been invited.

www.vanguardngr.com

With the BRICS nations GDP already larger than the G7 threatening to leave the dollar, and now many other countries expressing intent to drop the dollar and join BRICS and their new financial system, what will happen to the dollar when demand evaporates while supply is at an all time high? Likely, the value of the dollar will come crashing down to meet the lower demand, thus decreasing the purchasing power of the dollar, driving the cost of good significantly higher. This is where hyperinflation reaches the west and any countries relying on the dollar still in this scenario. Media will obviously not discuss this reality bluntly as it would cause a panic but those financially literate, understand. The current game in town is how to preserve your wealth in preparation for this event which is why gold, silver, and Bitcoin are rising.

"The investing playbook for inflation also applies for fighting de-dollarization. That is to say that if the dollar plunges in value, there is likely to be a large rise in inflation within the American economy."

France says Macron hopes to attend BRICS summit

French President Emmanuel Macron hopes to attend a BRICS summit scheduled for August, his foreign minister said Tuesday, a meeting to which Russian leader Vladimir Putin has been invited.

www.vanguardngr.com

Interest rate hikes do slow down and even help reverse/lower inflation, but these actions are being counter acted by demand for the dollar decreasing. At best, we would be at a net neutral with hikes slowing down inflation and demand decrease of the dollar increasing inflation but sadly, the data is not showing that. Fed is still unable to keep inflation under control with interest rate hikes. It plans to hike more but also knows that if it hikes anymore, it could prike the bubble and cause a crash (most financial analysts already believe this is coming either way).

 

[itouchyou]

Hyperinflation:

You are only interpreting the public data that is pushed by mainstream. Our dollar supply continues to increase YoY. Why have we never experienced inflation in the past on the levels that we are now? Because of USD holds the global reserve currency status and trade is pegged to the dollar. Thus anyone that wants to participate in global trade, must hold dollars or some dollar derivative asset. This part most already know but still most don't understand why/how we are losing reserve currency status and what that will do to US purchasing power.

When the west removed Russia from the SWIFT financial payment system, expecting this to crush Russia's economy and cripple them economically and militarily, this backfired. Russia found a way to circumvent these financial sanctions and created an entirely new system with its trading partners. Trading partners realized that not only can they conduct reasonable trade without the dollar, that the dollar hegemony is to their detriment, as it could be used as a weapon against them if you did not do what the US/West wants. With Russia and China leading the way, and China offering growth to join this new system of trade which they are saying will be backed by gold, while the US dollar hegemony offers trade backed by dollars and threats of war and toppling your government if you don't join, many are wising up. The West/Ukraine is losing the war horribly. The US can't economically support another war front outside of Ukraine without crashing the economy definitively, many countries see this weakness as an opportunity to not pay homage to the US and exit our system and join the BRICS. The demand for the dollar has only managed to keep inflation under control until recently through military extortion, forcing all these countries to trade in dollars. Even with forcing all this demand throughout the world, we are still experiencing inflation now.

"The current BRICS five now contribute 31.5% of global GDP, while the G7 share has fallen to 30%. The BRICS is expected to contribute over 50% of global GDP by 2030, with the proposed enlargement almost certainly bringing that forward."

"The latest report indicates that the countries ready to join the BRICS alliance are Afghanistan, Algeria, Argentina, Bahrain, Bangladesh, Belarus, Egypt, Indonesia, Iran, Kazakhstan, Mexico, Nicaragua, Nigeria, Pakistan, Saudi Arabia, Senegal, Sudan, Syria, the United Arab Emirates, Thailand, Tunisia, Turkey, Uruguay, Venezuela, and Zimbabwe."

The BRICS Has Overtaken The G7 In Global GDP - Silk Road Briefing

By Chris Devonshire-Ellis The India-based Megh Updates platform, one of the world’s largest online informational platforms in terms of views, has stated that BRICS countries have officially overtaken G7 in share of world PPP GDP, and that this trend can be expected to continue. The BRICS...

www.silkroadbriefing.com

.

More than 30 countries want to join the BRICS

South Africa’s representative to BRICS Ambassador Anil Sooklal has hinted that the grouping is set to grow bigger this year with more

moderndiplomacy.eu

This doesn't even include the surprise of France.

