May 30, 2024

TechNewsInsight

Technology/Tech News – Get all the latest news on Technology, Gadgets with reviews, prices, features, highlights and specificatio

Meet the pessimists who are waiting for the economy to collapse

Meet the pessimists who are waiting for the economy to collapse

kofikai/Getty Images

  • Economic pessimists get louder when they say the economy is headed toward collapse.
  • There is a difference between what experts say about health economics and the experience of many individuals.
  • The feelings of economic doom and gloom are palpable

Daniel, a Redditor based in Washington, D.C., has been browsing the subreddit r/Economycollapse for about four years. He says that he is not pessimistic, but he believes that a coming economic collapse for the United States could mirror the collapse of the Soviet Union at the end of the Cold War.

Daniel, who asked that only his first name be used to protect his privacy, took steps to prepare for his bleak vision of the future. He refuses to keep his savings in cash and invests all his money in a portfolio of defense stocks, gold, cryptocurrencies and other assets that he believes will maintain their value.

“The only thing that will be guaranteed for our economy is a wartime economy,” Daniel told Business Insider in an interview. “Only time will tell how bad things will really get.”

Observers might be quick to dismiss such talk as conspiratorial or alarmist, but a growing number of people in online communities on Reddit and elsewhere say their unease about the economy and physical conditions in the United States points to an impending collapse.

Experts say sentiment is rising amid the frustration and anxiety that has accompanied the pandemic, and it never seems to subside, although most economists agree the economy is probably doing just fine for now.

Interest in a very bearish market is affecting the market or the economy is on the rise based on primary research data. Google searches for “stock market crash” jumped 17% during the latest quarter, while searches for “economic collapse” rose 15%, according to search analytics firm Glimpse.

See also  Covid-19 Live Updates: News of Vaccines and Boosters
Interest in research on economic collapse has surged
Google Trends/Profiles

Membership on the subreddit r/economycollapse has also soared in recent years, rising 80% from the end of 2021 to the end of 2023. The broader doomsday message board, r/collapse, also saw an increase in membership, rising 26%. Since the end of 2021, according to the analytics site Subreddit Stats.

In both communities, users are sounding the alarm about all sorts of apocalyptic scenarios for the economy, with some predicting they will happen Stock market crash, Housing market collapseor a Complete collapse of the American financial system.

A r/Economiccollapse member associated with Business Insider, who has withheld their identity to protect their privacy, said they believe the stock market will “fall” if the Fed doesn't continue to raise interest rates, causing the problem of hyperinflation to spread throughout the economy.

“I've only met a few people in person who really know what's up,” they told BI. He added: “I'm very pessimistic because I don't have much control over the matter, and I haven't seen any evidence that things are getting back on track.”

Another user warned that the recent surge in AI stocks could lead to a dot-com-style collapse.

“Irrational exuberance and greedy speculation. Big money will be made in the short term, but there are huge implications when the party is over,” they wrote in a post. “I don't want to be left holding the bag when everything falls in.”

Many pessimists say they are just presenting a more realistic version of the situation. Freddie Smith, a Florida-based real estate agent, says it's not a worry, but he regularly posts warnings about the economy on his social media accounts. In one TikTok, he speculates The economy is worse now than it was during the Great Depression Due to the high cost of living.

See also  Meta Reality Labs unit reports a loss of $3.99 billion in the first quarter

“They're still sucking money out, pushing people over the edge,” Smith said of the government's treatment of the middle class. Homelessness rates are expected to rise and the number of people living paycheck to paycheck will increase if economic reforms are not made.

Jonathan Rose, CEO of commodities firm Genesis Gold Group, says he has also noticed increased anxiety among his clients. Rose estimated that the number of investors he works with who have bought physical gold specifically as a store of value has risen about 40% to 60% since the pandemic.

Rose said he believes some clients looking to hold gold are homeowners and preppers, people looking to prepare for a major disaster or achieve a completely self-sufficient “off the grid” lifestyle.

“People are looking to prepare with metal,” Rose said. “There's always a steady flow of people who are always looking to protect and diversify. But I think there's definitely been an uptick in the last couple of years.”

Perception and reality

The economic reality does not quite match what many in these forums say they are preparing for.

The United States has avoided the recession that was expected over the past two years. The labor market also remains relatively strong, with the unemployment rate remaining near historic lows in March.

Rose expects that pessimism about the economy has increased since the beginning of the pandemic. He says this experience of uncertainty and fear has made people more aware of the risks facing the economy, which include rising levels of government debt, rising geopolitical tensions, and stubbornly high inflation.

See also  Biden says he will "join the picket line" alongside UAW members in Detroit

“I think there are more problems today than there were 10 years ago,” Rose said. “So people are concerned about these problems, and people are saying we are on to something. I agree with that.”

Many people may also react to the fact that their life experience in economics may not match the strength of the data reported.

High costs of living are starting to hurt the US middle class, and a Northwestern Mutual survey found that financial anxiety among Americans is hovering at its highest levels since 2012.

“I definitely see the higher prices and costs of living that inflation has given us in restaurants and grocery stores,” said Richard Sella, a financial historian at New York University. “Others may not be as lucky and may be restricted, and this can affect their outlook for the stock market and the economy.”

Smith said he makes videos to educate people about the economy and express his frustrations about the working class.

“I look at these 23-year-olds talking online about how they work 40 or 50 hours a week and live with their parents,” Smith told BI. “The whole world has changed in the past ten years… I think the frustration is the lack of recognition of the broken system,” he said.