When Is The Economy Going to Collapse?

What is going on right now is extremely

confusing. It feels like everything that

could go wrong is going wrong. We've got

geopolitical tensions rising. We've seen

a president of a sovereign nation

captured.

We have trade wars going on and an

annexation attempt that led to huge

flare-ups between the US and Europe. And

I mean, Russia and China certainly

aren't super friendly with the US right

now either, not to mention a potential

intervention in what's going on in Iran.

All of this should be pointing to

extreme economic instability. And in

fact, the global uncertainty index is

the highest that it's been ever. That's

what's going on on the outside. But then

when you look at what's going on inside

the United States, you've also got

tensions rising.

As of early 2026, roughly 80 to 90% of

Americans perceive the country as more

divided than ever. And arguably, this is

happening in other parts of the world as

well. Over the past year alone, the

wealth of the 10 richest US billionaires

soared by $698 billion.

And in this the top.1% share of total

wealth is now at a record high of 12.6%

according to research from Oxfam. We're

seeing the rise in AI both in software

and hardware in the form of robotics

threatening the future of work and

existing business models. And this is

pointing to even higher chances of even

more wealth inequality as productivity

gains go to the owners of AI companies

and not towards the wages of employees.

Yet in America and in other parts of the

world as well, we're seeing stock

markets at all-time highs. We're seeing

GDP growth hitting levels that we

haven't seen in years. That doesn't

sound like it matches with everything

else that I just described. I mean, what

exactly is going on here? How much

longer can this go on? And what does it

actually mean for you

and your money? One of the biggest

misconceptions about what's going on

right now is that there is a massive

difference between the markets and the

economy. Stock markets going up is

really more about the valuation of

companies.

Stock markets are where companies go to

raise money. They raise money by issuing

shares which represent ownership in that

company and each one of these shares is

traded on the market at a particular

price. The valuation of a company is

derived by just multiplying the total

amount of shares, the shares outstanding

by the price of each share. And that

gives you the market capitalization or

the valuation of a company. But a

company's valuation doesn't mean that

there's that much money in that market.

It's just a way of looking at the size

of the company based on the demand for

the shares of ownership. If everyone

wanted to sell their shares at once, you

certainly wouldn't have all of that

money, right, as you would have in the

valuation of the company in the hands of

the sellers of those shares. Now,

there's several reasons why you wouldn't

get every single dollar of the valuation

out in that scenario, but the point is

that the valuation does not equal

dollars in an actual account. The

overall stock market is a bunch of these

companies who get their values the way

that I just described. And we are

typically measuring the stock market

based on what are called indices, which

are just essentially measurements of a

basket of stocks. Common indices are the

S&P 500 and the NASDAQ. The point of

this is that just because the value of

the S&P 500 is going up doesn't mean

that there are more jobs being created

or higher wages for employees or more

transactions that are happening in the

economy. It's just that the price that

investors are willing to pay for a share

of a basket of companies is rising. Yes,

you can make the argument that investors

are investing into these companies and

the prices and the valuations of them

are going up because the value of the

assets that they have are going up or

because the amount of cash flows or

revenues or earnings that they're

generating are going up. But the truth

is is that we're kind of living in a

world where that's less of the case

today where it leads us right into the

second part of this equation where

investors really are just trying to find

a way to park their money in a place

that won't lose value. The other half of

the equation when we're looking at why

does it feel like everything is going so

poorly yet everything looks on paper

like it's doing well is the fact that

we're constantly measuring the US stock

market in terms of US dollars. But US

dollars don't have a stable value. Since

1913, the US dollar has lost roughly 95

to 98% of its purchasing power due to

inflation. In simple terms, what $1

could buy back then would cost around

$25 to $30 today. And because of this,

looking at the stock market only in US

dollar terms can be misleading. The

market often rises partly because the

value of the dollar is falling. The

whole point of putting your money in the

stock market is to protect your wealth

so that you can save in an instrument

that will be worth more later, that will

buy you more than what it did in the

past. But if we're measuring in dollars

that are constantly losing value, then

we might be missing the point. Some

monetary economists prefer to measure

the stock market against hard assets

like gold, which can act as a long-term

store of value. When you do that, the

picture can look a little different.