France says Macron hopes to attend BRICS summit

French President Emmanuel Macron hopes to attend a BRICS summit scheduled for August, his foreign minister said Tuesday, a meeting to which Russian leader Vladimir Putin has been invited.

www.vanguardngr.com

With the BRICS nations GDP already larger than the G7 threatening to leave the dollar, and now many other countries expressing intent to drop the dollar and join BRICS and their new financial system, what will happen to the dollar when demand evaporates while supply is at an all time high? Likely, the value of the dollar will come crashing down to meet the lower demand, thus decreasing the purchasing power of the dollar, driving the cost of good significantly higher. This is where hyperinflation reaches the west and any countries relying on the dollar still in this scenario. Media will obviously not discuss this reality bluntly as it would cause a panic but those financially literate, understand. The current game in town is how to preserve your wealth in preparation for this event which is why gold, silver, and Bitcoin are rising.

"The investing playbook for inflation also applies for fighting de-dollarization. That is to say that if the dollar plunges in value, there is likely to be a large rise in inflation within the American economy."

France says Macron hopes to attend BRICS summit

French President Emmanuel Macron hopes to attend a BRICS summit scheduled for August, his foreign minister said Tuesday, a meeting to which Russian leader Vladimir Putin has been invited.

www.vanguardngr.com

Interest rate hikes do slow down and even help reverse/lower inflation, but these actions are being counter acted by demand for the dollar decreasing. At best, we would be at a net neutral with hikes slowing down inflation and demand decrease of the dollar increasing inflation but sadly, the data is not showing that. Fed is still unable to keep inflation under control with interest rate hikes. It plans to hike more but also knows that if it hikes anymore, it could prike the bubble and cause a crash (most financial analysts already believe this is coming either way).

I am familiar with what is going in with BRICS. What you are alluding to takes decades to happen. We don't lose reserve currency in a matter of years, that takes a LONG time. By then, something will have changed. Perhaps a new war is started. Perhaps CBDC gets implemented on a global level. Who knows.

I don't look at only inflation numbers published by mainstream, I know that in certain sectors inflation is higher than what the numbers indicate. The CPI prints are manipulated a fair bit. That being said, we are still nowhere close to hyperinflation.

All these countries hopping on the BRICS bandwagon are doing so because it is in their self interest. It's not because they hate the US and want to see it fail. If the US comes with some kind of solution to make the dollar attractive once more, BRICS might not be an issue. It's just politics.

To put things in perspective, the USD accounted for 73% of global currency reserves in 2001. Today it accounts for 58%. 22 years for that drop.

 

[AAAgent]

401ks are tied to index funds for the most part which are tied to legitimate businesses that are constantly growing. The intrinsic value of these businesses will always exist regardless of the strength of the dollar and the market capitalization of these companies in a legitimate market will reflect that whether their price is $100 share or $10,000/share after currency devaluation due to inflation. I do not understand how inflation does anything negative to 401ks, as a matter of fact a retirement account is probably one of the safest places to park your money to hedge against inflation as long as you have exposure to the world market and not just the USD. The only risk is if there is a black swan event like 2008 or the pandemic that slashes share prices to oblivion overnight, but that is a risk we all have to take. The people getting hurt by inflation are the ones that are stashing their money under their mattress or leaving it in an account that doesn't generate interest on the balance.

The dollar is hanging on by a thread at the moment. It may last a few more months at these levels, maybe another year. Dollars are not being dumped yet by the BRICS as the system is not setup yet. It's being prepared at the moment, which markets understand. Thus there is still value that can be extracted from markets.

I'll say "if" here, but it's more of a when situation. If the dollar collapses, you will likely see a panic towealth preservation and a dumping of all assets, including stocks/401k's and a flood into safe haven assets. Demand for Gold/Silver is already at all time highs, and gold prices have already reached all time highs earlier this year. Clearly, this is already starting to happen. I myself have prepared for this, likely @jaygreenb and those financially literate enough to understand these conditions.

"According to the report, global demand rose to a new record high of 1.242 million ounces, up 18% from the record levels seen in 2021. At the same time, the global silver supply totaled 1.004 billion ounces, roughly unchanged from the previous year. For 2023, supply is expected to grow by 2% to 1.024 billion ounces.

"Silver demand was unprecedented in 2022, and we don't say that to try and be sensational that is the only way to describe the market," Neman said. "The silver market has entered a new paradigm of deficits that kicked off in 2021.""

