With another year wrapping up, I’m curious how people here are thinking about next year.

What do you think will be the biggest drivers of returns by the end of 2026? Are you making any portfolio adjustments now based on those views?

It's going to be an interesting year for sure..lol.

Evidence Supporting a Potential 2026 Land-Driven Economic Crisis

Historical Cyclical Patterns

The 18-year real estate cycle theory has shown remarkable consistency throughout modern economic history:

• The 2008 housing crash + 18 years = 2026

• Previous major U.S. real estate crashes occurred in 1989-1990, 1973-1974, 1954, 1935 - showing this pattern holds

• Economist Fred Harrison accurately predicted both the 1990 recession and 2008 crash using this cycle theory

Current Land Value Surge

The Current Data Supporting a 2026 Land Price Crash

The evidence for a potential 2026 economic crisis triggered by land speculation is compelling:

1. Historical Cycle Analysis

• The 18-year real estate cycle theory shows remarkable consistency throughout history

• Previous major crashes occurred in 1989-1990, 1973-1974, 1954, 1935, and 2008

• If we count from the 2008 housing crash + 18 years = 2026

2. Surging Land Values Despite Economic Warning Signs

Land values have increased dramatically since 2020:

• Agricultural land values jumped 5% in 2024 alone, hitting a record $4,170 per acre

• Residential land prices have surged 82% from January 2020 to February 2025 in California

• Home price-to-income ratios have reached record highs, with the national average at 4.7, and states like Hawaii (9.1) and California (8.4) seeing extreme imbalances

3. Credit Conditions Enabling Speculation

• The Federal Reserve cut rates by 1 percentage point in 2024 (from 5.25-5.50% to 4.25-4.50%)

• This loosening of monetary policy is creating conditions similar to previous speculative cycles

• Further cuts are projected through 2025, potentially fueling more land speculation

4. Unaddressed Structural Issue

• The fundamental problem that I will leave down in the comments - lack of land value taxation - remains completely unaddressed

• Without this structural reform, there's nothing stopping the cycle from repeating again

• Current tax policies still encourage land speculation rather than productive use

5. Housing Affordability Crisis

• In 2022, the median home price was 5.6 times higher than median household income - the highest on record

• This ratio has worsened significantly since 2019, when it was just 4.1

• This disconnect between housing costs and incomes is precisely the kind of imbalance that precedes major corrections

My Assessment: Why 2026 Is Likely for a Crash

Looking at all this data together, I believe a 2026 land-driven crash is highly plausible. Here's why:

1. We're following the same pattern as previous cycles: The housing market recovered from 2008, entered a growth phase, and is now entering the speculative phase where prices detach from fundamentals.

2. The post-pandemic surge in land values matches historical pre-crash patterns: Just as speculation shifted from land to stocks before the Great Depression, we're seeing investment capital moving between asset classes now.

3. The price-to-income ratio is flashing warning signs: When housing becomes as disconnected from incomes as it is now, it signals an unsustainable bubble.

4. Monetary policy is enabling speculation: The Fed's rate cuts, while intended to support the economy, are creating conditions where speculative investment in land becomes more attractive.

5. The structural reform needed to prevent the cycle hasn't happened: Without land value taxation to capture the unearned value, there's nothing preventing the same cycle from repeating.

If Henry George's theory is correct - and the evidence suggests it is - we're approaching the peak of the land value cycle. The coming year could see further speculation before a significant correction in 2026, absent any major policy intervention.

Everyone is starting to ask what next year’s market outlook will be. So let’s study Wall Street’s latest New Year forecasts together. The market has really been wild lately. One minute everyone is celebrating Nvidia’s earnings, thinking tech stocks can keep rising for another ten years, and the next minute the market suddenly tanks and big players dump Nvidia to rotate into Google. The AI ​​boom has clearly entered its second half.

So the question is: how long can this wave last? After this round of Christmas gains, will next year keep taking off or fall flat? Every year end, those suit-and-tie Wall Street elites start brainstorming and draw a road map for the next year. This year, I looked through everything almost all of them are bullish. Eternal bull market.

