I predict a massive financial case next 5 years

You'd like to think there could be a better "opportunity" than war!!

There are no/few true economic laws at all are there? else we could follow them and avoid crises? There seem to be economic camps which it's perfectly legitimate to be in (keynesian etc), so no one right way, there are theories/indicators and I read that once you go over a certain debt to GDP ratio (and it used to be stated as around 100%) then more debt didn't create enough economic activity to arrest the cycle a sort of tipping point/event horizon. But then look at Japan's now.

It all seems to be mainly confidence (TINA) based, and also that any 'solution' would create bigger short term problems? ie it's easier for most people if the status quo persists, but gradually there seems to be a pinch on the lower classes where inflation is felt most, US homeless issues, worldwide economic migrants, widespread petty crime/shoplifting increasing, councils broke, slower NHS service just a bit of general social decline.

The paradox, would seem to be there is no easy solution at the moment, but the cause of problems seemingly can't even be slowed (on the contrary) so it's set to continue to make the issue bigger, making the solutions even harder and consequences worse as time goes on? A sort of catch22 doom loop......but one that could go on for years/decades?

The debt repayments as a percentage of GDP are also now rising, talk of the US debt burden approaching (apparently now surpassed) the defense budget

https://www.visualcapitalist.com/u-s-debt-interest...
"On average, the U.S. spent more than $2 billion per day on interest costs last year (2023). Going further, the U.S. government is projected to spend a historic $12.4 trillion on interest payments over the next decade, averaging about $37,100 per American.

Exacerbating matters is that the U.S. is running a steep deficit, which stood at $1.1 trillion for the first six months of fiscal 2024. This has accelerated due to the 43% increase in debt servicing costs along with a $31 billion dollar increase in defense spending from a year earlier. Additionally, a $30 billion increase in funding for the Federal Deposit Insurance Corporation in light of the regional banking crisis last year was a major contributor to the deficit increase.

Overall, the CBO forecasts that roughly 75% of the federal deficit’s increase will be due to interest costs by 2034."


So unsustainable in any logical sense but can't stop it now as the consequences will be severe? but no real plan/ability to turn this around?

Do you really think that wealthy people worry about deficits?

Is there a chance the track could bend?

How would you lose reserve currency status “for a while”

I’ve not watched the video. Seen one you’ve seen them all.

I’m sure the world should have ended about 1,000 times by now but it’s still going.

The question is correct in its needs though, how do you position for the unknown future?

The best is to secure what you have. Anything else is speculation.

Focus on your own lot.

Andy Schectman has been talking about dedollarisation and the USD losing World Reserve Currency status for a while, as well as how it appears everything is shifting to the East via the BRICS arrangements, with a move to a gold-backed financial system.

I'm going to pull that back and diversify into property and precious metals.

As you say, t’s not a zero-sum game,.

Banks don’t (generally) make money by trading in the markets. We are selling services to companies. Offering loans, issuing bonds, and hedging their risks.

An options trader may be buying calls on bonds from someone who owns the bond, and then selling those options on to someone who wants to speculate on the price moving higher. They take a small spread between the two prices, which is where they make their money.

The reason traders need to be bright and good with numbers is that the two sides of the deal rarely happen at the same time, or exactly match in economics (they may buy an option on a 10y govt bond and sell an option on a 9y one) and so they need to know how much they need to charge for the resultant risk.

They do this in interest rates, inflation, commodities, FX, equities etc, with each trader generally trading only one specific type of product or currency.

We also sell investor products, packaging (for example) equities in with debt to produce a note that will pay you any increase in the FTSE, but guarantee to return your initial investment if the FTSE falls.

Running risk in trading books nowadays costs a lot of money. The bank must set aside capital against that risk, meaning that they can’t then use it for something productive.