Silver supply deficit reaches record high, could fuel price growth - Silver Institute report

Kitco News' general-interest stories takes a look at what is making headlines in the marketplace and how that is impacting precious metals prices

www.kitco.com

In this situation, expectations are a crash worse than the great depression. Stocks may likely take many many years to recover or not at all. Given the new financial system that is being established to remove the dollar as the global reserve currency, the west managed precious metals exchange COMEX that prices gold/silver/etc. also likely shifting to BRICS.

We'll likely see deflation in assets that require credit/lending as this system will be crippled, and non essential goods. Essential goods will likely hyperinflate.

 

[itouchyou]

The dollar is hanging on by a thread at the moment. It may last a few more months at these levels, maybe another year. Dollars are not being dumped yet by the BRICS as the system is not setup yet. It's being prepared at the moment, which markets understand. Thus there is still value that can be extracted from markets.

I'll say "if" here, but it's more of a when situation. If the dollar collapses, you will likely see a panic towealth preservation and a dumping of all assets, including stocks/401k's and a flood into safe haven assets. Demand for Gold/Silver is already at all time highs, and gold prices have already reached all time highs earlier this year. Clearly, this is already starting to happen. I myself have prepared for this, likely @jaygreenb and those financially literate enough to understand these conditions.

"According to the report, global demand rose to a new record high of 1.242 million ounces, up 18% from the record levels seen in 2021. At the same time, the global silver supply totaled 1.004 billion ounces, roughly unchanged from the previous year. For 2023, supply is expected to grow by 2% to 1.024 billion ounces.

"Silver demand was unprecedented in 2022, and we don't say that to try and be sensational that is the only way to describe the market," Neman said. "The silver market has entered a new paradigm of deficits that kicked off in 2021.""

Silver supply deficit reaches record high, could fuel price growth - Silver Institute report

Kitco News' general-interest stories takes a look at what is making headlines in the marketplace and how that is impacting precious metals prices

www.kitco.com

In this situation, expectations are a crash worse than the great depression. Stocks may likely take many many years to recover or not at all. Given the new financial system that is being established to remove the dollar as the global reserve currency, the west managed precious metals exchange COMEX that prices gold/silver/etc. also likely shifting to BRICS.

We'll likely see deflation in assets that require credit/lending as this system will be crippled, and non essential goods. Essential goods will likely hyperinflate.

Well - I don't mean to be dismissive, but your theory has gone to full blown conspiracy theory levels at this point. Dollar destruction within months? If you're that confident I'd be interested to see your short position.

Gold and silver prices have barely moved. People have been talking about recession and hyperinflation for years now. I just don't see it. Atleast not anytime soon.

 

[AAAgent]

I am familiar with what is going in with BRICS. What you are alluding to takes decades to happen. We don't lose reserve currency in a matter of years, that takes a LONG time. By then, something will have changed. Perhaps a new war is started. Perhaps CBDC gets implemented on a global level. Who knows.

I don't look at only inflation numbers published by mainstream, I know that in certain sectors inflation is higher than what the numbers indicate. The CPI prints are manipulated a fair bit. That being said, we are still nowhere close to hyperinflation.

All these countries hopping on the BRICS bandwagon are doing so because it is in their self interest. It's not because they hate the US and want to see it fail. If the US comes with some kind of solution to make the dollar attractive once more, BRICS might not be an issue. It's just politics.

To put things in perspective, the USD accounted for 73% of global currency reserves in 2001. Today it accounts for 58%. 22 years for that drop.

This has been happening for decades......and it's now snowballing. the government/fed has managed to finagle its out way out crisis many times, but lowering rates is not an option due to inflation, raising rates is a limited option due to crashing the economy, printing money is worsen inflation, and wars will worsen inflation. The old tricks won't work anymore and we're waiting to see what new tricks can be pulled out of the hat, if any.

Financially, the US in its current state will be hard pressed to financially support any other wars outside of Ukraine.

"

• The US dollar's reserve currency status has seen gradual erosion for two decades, Eurizon strategists said.
• But last year, the pace of erosion was 10 times faster amid currency sanctions against Russia.
• The dollar's dominant role in international trade is unlikely to be challenged soon, Eurizon said.

The dollar's standing as a reserve currency of choice saw a steep decline in 2022 even though its strength in international trade remains unchallenged, according to Eurizon SLJ Asset Management.

In a Monday note, strategists Joana Freire and Stephen Jen calculated that the greenback accounted for about two-thirds of total global reserves in 2003, then 55% by 2021, and 47% last year.

