Crossroads of the American Economy: Recession Storm or Gilded Boom?

[Dash man]

My idea of the future is playing with my grandkids and watching them grow up. I’ve learned to not worry about things I can’t control.

 

[pacergal]

My idea of the future is playing with my grandkids and watching them grow up. I’ve learned to not worry about things I can’t control.

Me, too. But sometimes easier to say than do.

 

[Koolau]

Not to get too fatalistic, but I occasionally think that my advanced age does have the advantage that I'll not be around to see the aftermath of the current situation - at least not long enough to be dramatically affected by it.

Of course, I've optimistically set my financial plan to expire at age 99 which is still several years off. So if I get lucky (unlucky?) and live that long, I may indeed be right in the middle of whatever develops in the economic world. YMMV

 

[Out of Steam]

Of course, I've optimistically set my financial plan to expire at age 99 which is still several years off. So if I get lucky (unlucky?) and live that long, I may indeed be right in the middle of whatever develops in the economic world. YMMV

I would tell you that I am not making plans for a lifespan beyond age 90. On the other hand, I’m stopping to see my 92 year old uncle and his wife in England next week.

 

[imjustawarrior]

My DW and I are in our 50's. My dad is 90. I have our plan going to 98, but the older I get the more optimistic that seems.

 

[53anddone]

I don't see how bullying pretty much every country (including our friends like Canada and the EU), will end well.

Cap that will trying to undo everything climate related that had a prayer of making the planet better for our kids and I would say a "gilded age" is kind of far fetched.

Frankly, its a depressing time.

 

[Uplooking]

I think the next step in American economic evolution is the complete automation of industries using robots. I think this would've happened naturally at some point, but tariffs or whatever might accelerate this move to robotic labor.

I'm old enough to remember the George Jetson cartoons - "Brutal, I had to push the button on and off five times. - That Spacely is a slave driver."
Fun memories aside, what would one do for 100 years if there wasn't "work" to structure our time and provide value/reward?

 

[FREE866]

Ray Dalio has been around the block a few times. He voiced his opinions on Meet the Press today.

Ray Dalio is extremely smart, but he also says a lot of things. As does Jamie Dimon, Bill Ackman, , etc etc
They're often wrong with their predictions as well , but their comments make tantalizing headlines that stir the pot. I'm not going to make my long term investment plans on their tweets of the day.

 

[FiveDriver]

I don't place Ray Dalio and Jamie Dimon in the same pantheon.

When Dalio speaks out, I tend to keep a watchful eye on what he says.

 

[FREE866]

When Dalio speaks out, I tend to keep a watchful eye on what he says.

As do I..

I watched what he said in 2015 when he made headlines predicting a 1937 scenario of markets plunging and it didn't happen

I watched what he said in 2017 when he said the market was going down because of the Feds moves...didn't happen

I watched in 2019 when he said recession was coming.....actually Covid happened to be fair, but without it there was def no recession.....

in 2022 he said we were looking at a "perfect storm" coming for the market.....2023 and 2024 were banner years.....


So again, i would be dubious of changing my asset allocation because "Ray Dalio saId......."

 

[tflannery]

Pride before the Fall is what comes to mind.

If your are not familiar with the above expression, it is a warning that arrogance and overconfidence often lead to failure or downfall. It sounds like the current state of the USA.

 

[HFWR]

As do I..

I watched what he said in 2015 when he made headlines predicting a 1937 scenario of markets plunging and it didn't happen

I watched what he said in 2017 when he said the market was going down because of the Feds moves...didn't happen

I watched in 2019 when he said recession was coming.....actually Covid happened to be fair, but without it there was def no recession.....

in 2022 he said we were looking at a "perfect storm" coming for the market.....2023 and 2024 were banner years.....


So again, i would be dubious of changing my asset allocation because "Ray Dalio saId......."

But he’s called nine of the last six recessions!

The bond market hasn’t yet reacted as he opines. Still might…

 

[Dtail]

Ray Dalio is extremely smart, but he also says a lot of things. As does Jamie Dimon, Bill Ackman, , etc etc
They're often wrong with their predictions as well , but their comments make tantalizing headlines that stir the pot. I'm not going to make my long term investment plans on their tweets of the day.

Good call. No one talks much about their error rates irrespective of their business acumen.
Add the bond king to the mix.

 

[equakesfan]

The arguments for a recession with inflation: Chaotic tariff policy paralyzes businesses and consumers reducing investment and spending, retaliatory tariffs on US exports hurt business, reduced demand and increased supply for US bonds increase interest rates, reduced demand for the dollar raises prices of imports and commodities (oil) increasing inflation, reduced government spending is a drag on the economy.