The most optimistic one is Deutsche Bank. They boldly claim the S&P 500 could reach 8000 points next year, nearly a 20% increase. Keep in mind, the S&P has already risen more than 10% this year, and they still want more. Why so optimistic? It basically comes down to two words: Artificial Intelligence.

AI is no longer just a tech buzzword. It has become the engine of the entire capital market. Nvidia, Microsoft, Google these giants are throwing insane amounts of money into AI R&D. Capital expenditure is at record highs. Deutsche Bank believes AI investment and adoption will dominate market sentiment next year and could even spark a true productivity revolution.

But here’s the problem the S&P 500 is now trading at a 25x P/E ratio, while the historical average is just above 15. Isn’t that expensive? It definitely is. But Deutsche Bank insists that even if valuations don’t expand further, they can stay high. Why? Because supply and demand for stocks are extremely strong. Money is still flowing into equities, corporate buybacks haven’t stopped, and earnings expectations are rising. They even predict that in In 2026, EPS could reach $320.

Interestingly, Morgan Stanley is also bullish, targeting 7800 points, yet they didn’t buy the Magnificent Seven. Their chief strategist Wilson thinks tech stocks might fall alongside the broader market. They prefer small caps, consumer discretionary, healthcare, financials, and industrials. Why? Because they see a key signal earnings expectations are shifting from tech to other sectors, and consumer spending is moving from entertainment to physical goods. This suggests the economy might be entering a new phase.

More importantly, Morgan Stanley is betting that the Fed will cut rates early. The logic is simple: if employment weakens, liquidity tightens, and risk assets fall, Powell won’t be able to hold he’ll have to pump liquidity back into the market. Once rates turn down, the valuation ceiling opens again.

HSBC, Barclays, and UBS all agree. HSBC even said: who cares if there’s a bubble? The dot-com bubble also rose for three to five years just get on the ride first. UBS even drew a bull scenario where the S&P hits 8400. But they also admit the market is shifting from tech dominance to broader sector participation. Capital spending is no longer only on AI chips it’s spreading across more industries.

From my perspective, the U.S. market is still the top priority next year, but we shouldn’t be overly optimistic because it will be Trump’s second year in office. You might not know this, but historically, the second year of a U.S. presidential term especially midterm election years has been the weakest and most volatile for stocks.

In 2018, during Trump 1.0’s second year, the first half was great, then the market collapsed in the second half. The trade war began, tech stocks plunged, the VIX soared 70%, and even crypto and emerging markets crashed.

And now? The script looks nearly identical. Policies change every day. Tariffs can hit at any time. Even if the Supreme Court slows down tax hikes, the possibility alone is enough to make manufacturers, retailers, and exporters lose sleep.

Plus, the 2026 midterm elections are coming. Both parties will go all-out, meaning fiscal policy may freeze again, and market trust in the government will keep eroding.

What’s worse, sector divergence is even more extreme than in 2017. In the U.S., only AI related tech stocks are supporting the market. Materials, energy, real estate everything else is dropping. Europe isn’t much better. Finance and utilities barely hold up while others slump.

When only a few assets are booming and most are stagnant, it signals a fragile market. If tech stocks cool off, the entire market could lose momentum instantly.

So next year, political cycles, policy risks, and the pressure of converting AI hype into real profits these three mountains won’t disappear. Right now the market is pricing in aggressive rate cuts while also assuming a soft landing and continued earnings growth. Wanting everything at once often ends badly.

In my view, the script may look like this:

First half: AI momentum and liquidity expectations may push the market higher again.

Second half: As midterm elections approach, policy noise increases, earnings get disrupted, and volatility returns.

Whoever holds high valuation, low cash flow story stocks will be the most at risk.

2026 date will be the biggest housing crash in history. Evidence all those homes banks, blackrock, etc. bought are not being sold. Sitting, molding. The housing median price will crash all the way down to median income level. Communities will see 50% or more in housing value crash. Anybody who bought a house in the last 4 years at least will be underwater on their loan vs. home value.

Since it is the first day of the year, I decided to give my predictions for 2026 and beyond. All of these are based on damped sinusoidal waves with 7-year, 5-year, and 19-year cycles. All of the cycles have been checked for significance.