"This 8% decline in one year is exceptional, equivalent to 10 times the average annual pace of erosion in the USD's market share in the prior years," the authors said.

The drop-off in the dollar's standing as a reserve currency accelerated since the start of the war in Ukraine in particular."

The dollar's dominance as a reserve currency eroded last year at 10 times the pace seen in the past 2 decades

"We believe the erosion of the dollar's reserve currency status has accelerated in recent years at an alarming pace," Eurizon said.

finance.yahoo.com

 

[AAAgent]

Well - I don't mean to be dismissive, but your theory has gone to full blown conspiracy theory levels at this point. Dollar destruction within months? If you're that confident I'd be interested to see your short position.

Gold and silver prices have barely moved. People have been talking about recession and hyperinflation for years now. I just don't see it. Atleast not anytime soon.

Your knowledge and reaction is typical of a normal person that doesn't see the full picture of the markets or economics, therefore lack understanding. Even when presented with the data, the shock factor is too much. I've seen this with many people. Not my job to convince you, the data is there if you want to dive into it. This is how I acquired my wealth by studying trends, economics, geopolitics, financial markets for years. My job also involves managing global business operations, P&L, identifying trends, verifying data of trends, acting on the trends to capitalize to gain a competitive advantage, ROI, etc.

Seeing the headlines and what is being shared by MSM is one thing. There's also spin and propaganda. When you look at the numbers, you are able to piece together the actual story taking the truth and removing the BS that is shared. No one can time the markets and no one knows what the gov/fed will try to do to save markets/economy but what I can see is the data and trends.

I'm not shorting the market. Not necessary for me to take those risks at this point anymore but I do expect the market to continue to melt-up for the short term. I am in wealth preservation mode at the moment.

 

[AAAgent]

All these countries hopping on the BRICS bandwagon are doing so because it is in their self interest. It's not because they hate the US and want to see it fail. If the US comes with some kind of solution to make the dollar attractive once more, BRICS might not be an issue. It's just politics.

The US solution to make the dollar attractive historically for nations is moving Aircraft carriers into your waters to pressure you to maintain the dollar to keep trade and sovereignty. If that doesn't work, it trumps up WMD's, chemical weapons, and genocide claims to invade and install a puppet government that will take dollars. This is pretty well known.

While historically, China has offered investment, manpower to build infrastructure for technology and roads/bridges, etc.

Faith and trust in working with the US has been eroded, as well as our military strength to enforce our historical practices due to financial constraints. Is it possible for the US to change course, yes but it's likely too little too late to stop the shift. Will take a long time to build up a strong reputation and win back nations once we lose our bullying power.

 

[jaygreenb]

I'll say "if" here, but it's more of a when situation. If the dollar collapses, you will likely see a panic towealth preservation and a dumping of all assets, including stocks/401k's and a flood into safe haven assets. Demand for Gold/Silver is already at all time highs, and gold prices have already reached all time highs earlier this year. Clearly, this is already starting to happen. I myself have prepared for this, likely @jaygreenb and those financially literate enough to understand these conditions.

That obvious huh lol I have a lot of physical metals and bitcoin in different forms of self custody, probably too much. I also have a lot of cash in t bills and high yield savings accounts for the liquidity. The only thing I am unsure about is the timeline, they have been able to kick the can a lot farther than I would have thought in the past. There are a lot of long term financial and social cycles converging right now which historically have resulted in turmoil, massive changes and war. The world is moving away from the dollar, just do not know how quickly it happens but want to be ready either way. Gut feeling is a lot of things could potentially happen quickly this decade.

 

[FlirtLife]

Wait so you don't earn anything worth mentioning, haven't acquired anything worth mentioning, don't understand pensions, don't understand the financial system, don't understand economics but you are lecturing on building wealth?

Anything else besides the 4% rule we should learn from this masterclass of yours?

I keep my NW private.

If you don't dispute the 4% rule, you'll need to admit OP needs about $5 million to retire (which I showed above), and not the $20 million BIG and ROUND number you made up. Either the 4% rule is wrong, or you're wrong. Which is it?

When I disagree that pensions are a "scam investment", you call that "don't understand pensions"? Quote what I said incorrectly about pensions, then. But if you call a specific company's pensions a "scam investment" in a newspaper, expect to be sued and lose in court.