The arguments for a gilded age: Increased tariffs spur investment by business, technology improves productivity, lower taxes spur the economy, lower demand of US products and commodities abroad lower prices.

With the on again off again nature of the tariffs so far and the drag on the economy by reduced spending stronger than the spur of the economy by tax cuts, I think .we are headed for a recession (and potentially a depression) in the near future.

 

[AudiDudi]

OFC, there is always the old adage - Recession - when your neighbor loses his j*b. Depression - when you lose yours. But with the number of people here that don't have a j*b, we may not feel a Depression as much as some.

 

[Koolau]

I would tell you that I am not making plans for a lifespan beyond age 90. On the other hand, I’m stopping to see my 92 year old uncle and his wife in England next week.

I know (or knew) 2 men and 4 women who made it to or beyond 100! Amazingly, their health held pretty well until the last few months of their lives.

 

[Shredder]

I know (or knew) 2 men and 4 women who made it to or beyond 100! Amazingly, their health held pretty well until the last few months of their lives.

My mom passed at 101 last november.

For our future it might be a good idea to learn Chinese. Well after i master English, lol.

 

[HFWR]

My mom passed at 101 last november.

For our future it might be a good idea to learn Chinese. Well after i master English, lol.

I know lots of colorful metaphors.

A lady I’d known my entire life - she and her husband lived next door to my maternal grandparents, among other connections - passed a year or two ago at 103. She was sharp as a tack and full of piss and vinegar until the very last.

 

[PlayinwithFIRE]

Uncertainty will trigger CEOSs to reign-in growth strategies..and hunker down until the dust settles. This will stagnate job growth , possibly coupled with pre-emptive riff'ing to lower burn rates. Unemployment will increase.

All this will stagnate growth and the malaise will give consumers pause on spending.

Globe will look elsewhere for partners. China stepping into the gap.

A friend of mine, who has run lean and scrappy and employed 4 or 5 people for the last 10 years out of his garage, was just informed that his order of power supplies from Thailand just 2.5X'd in price on him. There is no US based replacement power supply.
Tariffs working as intended?

Does something have to be done about the debt? Absolutely.

Is this the way to do it? Don't think so.

pwf

 

[landover]

I’ll go even further and say AI-enhanced robots are going to work already and the combination of infinite intelligence + infinite labor run 24/7 will be transforming all aspects of economic and personal life in ways we can’t yet fathom. My bet is we’ll have explosive productivity growth and it will be deflationary on prices. I don’t think the transformation will be thanks to tariffs, nor limited to America. Sounds crazy but those are my cards on the table.

Shorter term there will be ups and down, this tarriff saga will nudge towards faster automation. And about bringing production back onshore, factories will comeback but still there may be widespread job losses as both mental n physical work will automate. And if this happens, current events will be a small blip compred to new turmoil.

4% rule should be relooked in context of longer lifespan and economic system changes due to possible AI explosion.

 

[Koolau]

4% rule should be relooked in context of longer lifespan and economic system changes due to possible AI explosion.

I'm not sure I understand why the 4% rule is under pressure due to AI explosion.

 

[jazz4cash]

Some comments make me think the definition of Gilded Age may vary among readers.

 

[MichaelB]

Some comments make me think the definition of Gilded Age may vary among readers.

Yes indeed. It is much easier to have or offer a rosy outlook when that outlook isn’t specific and can’t be measured.

 

[punkinhead]

The limitless-borrow-and-spend party may be ending but there are good times yet to come.

I wish I could believe that but all the evidence is to the contrary. All I've seen are claims of waste/fraud cuts that have turned out to not be true and calls for huge tax cuts. So spending isn't decreasing and tax revenue will shrink. That's not a recipe for reigning in the deficit.

 

[target2019]

Some comments make me think the definition of Gilded Age may vary among readers.

Yes indeed. It is much easier to have or offer a rosy outlook when that outlook isn’t specific and can’t be measured.

I usually come away from these type of discussions with ambivalence since both extremes are essentially trying to convince me that the opposite view is evil.

I quickly perused the charts at
Bear Market Anatomy – the path and shape of the bear market.

https://www.gspublishing.com/content/research/en/reports/2025/04/08/0bf285f5-8d4a-478c-843f-4b4ea81256d5.pdf

The takeaway is that Goldman Sachs sees the U.S. on the Recession trail, of the Event-driven kind. But other indicators suggest this could morph into Cyclical bear market.

I was disappointed to read about the historical "Bear Market Bounces" too. Of course they also wash out during a recovery.