• 2026-Anemic and below historical trending average.

• 2027-Higher than average potential for market losses.

• 2028-Even higher than average probability for market losses. This year holds the highest potential for a market crash in the near future.

• 2029-2031-Anemic and below historical trending market averages.

• 2032-Higher probability of better than average market gains.

I am telling my peeps to take some money off the top, and fall in love with cash and cash equivalents.

If I were to guess what the catalysts are, we have a lot of political risks (i.e., Trump tariffs), and market risks with AI being an over-hyped reality (similar to the tech bubble, but not as severe).

Everyone is starting to ask what next year’s market outlook will be. So let’s study Wall Street’s latest New Year forecasts together. The market has really been wild lately. One minute everyone is celebrating Nvidia’s earnings, thinking tech stocks can keep rising for another ten years, and the next minute the market suddenly tanks and big players dump Nvidia to rotate into Google. The AI ​​boom has clearly entered its second half.

So the question is: how long can this wave last? After this round of Christmas gains, will next year keep taking off or fall flat? Every year end, those suit-and-tie Wall Street elites start brainstorming and draw a road map for the next year. This year, I looked through everything almost all of them are bullish. Eternal bull market.

The most optimistic one is Deutsche Bank. They boldly claim the S&P 500 could reach 8000 points next year, nearly a 20% increase. Keep in mind, the S&P has already risen more than 10% this year, and they still want more. Why so optimistic? It basically comes down to two words: Artificial Intelligence.

AI is no longer just a tech buzzword. It has become the engine of the entire capital market. Nvidia, Microsoft, Google these giants are throwing insane amounts of money into AI R&D. Capital expenditure is at record highs. Deutsche Bank believes AI investment and adoption will dominate market sentiment next year and could even spark a true productivity revolution.

But here’s the problem the S&P 500 is now trading at a 25x P/E ratio, while the historical average is just above 15. Isn’t that expensive? It definitely is. But Deutsche Bank insists that even if valuations don’t expand further, they can stay high. Why? Because supply and demand for stocks are extremely strong. Money is still flowing into equities, corporate buybacks haven’t stopped, and earnings expectations are rising. They even predict that in In 2026, EPS could reach $320.

Interestingly, Morgan Stanley is also bullish, targeting 7800 points, yet they didn’t buy the Magnificent Seven. Their chief strategist Wilson thinks tech stocks might fall alongside the broader market. They prefer small caps, consumer discretionary, healthcare, financials, and industrials. Why? Because they see a key signal earnings expectations are shifting from tech to other sectors, and consumer spending is moving from entertainment to physical goods. This suggests the economy might be entering a new phase.

More importantly, Morgan Stanley is betting that the Fed will cut rates early. The logic is simple: if employment weakens, liquidity tightens, and risk assets fall, Powell won’t be able to hold he’ll have to pump liquidity back into the market. Once rates turn down, the valuation ceiling opens again.

HSBC, Barclays, and UBS all agree. HSBC even said: who cares if there’s a bubble? The dot-com bubble also rose for three to five years just get on the ride first. UBS even drew a bull scenario where the S&P hits 8400. But they also admit the market is shifting from tech dominance to broader sector participation. Capital spending is no longer only on AI chips it’s spreading across more industries.

From my perspective, the U.S. market is still the top priority next year, but we shouldn’t be overly optimistic because it will be Trump’s second year in office. You might not know this, but historically, the second year of a U.S. presidential term especially midterm election years has been the weakest and most volatile for stocks.

In 2018, during Trump 1.0’s second year, the first half was great, then the market collapsed in the second half. The trade war began, tech stocks plunged, the VIX soared 70%, and even crypto and emerging markets crashed.

And now? The script looks nearly identical. Policies change every day. Tariffs can hit at any time. Even if the Supreme Court slows down tax hikes, the possibility alone is enough to make manufacturers, retailers, and exporters lose sleep.

Plus, the 2026 midterm elections are coming. Both parties will go all-out, meaning fiscal policy may freeze again, and market trust in the government will keep eroding.