 

[AAAgent]

That obvious huh lol I have a lot of physical metals and bitcoin in different forms of self custody, probably too much. I also have a lot of cash in t bills and high yield savings accounts for the liquidity. The only thing I am unsure about is the timeline, they have been able to kick the can a lot farther than I would have thought in the past. There are a lot of long term financial and social cycles converging right now which historically have resulted in turmoil, massive changes and war. The world is moving away from the dollar, just do not know how quickly it happens but want to be ready either way. Gut feeling is a lot of things could potentially happen quickly this decade.

If there wasn't this shift in de-dollarization, bond crisis, CRE crisis happening, I would also be more comfortable with the thought of the can being kicked down the road. We've already seen inklings of the bond crisis causing regional bank insolvencies multiple times this year. CRE is on the precipice as well. One of these can's is going to pop off and will likely kickstart widespread panic. Definitely don't think we'll get anywhere close to a decade and expecting things to happen from now ranging into end of 2024. The fact that we have election season coming up, this may kick the can down the road until its over as all stops will be pulled to maintain sentiment going into elections.

 

[FlirtLife]

Government has put us on the brink of hyperinflation by massively increasing the circulating supply of dollars. They are trying to combat this by slowing down the m2 velocity and decreasing the amount people spend/exchange dollars by increasing interest rates. This is being counter-acted by many large nations abandoning the dollar and joining BRICS and Crypto thus decreasing the demand for purchasing dollars and using dollars compounding on the supply issue.

Can you name the "many large nations" using "Crypto" instead of "the circulating supply of dollars"?

 

[itouchyou]

Your knowledge and reaction is typical of a normal person that doesn't see the full picture of the markets or economics, therefore lack understanding. Even when presented with the data, the shock factor is too much. I've seen this with many people. Not my job to convince you, the data is there if you want to dive into it. This is how I acquired my wealth by studying trends, economics, geopolitics, financial markets for years. My job also involves managing global business operations, P&L, identifying trends, verifying data of trends, acting on the trends to capitalize to gain a competitive advantage, ROI, etc.

Seeing the headlines and what is being shared by MSM is one thing. There's also spin and propaganda. When you look at the numbers, you are able to piece together the actual story taking the truth and removing the BS that is shared. No one can time the markets and no one knows what the gov/fed will try to do to save markets/economy but what I can see is the data and trends.

I dont even watch MSM. All you have linked in terms of data is pretty much clickbait articles.

First you talk about hyperinflation which is 50% month over month vs the 5% year over year we're seeing. Give or take a few % since the official numbers are sugarcoated a bit. Still nowhere near hyperinflation.

Then you claim interest rate hikes will make pensions and 401ks worthless. No logic there.

Then you say the dollar could become useless within months, but then shortly after that you say the dollar will be fine until elections are over next year.

You present very few real numbers with charts and all of your writing just reads like aomething I'd see off twitter. You don't even have a short position.

Anyone can link together various events around the world and push some theory of the entire economy collapsing, but if they have no skin in the game their theory is largely not that strong.

Just reads like any other doomsday scenario.


I will say though, your theory isn't without it's merits. There is a lot of truth in there. My main issue is that the timing of what you say will happen is just too unrealistic. You are basically attempting to predict a black swan event. Things like this have too many moving parts to be accurately predicted down to the month/year.

 

[jaygreenb]

If there wasn't this shift in de-dollarization, bond crisis, CRE crisis happening, I would also be more comfortable with the thought of the can being kicked down the road. We've already seen inklings of the bond crisis causing regional bank insolvencies multiple times this year. CRE is on the precipice as well. One of these can's is going to pop off and will likely kickstart widespread panic. Definitely don't think we'll get anywhere close to a decade and expecting things to happen from now ranging into end of 2024. The fact that we have election season coming up, this may kick the can down the road until its over as all stops will be pulled to maintain sentiment going into elections.

Definitely agree, there are a lot of different areas that could break down and set off a chain of other failures. The only real question for me is how effective can the fed/govt play wack a mole and how long can it be delayed. Personally think it would be prudent to be positioned for short and longer term scenarios. For example, in 2020, when covid started to kick off and all markets were falling off a cliff. At that point in time I would have never guessed what level of stimulus would happen or that the markets would just rip to the upside for a few years. One of those the markets can stay irrational longer than you can stay solvent. So basically, be ready for anything

 

[jaygreenb]

Can you name the "many large nations" using "Crypto" instead of "the circulating supply of dollars"?