Over certain periods, including much of

the last 25 years, gold has performed as

well as or even better than the stock

market, when measured in real purchasing

power. So, the rising stock market is

actually more representative of a crash

in the value of the dollar rather than

the increase in the value of these

stocks or in the strength of the

economy. Now to speak to real economic

measures. Well, technically the Atlanta

Fed GDP now data is projecting 3.7%

growth for Q4 2025.

GDP is consumption plus investment plus

government spending and net exports.

Now, the biggest contributor right now

is consumer spending, but consumer

spending is mostly being dominated by

higher inome households, showing that

there's a major divide in this economic

boom. A part of the reason that higher

income households are spending more

money is because of the fact that stocks

and AI related equities are boosting

their consumption. The economy is

divided into what many point out as a K

shape.

You have the people who are doing well

doing really well and the people who

aren't not doing so hot. So right now

people with stocks, real estate,

business ownership or high skill tech or

finance jobs have typically seen rising

asset prices, strong income growth and

more job security. On the other hand,

people who are in the middle or on the

lower income spectrum are seeing

inflation.

And even with lower inflation, you have

essentials like food, rent, and services

that are remaining costly. Now, for

people who are not higher income

households,

you basically see this problem where

wages aren't keeping up with the growth

in prices.

So even with lower inflation, essentials

like food, rent, and services remain

costly. Wage gains haven't fully offset

the price increases that came from 2021

to 2023

amongst people who are not in that

higher income category. So the economy

is doing fantastic on the macro level. I

mean GDP is rising, inflation's coming

down, and the stock market once again is

booming, right?

But that just doesn't really paint the

full picture. You could look at

everything is doing really well on a

macro level, but when you actually zoom

back in, it's super uneven as to who's

actually benefiting from the way that

the economy and the stock market is

doing. But the real question is, how

much longer can this actually go on for?

I mean, really, this is ridiculous.

Shouldn't the economy and the market be

crashing by now? Now, I mean, there's a

lot of people who are betting on exactly

that. And to be honest, this can go on

for as long as it doesn't lead to a

complete halting in the system as it is.

We've seen some outbreaks of civil

unrest across the United States for

other reasons, and you see it in

countries where things have gotten way

more intense, but that tends to be the

thing that leads to a reworking of the

system. But what I imagine is a world

where technology and AI actually ends up

leading to the rich getting way richer

than everyone else. But the overall

baseline

for the individual rises, whether that's

through universal basic income or any

other form of it, and that'll keep

people from wanting to rebel and causing

any big issues. But the real question

is, what does all this mean for you and

your money? Well, I'm not a financial

adviser and this is not financial

advice. Please do not take financial

advice from a random guy walking around

a park

talking to a stick.

But it's very likely that things are

going to continue in this way and

potentially even accelerate. Rates are

going to come down and that's likely to

cause stocks to go even higher and for

the dollar to fall even further. AI will

lead to productivity gains that go to

asset owners and not employees. And in

this environment, capital becomes the

only real tool that you have to get

ahead. So the thing to think about here

is what are the likely assets to do well

for sure and then what are the assets

that are likely to do the best in this

kind of an environment. Many economists

point to gold as the only for sure

answer as to what is coming next and

that's including everything that's going

on with geopolitics. Right? We've got

this ddollarization and this move away

from the US and the US dollar as a

standard. Metals investors are looking

at copper as what might perform the best

in the kind of environment that we're

moving into. There are analysts that are

saying that the world is leading toward

a major copper deficit over the next 10

to 20 years and that could provide the

opportunity that people are looking for

when it comes to the fastest horse in

this race against the US dollar. Younger

people are looking to crypto as the

potential savior and it's very clear

that the US is putting everything it can

into getting the Clarity Act across the

finish line. White House officials are

saying that there are trillions of

dollars on the sidelines waiting on the

Clarity Act to pass. I personally

believe that there will certainly be a

need for a radical shift in the monetary

system for that baseline level of

standards to rise and keep people

pacified. And there would be no better

way to do that than with an asset that

has nothing to do with anything and that

has space and room for infinite

manipulability.

I think that's a word. But I don't know,

maybe I've completely lost the plot.

What did I miss? What did I get wrong?

Or how could I be looking at this

differently? Let me know in the comments

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peace.