What’s worse, sector divergence is even more extreme than in 2017. In the U.S., only AI related tech stocks are supporting the market. Materials, energy, real estate everything else is dropping. Europe isn’t much better. Finance and utilities barely hold up while others slump.

When only a few assets are booming and most are stagnant, it signals a fragile market. If tech stocks cool off, the entire market could lose momentum instantly.

So next year, political cycles, policy risks, and the pressure of converting AI hype into real profits these three mountains won’t disappear. Right now the market is pricing in aggressive rate cuts while also assuming a soft landing and continued earnings growth. Wanting everything at once often ends badly.

In my view, the script may look like this:

First half: AI momentum and liquidity expectations may push the market higher again.

Second half: As midterm elections approach, policy noise increases, earnings get disrupted, and volatility returns.

Whoever holds high valuation, low cash flow story stocks will be the most at risk.

Is it really safe to invest right now when people like Peter Schiff and Michael Burry who both CORRECTLY PREDICTED THE 2008 FINANCIAL CRISIS think that we will have a stock market crash in 2026?

Firstly, let me say I hate these over-done posts as much as the next person hah, but I did want to offer my insights as a 20+ year investor with both a long portfolio and an options portfolio that I generate a living income off of.

My long portfolio is currently 100% SGOV. Without overanalyzing or cherry picking, the simplest historic indicators show that market valuations right now are extremely rich, of the type that always proceeds a major correction.

Shiller PE nearing dot-com levels: https://www.multpl.com/shiller-pe

Trailing PE highest on record: https://worldperatio.com/index/sp-500/

Forward PE at a ceiling it only surpasses during major market crises: https://en.macromicro.me/series/20052/sp500-forward-pe-ratio

On top of that you have a flight to safety, gold, and a flight from risk, bitcoin, rounding out 2025 narratives.

However, despite this, I'm not actually bearish for 2026. There will be an come-uppance, we all know this, but I can see 2026 melting up another 5-10%.

This is because the single most influential variable the market has responded to in the last 15 years is liquidity, and apparently the biggest source of liquidity isn't jobs or GDP, but interest rates. This has driven the Main St vs. Wall St divide since 2008.

Now the US has an administration that is hell bent on lowering interest rates, regardless of any orthodox impetus to do this. Trump will be appointing a new Fed chair, and possibly more members, who will basically vote how he says. Not only that, but I could see this new chair making statements during any moderate 10% market correction that support QE and rescuing the market, meaning almost any red month will be a buy-the-dip type situation.

We also have a pending SCOTUS decision, possibly as soon as Jan 9th, that actually looks like it could undo tariffs, which I think would cause a rally in the S&P493.

You never know with someone like Trump at the handle, but it's hard for me to see any major negative catalysts for 2026, aside from 'concerns about valuations'. Maybe a single missed ER by nVidia will cause an unwind, or maybe global liquidity will begin to dry-up as most other OECD nations take more moderate monetary policies and more severe theories about the yen carry-trade show true.

I always play defensively as I live off my savings - I intend to stay in SGOV in my long portfolio - I'll take a safe 4.25% over a risky 8.5% any day of the week. For options, where I normally sell CSPs, I'll likely pursue more delta neutral strategies.

Lowering interest rates in a hot economy with high and sticky inflation is bearish and most of the new investments by institutions & family offices appear to be in oversold defensive sectors. I’m genuinely concerned about 2026 with market driven by sentimental factors than technicals or fundamentals. Any insights?

Real estate has historically followed an 18 year cycle of booms and crashes. Do we see another crash in 2026, similar to 2008?

The first link below is an article written by an economist in 2012. The 2nd is a graph of Real Residential Property Prices for the US.

https://www.progress.org/articles/the-depression-of-2026

https://www.tradingview.com/x/o23dROId

I’ve seen a lot of predictions about an economic crash (some people even said it would April 2024), but the big crash is coming by early 2026 and the tipping point will be massive cuts to social services like Medicaid, Medicare, and Social Security. It depends on those cuts. The economy will limp along, but if/when those social program cuts happen, that’s when we're all screwed.

