Economic and market musings / 2025

[BackInTheGame78]

I have a Bachelor of Commerce, and the only economics and finance courses I took were in my first and third years. That said, and speaking as neutrally as possible, the media’s focus on tariffs revolves around protectionism and the idea that the U.S. can produce everything domestically while isolating itself from globalization and supply chains. In other words, achieving 100% market autonomy.

I’m not sure how that would work, but from my perspective, it would lead to decreased production and innovation. For example, if BMW were forced to source all components from within the U.S. to sell cars in the American market, they would have to drastically reduce the number of models available to achieve any kind of economy of scale. Cutting off access to specialized foreign components would either drive costs up or eliminate certain features altogether.

This is highly unlikely to happen with how global the world has become and even if it could it would mean prices would skyrocket since we will be forced to buy materials produced at US Labor prices instead of the much cheaper foreign labor prices.

Now just consider something like a car that has hundreds of pieces and now each of those pieces costs 50% at minimum more due to it being made in the US.

Maybe back in the 1600s this made sense, but not in today's world.

 

[plumber]

I have a Bachelor of Commerce, and the only economics and finance courses I took were in my first and third years. That said, and speaking as neutrally as possible, the media’s focus on tariffs revolves around protectionism and the idea that the U.S. can produce everything domestically while isolating itself from globalization and supply chains. In other words, achieving 100% market autonomy.

I’m not sure how that would work, but from my perspective, it would lead to decreased production and innovation. For example, if BMW were forced to source all components from within the U.S. to sell cars in the American market, they would have to drastically reduce the number of models available to achieve any kind of economy of scale. Cutting off access to specialized foreign components would either drive costs up or eliminate certain features altogether.

your correct. but it will improve the position of the lower 80%. specifically those willing to go work hard. like the old days, reward for effort and results. yes the cost will increase on a bmw. the portion of income of the 80% used for basic needs should go down.

 

[Divorced w 3]

If the U.S. has "major layoffs" and "a weak white collar job market", why is the unemployment rate 4.1%?

Civilian unemployment rate

www.bls.gov

Also, layoffs don't cause market drops. Financial conditions cause both the market drop and layoffs.



That's accurate. Consumer sentiment can also be self-fulfilling. If consumers are fearful of the economy slowing, they may spend less, and cause the economy to slow.

Look at where it was when he left office 4 years ago. It’s 33% higher now.

 

[Divorced w 3]

There are rankings and statistics of cities, countries, costs of living and salaries.
Salaries. There is never any talk of earning potential, and the power of that earning compared to the world.
I can earn 1 apple in Italy with 1 hour of work, or 10 in Switzerland, or work 10 hours in Bangladesh and have 1 apple.

This is just an example to understand, that the cost of living does not matter, but "the opportunity to earn a sum that gives me international purchasing power".

Having said that, I could have a drill company in Italy and make 100k in turnover and 20k in net profit.

Have the same company in Switzerland and make 1m in turnover and 200k in net profit.
It would be interesting to hear other people's perspectives on this area.
"Purchasing power" and not "cost of living / salary ratio"

Worry about local purchasing power and position yourself and career accordingly.

Unless you’re importing directly from other markets, whatever you’re buying from international suppliers has been imported for you and priced by someone else to sell to you for their trouble.

if you have an annual international travel budget, sure, keep this in mind, but it would have to be substantially sized. Even if you’re spending 5-10k a year traveling abroad, currencies annd local costs aren’t going to typically move that much, save for very rare circumstances.

 

[jhonny9546]

Worry about local purchasing power and position yourself and career accordingly.

A friend of mine works and lives in Switzerland and earns 80k per year, spends 30k for living costs, finds himself with 50k in savings.
The same friend, did the same thing here in Italy with 20k, 10k, 10k.
So the difference is 5 times higher.

Now, if he were to go on vacation to Japan, the whole trip costs 3k.
In the first case he spends 1/15 in the second case 1/3 of his assets.

I meant this

 

[Divorced w 3]

A friend of mine works and lives in Switzerland and earns 80k per year, spends 30k for living costs, finds himself with 50k in savings.
The same friend, did the same thing here in Italy with 20k, 10k, 10k.
So the difference is 5 times higher.

Now, if he were to go on vacation to Japan, the whole trip costs 3k.
In the first case he spends 1/15 in the second case 1/3 of his assets.

I meant this

Gotcha. If you have the ability to live wherever, I would go somewhere warm with a beach and cheap overhead.

 

[jhonny9546]

Gotcha. If you have the ability to live wherever, I would go somewhere warm with a beach and cheap overhead.

I live there yet, maybe too hot

 

[BackInTheGame78]

Gotcha. If you have the ability to live wherever, I would go somewhere warm with a beach and cheap overhead.

Portugal is becoming a haven for expats in Europe exactly for this reason

 

[BackInTheGame78]

Very interesting...one of the most accurate recession indicators is that the US always goes into a recession within 3 years of reaching full employment. It's even more accurate than the yield curve inversions which are often used...

That happened three years ago...

The Setup is Obvious. The Choice is Clear. The Outcome Isn’t.

Today’s crypto dilemma: make money or get rich? The March 2025 issue.

cryptoiseasy.beehiiv.com