this post was submitted on 18 Sep 2025
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[–] SnuggleButt@hexbear.net 1 points 1 week ago (1 children)

I mean this is all true but my point is it’s been happening since 08 non-stop. The house of cards is designed to function like this, and whenever there’s turbulence that might threaten it, the us govt prints their way out.

It feels like a perpetual crash is looming because they’ve designed the system to perfectly maintain a constant crash for ordinary people, and drip feed assets to the wealthy. I don’t see an event that stops this from happening until after the US loses the world reserve currency, which would necessitate a substantial decoupling between Europe and the US, which would necessitate more than just China as a competitive superpower

[–] yogthos@lemmygrad.ml 1 points 1 week ago (1 children)

The key part is that this is a self reinforcing phenomenon. It's not a linear progression where things are deteriorating in a predictable manner. All the different factors work together creating an accelerating crisis. Eventually tipping points will be reached when the whole house of cards struts to crumble. The catalyst will be when there's a critical mass of people who can't make ends meet and aren't able to paper over that with credit. This has little to do with the dollar being the reserve currency. What matters far more are things like cost of energy, cost of imports, and the state of the domestic economy. All these things are now unravelling due to the proxy war with Russia and the tariff war with the whole world. Europe can't keep the US economy afloat, and European economies are now collapsing even faster than the US is.

[–] SnuggleButt@hexbear.net 1 points 1 week ago (1 children)

Well the reserve currency is the lynchpin in my opinion because it’s holding back a tidal wave of inflation, which would then cause the issues you’re describing to explode. Without the demand that status generates, the excess supply has nowhere to go. Our current crisis is a function of the massive printing during Covid that even the reserve currency status struggled to contain.

I feel like if Covid as a tipping point did not destroy this country im not sure what will. A lot of people are taking on debt, but there’s a lot farther they can fall. There are cheaper alternatives they will move to in terms of housing, food, etc. not everyone sits at the bottom but everyone can sit at the bottom and I think there’s still a lot to fall. Much poorer countries exist in much worse conditions. And the institutions whose value are based on that debt that won’t be paid back will just be bailed out like in 08 and during covid via printing. This is why the reserve currency is the lynchpin because they can only keep doing this if there’s external demand for dollars.

There already is a critical mass of people who are doing really poorly, but relatively. The issue is they’re not all entering that state at once, so the permanent crisis I describe in my prior comment is one of very many small crises happening, always. This both normalizes the situation but also prevents a large mass of people from being disenfranchised at once, making it hard for society to react as a mass unit. These smaller units will slip into conditions similar to poor countries, meaning they are still viable to live in even though they’re terrible, all driven by consistent inflation.

It’s a decentralized, slow and steady destruction that only affects small portions of the population at once. Unless inflation erupts at once it won’t ever effect enough people at the same time to cause a mass situation

I think the best marker of an imminent rapid decline is the middle-upper class/upper-class non elite. Like, think of people like doctors. These typically indicate the beginning of a revolution or a large change because they have enough money to live very well lives, but not enough to maintain them in the face of hard times, meaning their standard of living can shift the most out of any group of people, and they still represent a nominally large population. There are less of them than there once was but they still exist and I think are important to pay attention to

[–] yogthos@lemmygrad.ml 1 points 1 week ago (1 children)

I'm not sure the reserve currency is as important as people make it out to be in practice. It's pretty clear that trade can happen perfectly fine using bilateral swaps as we've see happening within BRICS on increasing basis. The dollar is also losing its status as a safe store of value due to geopolitical volatility and its devaluation. We've seen central banks increasingly buying up gold recently with prices going through the roof. This is a direct result of countries trying to divest from the dollar.

The reality is that the US is a huge economy, and even when tipping points like covid are reached, the effects will be delayed. However, the damage continues to accumulate, and people are being pushed on ever thinner margins. People don't have to enter into a state of crisis all at once, it's a question of quantity transforming into quality. At some point you reach a stat where there just aren't enough people who are financially solvent to keep the economy functioning.

Meanwhile, the economic war with the rest of the world is indeed driving inflation up, and cost of living is already outpacing wages. As I've pointed out earlier, this has been papered over by people using credit to an extent, but that's also now running out. Hence why there are record credit card, mortgage, and auto defaults happening as we speak.

The idea of top 20% or so carrying the economy is basically described here, and the risk identified is that the country can descend into civil unrest under these conditions https://elpidio.org/2018/02/12/citigroups-plutonomy-memo-there-are-rich-consumers-and-there-are-the-rest/

I'm not going to try to predict when the crash actually happens. There are just too many variables at play. For example, one thing I expect to happen is that the US will cannibalize the vassals such as Europe to bolster its own economy. This could easily buy a few more years. So, it could be a slow burn you're describing going on for a while yet. However, I don't see how the crash can be avoided in the long term.

[–] SnuggleButt@hexbear.net 1 points 1 week ago (1 children)

Oh yeah I agree I don’t think it will be avoided long term, I probably just think it will take longer than you probably think is all. And mainly I tie reserve currency to inflation, in that its current strongest property (due to the dollar slowly losing this status) is holding the floodgates of immense inflation back, not necessarily the insane trade leverage it once had

[–] yogthos@lemmygrad.ml 1 points 1 week ago

Right, it's really hard to predict when the house of cards will come crashing down. One thing I've learned is that these things do tend to take a long time even after the inflection points are reach just because there's a lot of momentum in the system.

We can also see how places like Brazil continue to function where majority of the population is immiserated. So, that supports your point that it could be a long while yet. I suspect what's going to be the key factor is how rapidly the standard of living declines. If it's gradual then, as you said, it's entirely possible that people will keep adjusting to new living conditions without any mass opposition forming.