There are three pretty distinct areas of this so depends what you are specifically referencing. They are Bitcoin, Alt coins and CBDC's

 

[jaygreenb]

Are you aware of what hyperinflation even is? Hyperinflation is 50% inflation month over month. Right now the government has put us at maybe 4-5% year over year. Unless I'm retarded I don't see how 4-5% year over year is anywhere close to 50% month over month.



This doesn't make any sense. Interest rate hikes are designed to increase the cost of lending and subsequently force companies to lay people off (which reduces the consumer's discretionary spending) to protect their profits as well as reduce corporate spending which ultimately circulates money out of the economy to slow down inflation.

401ks are tied to index funds for the most part which are tied to legitimate businesses that are constantly growing. The intrinsic value of these businesses will always exist regardless of the strength of the dollar and the market capitalization of these companies in a legitimate market will reflect that whether their price is $100 share or $10,000/share after currency devaluation due to inflation. I do not understand how inflation does anything negative to 401ks, as a matter of fact a retirement account is probably one of the safest places to park your money to hedge against inflation as long as you have exposure to the world market and not just the USD. The only risk is if there is a black swan event like 2008 or the pandemic that slashes share prices to oblivion overnight, but that is a risk we all have to take. The people getting hurt by inflation are the ones that are stashing their money under their mattress or leaving it in an account that doesn't generate interest on the balance.

I don't think it is that simple, there are many variables and effects. It is possible to have a scenario where inflation far outpaces stock prices. Extreme example is Venezuela where stock market hit all time highs but relative purchasing power got destroyed. In a low rate environment most companies were doing buybacks to increase share price. Since cost of capital was essentially close to free, they could keep rolling the debt and focus on growth over profitability. If rates stay elevated we are going to see a large amount of insolvency's and layoffs, which sets off other sets off chain events as well. Because of the cost of capital you also may have significantly lower multiples on valuations and stock price.

This article determined 15% of publicly traded companies are zombie corporations. Because of the monetary policy the past two decades it allowed dysfunctional corps, individuals and governments to become incredibly inefficient and developed habits that would never work in rational historic markets. Would also add, if banks had to mark to market what their balance sheet is today, majority would be insolvent as well.

Can Zombie Firms Survive Rising Interest Rates?

Companies that can’t pay their debts are supposed to turn things around or go out of business. But across the world, a rising number of “zombie firms” are limping along, unable to pay their debts but somehow hanging on. Now, with interest rates rising, the question is whether the zombies will...

hbr.org

My personal opinion is you need to be careful of recency bias and be open to the possibility the next decade or two may look a lot different then the past few. There have been many periods in history where a black swan or major trend change happens and what worked at the time got blown out. The standard 60/40 may not work going forward as it has in the past and something like Ray Dalio's all weather portfolio or the dragon portfolio should be considered. Ultimately nobody knows for sure and we will have to see how it plays out.

Ray Dalio All Weather Portfolio Review, ETFs, & Leverage (2026)

Is the All Weather Portfolio too conservative or just right? Ray Dalio's allocation explained with exact allocations, performance data, and ETFs to use.

www.optimizedportfolio.com

Tokenist: Breaking News on Crypto, Stocks, and Macro Finance

The Tokenist is your trusted home for the latest finance news on stocks, crypto, forex, and more. Join us.

tokenist.com

 

[AAAgent]

I dont even watch MSM. All you have linked in terms of data is pretty much clickbait articles.

First you talk about hyperinflation which is 50% month over month vs the 5% year over year we're seeing. Give or take a few % since the official numbers are sugarcoated a bit. Still nowhere near hyperinflation.

Then you claim interest rate hikes will make pensions and 401ks worthless. No logic there.

Then you say the dollar could become useless within months, but then shortly after that you say the dollar will be fine until elections are over next year.

You present very few real numbers with charts and all of your writing just reads like aomething I'd see off twitter. You don't even have a short position.

Anyone can link together various events around the world and push some theory of the entire economy collapsing, but if they have no skin in the game their theory is largely not that strong.

Just reads like any other doomsday scenario.


I will say though, your theory isn't without it's merits. There is a lot of truth in there. My main issue is that the timing of what you say will happen is just too unrealistic. You are basically attempting to predict a black swan event. Things like this have too many moving parts to be accurately predicted down to the month/year.

- Hyperinflation, already addressed clearly. If you don't agree or see how this can snowball quickly, then we can agree to disagree.