Why social service cuts? They prop up consumer spending and general economic stability. Millions of Americans rely on Medicaid, Medicare, and Social Security just to get by. (Medicaid/CHIP alone covers about 79 million people as of 2024​ and Social Security supports ~73)

If funding gets slashed, a huge number of people will suddenly have less money to spend on groceries or essentials and that’s a direct hit to consumer spending, which is like 70% of our economy. On top of that, cuts to things like Medicaid/Medicare mean more people unable to afford healthcare which could leave them with medical debt or skipping care​.

States would hurt since they share the cost of these programs. States either have to fill the gap (blowing up their budgets) or cut services locally. It's really just less money flowing through local economies and more financial stress on families and state governments.

The economy is already under strain from multiple directions. We’ve been living in an economic “bubble” especially in the stock market. Valuations are wildly high by historical standards (the U.S. market is trading around 38 times earnings, which is in the 95th percentile of historical valuation levels​).

At some point that bubble could burst if investors get spooked. There's also corporate debt. Companies binged on cheap loans for years and now those debts are coming due in a high interest rate environment. We’re actually starting to see signs of trouble with corporate defaults jumping 80% in 2023 (153 companies defaulted vs 85 in 2022)​. A lot of firms have to refinance their bonds soon, and it’s going to be way more expensive so some might not survive that.

Commercial real estate is a ticking time bomb. Office buildings are sitting half-empty and their values have plummeted. Building owners are struggling to repay loans.

If landlords default, that puts banks (especially regional) in trouble and could tighten credit availability further. We’ve seen the cracks with some regional bank failures in 2023, partly because they didn’t manage risks well when interest rates rose. (Worth noting: even the Federal Reserve pointed to a 2018 deregulation rollback under Trump as one factor that made Silicon Valley Bank’s collapse more likely​. Basically, some safeguards were loosened and banks took on more risk than they should have.) So the financial system isn’t as solid as we’d like, and higher interest rates by the Fed (to fight inflation) are slowly pressing on the bruises of the economy.

Tariffs are essentialy taxes which translates into higher costs for businesses and consumers. It's that simple. Worse tariffs will cause higher prices or thinner margins which quite simply is not great for economic stability. Deregulation (not just banking, but environmental, etc.) might boost short-term profits but WILL cause long-term costs or instabilities (think of environmental cleanup costs and risky financial behavior).

We have a war in Ukraine that’s messing with energy and food markets, new conflicts popping up (the Middle East and oil prices), and general geopolitical rivalry (US vs China) which will affect supply chain uncertainties. Global instability means more risk of something big going wrong like a supply shock that could hit our economy at a vulnerable time.

So with all that as background, here’s how I see the timeline playing out:

Early 2025: The economy holds up. We don’t get the big crash yet. We avoid a real recession through 2025. Unemployment might tick up a bit but stays relatively low. Consumer spending might not be great but manages to keep going because people still have jobs and some savings. There is a political incentive to keep things looking good (I think?!). Maybe we see corporate defaults but nothing dramatic.

Mid 2025: Slowdown is noticeable. Higher interest rates will start biting harder. Consumer savings start running out if social services get cut quickly. Not full recession.

Late 2025: The recession hits. By late-2025, if there really are major budget cuts on social programs, those will start to be felt. Millions of people will have reduced benefits or lose coverage which translates to less spending in the economy pretty quickly. I see layoffs to increase. Businesses struggle. Rising unemployment, falling stock prices, credit getting tighter, perhaps some smaller banks failing or needing bailouts. Confidence would dive.

Early 2026: I predict we’ve crashed. It's a financial crisis or a really sharp economic contraction. The stock market bottoms out and big companies go bankrupt. Unemployment is bad. I’d expect at that point the government and Fed would scramble to intervene, maybe they'll wave around those Elon Musk $5000 to those who are worthy, but by then a lot of damage is done similar to how it felt in 2008.

So, why might this not happen? I’m open to the idea that I could be off-base or missing something. Maybe all the social service cuts won’t be as severe or won’t happen, or it will face political gridlock, or they get watered down. Maybe the economy could be more resilient than I expect like if the Fed manages a “soft landing” to bring down inflation without a major recession. Maybe it's also possible consumers and businesses adapt, but how?

