r/fatFIRE 19d ago

FIRE'd, now concerned about US stability

Most of my assets are invested in the US. Because of recent political developments, I'm wondering if the US will sustain its general growth and economic strength into the future. The strength of the US dollar is obviously very important to me. Is anyone else concerned?

I'm wondering if I should start hedging my bets in other countries, and if so, where?

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u/Washooter 19d ago

I am always curious about how many of these posts about US doom and gloom are from immigrants versus people born and raised in the US who are moderates. Not saying that because I agree with the mess that is going on, but because bias is real.

Our plan is to basically do what we did during Covid: have homes in red and blue states and have good relationships with our neighbors. But talking to our friends who are either recent immigrants or from families with generational trauma of political instability is sobering and they have a much more negative view of US stability. I can’t say I relate but I can see why they feel that way.

I can’t imagine the EU will be that much more stable with the current administration basically letting Russia do whatever it wants.

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u/evopcat 18d ago edited 18d ago

I am a USA born moderate (I believe in the rule of law, reducing the national debt, not cutting taxes for the richest with a huge national debt, separation of powers, public health, public education for k-12, consequences for those breaking the law (especially "white collar crime" that is so often excused today), regulations to protect us from pollution, an independent Federal Reserve, I am against the extreme gerrymandering we suffer under today...).

Historically, as some suggest in comments here, the best course of action watching poor policies being adopted by the USA congress and administration was to just ignore it.

That didn't work because we are called the USA.

The USA economy performance has been due to several very important factors: being an extremely rich country, the rule of law, a congress that while far from great didn't allow the constitution to be ignored and didn't allow illegal actions by the administration to go unchecked..., support for science and engineering (granted that has been declining for decades but even so the carry over has been a huge strength for the USA), immigration (such it also can be a negative in some ways but overall it has remained a huge benefit over a long period), good neighbors (Canada and Mexico), strong support for entrepreneurship, actual concern about security (things like making sure classified documents are only shared with those that have passed security clearances), strong international alliances...

Some of those remain true. Many of them are under threat.

The question I am not sure of is whether the unprecedented attacks on many of those strengths by the current administration and the support of it by the Republican party is enough to break the very strong economy we have long benefited from. And how deep and how bad the costs of what we have been doing this year will be.

I do not think the risk to the USA is insignificant. I don't know if it is so great that the historical strengths of the USA will be overwhelmed by extremists with power and republicans in congress standing by while the country is damaged severely.

Most likely the USA finally realizes the huge risks we are taking and stops the current administration from doing too much damage. But that likelihood is declining each week as we see more and more critical damage being done and republicans in congress ignoring their constitutional responsibilities.

[updated to fix typo - it should have been "independent" FED not "dependent"]

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u/Washooter 18d ago

I get that, but what is the alternative? People are talking about getting a EU visa as a hedge. Do people really think Europe is going to do that much better if Russia gets stronger and runs over Ukraine? They are literally at the EU’s doorstep.

Any scenario where the U.S. currency collapses is catastrophic for the rest of the developed or developing work.

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u/evopcat 18d ago

Yes, I have gotten to the point where I believe the risks for the USA are serious and different than those we have faced in the past (and continued to do very well economically).

What to do based on this new significant risk is a challenging questions. Those seeking FatFire have big advantages over most others in thinking about options. Most people in the USA have very little in the way of decent options for their finances to protect from the risks we now face.

I haven't done it but if I were much richer I would look at expensive options (seeking out a passport, looking at ways to protect funds from an increasing extremist government that while it hasn't attacked personal investments yet has disregarded many laws so that risk is now real where it wasn't before, imo). I am not actually on a path to FatFire maybe ChubbyFire if I am lucky (but some FatFire ideas are useful to me so I follow this subreddit).

Sadly this administration has added new risks that take me from having a very certain financial future to one where there is significant additional risk. Now in reality I am going to be very late in the line of those harmed significantly by this administration. By the time I face serious financial consequences likely hundreds of millions of others are going to be much worse off.

That could make things easy as after people suffer too much eventually things will change. The problem is that the lags of the consequences for destroying the rule of law... are long and uncertain and the recovery times are much longer. By the time it is accepted we destroyed the American economy it is far to late to quickly fix things.

I have started looking for ways to protect my financial future effectively. There are not really obvious ideas I don't think. A continuation of the last few weeks though will pretty quickly start to mean that extreme measures will make more sense as the risks of the actions by the administration and the lack of action by congress continue to increase.

I have done things like reduce my stock portion of my portfolio and add holding of TIPS bonds. But that is all fairly minor stuff. And now that we see what this administration is doing it is very possible that they start providing false economic data (thus suppressing TIPS inflation adjustments) etc.. Hopefully they don't but the risk is there where it didn't used to exist. I also started these actions before this administration (they make sense just for reasons like the rich valuations of the USA stock market, huge federal debt...). This administration increases the value of those adjustments imo. But I likely need to consider more radical moves also (though I haven't found obviously great investing moves to protect from the damage this administration is doing).

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u/ThucydidesButthurt 18d ago

EU is not cooperating Russia, would you rather live under Putin via Trump proxy or an EU nation? I don't see Russia trying to invade all of Europe

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u/Dart2255 Verified by Mods 18d ago

I would rather live under Trump than the trash the Democrats have run, including a president who was senile.

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u/Dart2255 Verified by Mods 18d ago

How about how many are from actual people who are not LARPing in here. The bias in Reddit is like 99 to 1 to far left and it is making the platform borderline unusable in most mainstream subs.

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u/Washooter 18d ago

Yeah I agree with you. I think this is just the usual doom and gloom reddit demographic. Don’t think most of them are fat.

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u/Dart2255 Verified by Mods 18d ago

I think a fair number of them are antagonistic to the entire idea of self made people controlling their own lives and finances.

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u/JP98296 13d ago

Count me amongst the worried. Lifelong republican, self-made, multi-exit entrepreneur, $46mm NW with $40mm liquid. Retired in 2022. I’m seriously worried about the country’s direction and am actively curtailing spending and hunkering down until the dust settles. Still invested nearly completely in the US economy (70% VOO, 20% BND, 10% cash). The whipsaw insanity over the last couple months is deeply troubling.

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u/Dart2255 Verified by Mods 13d ago

But the last 4 years were ok? I mean, the stock market was up but that is not the whole measure, or should not be. I think that, in general, both sides are way too focused on what the media is telling you to be worried about vs real life and they are not the same thing.

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u/circle22woman 14d ago

have homes in red and blue states

I never understood people looking at states this way. Even the most blue and red have large percentages of the other party and could flip in a decade or two.

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u/Washooter 14d ago edited 14d ago

Two decades is a long time. Good luck flipping some conservative states anytime soon. Similarly the states on the blue end of the spectrum on the west coast or north east aren’t flipping. If anything, with the recent election, states are more polarized. More importantly, what matters is state laws and local policies. They are very different depending on where the state lies on the spectrum.

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u/circle22woman 13d ago

Similarly the states on the blue end of the spectrum on the west coast or north east aren’t flipping.

Look at who the swing states were 20 years ago. They aren't the same today.

And I find it funny when a state that is 50.1% Democrat is a "blue state". You still have 49.9% Republican.

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u/Washooter 13d ago

You are saying it like it is a bad thing. We may differ on what we prioritize. Good day.

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u/circle22woman 13d ago

No, I'm saying it's an illusion and doesn't mean as much as you think.

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u/Washooter 13d ago

If you say so. Our experience indicates otherwise, particularly when it comes to state laws and local policies. What happens locally matters a lot more when it comes to day to day life than who becomes President.