- Interest rates affecting 401k's/stocks. These are not only being affected by interest rates directly but also indirectly. Many companies own government debt, especially financial companies like banks. This was previously a great way to safely park your excess cash or just cash in general to generate yield in a low to 0% interest rate environment. Because of how fast fed has increased interest rates essentially from 0 to 5%+ in the span of a little over 12 months, the value of these bonds has depreciated extremely quickly before companies have even had a chance to react. When interest rates go up, bond yield goes up, but principle value of the bond decreases.

When you're holding $500bn in 10 year government bonds per say at 2% yield, but suddenly in a span of 8 months later, the fed funds rate is 4.5%. You yield increases to 3%+ but now your bond principal value has just dropped by 15%. The yield doesn't make up for this loss and when financials are reported, these numbers eventually hit the books, show that the bank doesn't own enough assets to meet its liabilities and cause panic. 2020-2021 numbers are much worse for those who own the 10 year. This is what caused the collapse of the few banks earlier this year and regional banking crisis from March 2023 to May 2023. Many banks are still in danger zones, some are surviving due to M&A but

US - FedWatch Rate Forecast (2026) | US Treasury Bonds | Collection | MacroMicro

Key fundamental and positioning indicators to monitor for US Treasury bonds.

en.macromicro.me

Due to rates and economic environment, funding and lending standards are tightening extremely. Those that need money, especially start-ups and small businesses aren't able to get it. Many banks just can't lend due to the above. Many of these companies will fold or also start laying off if they haven't already.

The rates are really hurting the economy in multiple ways. The longer or higher rates persist or get, the worse the situation is.

- Dollar crash can literally happen anytime. It's like a house of cards, similar to the market. Launching the BRICS currency, China dumping bonds, etc. You'll honestly need to do your own research as I don't have the time to detail everything here and it does take a lot of time to research, digest, and put the pieces together.

- Presenting few real numbers. Again, I can't explain and teach global economics, geopolitics, markets, trends, all in a single posts and provide sources. I've cited information that outlines the picture. If that isn't enough for you, again you can DYOR. That's exactly what I did.

- No skin in the game. I never said I had no skin in the game. I just said I wasn't shorting. I'm own physical metals, Bitcoin, and some cash. I've cashed out my 401k, although a bit early probably but im okay with this. I'll also be selling my stocks shortly. Will accumulate until end of summer and then pay off all debt and just weather the storm. If the storm comes before then, i'm already prepared anyway and won't be much affected. Just not shorting the market which is an unnecessary risk when i'm in assets that do essentially the same thing with lower risk.

- Reads like any other doomsday scenario. Yes, it's a bad scenario but i don't focus too much on the bad, although I expect it to be horrible. I'm more focused on how I can make money and at the very least, preserve my wealth during these times. Even if i'm wrong and the can gets kicked down the road, my assets will still do well an environments slowly get worse, instead of quickly getting worse but i'm hedged either way.

 

[EyeBRollin]

- Hyperinflation, already addressed clearly. If you don't agree or see how this can snowball quickly, then we can agree to disagree.

Lay off the doomsday blogs. Inflation was much worse in the 70s and even that wasn’t hyperinflation. USA lacks the fundamentals for hyperinflation to be of concern. 5% year over year is only barely above optimal.

 

[jaygreenb]

Lay off the doomsday blogs. Inflation was much worse in the 70s and even that wasn’t hyperinflation. USA lacks the fundamentals for hyperinflation to be of concern. 5% year over year is only barely above optimal.

To be fair, they keep changing the rules on how it is calculated to pad the numbers. If calculated the same way as the 70's, today would be a lot higher

 

[EyeBRollin]

To be fair, they keep changing the rules on how it is calculated to pad the numbers. If calculated the same way as the 70's, today would be a lot higher

I always hear about hyperinflation every time there is a Democratic President. I never hear about it when there is a Republican President. It would appear GOP tax cuts for the wealthy are never inflationary. Funny how that works.

(There is no threat of hyperinflation. It is all election season rhetoric.)

 

[jaygreenb]

I always hear about hyperinflation every time there is a Democratic President. I never hear about it when there is a Republican President. It would appear GOP tax cuts for the wealthy are never inflationary. Funny how that works.

(There is no threat of hyperinflation. It is all election season rhetoric.)

I did not reference hyper inflation, I compared how it is calculated today. Not sure how this became political, are you ok?