What reasons are there to think the economy won’t crash by 2026? Maybe you think the timeline is wrong? I’m genuinely interested in seeing if this seems right.

Is it when retail are forced to sell their positions, even at a loss because they lack the funds to cover bills, etc?

So like recession times? Is it when unemployment rates are high? is it when disposable income is at its lowest? is it when people can't affford new triple A games? etc.

Hear me out

Everyone is bullish asf, Even the bears are out of the trenches buying ai stocks and memecoins. My taxi driver was asking me about quantum computing last week?? Markets have been surging since 2020 and that might be thanks to Trump… But he’s back, everyone is locking in awaiting a new bull run, I say this is where the fun ends.

The sentiment in my eyes is perfect, I strongly believe 95% of markets are “rigged” one way or the other. Let’s say we get a crash this year, Trump can easily blame Biden for the collapse and the rebound would obviously be his own treat.

Am I crazy or does this make sense? There are some indications that a crash is coming, this has obviously been around since 2021, but everyone is cooled off now and with Trump as pres, if the crash doesn’t happen in 2025 it will most likely be inevitable right before or after next election.

I want your opinions degens

All the noise from people keep saying that the next bear market will be a cute little dip. That we would go into "stocks like environment" where we see smaller dips, but also smaller gains in coming bulls.

Nope.

2026 is shaping up to be the most violent unwinding this space has ever experienced, and almost nobody is ready for it, as the general consensus from retail is the opposite atm.

Let me explain why.

1. Institutions don’t hodl. They sell. And HARD they will sell.

This cycle was the first time Bitcoin became a truly real institutional asset. Sounds bullish on paper, but the reality no one wants to talk about: institutions are forced sellers during recessions.

They de risk into cash.

They have clients to protect, redemptions to satisfy and risk rules to follow.

They are not your diamond handed Twitter influencers or average crypto bro from Reddit.

When liquidity dries up, they don’t wait for hopium. They hit the sell button.

2. The MicroStrategy situation is a ticking bomb. BOMB. The "Tsar bomba" kind of a bomb.

Everyone treats MSTR like some “savior of Bitcoin”, but it is basically a publicly traded giga leveraged long BTC position. They have billions in debt and BTC as collateral. If BTC drops -40 to -50%, which it likely will, they get squeezed harder than crypto gif memes.

If MSTR starts getting margin pressure or forced collateral adjustments, then the selling pressure will be worse than 3AC, Celsius and Terra combined. We will se a huge black swan event, similar or wose than the FTX event. However, this can be magnificant for retail to entry at low prices.

3. ETF flows do not just go up.

Yes. We had the first ETF driven bull run ever. But know what? That will follow with the first ETF driven bear run. If there is a recession or just a risk off macro period, ETF outflows will be brutal. Financial advisors will rotate clients into safer assets. Pension funds will reduce risk exposure. Family offices will trim BTC like any other volatile asset. When the lights go off for good (already starting), ETF outflows mean instant sell pressure that retail is not ready for.

4. Corporate treasuries might have to dump too.

Companies holding BTC look cool in a bull run, but when earnings weaken and credit conditions tighten.. Yeah, time to buckle up and say cya. It's natural for boards to tell them to cut risk. Auditors push impairment accounting. Cash becomes the thing again. Corporate selling has not been tested in a real macro downturn. 2026 WILL LIKELY be the first time.

5. Leverage in this market is insane compared to previous cycles.

The amount of perpetuals, options, structured BTC notes and corporate debt collateralized by BTC is ridiculous. When all of that unwinds under macro stress, it won’t be a small minus -30% dip. It will be a face melting liquidity vacuum.

6. QE will not save you early. It arrives after the pain.

Last but not least. Most people embrace the hopium of QE starting in 2026. Yes. Probably and actually, likely. But only after the market collapses. Q1-Q2 will be brutal. It will be enough time for the charts to plummet so hard it will go beneath your screen's bottom corner. Yes, after that will likely come QE, but why hold through that when one can sell now and double their position soon?

The next crash will not be (only) a retail emotional panic.

It will be an institutional, corporate, leverage driven purge.

BTC survives. ETH probably survives. SOL might survive but bleed badly. Most altcoins will die and never come back. Many of the TOP 20 and even TOP 50 alts are already down -60% to -80% of their ATH prices. ADA going $0,02 or ALGO below $0,5 or ETH below $1000 are not unlikely scenarios. Some will drop even a lot more. Many big alts will be f**d up so hard even their mother will not recognitze them.

So what I'm kinda trying to say.. If you think 2022 was bad, 2026 is going to surprise you.

Not financial advice, btw.

Just a warning from someone who finally stopped drinking hopium and started looking at the actual market structure we created.

Is there going to be market crash in 2026? I am seeing some videos in youtube but I am not an expert, so cannot figure out whats going on.

If Market crashes, which are dividend stocks to hold on?

Many investors worry that a market crash is imminent. Yet, despite these concerns, stocks seem to be making new all time highs every day. Two reasons we believe why this is happening are the U.S. administration’s aggressive push to grow and inflate its way out of the debt problem, and the performance-chasing behavior of underperforming hedge funds.

1. The Administration’s Strategy: Inflate the Problem Away

Whether or not anyone agrees with the approach, this administration has made its strategy clear:
Grow or inflate the economy out of the debt burden.

Inflation doesn’t make the debt go away, but it makes the debt smaller relative to the GDP.

This improves the debt-to-GDP ratio, a key metric for fiscal health. For instance, if debt stays flat at $37 trillion but inflation drives nominal GDP up by 3-4% annually, the ratio drops, making the debt appear more manageable.

Inflation acts like a slow erosion of the real value of the debt. The government collects taxes in inflated dollars, while repaying debt issued in old dollars.

So if an administration believes: “We can outgrow or inflate our way through the debt problem,” then the policies will naturally lean toward:

• supporting equity markets

• maintaining liquidity

• promoting credit creation

• stimulating demand

In other words: they are trying to push stock prices higher because they see it as part of the solution.

2. Hedge Funds Are Underperforming So Now They Are Forced Buyers

The majority of hedge funds are lagging this year because they believed we were in a bubble the whole year. Many were underexposed or hedged too aggressively. So many funds now must buy stocks even if they don’t want to.

Underperformers become price-insensitive buyers.

The Point: Markets Don’t Need to Be Healthy to Go Higher

Markets rise for many reasons:

• monetary policy

• fiscal support

• liquidity injections

• structural flows

• buybacks

• pension rebalancing

• FOMO from underperforming funds

The current rally should not be interpreted as evidence that risks have disappeared. Rather, it reflects the reality that the institutional and political forces driving asset prices higher are stronger, more persistent, and more structurally embedded than many market participants appreciate.

https://www.civolatility.com/p/why-prices-will-keep-going-higher

For several Decembers we've pinned a prediction post to the top of the sub for a few weeks. Use this to make some predictions for 2026. Here's the 2025 predictions post - who do you think did best?

A few people did well with a lot of their predictions, but everyone also got a few things wrong. u/TemetN & u/omalhautCalliclea scored a lot more hits than misses.

Make some predictions here, and we can revisit them in late 2026 to see who did best.

So I provided it knowledge on the stock, bond and FOREX markets up till today and some information on Trumps policy, and with purely it's training data asked GPT to produce a timeline from tomorrow till the mid terms.

-----

April 21–30, 2025

• Market Shock: After closing April 17th at S&P 5,300; NASDAQ 16,300; Dow 39,000; DXY 99.23; 10‑yr 4.50%, the S&P opens down 4% on April 21, marking the worst YTD so far in half a century.

• Supply‑Chain Buckle: Every known product category—electronics, auto parts, pharmaceuticals, food packaging—sees immediate shortages. Major Tier 1 suppliers announce force‑majeure; secondary and tertiary suppliers become aware of their precarious position.

• Freelancers and small businesses: Waste removal, facilities maintenance, professional services (gardeners, therapists, escorts) report 75% drop in volumes.

• Policy Response: Fed, under the guise of Trump, does little to change the situation; Treasury backstops money‑market funds. But with no bond buyers, yields spike.

May 2025

• Credit Seizure: Commercial paper, corporate bonds, munis all freeze. No short‑term funding exists.

• Supply‑Chain “Bust” Phase: Ports operate at 25% capacity; trucking volumes collapse 80%; rail carloads down 85%.

• Main‑Street Collapse: Unemployment surges to 10%; 20% of small businesses shutter, many plan to by Q3; Mortgage delinquencies climb sharply.

• No Truce: Trump doubles down, raises tariffs on any country offering even minimal relief.

June 2025

• First U.S. Default: Treasury misses a coupon on a July 1 bill auction after bond auctions repeatedly fail. Official “X‑Date” passes.

• Global Credit Freeze: G7 swap lines activated but foreign banks refuse U.S. collateral. Dollar funding evaporates worldwide.

• Human Impact: SNAP and Social‑Security payments delayed; state and local governments halt payrolls.

• Market Panic: Stocks plummet as pension funds mark assets to market; forced selling ensues.

July 2025

• Aftermath of Default: Major U.S. banks report capital shortfalls; FDIC steps in to guarantee deposits.

• Supply‑Chain Extinction: Entire domestic production lines for consumer goods, medical devices, and machinery shut down permanently.

• Black Market & Barter: Critical goods move underground; barter networks form in urban centers.

• Market Reaction: Equities snap up 7% on rumors of sovereign restructuring talks—but no firm deal materializes.

August 2025

• “Bad Bank” Talks Collapse: G7 and IMF negotiations to pool distressed Treasuries break down as Trump refuses oversight.

• Humanitarian Crisis: Food, medical, and energy shortages prompt states of emergency nationwide.

• Market Fallout: Stocks resume free‑fall; yields surge back above 12%.

September 2025

Complete Financial Freeze

• Interbank markets collapse: repo, FX swaps, derivatives vanish overnight.

• GDP plunges –15% annualized.

• Trump rebuffs all overtures for tariff relief.

• Stocks briefly rally 5% on unfounded backchannel rumors—only to crash again.

Metrics – September 30 Close

table changes from here, generated the 2nd portion

October 2025

Deep Recession Sets In

• Layoffs hit public sector; metro areas impose curfews amid unrest.

• Supply-chain blackout begins — shelves empty, no domestic production possible.

• Bonds go "no bid" — trades revert to phone calls.

Metrics – October 31 Close

November 2025

Midterm Turmoil Begins

• Rumors of martial law swirl across swing states.

• Black-market dollar trades at 80% of official DXY.

• Brief 15% stock rally on false expectations of electoral resolution—quickly fades.

Metrics – November 30 Close

December 2025

Complete State Breakdown

• Federal government runs on fumes.

• Several states issue their own IOU currencies.

• Retail down 90%; zero domestic output.

• Markets frozen.

Metrics – December 31 Close

January 2025

The "Dual Currencies" Era Begins

• SDRs and crypto fill vacuum left by the dollar.

• Federal authority limited to D.C. metro.

• Equities drift down on low-volume trades.

Metrics – January 31 Close

February 2026

Shadow Economies Rule

• Most U.S. transactions occur via barter or local scrip.

• Midterms in doubt: ballots uncountable, logistical collapse.

• Markets frozen.

Metrics – February 28 Close

March 2026

Forced Debt Restructuring

• G7 brokers historic haircut deal on U.S. Treasuries.

• U.S. implicitly admits "odious debt" doctrine.

• Small equity rally on clarity.

Metrics – March 31 Close

April 2026

IMF-Led Restructuring Begins

• New U.S. bond regime launched.

• Haircut acceptance gives markets relief rally.

Metrics – April 30 Close

May 2026

Stalemate

• Trump refuses to acknowledge restructuring.

• Federal gridlock worsens as funding dries up again.

Metrics – May 31 Close

JUNE 2026 – Midterm Elections

Election Week Chaos

• Certification fails in multiple states.

• Armed standoffs break out in some jurisdictions.

Post-Election Market Scenarios: