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I value that there are many independent and diverse thinkers here. I am interested to know what others think about what occupies my mind more and more, the themes "War / Currencies / Jurisdictions". I do not label this post OT as it´s about investing (in Berkshire too).

I am scared. Scared about the scenario of war in Europe on a far wider scale than "only" Ukraine-Russia (but caused by it) becoming ever more likely. I have that impression because living in Germany I am shocked about the development here: The formerly pacifist Green party is the greatest warmonger of all (I once voted for them, but when young we all make mistakes). They are for armament without any limitations. They paint a black-and-white picture of the Devil (Putin) versus the rest. Even being an IT guy I learned that nothing in life is 0 or 1, black or white. Diplomacy for them is no political means, it´s only about preparing for war.

And that is the stance of nearly all prominent political and media figures here in Germany - apart from a veteran politician like Juergen Todenhoefer, who remarkably commented "Today´s generations don´t know what war really is; for them it´s abstract; they never experienced it". And not only in Germany, but that´s the stance of Brussels/the EU commission, with only Italy and Spain not totally in line. You would be hard pressed to find members of the German government or the EU commission who utters words like "Diplomacy", "Talks", "Negotiating" etc. I always thought politics is the (dirty) business of compromising, of sacrificing this to get that etc. The business of diplomacy. Not any more.

The relevance for investments: As many others too this year I moved from the USD into other currencies. I intended to continue this, to further reduce my USD exposure in favor of EUR, GBP, NZD and AUD. My reason was optimizing returns in light of the USD eventually falling much further.

But I am about to change my mind, as I am seeing a potential for something far bigger than having sub-optimal returns: To loose my money. Not only because of the currencies, but even more so because of the jurisdictions in which those currencies would be held. What I am seeing here in Germany really scares me. And if the worst becomes reality I think it will happen here, in Europe.

Shortly ago Jim said
From a jurisdiction risk point of view, the US now clearly has the profile of an emerging market, without a doubt.

From a "War in Europe scenario" I see the US as a much safer place than having my money in German, French and Irish banks (European IBKR customers are customers of IBKR Ireland). Regarding moving money I am therefore currently only thinking about moving more to the other end of the world, to New Zealand. Not just because of currency diversification, but because of geography/jurisdiction, as those monies are held at a bank in NZ (where I once lived, am still every year for several months, and am tempted to move again for good).

"From a jurisdiction risk point of view, the US now clearly has the profile of an emerging market, without a doubt."

From a "War in Europe scenario" I see the US as a much safer place than having my money in German, French and Irish banks

FWIW, the S&P 500 just crept back up to just shy of the all time high.

While everyone is paying attention to Ukraine/Russia, I suspect that within the next few years, China/Taiwan will become an attention-getter. That would inevitably involve Australia and New Zeland (aas well as Japan and South Korea) as allies of the US.

The choisess are not without risk.

Jeff

From a "War in Europe scenario" I see the US as a much safer place than having my money in German, French and Irish banks (European IBKR customers are customers of IBKR Ireland). Regarding moving money I am therefore currently only thinking about moving more to the other end of the world, to New Zealand. Not just because of currency diversification, but because of geography/jurisdiction, as those monies are held at a bank in NZ (where I once lived, am still every year for several months, and am tempted to move again for good).

Your concerns mirror ours, except that we are also concerned about NZ/Australia given the threat of China. There seems to be nowhere to go, so we stay put, mired in analysis paralysis, 50/50 USD/stocks. I have no clue as to what is the better course of action, never mind the best, so inaction seems to be the route we are taking.

IP

Your concerns mirror ours, except that we are also concerned about NZ/Australia given the threat of China.

Australia population: 26.7 million
New Zealand population: 5.4 million

Neither country has "a rifle behind every blade of grass".

NZ would be gone in an afternoon. Australia a bit longer because of its size.

NZ would be gone in an afternoon. Australia a bit longer because of its size.

Perhaps you have forgotten about the ANZUS treaty that binds Australia and the U.S. to act to meet the common danger. Or were you thinking the US might abrogate its treaty responsibilities?

Aussi

Your concerns mirror ours, except that we are also concerned about NZ/Australia given the threat of China.

I find it hard (read: impossible) to envision China going after either Australia or New Zealand or both. Why would they? There is nothing of strategic value in either place. Surely doing so would start a world war, unlike the taking of Taiwan which could be accomplished;listed in a week or two, and which they have laid claim to for more than a century.

If China was interested in expansion, I’m pretty sure their Belt Road initiative points in a direction far more likely. They have contiguous neighbors which would be easier to defend - and to invade - than some remote islands a thousand miles away.

I’m just not seeing any there there. I haven’t even heard of whiff of this in any reading I have done over the past several years.

No, I know about that treaty. I figure that if China went after A & NZ, the US navy would be busy defending Hawaii and the West Coast. Nobody who went after A & NZ would not have plans that took ANZUS treaty into account.

Seeing what swarms of drones are doing in the current newsworthy battles brings to mind what happened to HMS Prince of Wales and HMS Repulse. Suddenly battleships were unexpectedly vulnerable to an new tactic.
Battleships -- "Queen of the Seas" -- became obsolete "effectively just before the start of World War II" -- US Navy.

Youtube has many videos like "5000 Drone Christmas Light Show" and I wonder if aircraft carriers would survive such a swarm.

First of all, if I was either a Kiwi or an Ozian, I would take great exception to "There is nothing of strategic value in either place." Certainly, Australia has vast mineral wealth as well as both countries punching above their weight class when it comes to food production.

China is in the process of building a world-class blue-water navy capable of protecting its interests. Those interests now span the Pacific as far as South America - effectively on a line which cuts off the Anzac area.

Australia has participated in every harebrained war that the US got involved in - presumably to make sure we reciprocate if "Asia" (whether China, Japan, Russia, whoever) tried to take a poke at them. Up until a few months ago, I took the US obligation to the treaty as immutable, but we seem to have suddenly become "more fickle and selective".

Jeff

What I am seeing here in Germany really scares me. And if the worst becomes reality I think it will happen here, in Europe.

I am really surprised by this. My impression was that Putin considers the Kyivan Rus countries (Russia, Belarus, Ukraine) to be, effectively one country. And that Russia is entitled to its sphere of influence that are the former iron curtain countries, like Poland and Bulgaria and Hungary. Just as US gets the Western puppets (in his mind) and China gets ASEAN countries.

US and Europe upset the apple cart by expanding NATO after promising Russia that they would not. His Ukraine invasion is to restore the balance. He is not looking to attack Germany or other Western NATO countries. Why are Germans talking of war? I mean it's always a good political strategy to get votes, to scare people about a foreign boogeyman, but do they really believe it?

China getting Taiwan seems far more certain than Russia starting WWIII in Europe. Although I heard somewhere that the medieval Turkish word for Europe was "Land of war", which checks out. A bloodthirsty people by all accounts.

Putin ... He is not looking to attack Germany or other Western NATO countries. Why are Germans talking of war?
They do believe that Russia wants to geographically expand, to get more countries under it´s control, with especially the small Northern European ones (Estonia, Latvia, Lithuania) possibly "the next ones".

do they really believe it?
Why do you think Finland 2023 finally after all those years joined NATO? And in 2024 Sweden?

US and Europe upset the apple cart by expanding NATO
Correct. Since decades NATO constantly expands eastwards (the German expression for it: "NATO Osterweiterung"). Russia again and again warned that´s unacceptable. 2021, before(!) the invasion of Ukraine, they again warned about "red lines" they can´t allow the West to cross, mentioning specifically the planned admission of Ukraine into NATO (2008 NATO promised to allow Ukraine to join NATO).

But: Nobody here in Germany sees that this is the cause for what´s happening, that this is self-inflicted. I wonder what Americans would do if Russia moves heavy weaponry weapons to their front door (Actually we know: Cuba crisis). The really disturbing thing is that nobody here talks about that, as it would disturb the black-and-white picture. Bias in action: It can´t be true what otherwise would cause cognitive dissonance: That you yourself are causing the bad that´s happening to you. There must be an external cause.

This is why I am scared. Because politicians and media are so switched into line, with the few critical voices pushed into a corner and labeled "Putin-Versteher" (Literal: "Putin Understander", but meant dismissive, not in the usual positive way "understanding" is meant). It is a circle, and with the word "Diplomacy" not even allowed ("Are you one of those 'Putin Versteher'?") I don´t see a way out.

https://www.reuters.com/business/aerospace-defense...

The treaty, with the US, which limits the deployment of Russia's short and medium range ballistic missle ends on February 5th.

Jeff

The distance between China and NZ is 11,000 km. It'll take more than an afternoon. But why would China want NZ?

Australia is a different story, but also quite far away, about 8000 km. But it is possible that China might want Australia someday for its energy resources.

And it would be somewhat enjoyable for China's opponents to see it fighting wars thousands of kilometers away.

Up until a few months ago, I took the US obligation to the treaty as immutable, but we seem to have suddenly become "more fickle and selective".


There is a thing going around about NATO Article 5 which is some kind of logical fallacy that I don't know the name of that fallacy. Maybe something about confirmation bias?

Article 5 is not long. It starts out with "The Parties agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all" People stop reading right there.
Although the words "in Europe or North America" usually are replace with ellipsis (three dots). First error.

The major error is completely ignoring the last part of that SAME long sentence: "by taking ... such action as it deems necessary.


Musing on a hypothetical, if country R (with a 5,000,000 man army) attacked its nextdoor country F (with a 22,800 man army) what might country U (with a 450,000 man army) (which is 4,000 miles away) likely to deem necessary?

Excuse me, now I have to go change my underwear.

This is why I am scared. Because politicians and media are so switched into line, with the few critical voices pushed into a corner and labeled "Putin-Versteher" (Literal: "Putin Understander", but meant dismissive, not in the usual positive way "understanding" is meant). It is a circle, and with the word "Diplomacy" not even allowed ("Are you one of those 'Putin Versteher'?") I don´t see a way out.

A rottweiler isn't particularly concerned that a chihuahua is yapping at him.

Germany is self-deleting itself. When the events on 2015-2016 New Year's Eve in Cologne, Germany happened, I said to myself, "Man, they have stepped in it now! German men will not accept that AT ALL."
And ... nothing happened.

Then Germany shut down all their nuclear power plants, and killed their industries.



However did we get to this topic on the Berkshire board? Things are that slow?

And I said to myself: "Merkel´s historical mistake will haunt Germany forever".
There is a reason why I more and more want to leave (NZ or Portugal probably).

And we got here and to the other political threads because all that turmoil has a lot to do with far-reaching not only life but also investment decisions, also concerning our investment in Berkshire.

Ray There is a thing going around about NATO Article 5 which is some kind of logical fallacy that I don't know the name of that fallacy. Maybe something about confirmation bias?

Mar 7, 2025 — Asked about NATO Article 5 commitment, Trump says U.S. "not going to defend" allies that fail to meet his spending requirements.

Article 5 is not long. It starts out with "The Parties agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all" People stop reading right there. Although the words "in Europe or North America" usually are replace with ellipsis (three dots). First error.
The major error is completely ignoring the last part of that SAME long sentence: "by taking ... such action as it deems necessary.

Though that's a good point, to me the key point is that article 5 has always been a bit of a bluff. Even if a massive intervention were deemed necessary, it was (ahem) always more than a bit unsure that a member with a big stick would actually wield it. This leads to my prediction: Mr Putin will have substantial success killing off NATO by calling the bluff, brief and repeated attacks on small NATO countries after which nothing happens in retaliation other than some strongly worded press releases.

That being said, I have no truck with those who say NATO shouldn't have "expanded eastwards" as it was a provocation. It wasn't NATO expanding, it was countries asking to join the club: that's how a new member comes to be. All the existing members did is agree to the applications, it wasn't a grand plot by a cabal sitting around a bit compass rose in a secret bunker. By far the most succinct explanation of what NATO is and does is simply "the club of places that would really rather not be invaded by Russia". It's inevitable that countries near Russia, especially smaller ones, will see the attraction of making the request.

Jim

It wasn't NATO expanding, it was countries asking to join the club: that's how a new member comes to be. All the existing members did is agree to the applications,

That's just a word game.
Playing a word game does not hide the fact of "NATO expanding eastward."

And it doesn't really matter what NATO thinks about it, what matters is what Russia thinks.

Actually, it's not "what NATO thinks", it is "what NATO pretends to think".

Everybody with more than a room temperature IQ knows that NATO was purposely moving toward Russia.

Looking at a map, can anybody explain how Turkey is North Atlantic?

As the great Fred Thompson said, "This business will get out of control. It will get out of control and we'll be lucky to live through it."

And it doesn't really matter what NATO thinks about it, what matters is what Russia thinks.

Sure, I have no problem with that view. The Russian government has a bit of a paranoia that isn't exactly new, so sure, they see it that way to some extent: they expect everybody in the world wants to invade them at any time. They probably see an Apple store within 1000km of their borders as a threat.

What bugs me is odious apologists in the West who spout the same line, that it's the west's fault for doing something about not wanting to be invaded: banding together.


Looking at a map, can anybody explain how Turkey is North Atlantic?

Per my comment, so I wouldn't agree at all that it's a problem. NATO is just an acronym (I forget what language) for "Don't want Russia to invade here". I can see the Turks getting behind that notion. Or Georgians, for that matter.

Everybody with more than a room temperature IQ knows that NATO was purposely moving toward Russia.

Nope. Again, it's not "NATO moving towards Russia", it's "More countries worried about Russia attacking them". The same result in terms of the boundaries of the treaty countries, but the latter makes it clear that it is entirely rational behaviour on the part of those joining NATO, and not in any way a "move" towards Russia.. NATO wasn't about to invade Russia. The Kremlin sees neighbours putting up better fences as a threat, but that's in their heads.

What's the option? Behave more passively and don't build an army just so Russia will feel less emotionally aggrieved when they cross your borders in tanks? Personally I don't think their hurt feelings are that important, and it certainly doesn't affect their actions. Every dictator and would-be dictator becomes a territorial expansionist when control looks like it might slip. Nothing like jingoism to get the masses in line behind you, or at least enough of them to consolidate your grip. And as a result there is nothing so tempting to such a person as a nearby smaller and isolated country. I can understand such a country not wishing to be isolated any longer than necessary.

So much, so obvious. The *interesting* question is whether the European NATO countries will respond when Canada has to invoke article 5 when the Americans invade for a third time, expecting erroneously for the third time that the population will rise up in support of the move.

Jim

US and Europe upset the apple cart by expanding NATO
Correct. Since decades NATO constantly expands eastwards (the German expression for it: "NATO Osterweiterung"). Russia again and again warned that´s unacceptable. 2021, before(!) the invasion of Ukraine, they again warned about "red lines" they can´t allow the West to cross, mentioning specifically the planned admission of Ukraine into NATO (2008 NATO promised to allow Ukraine to join NATO).

It’s deeply concerning that there are people in democratic countries willing to promote the ultra-nationalist Russian narrative that NATO expansion is to blame for Russian aggression—even though countries joined NATO through the democratic decisions of their elected leaders. The fact that more and more conservatives in free societies now believe people in smaller nations don’t deserve free will nor the right to self-determination (or should blame themselves for getting invaded as a consequence of exercising such basic human rights) is a very disturbing development.

I find it more troubling that at least here in Germany it´s not possible to talk about such, as I always thought democracy is about the free exchange of differing opinions, about "May the better argument win".

The *interesting* question is whether the European NATO countries will respond when Canada has to invoke article 5 when the Americans invade for a third time,

LOL.
Would that be about the quickest invasion in recorded history? Over by lunchtime?



NATO wasn't about to invade Russia. The Kremlin sees neighbours putting up better fences as a threat, but that's in their heads.

The best tactic for handling a paranoid psychopathic neighbor is to move away from them. The 2nd best tactic is to be quiet and not annoy them. I guess the 3rd best tactic would be to tell them that your big bad brother who lives a few thousand miles away has your back.

And, y'know, when he tells you to DON'T DO THAT, probably you should tip-toe around and not do that.

But, hey, I have had many people ask me how many rubles I get paid for what I post, so...whatever.



I read a wide range of opinion sites, some of them seem to have reasonable views of the world. One big thing that you must avoid -- and it is very hard to avoid -- is being all blindly rah-rah for your own team.

We all know that the political world is changing right now.
One that I read recently opined that what will shake out when things settle down will be the that world will resolve into 3 general spheres of influence headed by Russia, USA, and China.

This business in Ukraine with hypersonic missiles and swarms of drones surely has military organizations crapping their pants.

It’s deeply concerning that there are people in democratic countries willing to promote the ultra-nationalist Russian narrative that NATO expansion is to blame for Russian aggression

It is called realpolitik. Deal with what is rather than the way you wish it was.


...in free societies now believe people in smaller nations don’t deserve free will ...

As William Munny (played by Clint Eastwood) said "Deserve's got nothing to do with it."



Russia said in no uncertain terms what their Red Line was.

The West said, "Oh yeah? Watch this!"

And Ukraine peoples paid the price.

Hmm, I did a dictionary check on "Ukraine" to make sure I spelled it right, and it said "1. A republic in southeastern Europe; formerly a European soviet; the center of the original Russian state which came into existence in the ninth century." So maybe present day Russia has what they see as a valid claim.

Looking at a map, can anybody explain how Turkey is North Atlantic?

Per my comment, so I wouldn't agree at all that it's a problem. NATO is just an acronym (I forget what language) for "Don't want Russia to invade here". I can see the Turks getting behind that notion.

Turkey joined NATO in 1952, along with Greece. The Soviets were threatening at the time to seize the Dardanelle Straits which are their only access to the Mediterranean. Remember, Bulgaria which was a Soviet puppet at the time is only 100 miles from those straits, so the threat was very tangible. Also notable, Greece joined NATO a couple of years after the end of its civil war in which the Greek communists were defeated. So much forgotten history...

Elan

"I find it more troubling that at least here in Germany it´s not possible to talk about such, as I always thought democracy is about the free exchange of differing opinions, about "May the better argument win"."

Is it really illegal to not talk about such in Germany or are you just doing the figurative whine of someone who is allowed to express such ideas but always sees opponents push back on why they are bad as saying they are not allowed?

The *interesting* question is whether the European NATO countries will respond when Canada has to invoke article 5 when the Americans invade for a third time,

LOL.
Would that be about the quickest invasion in recorded history? Over by lunchtime?

You seem to be gloating about the prospect, which I find disgusting.
Practically speaking you may be right, because I think it's not beyond the current American regime to pull a Hiroshima-Nagsaki on Canada. - Dropping a couple of modest nukes on a couple of small towns in Canada, after which the Canadian government will inevitably choose to surrender.

One that I read recently opined that what will shake out when things settle down will be the that world will resolve into 3 general spheres of influence headed by Russia, USA, and China.

If you look at the size of these countries, in terms of population and economy, the notion of three spheres is ludicrous. Russia's population is 9th in the world, behind Pakistan, Nigeria, and Bangladesh. Its GDP ranks 11th, behind Italy, Brazil, and Canada. Russia is no more than a tail being wagged by the Chinese dog. China has long nurtured countries like North Korea and Russia as surrogates in its patient campaign to undermine the world dominance of America and its allies.

But regardless, if that is some version of real politic, it is mind boggling that any patriotic American would accept it lying down.

Elan

It’s deeply concerning that there are people in democratic countries willing to promote the ultra-nationalist Russian narrative that NATO expansion is to blame for Russian aggression

I hope Said and I are not being counted among these people.
NATO told Russia they won't accept applications from its neighbors. They broke that promise.
Yes Jim, it is entirely reasonable for the small former Warsaw Pact countries to apply to join NATO.
It was for NATO to reject them - if NATO could put Ukraine in limbo, why not these countries? Maybe they could have worked out a milder pact than the NATO pact with Article 5. Like US did with Taiwan. Ambiguous support.
Maybe it meant throwing these Eastern European countries to the wolves (or to the Bear), tough. Don't be a small country near Russia.
But it looks like NATO did want to take on Russia. Western countries feeling their oats again after the Soviet Union collapsed. So here we are.

As for Americans invading Canada, or Greenland, or Panama for that matter; I have a few doubts. I think (I don't know) that it will materialize just like the border wall paid for by Mexico was constructed in the first term.

Everybody with more than a room temperature IQ knows that NATO was purposely moving toward Russia.

So the most recent countries to join were Sweden and Finland. Was this because NATO was purposely moving towards Russia? I don't think your thesis has much bearing in fact. Finland has been subject to Russian invasion twice and sees current Russian aggression. Perhaps countries are joining NATO as Russia wants to move westward.

Aussi

I find it more troubling that at least here in Germany it´s not possible to talk about such, as I always thought democracy is about the free exchange of differing opinions, about "May the better argument win".

I just want to remind you that you said you believe people from weaker or smaller countries/groups/factions do not get to enjoy the same rights and freedoms as those from stronger and bigger coutries/groups/factions. Since you are in the minority, you should already be prepared to lose some of the freedoms and rights that are fundamental to democracies.

But as we already know, "not possible to talk about" is just how conservatives describe any form of pushback.

And it doesn't really matter what NATO thinks about it, what matters is what Russia thinks

This I believe is very true. And also actions speak louder than words. So Russia's thinking could be deduced from its actions.

Russia invaded Georgia in 2008. Invaded Ukraine in 2014. Only mention NATO as a justification for invading Ukraine in late 2021. Based on Putins actions it appears to me that aggression was foremost and NATO was a pretext to try and confuse people. Which seems to have worked.

Aussi

If Jim's assessment is the case, then it is to the interest of those countries with immediate concerns about being invaded by Russia to see its weapons destroyed in the mealstrom of Ukraine.

The recent "Spiderweb" drone attack on the Russian (nearly said Soviet) nuclear-cabable bomber fleet not only shook up the Russians, but the US as well. It turns out that the US doctrine has been influenced by the fact that a dollar spent on defensive hangers was one that could not be spent on offensive weapons. That means that our fleet of nuclear-capable bombers would be just as vulnerable to a similar attack by any adversary able to scrape together the resources for this sort of asymetric attack. While there may be some treaty obligfation to keep the planes in the open for mutual inspection, the locations we have kept ours doesn't inspire confidence.

So it actually also benefits the US for Russia to expend its vast supply, hoarded for decades, of weaponry in Ukraine. While other countries are taking heed of the advantages of swarms of inexpensive AI enhanced drones as an alternative to multi-bilion dollar aircraft and naval vessels, we seem commited to ever more elaberate, expensive and likely only partially effective weopon systems such as the "golden dome". Our political system requires that weaopons be built in multiple plants, spread across the states so that the maximum number of congressmen can bring home the bacon (and receive their "gifts" from lobbiyists).

Heaven is where the police are British, the cooks are French, the mechanics German, the lovers Italian and it's all organised by the Swiss.
Hell is where the chefs are British, the mechanics French, the lover's Swiss, the police German and it's all organised by the Italians.

I would not be surprised if some have thought up the idea of "sharing the wealth" by giving the impression that everrything "works out" if Russia gets Ukraine, China gets Taiwan, the US gets Greenland, Israel gets Gaza and nobody sanctions anyone.

Jeff

Me: ... at least here in Germany it´s not possible to talk about such
Umm: Is it really illegal to not talk about such in Germany or ...

Twisting "possible" into a never claimed "illegal"?
I am out.

Me: ... at least here in Germany it´s not possible to talk about such
Umm: Is it really illegal to not talk about such in Germany or ...

Twisting "possible" into a never claimed "illegal"?
I am out.

Not "possible" as in the AfD, aka fascists, aka thinly veiled nazis, getting 20% of the vote in the latest federal election?

Elan

I find it hard (read: impossible) to envision China going after either Australia or New Zealand or both.
...
I haven’t even heard of whiff of this in any reading I have done over the past several years.

I agree it is early days and Taiwan remains a primary objective, but my searching on all things New Zealand/Australia has led the search bot to send things to my attention that I would not normally have seen. It is clear to me that tensions are rising, particularly in New Zealand, over the actions of China. Though diplomatically presented, you can see some of those concerns here: https://www.nzsis.govt.nz/news/nzsis-shares-more-c...

And here:

https://www.csis.org/analysis/new-zealands-wake-ca...

In late February, a Chinese navy task force transited the Tasman Sea and conducted live-fire exercises with no prenotification, causing some 50 commercial airlines to alter their flight routes to avoid becoming inadvertent targets. The week prior, the Cook Islands, a Pacific Island in free association with New Zealand, signed several agreements with China, including a wide-ranging Comprehensive Strategic Partnership.

While the fire may not yet be visible, there sure is smoke building. I've read several other articles on beefs about trade that China has with NZ.

While it is early days, we are seeing world events move quickly these days. We are looking into NZ for more than a casual vacation, and looking down the road as far as we can. This repositioning cruise of life we are looking at is a one time deal and has to be done right. Too much is at stake to get it wrong.

IP

"NATO told Russia they won't accept applications from its neighbors. They broke that promise."

I see that many in here are victims of Russian propaganda.

Such a promise has never been given. A detailed review of the subject can be seen here:
https://www.propastop.org/en/2024/06/24/narrative-...

Im a nutshell:
“Russia has been quite successful in selling the narrative that in exchange for accepting German unification through the 2+4 agreement, they were promised that NATO would not expand. ...

... whatever promises were negotiated with the USSR in 1990, the stark fact is that Russia accepted NATO expansion with detailed conditions and in writing when it signed the NATO-Russia Founding Act in 1997. In fact, the USSR had already signed the Paris Charter in November 1990, with which it was obliged to ‘fully recognize the freedom of countries to choose their own security arrangements’."

There is, however, one promise that was clearly broken by Russia: not to threaten Ukraine's sovereignty - a promise given in exchange for Ukraine giving up its nuclear arsenal.
See here:
https://en.wikipedia.org/wiki/Budapest_Memorandum

"Twisting "possible" into a never claimed "illegal"?"

Ok. Then your original statement is clearly false and a lie.

It is the whine that people say whenever someone pushes back on their ideas or their views are unpopular. Free speech doesn't mean it is free from disagreement or consequences.

A final word: It´s disappointing what happened to this thread I started expressing what keeps me up at night (not really), in hope of getting educated comments about

- War in Europe: Likelyhood in general, maybe country-specific
- Currencies: Which ones others think might be more safe/stable vs. less safe/stable ones, and hopefully new points I don´t think of
- Jurisdictions: E.g. what they think about holding EUR/NZD... at Schwab etc. versus holding them in a bank in their "home" country; maybe comments about the it seems to me nearly non-existing coverage for IBKR Ireland customers (I think that´s all European IBKR customers), contrary to IBKR US and all European banks

Such was what I was hoping for. Instead all those many posts are not only about the war part, now it degenerates into twisting words and getting personal (Actually there is a lot of irony in being labeled "Conservative", as a friend in the advertising business once commented: "Said, you don´t fit into any of our drawers. It´s impossible to put labels on you, a nightmare for every advertiser").

I am disappointed by the board --- and I am disappointed by myself, having letting me drawn so easily into that.

" Such was what I was hoping for. Instead all those many posts are not only about the war part, now it degenerates into twisting words and getting personal (Actually there is a lot of irony in being labeled "Conservative", as a friend in the advertising business once commented: "Said, you don´t fit into any of our drawers. It´s impossible to put labels on you, a nightmare for every advertiser").

I am disappointed by the board --- and I am disappointed by myself, having letting me drawn so easily into that.'

good morning, try the ignore feature, you are wasting your time trying to reason with 75 % of the population, they are locked in. Have a grand day.

Practically speaking you may be right, because I think it's not beyond the current American regime to pull a Hiroshima-Nagsaki on Canada. - Dropping a couple of modest nukes on a couple of small towns in Canada, after which the Canadian government will inevitably choose to surrender.

Wow, I would put the odds of this about equal to an alien invasion of planet earth - certainly possible but absolutely not worth putting much thought into it.

tecmo
...

- War in Europe: Likelyhood in general, maybe country-specific
- Currencies: Which ones others think might be more safe/stable vs. less safe/stable ones, and hopefully new points I don´t think of
- Jurisdictions: E.g. what they think about holding EUR/NZD... at Schwab etc. versus holding them in a bank in their "home" country; maybe comments about the it seems to me nearly non-existing coverage for IBKR Ireland customers (I think that´s all European IBKR customers), contrary to IBKR US and all European banks

On those subjects, I'm happy to offer my uninformed opinions.

I think war in Europe is likely, indeed already taking place if you use a definition like "adversary state killing people in your country and performing lethal acts of sabotage". But even if correct, that's not useful information, as it could remain at a relatively background level (except for those directly involved) or become huge. I know folks who live near the Suwałki gap, on the Lithuanian side, and let's just say I'm glad I don't live there. I assume an "event" there is in the 50/50 range. I anticipate multiple small events in different locations, each just shy of an undeniable casus belli, with a gradual escalation and a ton of hybrid/deniable attacks. (incidentally, I think operation spiderweb is likely to be used as a playbook for deniable state attacks or terrorist attacks in future)

For currencies, the US dollar is likely to remain pre-eminent in terms of liquidity and financial use, but seems very likely to lose some purchasing power, perhaps quite a lot. The Euro has some structural flaws but looks like it will endure. There may be another crisis or two, but it will survive those. I'm holding my cash largely in sterling at the moment, with some others. Being a simple stand-alone sovereign issuer, the UK risks are very simple to understand: the pound might fall some. Other than that you're fine. The problem with NZD is that the country is small. If a global scale hurricane starts blowing, a small economy can be sideswiped quite badly even without intent. A terms of trade shock could it it quite hard.

For jurisdictions, I agree that risks seem large enough that a bit of diversification makes some sense. My current plan is to move some assets to a Saxo account in Europe, perhaps half. Even though Saxo isn't perfect, they seem closest to what I prefer. I have some assets at a "wealth management" bank, but they are always very annoying and I don't want to put more there.

As for the risks this is intended to reduce: For example, if I withdraw money from my IB UK account, whose parent firm is in the US, is that a "remittance" out of the US subject to the new 3.5% remittance tax, and thus in effect a seizure of 3.5% of my wealth? I don't think so, as I think (?) a "remittance" requires that the payee be a different person, but the fact that it's already a serious question means I have received the mural memo. If I (or any other non-US person) want to keep what wealth I have, I need to move as much as I can out of the reach of an unpredictable US.

If one wanted a one-click resilient asset but didn't mind US domiciled financial securities for some reason, I'd pick WIP. A mix of inflation-protected bonds from sovereign issuers in a wide variety of non-US currencies. Biggest currency weights something like 1/4 Euro and almost 1/5 sterling, then a long tail. The mere fact that it's a fund creates vulnerabilities, but the underlying assets should in theory be a considerably better store of value than (say) gold.

I am disappointed by the board --- and I am disappointed by myself, having letting me drawn so easily into that.

I wouldn't feel too bad on either front. These are very difficult subjects to discuss, and it is natural that they will spark other related thoughts and (yes) feelings. Many foundational axioms of investing in recent decades have been, quite justifiably, called into question or flat-out disproved. I think we can give ourselves a bit of slack, but yes, a return a little more towards investment subjects is probably apt.

I still like the old MI board motto: be nice to others, but feel free to beat an idea within an inch of its life. The phrasing may be a bit extreme, but the notion of maintaining the distinction is worthwhile. If someone says something plainly false, it's cool to point out the fact and reference a link tied to objective reality, but do let's try not to mock the person for having believed it. We *all* believe *something* that ain't so.

Jim

I did not read every post, so hopefully I am not repeating what someone else said. Said is correct that we verbally promised not to expand NATO and we did expand it. That was wrong. However, Russia agreed not to attack Ukraine if Ukraine gave up their nuclear weapons.
Putin said the greatest tragedy in the 20th century was the fall of the Soviet Union. He was not talking about communism. He was talking about territory. He has attacked Chechnea, Georgia, Ukraine and Moldova. Since Europe can’t count on the US anymore, they need their own weapons.

You seem to be gloating about the prospect, which I find disgusting.
Elan, don't take it personally. It's just observations & drawing potential conclusions.

The US does not want Canada. At all. That was a comment on the disparate sizes & power of the two militaries. Canada can't even get their own soldiers & equipment to the areas of conflict in the world where they are helping us. They depend on US transportation to get there.

Practically speaking you may be right,
See? Even you acknowledge it. Got nothing to do with gloating or wishing, got to do with simple observation of "correlations of forces and means (COFM)". COFM is defined as the military balance between two opponents



"3 general spheres of influence headed by Russia, USA, and China."
If you look at the size of these countries, in terms of population and economy, the notion of three spheres is ludicrous.

Size has little to do with it. "It's not the size of the dog in the fight, it's the size of the fight in the dog."



if that is some version of real politic, it is mind boggling that any patriotic American would accept it lying down.

Whaaat???? And it's not "real politic", it's "realpolitik".
"Politics based on practical rather than moral or ideological considerations"
"Realpolitik is a political system that's not based on beliefs, doctrines, ethics, or morals, but rather on realistic, practical ideas."
" the approach of conducting diplomatic or political policies based primarily on considerations of given circumstances and factors, rather than strictly following ideological, moral, or ethical premises"


Russia is no more than a tail being wagged by the Chinese dog.
I do not understand how anyone could seriously believe this.



Heck with it, I hate getting dragged into these types of discussions. People continually conflate "is" with "ought".
I'm out.

"NATO told Russia they won't accept applications from its neighbors. They broke that promise."

I see that many in here are victims of Russian propaganda.

One of the sites I read, I think it might be Kin Du Toit, keeps posting a gif saying:
"Everything they tell you is a lie, and No I don't have a f'king link!"

Russia apparently thinks that that promise was made or implied. We know that much of Diplomatic Language is couched in implication and innuendo rather than direct statements. Doesn't really matter either way, Russia is acting as if that promise was made.

In any case, Russia very clearly told NATO what their red line was.
NATO ignored that statement and here we are.

It sucks to be a small country on the border of a large paranoid neighbor.

For currencies, the US dollar is likely to remain pre-eminent in terms of liquidity and financial use, but seems very likely to lose some purchasing power, perhaps quite a lot. The Euro has some structural flaws but looks like it will endure. There may be another crisis or two, but it will survive those. I'm holding my cash largely in sterling at the moment, with some others.

You have the "opportunity" to move your money around to different countries and currencies. I put opportunity in quotes because I'm not sure if that is advantageous or not. Maybe like the opportunity to dance across a minefield?

I believe most of us here are Americans and so don't have the need or ability to think strongly about different currencies. But luckily for us, the first bit of what you said above is the saving grace for us. If the USD fails, we have much larger problems than the currency.

The father of a close Mexican-American friend lived in San Diego and had a thriving import/export business with Mexico. He told us he fortuitously had moved a lot of money between USD & Pesos just a couple of weeks before they devaluated the peso in Feb 1982. If he hadn't done that he would have been wiped out. Ugh.

The US does not want Canada. At all.

This is a very nice thought, but given that the US government has stated the precise contrary repeatedly and most emphatically, it sounds a lot like wishful thinking. Or, more bluntly, just plain denial.

All the norms have been tossed out. Other than the fact that "it hasn't happened recently", I don't see any reason to think another attempted takeover of Canada can't or won't happen. It has been announced, so your thinking is what, "they're just joking?" It is unimaginably difficult to explain to an American how offensive, and indeed wilfully blind, that is.

The main reason it is entirely possible, indeed eminently plausible, is because so many people are making that very mistake: it's all just a joke, pay no attention to the fellow on the TV. US politics is too often seen as mere entertainment by voters, but (surprise) it isn't.

As you note, the unfortunate truth is that Canada is very much at the mercy of the US should they decide to become more hostile: a third attempt would succeed. They could crush the Canadian economy by banning Canadian goods, or nearly starve us out by stopping food shipments north during the winter, or any other number of things, up to and including simply driving some armed folks up the road. Canada has a lot of resources the US wants, and has always wanted, and it would make a great Melitopol-style mostly-land bridge to Greenland. It's just the thing if you want to turn continental economic power into an old school empire, and it would be naive to think that current US leaders don't want that, or don't have the will and tools to make it so should they decide to pull the trigger (such a quintessentially US idiom). They might act, they might not, things are unpredictable. But there is no support whatsoever for the notion that they simply can't because it's inconceivable. ("I don't think that word means what you think it means")

Sometimes a cigar is just a cigar, and sometimes an expansionist empire stating the firm plan to take over other countries' territory is just that.

Jim

Russia apparently thinks that that promise was made or implied. We know that much of Diplomatic Language is couched in implication and innuendo rather than direct statements. Doesn't really matter either way, Russia is acting as if that promise was made.

Sometimes the simplest explanation is best. From literally the start of his reign Putin has said the breakup of the Soviet Union was illegitimate and those territories are "historic Russia" and losing them was an "the greatest geopolitical catastrophe of the 20th century." He views Ukraine as "lost Russian lands" and stated Ukraine has no right to exist as a state. He's been saying these things for decades. And indeed, Putin started invading his neighbors from basically day one of his presidency. In words and in actions, Putin believes his mission is to reconstitute the Russian Empire. He's even compared himself to Peter the Great.

You are correct in the sense Putin believes Ukraine should be in his sphere of influence and wants no meddling from the West. But it is incomplete to suggest he invaded because of interference from the West. He invaded because in his view Ukraine is legitimately part of Russia and he wants to reconstitute the Russian Empire. Importantly, the Ukrainians (most of them) don't see themselves as Russians. That's one thing that gets lost in this.

For currencies, the US dollar is likely to remain pre-eminent in terms of liquidity and financial use, but seems very likely to lose some purchasing power, perhaps quite a lot. The Euro has some structural flaws but looks like it will endure. There may be another crisis or two, but it will survive those. I'm holding my cash largely in sterling at the moment, with some others.
...
You have the "opportunity" to move your money around to different countries and currencies. I put opportunity in quotes because I'm not sure if that is advantageous or not. Maybe like the opportunity to dance across a minefield?

I wouldn't suggest that my moves make me financially safe. But one does what one can.

Right now I see a sign on the road that says "minefield ahead", so I'll change direction. You can at least pick the road that isn't already clearly signposted as likely being fatal.

The interesting point is what will happen to the US dollar. The US consumes very much more than it produces. US consumers (including the government) are able to consume as much as they do solely because non-US investors plow an incremental net ~$100 billion a month into US securities, mainly stocks and bonds. There are other things going on, but those two are by far the largest and explain each other, the rest of the capital account being a macro sideshow by comparison. The arriving money sloshes around the US, which is not short of entrepreneurs, so there are lots of profitable companies, keeping the investment attraction high, along with the US dollar and US asset valuation multiples and US consumer spending power. What happens if $100 billion a month in incremental net new foreign capital turns into (say) merely $80 billion a month? One of two things, I assume: either (a) US consumption falls (lower current account deficit, lower aggregate borrowing, fewer Barbies at Christmas), or (b) some mix of lower dollar and lower prices for US investment assets, sufficient to make them cheap enough to attract the missing $20bn a month. (some people posit a third approach, which is more or less to steal the difference). Do the asset prices have to be even cheaper the next month, and cheaper again the month after?

These are hard questions. But I don't think the prospect of a big fall in US asset prices and the purchasing power of the US dollar is something that is dodged based on where you live.

Jim

Importantly, the Ukrainians (most of them) don't see themselves as Russians.

Partially true. There are many regions where the Russian population is significantly higher than native Ukranian, and this is where most of the disputes rise. During the soviet era, a lot of Russians migrated to Ukraine and have been there for quite a while.

From Wikipedia : Outside of Crimea, Russians are the largest ethnic group in Donetsk (48.2%) and Makiivka (50.8%)

tecmo
...

"The US does not want Canada. At all."

This is a very nice thought, but given that the US government has stated the precise contrary repeatedly and most emphatically, it sounds a lot like wishful thinking. Or, more bluntly, just plain denial.

That was just Trump trolling & dissing Canada.
Doesn't ANYBODY read The Art of the Deal?

I still don't know if was just to insult Trudeau/Carney or to push the Canadian voters to vote for Carney instead of Poilievre in order to keep the Liberals on the path of harming the country. For them to vote Liberal to thumb their noses at Trump. I figure that's more likely than not.

It is unimaginably difficult to explain to an American how offensive, and indeed wilfully blind, that is.

Consider the possibility that this is exactly what was intended. Not willfully blind but purposely intended. Do you really think that Trump wants 40 million additional left-of-center voters?


For Canada to become a US state is practically impossible. First off, Americans in general don't want another California. Or another Puerto Rico.

None of the necessary legal steps could happen in the foreseeable future.
* The territory must have a referendum to become a state.
* Then petition Congress.
* Congress must pass an enabling act.
* Both House and Senate must pass legislation admitting the new state.
* This means that the majority of existing states must vote to admit the new state. This simply will not happen, given the current political situation.

Frankly, it is more likely that Mexico would become a state than Canada. And that of course will not happen.

Russia always draws its red lines in other people's territories. How would that work - their former satellites become independent countries, but cannot freely choose their alliances? This must be a very Russian form of independence. They still call their form of government a democracy btw. Ukraine, OTOH, is a "Nazi-regime".

BTW, why did Russia invade Finnland, Chechnya or Georgia? I believe, they did not want to join NATO.

There is a famous Gorbachev interview which clarified the issue once and for all: At the 2+4 roundtable, they did not even talk about the NATO eastward expansion. That said, Gorbatchev believed it was a mistake by NATO to expand eastward. (You might also want to ask the Poles, the Swedes, the Finns etc.)

As far as the original subject of this thread is concerned:
On this very board, 11 months ago, we had a long discussion: Was the writing on the wall - or not?
https://www.shrewdm.com/MB?pid=-2&previousPostID=4...

I was surprised to read that many were simply happy with a "likely repeat" of the first Trump market boom. That mood has apparently changed.

After the election I moved 87% of my funds out of the U.S., mostly into UK, EU and JP mid caps. The UK and Japan, being monarchies, should be relatively protected from the current "democracy crisis". And they can print their own currencies. The EU is probably the most undervalued asset in the world right now. Even by its own citizens. Everybody seems to believe it is certain to become somebody's lunch. I don't think so. Maybe I am naive, but I deeply trust in culture. Europe has very deep cultural roots and won't be able to become anybody's prostitute, even if some European politicians are almost paying in order to sell themselves.

Having lived in Italy for many years, I have some firsthand experience why Mussolini apparently said that governing the Italian people is not difficult, but useless. In today's world, I take that as a positive quality.

I see that many in here are victims of Russian propaganda.

I did not hear this from any Russian associated source.
I heard this in an interview with an old American diplomat/journalist (can't recall name). Based on his apparent depth of knowledge and lack of bias, IMO he was not pro-Russia or pro-anyone.
Please STOP underestimating us, we are not "victims".
I read the link you posted, it feels like sophistry to declare that "whatever the various Western leaders discussed with Gorbachev in 1990, these discussions were based on the assumption that the Soviet Union exists, and thus became insignificant with the collapse of the Soviet Union." And even they say that 'Baker reassured Gorbachev at the meeting that it was better for all parties to have a united Germany within the political and military structure of NATO than outside it. It is from this conversation that we find the words of Baker, which form the basis of the narrative: “If we maintain a presence in Germany, there would be no extension of NATO’s jurisdiction for forces of NATO one inch to the east.”'

Anyway, like Said said, whatever Russia thinks drove them to invade Ukraine. Trying to understand Russia's viewpoint is not the same as sympathizing with them or falling for their propaganda. Was Milton Myers a Nazi sympathizer for writing "They thought they were free"?

Idiots think others are idiots. Smart people have Dunning Kruger.

These are hard questions. But I don't think the prospect of a big fall in US asset prices and the purchasing power of the US dollar is something that is dodged based on where you live.

Right.

My #1 son, who is far to the left of his 2 brothers & his parents recently send me a paper/book going over history and how long empires have lasted. Turns out the average empire longevity is about 250 years. Of course like everybody says, "This time it is different." (LOL!)

But it is interesting to note that Russia and China have existed as countries for much much longer, but each has gone through a number of governmental empires.

Oh yes, he also pointed out that 2025-1776 is 249 years.

Another of the news/opinion sites I read, he is predicting that the present USA empire will crash around 2036. Probably he is very pessimistic. He does always look at the dark side of life.

I think that the world will keep stumbling along pretty much as it is for longer than any of us will be alive. I feel sad for my grandchildren's grandchildren though.

A while back I read a paper going over history and counting up the number of years in recorded history where there was not significant military action/wars happening. Turn out that number is zero (0).

>Please STOP underestimating us, we are not "victims".

Your reply reminds of a famous Russian joke:

A man was reported to have said: "Nikolay is a moron!" and was arrested by a policeman. "No, sir, I meant not our respected Tsar, but another Nikolay!" – "Don't try to trick me: if you say 'moron', you are obviously referring to our Tsar!"

This is a very nice thought, but given that the US government has stated the precise contrary repeatedly and most emphatically, it sounds a lot like wishful thinking. Or, more bluntly, just plain denial.
...
That was just Trump trolling & dissing Canada.
Doesn't ANYBODY read The Art of the Deal?

There is, alas, no evidence for your belief, but much evidence to the contrary. The official US policy stance has been clearly stated.

The Art of the Deal, the book by Mr Schwarz, has no relevance, other than perhaps suggesting that taking over ALL of Canada is a maximalist demand that will be backed off to settling for only a few provinces? There is another similarity: the book isn't about trolling and dissing, and neither is the plan to take over Canada.

Like Mr Trump or not, surprisingly often he means exactly what he says, and does exactly what he says he will do. The rationality of the stated intent seems to have little predictive power.

The process for statehood you mention has no relevance to the current administration, as they intend simple conquest and annexation. The intended method is causing a depression from economic embargo, forcing the otherwise unwilling populace and government to surrender. All out in the open and clearly stated policy, not a secret or a conspiracy theory or a jest. As should be rather obvious, the orderly provisions of the US constitution are not relevant.

As I mentioned, it is indescribably annoying for a non-US person to see Americans mistaking serious stuff for jokes, like chainsaw-cheering the deaths arising from the termination of USAID. It's certainly true that the US congress has the right and power to end it--foreigners have no right to that gift money--but equally true that they haven't.

The average American believes that foreign aid is 20% of the US federal budget, and when asked, the average of their responses is that it's too much and should be cut to 10%. The actual figure is very close to 1% in a typical year. It seems likely that some Americans are able to have estimates of what's serious that are similarly off by a factor of 20, which can similarly lead to real world deaths.

This won't blow over quickly. I certainly intend never to set foot in the US again. No offence.

Jim

With ALL due respect and reverence for your POV, maybe history can offer some perspective regarding the U.S. evolving dynamic of several distinct periods and political motivations.

+ Revolutionary War and War of 1812, one of American "War Hawks" objectives was the conquest of Canada yet later seen as leverage against British influence and support for Native American resistance.
+ Manifest Destiny, applied to westward U.S. expansion across the North American continent…Billy Seward openly expressed beliefs in this inevitable expansion (e.g. Alaska).
+ Mid-to-Late 19th Century, Canadian economic uncertainties led some Canadian merchants to call for annexation. American tariffs pushed twd u.s. hopes that Canada would join the U.S. to avoid 1800’s British Corn Laws.
+ Post Civil War the U.S. occasionally sought but failed to acquire parts of Canada through negotiation or in payment for claims.
+ Fenian Raids while not “official” U.S. government actions, Irish-American groups known as Fenians conducted raids into Canada aiming to pressure Britain by creating instability in British North America.
+ War Plan Red was reportedly a U.S. War Department a hypothetical plan for a conflict with Britain that included invading Canada (e.g. 1920-1940).

IMHO historically speaking, the U.S. has absolutely exhibited expansionist tendencies throughout its history regarding Canada. Strong Canadian Nationalism and resistance over time has led to U.S. recognition of we Canada's sovereignty.
This leads to my firmly held belief that the strong bilateral relationship have led to a reality where the idea of the U.S. taking over Canada is no longer a serious political or military objective…regardless of the today’s political rhetoric.

I respectfully reserve my right to be wrong.

Grateful Always,
PaulnKC

" NATO Secretary General Mark Rutte on Monday urged the European allies to make a "quantum leap" in military spending to deter Russia, which affirms Trump's own longtime message, as the NATO chief called for a whopping 400% increase in the Continent’s air and missile defense budget.

"The fact is, we need a quantum leap in our collective defense," Rutte said before an audience of the London-based think tank Chatham House. "The fact is, we must have more forces and capabilities to implement our defense plans in full. The fact is, danger will not disappear even when the war in Ukraine ends."

The comments came days after he stated provocatively that Europe must invest heavily in defense now, or learn Russian later."



https://www.zerohedge.com/geopolitical/invest-now-...

maybe history can offer some perspective regarding the U.S. evolving dynamic of several distinct periods and political motivations.

Don't miss the two full invasions.
1775-1776, including taking Montreal and the failed siege of Quebec City.
1812, full invasion and major battles on several fronts.

One thing seems consistent, then and now: the notion that those in the frozen north, or at least some large segment of them, will welcome the invasion and assist the Americans in their conquest.


This leads to my firmly held belief that the strong bilateral relationship have led to a reality where the idea of the U.S. taking over Canada is no longer a serious political or military objective…regardless of the today’s political rhetoric.

This is still a commonly held view, that nothing has changed, or at least not permanently. I agree that it seems certain that there will likely still be lots of commerce across the 49th one way or another. But in the same vein, it is absolutely certain that some changes are truly permanent. There will never again be the same level of trust, that's gone for good. The Canadians are usually too tactful to say it, and the Americans usually too prideful to believe it, but to the typical Canadian in this era, the US is perhaps still a great place to make a buck, but otherwise odious. Few Canadians have a positive view of China (~30%), but it's more than have a positive view of the US (26%).

It's not just a marital spat. We *all* have to recognize that the US is now a country that is a declared adversary of Canada and Europe, no longer an ally of "the west". Not just the annexation agenda, but also for example voting with Russia and North Korea and against those erstwhile allies, and pushing hard for Russian success in their wars of conquest. There are probably lots of folks in the US who are not happy with this situation, fair enough, but so what? At some point they have to just recognize it rather than denying it. They aren't in charge, and may never be, so it may just be the way things are now. It is far from certain that the US will have an election in 2028, as opposed to an "election". Peaceful transfer of power in a free and fair election may no longer be achievable. And even if things go swimmingly and a calmly rational person is in charge at some future date, the trust is gone. No sane jurisdiction will trust any US promise or treaty for the next century. This is a much bigger change in the structure of the world than the fall of the Soviet Union, and there is no putting the toothpaste back in the tube. The world has truly moved on because of changes in the USA, and oddly it seems to be the residents that are the least cognizant of it.

Jim

I still don't know if was just to insult Trudeau/Carney or to push the Canadian voters to vote for Carney instead of Poilievre in order to keep the Liberals on the path of harming the country.

Doesn't that make it worse? What kind of sorry human being takes pleasure in hurting his neighbors?

The apologetics are making my mind reel. No, he's not clueless and tone deaf. He just likes insulting and hurting people. Okay, he's got my vote.

Time for me to step away from the computer, I think. I can't believe what I read sometimes.

How can you not take Trump’s threats seriously after January 6? And the full pardons of the men who killed Brian Sicknick and maimed Michael Fanone?

What has Trump ever done that was not in the pursuit of power and wealth?

The US does not want Canada. At all.

So... you don't think Trump is the president of the US?

What happens if $100 billion a month in incremental net new foreign capital turns into (say) merely $80 billion a month?

Just based on the rather uneducated seat of my own pants, it doesn't feel to me like this is going to happen. Primarily, while the current mishegas will shake things up, there are pretty good reasons to believe that the US economy could be enhanced in performance over the next few years. Plus, paradoxically, I suspect that the world reaction to the chaos created by the current administration might be an enhanced flight to safety which may still be realized as investing in the US. Admittedly we don't have a lot of data yet, but so far warnings of recessions and inflations and loss of reserve currency status seem to have been greatly exaggerated. And when you think: where else are you going to put your money, what do you come up with?

Meanwhile, the OMB has consistently underestimated the value of lower taxes and lower regulation in increasing the growth rate of the American economy. And what are the chances that the seemingly gigantic wave of AI productivity that is about to crash over primarily the US economy are completely wrong? Maybe it doesn't seem like US surviving and thriving no matter what the government does is not a great plan, does that actually mean it is not the most likely outcome?

Jim, your pulling out of the US months ago had more influence over how I think about what is going on than, ... I don't know, almost anything else I can think of. But on reflection, I realized as a natural US citizen, I felt no real risk in investing in either US stocks or US government debt, although it seemed insane to me that any US leader should ever even want to play chicken with the bullet train that carries all that foreign money into the US every month. NO ONE ELSE has silicon valley. NO ONE ELSE has the magnificent 7 or whatever euphemism we use for the technical leadership of the world these days. And despite the Chinese doing perhaps better than expected, NO ONE ELSE has AI leadership.

Yes I wish things were different, and I sort of expect we are going to have to pay some price for the tragically disgusting turns in our leadership. But I'm sort of thinking that we will have to pay a material ECONOMIC price for any of this.

IDK,
R:/

“… countries joined NATO through the democratic decisions of their elected leaders. ”, so if Cuba was a democratic country, the US would have allowed it to install Soviet missiles?

NO ONE ELSE has silicon valley. NO ONE ELSE has the magnificent 7 or whatever euphemism we use for the technical leadership of the world these days. And despite the Chinese doing perhaps better than expected, NO ONE ELSE has AI leadership.

Fair points, though some might quibble about the last one.

The US has a half dozen gigantically successful firms, without a doubt, but the overall performance of the rest of the US equity market *businesses* is no better than the performance of the *businesses* in (say) Europe. Outside the giants, the financial return advantage of recent years has been about rising valuation multiples, not better economics, despite the low tax rates and business-friendly labour laws.

The real sugar high that is sometimes missed is debt. If aggregate borrowing in an economy is rising rapidly, that brings aggregate profits and consumption forward from the future, depressing them later by a somewhat greater amount. Unless the debt is defaulted.

it seemed insane to me that any US leader should ever even want to play chicken with the bullet train that carries all that foreign money into the US every month.

Indeed : )

The sugar rush is underappreciated.

Imagine a poor country with hard working people. Imagine lending those folks trillions of dollars at low rates, year after year, decade after decade, with the interest paid by more borrowing. Money keeps falling from the sky, so their companies do outstandingly well and living standards soar--lots of true local total factor productivity, but hugely accelerated and flattered by the continuous flow of extra capital from outside. Taxes can be low since the inflows plug the spending gap. The populace gets pretty rich, the economy soars, the companies are gushers of profits, and their equity markets rise to the moon. The money keeps pouring in, though it's now smaller than the economy.

And how will they do when the tap gets turned off? How will the companies do? The consumers? The stock market? All the human and physical capital is still there, but the tail wind of extra capital is now a head wind. Just for starters, either taxes go from unusually low to unusually high, or you get a massive debt default, or a currency crisis, or some combination of the above. Right now I think you can get some Argentine bonds maturing in 2117 for about 40 cents on the dollar.

Jim

if Cuba was a democratic country, the US would have allowed it to install Soviet missiles?

Interesting hypothetical, but moot--if they'd been a peaceful functional democracy they wouldn't have wanted to.
No more than Canada wants to host Soviet missiles pointing at the US.

Hmm, now that I think of it, maybe just a couple of Canadian missiles aren't THAT bad an idea...

Jim

Sorry, Jim, but Canada isn't as important as it thinks it is. No offence.

There is an old joke, A Canadian says to an American "When we think about America we think about your racism and no free health care and your income equality and [etc]. I am curious, when you Americans think about Canada, what topics do you think about?"


The American answers, "We don't think about Canada at all."

No offence.


==========
Oh, about USAID. USAID was largely a money laundering machine, transferring money to NGOs. It also dished out a little money for foreign aid. Which function has mostly been transferred to the State Department.

Regardless of all that, the US government is spending far too much money and borrowing far too much money.

Another topics on which I'm out. Back to Berkshire, hopefully.

Well, now that we have ample demonstration that politics is something that should not be discussed in public, how about we turn to religion?

"This won't blow over quickly. I certainly intend never to set foot in the US again. No offence."...Jim
...............................

Hopefully you will reevaluate when this thing reaches zero.

https://logwork.com/countdown-h5o4

ciao

Regardless of all that, the US government is spending far too much money and borrowing far too much money.

You think we're spending & borrowing too much money now? Wait 'till you get a look at the big beautiful bill!

During his last term Trump added $8 trillion in just 4 years...

"The amount he's added to the national debt is indecent." ~Mike Pompeo (Life long Republican)

Sorry, Jim, but Canada isn't as important as it thinks it is. No offence.

Hey, no problem. The US is much bigger and much more important on the world stage, without a doubt.

However, in that sense, Canada is therefore important indirectly---the fact that it is official US policy to annex Canada against the wishes of its population informs the world (including Americans who are paying attention) of what the US is really about these days. No illusions any more, no pesky lingering ambiguity.

When a celebrity kicks a dog in public, that particular dog may not be important, but you learn a whole lot of definitive information about the kicker country.

There was once a contest to complete the phrase "As Canadian as..."
The winner was "As Canadian as possible under the circumstances".

Jim

What has Trump ever done that was not in the pursuit of power and wealth?

Oh, hey, nobody is all one thing. He also does a lot of things aimed at making himself look good, for example : )

More seriously, some of his past policy results are actually sensible. Aside from being unfunded, the structural changes in the TCJA were good policy. It moved the US somewhat away from the prior situation of headline corporate tax rates dwarfing those of other countries combined with innumerable carve-outs and credits to make the true rates unfair and all but random.

Jim

so if Cuba was a democratic country, the US would have allowed it to install Soviet missiles?

It is now the year 2025, and I hope that we have moved beyond using policies and actions from the 1960s to justify illiberal and harmful decisions being made today.

But to address your question—Cuba sought to install Soviet missiles to ensure the survival of its regime, not as an expression of the will of its people. Moreover, when democratic and liberal countries invite foreign troops and weapons onto their territory—such as Germany did—I do not recall any neighboring countries threatening nuclear war.

First of all, if I was either a Kiwi or an Ozian, I would take great exception to "There is nothing of strategic value in either place."

Yes, mea culpa. I should have said “little of strategic value”, not “nothing.” Australia has coal, which it ships to China. It also has stores of rare earth ores, which is also ships to China for processing. Other than that, there’s really not a lot there (of foundational or existential strategic worth.)

Now it may be that China sees those commodities as somehow requisite for survival - although they manage to buy them now at favorable prices - and would risk a world war to take over the countries, but frankly that seems unlikely to me. Any territorial ambitions China has had over centuries have been limited to continguous areas where they once held sway (Tibet, Mongolia, Korea, etc) not countries thousands of miles away and separated by a vast ocean. Even Japan, at the height of its hubris a century ago, concentrated on adjacent countries to build a sphere of influence in the Pacific.

So apologies to Aussie and Kiwis. I didn’t mean to imply ”worthless”, I just meant “worth less” than instituting a world war to get what it can already get by simpler means.

Oh My Dear Friend Mungo,

I deeply appreciate you sharing your perspective and highlighting the depth of feeling you believe exists regarding U.S.-Canada relations. While historical invasions certainly do underscore periods of conflict and current political rhetoric can indeed be concerning, I would respectfully offer another view for consideration on the permanence of current sentiments.

My original point about the strong bilateral relationship leading to the obsolescence of annexation as a serious objective certainly does speak to a fundamental shift in the nature of the relationship, beyond just individual political administrations. IMHO interwoven economies, shared cultural touchstones and decades of cooperative efforts on global stages have built a foundation that is more resilient than one might suggest.

While polls may indicate current frustrations, please consider the distinction between transient political disagreements and a permanent, existential shift in a deeply established alliance. Nations, like individuals, experience periods of strain, but the underlying shared values and mutual interests between Canada and the U.S. have historically proven to be robust. To suggest that trust is "gone for good" and that the U.S. is now a "declared adversary" seems to overlook the ongoing collaboration in numerous critical areas from defense and security to trade and environmental protection.

Attributing such a definitive and irreversible decline to the entire "US" as a monster entity, rather than to specific political actors or policies may be an oversimplification.

I remain optimistic that the enduring ties and shared objectives between our two nations will ultimately navigate through present challenges, demonstrating a continued evolution rather than a complete and permanent severance of trust and alliance.

As always, I reserve the right to be wrong and remain profoundly respectful of your beliefs, Mungo.

Grateful Always,
PaulnKC

While polls may indicate current frustrations, please consider the distinction between transient political disagreements and a permanent, existential shift in a deeply established alliance. Nations, like individuals, experience periods of strain, but the underlying shared values and mutual interests between Canada and the U.S. have historically proven to be robust. To suggest that trust is "gone for good" and that the U.S. is now a "declared adversary" seems to overlook the ongoing collaboration in numerous critical areas from defense and security to trade and environmental protection.

Without a doubt it is hard to predict the future, so reasonable people can come to differing assessments of how permanent the changes are. It would be nice if your thoughts turn out to be correct.

I myself conclude that certain good aspects of the Canada/US relationship are already permanently gone, for two main reasons: first, certain reactions and actions of myself and those I know which are permanent. Selling American cottages, for example. Plus, I have been coming to the conclusion that certain aspects of US governance are permanently gone, and along with them the potential for amelioration of many types of international relations. On the latter, I am pretty sure at the very least that it is NOT simply a matter of waiting for the next election cycle. Much of what was taken for granted is simply no longer true. As an example, I am given to understand that previously routine Five Eyes intelligence is not being fully shared. Trust will take a long time restore, since there is quite a big gap between "has never betrayed us" and "betrays us once per century".

Attributing such a definitive and irreversible decline to the entire "US" as a monster entity, rather than to specific political actors or policies may be an oversimplification.

Certainly the individual is not the same as the governing group. Most folks are very nice, whether in Atlanta or Vladivostok. My comments are based on the actions of the US government, combined with the observation that those in the US who don't agree with its actions are, these days, wholly irrelevant. I think perhaps much more irrelevant than many have yet realized, and perhaps for much longer.

Jim

Jim,
I appreciate your candor.

I cannot totally incorporate your thoughts on this complex subject area into my own thinking because to do so effectively locks up my mental apparatus going forward. Essentially, yours and others inputs, while valid, can have the effect of weighing down my ability to make financial decisions going forward. I mean, the recent drone destruction of aircraft on bases in Russia presages the inevitable similar actions available to happen within the USA and elsewhere. It appears Peter Turchin’s research and predictions are happening now.

As for me, I am continuing with Mr. Buffett’s comments to try to eliminate the dark thoughts and to concentrate on what I can implement within my core competency circle. Politics, nationalism, how countries interact and the like are sand in my mental gears. Gears don’t do sand well. Gears like 90 weight lubricating oil with no solids.

Discussions of investing merit are 90 weight lubricating oil for my competency limited mind and you kind sir have been the unparalleled best at supplying those wonderful investment pearls over years.

I’ve made a lot of money from your investment words and am exceedingly grateful to you.

Uwharrie

I myself conclude that certain good aspects of the Canada/US relationship are already permanently gone, for two main reasons: first, certain reactions and actions of myself and those I know which are permanent. Selling American cottages, for example. Plus, I have been coming to the conclusion that certain aspects of US governance are permanently gone, and along with them the potential for amelioration of many types of international relations.

On the latter, I am pretty sure at the very least that it is NOT simply a matter of waiting for the next election cycle. Much of what was taken for granted is simply no longer true. As an example, I am given to understand that previously routine Five Eyes intelligence is not being fully shared. Trust will take a long time restore, since there is quite a big gap between "has never betrayed us" and "betrays us once per century".

Permanently is a long time; and I don't think really anything is permanent not the least of which is political policy between two nations that has often changed. You could argue that the changes are significant enough that long lasting impacts will be felt - I agree with that.

tecmo
...

I cannot totally incorporate your thoughts on this complex subject area into my own thinking because...

Fair enough! Probably best to assume that they're not all valid anyway.

I'm not sure I can incorporate my thoughts either, but I decided in March "what the heck, let's just pull the trigger on getting out while the getting is good". In a few ways it's a different risk/reward calculus for someone living in the US (First they came for the foreigners...), and geopolitical concerns or no, I would likely have done different things if Berkshire had been cheap instead of richly priced at the time.

As I mentioned then, I do fully expect my reduction of US exposure to cost me money in foregone gains.

Though it hasn't yet, oddly enough--I'm beating the S&P nicely TTM and YTD despite averaging over 70% cash. Sometimes everything moves the direction you expect, and sometimes it's all the reverse. Smart can work, but lucky is better.

Jim

Permanently is a long time; and I don't think really anything is permanent not the least of which is political policy between two nations that has often changed. You could argue that the changes are significant enough that long lasting impacts will be felt - I agree with that.

Fair enough. "Forever" is a long time, for sure.

But, despite a tariff tiff now and again, the US and Canada have been allies continually since Canadian confederation in 1867, and are now adversaries if not enemies for the first and only time. That's a step change.

Ignoring the military or economic muscle required, imagine how Americans would feel if the Canadian government announced it was going to take over and annex Wisconsin whether they like it or not (a roughly proportional move, based on population). Would anyone in the US find that an upsetting prospect? Or is everybody fine with the idea of all cheeseheads being forced to change citizenship? Would it be cause to change the ongoing relationship between countries, or would it be "Meh, take it"? Everybody knows that Canada is the best country in the world, so it's all for the best, right?

Sure, maybe things will heal at some point in the distant future, maybe not. But either way it's unspeakably obscene that some Americans think this is a joke, that anything the US government does to furriners is by definition unimportant, including becoming a conquering empire.

The joke further up the thread about the Americans not thinking of Canada at all is pretty good, but I wonder how many readers realize that it's a joke about Americans.

Jim

the US and Canada have been allies continually since Canadian confederation in 1867, and are now adversaries if not enemies for the first and only time.

Neither adversaries nor enemies.
Just a squabble between neighbors.

"Canada and the US have a highly integrated and extensive trade relationship, with the US being Canada's largest export market and Canada being the US's third-largest source of imports. In 2024, Canada exported roughly 76% of its goods to the US, and imported almost half of its goods from the US."

"U.S. total goods trade with Canada was an estimated $762.1 billion in 2024. U.S. goods exports to Canada in 2024 were $349.4 billion."

"The United States was the sole export market for nearly two-thirds (65.9%) of Canadian exporting enterprises in 2024."

This is unlikely to change majorly.

For Canada, trade with the US is just moving products a hundred or less miles via truck or rail car. Before lunchtime. Across a order that is 5,525 miles, through about 120 ports of entry.
Whereas trade with any other country has to go by ocean ship. After traveling inside Canada for average 2,600 miles to either coast. Through the bottleneck of just 5 major seaports.

None of that means that the US wants to make Canada a state. That's just bogyman thinking. And -- no offense -- Canadians puffing themselves up.

Canada is getting slapped right now because America thinks that they have been annoyingly taking advantage of the cross-border trade. (And it is not just Trump.)

Canada is getting slapped right now because America thinks that they have been annoyingly taking advantage of the cross-border trade. (And it is not just Trump.)

If "America" is thinking that (and I don't think most of us are), then America is pretty damn dumb. If I need widgets for my business and you can make widgets cheaper than I can make them, then I become richer by buying every single last possible widget I can from you. That's why trade exists.

If I were dumb as dirt and thought I was being "taking advantage of" because I was making money buying cheap widgets, I would impose a tariff so the cost my widgets goes up. My profits would go down, but at least...uh, I dunno what I get out of it. The deep satisfaction of having less money?

The US economy has beat the rest of the industrialized world over the last couple decades is in large part because we buy cheap widgets, not despite of it. The parable of Killing the Golden Goose has been around for about 2,500 years now. I think the lesson is so lasting because it never takes hold. I guess we're gonna learn it again. Good and hard, this time.

Next up, the parable of the Boy Who Cried Wolf. Also directly relates to current events. I'll leave the reasoning behind this as an exercise for the reader.

None of that means that the US wants to make Canada a state. That's just bogyman thinking. And -- no offense -- Canadians puffing themselves up.

Canada is getting slapped right now because America thinks that they have been annoyingly taking advantage of the cross-border trade. (And it is not just Trump.)

May I offer you a flashlight so you can pull your head out?

Nobody in America except the unwashed brainwashed thinks Canada has been "annoyingly taking advantage of the cross-border trade." What even.

"The joke further up the thread about the Americans not thinking of Canada at all is pretty good, but I wonder how many readers realize that it's a joke about Americans."

That was one of the ones I was going to reply to, and decided against it. I changed my mind again.

To any extent that American's don't think about Canadians, I think it is a tribute to Canada's reliability. Things I think about as an American when I think of Canada, in no particular order:

* We share the longest border in the world, it is essentially undefended
* We share 3 major sports leagues - the NHL, NBA, and MLB
* Canadians are massive figures in American popular culture - William Shatner, Dan Akroyd, Shania Twain, Michael J Fox, Tommy Chong, Keanu, Rush, The Guess Who, John Candy, Jim Carrey, Dave Foley, Norm MacDonald, and so on. This is mostly from memory. I had to stop myself on comedians, and I didn't even mention Rick Moranis or Phil Hartman. Someone should seriously study how Canada produces so many brilliant comedians.
* The next CEO of Berkshire Hathaway is Canadian (to keep things topical)
* Canada is the source of 60% of US petroleum and natural gas imports.

Nobody tells actually tells that "joke "in the US, at least nobody worth mentioning. Canada is popular, respected, and appreciated in the US and polls prove this. No attention-seeking logorrheic boor will change that anytime soon, but decent Americans understand how much we have to do to make up for the harm he has caused.

ps - unrelated, why GBP specifically instead a basket of GBP, JPY, or EUR?

If "America" is thinking that (and I don't think most of us are), then America is pretty damn dumb.

I have sadly come to the realization that much of the US is indeed pretty damn dumb. Too dumb and disconnected to keep a democracy I’m afraid. A pretty big percentage (30%?) of our citizens are full on brainwashed MAGA followers who are all in on autocracy for whatever sad/stupid reason. But the bigger percentage are the people who just don’t know what’s going on politically, who “don’t do politics” as they say. They are too busy making money and living their lives apparantly and have ignored politics largely for decades, other than voting every four years (without much thought) in their designated party. This is how we get these crazy leaders that we have now.

" They are too busy making money and living their lives apparantly and have ignored politics largely for decades, other than voting every four years (without much thought) in their designated party. This is how we get these crazy leaders that we have now."

Good morning lets expand it to crazy, incompetent, unqualified, and in way over their head. Who are you referring too specifically? Thank you.

ps - unrelated, why GBP specifically instead a basket of GBP, JPY, or EUR?

Various answers--
* It was in fact a blend of currencies, including Euros and Canadian dollars. It's just that the GBP chunk was biggest.
* Despite the rather dire economic news, the pound has held its value remarkably well since the credit crunch, and over the longer term has been remarkably stable, unlike the US dollar. The 2016 "Brexit drop" that one hears so much about was mostly just the unwinding of a pre-Brexit 2014-2015 temporary rise. If you look at the longer term, the trade weighted pound is about 7% higher than the very steady range 2009-2013, and has been rising slowly and steadily since 2016.
* Like most folks, I foolishly place undue emphasis on the currently available interest rate when choosing which currency to hold. The available rate was around 4.3% at almost any duration. IB is paying about 3.7% on cash deposits. Both of those figures dwarf the Euro equivalents.
* I have some UK related dealings, so the choice of currency didn't start from a clean sheet

Jim

I certainly intend never to set foot in the US again. No offence.

Never? If you expect to live no more than 3 1/2 years, that makes sense. Otherwise, I think there's still a slight glimmer of hope that things will get better.

Some people who vowed in 1933 never to set foot in Germany again, may have found it safe 15 years later.

Elan

I certainly intend never to set foot in the US again. No offence.
...
Never? If you expect to live no more than 3 1/2 years, that makes sense. Otherwise, I think there's still a slight glimmer of hope that things will get better.

I'm usually a glass-half-full kind of person, so sure, there's always hope that the future will be bright. But I really don't expect anything to be better four or eight years from now for...reasons, and in any case I can't think of any reason I'd ever want to visit.

To be fair it's not actually a big change, as I've mostly avoided the US for a long time. The biggest change is that I'm removing the US as a territory in which my health insurance is valid--saves a fortune.

Jim

Certainly the individual is not the same as the governing group. Most folks are very nice, whether in Atlanta or Vladivostok. My comments are based on the actions of the US government, combined with the observation that those in the US who don't agree with its actions are, these days, wholly irrelevant. I think perhaps much more irrelevant than many have yet realized, and perhaps for much longer.

And it is perhaps wishful blindness to ignore that Trump has been elected TWICE by the US. He is not an aberration. In terms of revealed preferences, Trump is as American as large pickup trucks and high-fructose corn syrup.

Fug,
R:

In terms of revealed preferences, Trump is as American as large pickup trucks and high-fructose corn syrup.

Interesting metaphor as the popularity of both items in the US stems directly from separate quirks of US tax law, not from simple local preferences. (perhaps that's why you picked them)

HFCS because of the more or less total ban on sugar imports above a quota level causing sugar to be twice as expensive as in the rest of the world and therefore making HFCS, normally a more expensive product, cheaper by comparison,

...and pickups because of the 25% duty arising from the chicken tariff dispute ~50 years ago, making them the extra-profitable product of preference for US production.

I don't know that there is any deep lesson from all that other than that one should never underestimate the power of unforeseen consequences from government initiatives. Or as Mr Munger might have said, "Show me the incentive and I'll tell you the outcome".

Jim

imagine how Americans would feel if the Canadian government announced it was going to take over and annex Wisconsin whether they like it or not (a roughly proportional move, based on population).

As a state, Canada would be BIG. From everything I have seen, Canada is if anything even woker than the Democratic party in the US, and significantly more left than any party in the US.

Maybe Canada should join the US before our mid-term elections, and we'd then be able to impeach and convict Trump with our new senators and congressmen from Canada.

Plus, once we merge with Canada, maybe we could re-join NATO?

Doesn't it seem like Canada could take one for the team to help a neighbor out?

R:)

Doesn't it seem like Canada could take one for the team to help a neighbor out?

Well, maybe if you let us re-run that last Edmonton/Florida game? Always know what your negotiating partner really cares about.

Jim

The joke further up the thread about the Americans not thinking of Canada at all is pretty good, but I wonder how many readers realize that it's a joke about Americans.

I've been happily thinking about Canada since 1967 when I had the pleasure of ordering my breakfast in French when we visited Expo '67 in Quebec. "Oofs" indeed!

A few years ago (well, nearly 30 years ago) I had the perfect American/Canadian experience. Took Horne's Ferry across the St Lawrence River. My recollection is that there was a Canadian customs or border small building, but there wasn't anybody in it when we got there. Or maybe there was someone there who waved us through. The wonderful thing was I bought a Coke at a little store, paid with a $5 American bill and received more than $5 Canadian in change. A perpetual money machine! It made me think of my friend asking me who was going to win the football game on Sunday because I was on the other side of the International Date Line from him so it was tomorrow for me and I should know.

When I was off to Visit the UK in 1978, an idiot friend of mine suggested I sew a Canadian flag on my backpack so that I could avoid any harshness from Brits who objected to the US. Short of tricking the Nazis in order to save my family, I would never deny my American-ness no matter how much Trump makes that look attractive.

Now of course if the US and Canada were to merge, then I could put a Canadian flag on my back-pack... If it was good enough for England and Scotland in 1707, why not? What if we promised to put the Queen on our money? Or take Canadian money at Par in the new "United States and Provinces of America"?

R:)

the fact that it is official US policy to annex Canada against the wishes of its population informs the world (including Americans who are paying attention) of what the US is really about these days. No illusions any more, no pesky lingering ambiguity.

I've been reluctant to enter into this heated exchange, but I must admit to being quite disappointed to see how quickly some respected persons on this board are thoroughly condemning the US.

Annexing Canada would not only violate the wishes of the Canadian population but most of the US population as well. Referring to such annexation as "official US policy" because Trump has disgustingly spoken out in favor of it is, to my mind, over the top, and, quite frankly, demoralizing. We, the internal resistance to a megalomaniacal oligarch elected to a four-year Presidential term by a *minority* vote, are now in need of worldwide support and encouragement rather than dismissal out of hand. I share your disgust with the status quo, but we in the US can't allow ourselves to simply roll over and play dead. I would hope the same is true for those in other countries.

The United States of America is *not* Donald J. Trump, and he most certainly does not speak for all of us.

Tom

The wonderful thing was I bought a Coke at a little store, paid with a $5 American bill and received more than $5 Canadian in change.

Reminds me of what happened with us when we landed in Sydney, Australia after an umpteen hour flight that left Los Angeles at 1:00 AM. (It was 21 hour flights starting from Chicago.)

In the terminal my wife badly needed a Coke, I went over the a soda machine but it only took AUD bills, no credit cards. The tour guide who met our group came over and said, "I'll buy it for you, no problem, it's not that much."
I figured it out later, it was about $3 USD. For a 12 oz can of coke.

I've been reluctant to enter into this heated exchange, but I must admit to being quite disappointed to see how quickly some respected persons on this board are thoroughly condemning the US.

Annexing Canada would not only violate the wishes of the Canadian population but most of the US population as well. Referring to such annexation as "official US policy" because Trump has disgustingly spoken out in favor of it is, to my mind, over the top, and, quite frankly, demoralizing. We, the internal resistance to a megalomaniacal oligarch elected to a four-year Presidential term by a *minority* vote, are now in need of worldwide support and encouragement rather than dismissal out of hand. I share your disgust with the status quo, but we in the US can't allow ourselves to simply roll over and play dead. I would hope the same is true for those in other countries.

The United States of America is *not* Donald J. Trump, and he most certainly does not speak for all of us.

For sure. Speaking for myself, the condemnation is the US government and its actions, not American individuals.

But the reality is that the folks in charge determine the US government's actions and form the facts on the ground, whereas the opinions of those Americans that don't agree absolutely don't matter at all. This seems so obvious I'm surprised it isn't more widely appreciated. When it comes to actions, as opposed to hand wringing, like it or not Mr Trump *does* speak for the United States and direct its actions more or less without limit. One might admire those who say they don't approve, inside or outside the US, but it simply doesn't matter a whit. The white house wanted jackboots on the streets of LA, so there are jackboots on the streets of LA. Maybe that's a good idea or maybe it isn't, but the point is that those who don't like the idea don't factor into the decision.

Indeed, it appears that the opinions of the US supreme court and congress no longer matter either, as they have been successfully reduced to advisory bodies by the simple expedient of ignoring them and getting people used to that. If the folks in charge decide to invade or bankrupt Canada (or shut down Harvard or support Russia or whatever), then that's what will happen.

Since the US administration DOES have the power, and HAS said emphatically and repeatedly that the plan is to annex my home country by economic coercion, it behooves me to take that at face value rather than pretending it isn't so. There are lots of nice folks in Russia, but they don't matter either--I'm never going to go on vacation there either, for precisely the same reason: the government has emphatically positioned itself as my enemy.

This might be a time limited situation, or it might not. The party in charge can stay in power past 3.5 years from now by adopting policies on balance approved of by the plurality of the population, or by ensuring that there isn't a free and fair election next time at the margin, for which there is a standard playbook. As time goes on we all see various bits of evidence in each direction. Prudent folk, no matter the home town, will to assess which is most likely and plan for whichever path(s) seem plausible.

Jim

> Various answers

Makes sense, thank you.

I figured it out later, it was about $3 USD. For a 12 oz can of coke.

As a partial apology for my previous post, here is a true story.
30+ years ago I landed in New York as an immigrant.
Since cats and dogs were unavailable, I decided to have a can of coke at the airport.
$2.55 IIRC. I thought nothing of it (despite having a grand total of $1600 and two bags of luggage to my name) because it was less than what I would pay in India (₹ 25, $3.125 at the official rate) for a can of coke.
Since then I have always narrowed my eyes suspiciously at anyone talking about purchasing power parity.

As time goes on we all see various bits of evidence in each direction. Prudent folk, no matter the home town, will to assess which is most likely and plan for whichever path(s) seem plausible.

Well said.

Tom

This might be a time limited situation, or it might not. The party in charge can stay in power past 3.5 years from now by adopting policies on balance approved of by the plurality of the population, or by ensuring that there isn't a free and fair election next time at the margin, for which there is a standard playbook.

While I agree with all of your post, I wanted to highlight this particular point. I've been thinking that and saying that since Trump came to power. It seems more and more unlikely that this is business as usual, that we will have free and fair elections ever again. I don't know what to do about it, but Trump has always railed against elections that go against him, and I cannot see he will be any different, and now he has grabbed all the power. I very much hope I am wrong, but a lot of Americans are still not being paranoid enough to think that Trump will not simply void the results of 2026 midterm elections or the 2028 general elections if either goes against him. He has tried that over and over in the past and failed. But this time he will definitely succeed based on the experience of his second presidency so far. The Congress and the Senate and the Supreme Court are absolutely no barrier. We are in the early era of an authoritarian regime, just too caught up in day to day chaos to see the big picture.

A 20oz Coke is priced at $3.50 in many of the vending machines at Atlanta International Airport right now. Yes 20oz.

>I don't know what to do about it, but ...

This feeling of helplessness is very common.
One of the greatest researchers in the field of authoritarianism, Timothy Snyder (until recently professor at Yale, now escaped to Canada), is providing great practical advice and free downloadable resources on his substack:

https://snyder.substack.com/p/on-tyranny-free-reso...

For example these posters to print out, distribute, share digitally of physically:

https://timothysnyder.org/resources/

Yale workshop explanations:

https://law.yale.edu/sites/default/files/workshop_...

“Practice corporeal politics. Power wants your body softening in your chair and your emotions dissipating on the screen. Get outside. Put your body in unfamiliar places with unfamiliar people. Make new friends and march with them.”

Referring to such annexation as "official US policy" because Trump has disgustingly spoken out in favor of it is, to my mind, over the top

Its not like Donald Trump slipped into the white house while no one was looking. He received over 77 million votes in 2024, only one president of the US ever has received more.

Its not like Donald Trump made an offhand joke about Trudeau being the governor of the 51st state and then made clumsy excuses how that is not at all what he actually said. He was asked over and over and over about it and the furthest he ever walked it back was to say it probably wouldn't require a military invasion to accomplish, you know, probably won't come to that.

It may be unfortunate, you might not like it, you may wish it was different. But there is NOTHING over the top about noticing that the president of the United States of F-ing America, backed by 77 million votes and the most awesome military and economy the universe has ever seen, has said this over and over.


and, quite frankly, demoralizing.

Indeed. And you should be even more demoralized as you fully assimilate that there are a bunch of dead Houthis and deported non-citizens, including some who had valid Visas, who understand that what Donald Trump says IS "official US policy".

Enjoy the rest of your day,
R:

the reality is that the folks in charge determine the US government's actions and form the facts on the ground, whereas the opinions of those Americans that don't agree absolutely don't matter at all. This seems so obvious I'm surprised it isn't more widely appreciated. When it comes to actions, as opposed to hand wringing, like it or not Mr Trump *does* speak for the United States and direct its actions more or less without limit. One might admire those who say they don't approve, inside or outside the US, but it simply doesn't matter a whit. The white house wanted jackboots on the streets of LA, so there are jackboots on the streets of LA. Maybe that's a good idea or maybe it isn't, but the point is that those who don't like the idea don't factor into the decision.

You seem to be saying that the will of a majority disfavored by a 'moron', inexplicably reelected for a second term, are now helpless. I'd say we're more the victims of a pusillanimous Republican-dominated congress that refuses to stand up to their lawless leader. Two senators per state, regardless of widely disparate populations, coupled with long-practiced gerrymandering of voting districts have imperiled us.

Given widespread tech-enabled socialization, I think the deeper issue is what's required for viable communal governance across scales of complexity ranging from familial to tribal to national to global. Even our still-aspiring democracy, revered for 250 years, suddenly appears vulnerable to the whims of a rogue president. The social, political and economic alignments within and among nations and governments must be impelled to align with our noblest instincts. Ultimately, only we the people can achieve that. The considerable benefits of civilization have evolved over the millennia at the expense of many lives.

Having lived a relatively long life, with four sons, grandchildren and great grandchildren, I'm vehemently opposed to the impulse to give up or give in to a petty wannabe dictator.

Tom

It may be unfortunate, you might not like it, you may wish it was different. But there is NOTHING over the top about noticing that the president of the United States of F-ing America, backed by 77 million votes and the most awesome military and economy the universe has ever seen, has said this over and over.


Lets assume this is Trump Policy (or objective) - the likely hood of this happening is still very low. It might have gone from a 0.000000001% chance to a 0.0000001% - so yes its 100x more likely than before, but still very unlikely.

BTW: I am Canadian, and find the discussion very distasteful, but with Trump this is one of a dozen things that fall into that bucket.

tecmo
...

Sorry Kramden. Can’t muster up much sympathy for dead Houtis.

Lets assume this is Trump Policy (or objective) - the likely hood of this happening is still very low. It might have gone from a 0.000000001% chance to a 0.0000001% - so yes its 100x more likely than before, but still very unlikely.

Imagine the scenario of Mr Trump manufactures an excuse and implements the steps sufficient to crush the Canadian economy (depression level) as a prerequisite "softening up" step to a planned takeover. Offhand I would put the chances of that much happening above 10%, eight orders of magnitude higher than your estimate.

It does not seem to be related to any negotiations or negotiating ploy based on the timing and the fact that he isn't actually asking for anything from Canada. He says he wants to annex Canada, he has been consistent on that point for a while, and nothing can stop him if he wants to, so the main alternative is that he simply changes his mind. Or becomes incapacitated. Obviously the fact that it was until recently unthinkable and illegal isn't a consideration.

Needless to say, this sort of thing is not good for the US economy, the returns of businesses dependent on its stability and health, the US dollar, or the US stock market. To the best of my knowledge there is currently nothing that matters more to the true intrinsic value of a share of Berkshire in the next 5+ years than the enthusiasms of the current president. And not just at the margin.

For example, Berkshire's revenues are overwhelmingly in US dollars. Berkshire's stock is down, not up, year-to-date, measured in almost any major currency other than the shrinking US dollar. But the markets are serving up fire alarm warnings.

A new war started today. Unsurprisingly there were ructions in all sorts of financial markets, but there was no "flight to safety" towards the US dollar--the day's range was the same as yesterday's, weakest in the last few years. Admittedly you have to have been watching the world economy pretty closely for the last few decades to appreciate how odd this is, but it's so unusual that it should be deeply troubling if you have any assets tied to the value of the dollar. It appears that people were selling assets, including US securities, but also immediately selling the dollar proceeds. Similarly, the yawning gap of the 1-year EUR/USD bill/bund yield spread has been the strongest predictor of currency movements for ages, but the massive 2.3% gap these days still isn't holding the dollar up, let alone causing it to rise. If Mr Powell were somehow convinced to cut rates, it might cut the lone thread holding it as high as it is. (or not--currencies are famously unpredictable).

Politics and headlines never matter to investing, except on the very rare occasions that they matter more than anything else.

Jim

It appears that people were selling assets, including US securities, but also immediately selling the dollar proceeds.

Assuming this is indeed a paradigm shift, have you seen any evidence of what the collective world may currently be viewing as the new "safe haven" in times of crisis as evidenced by foreign currency or foreign stock market moves?

Assuming this is indeed a paradigm shift, have you seen any evidence of what the collective world may currently be viewing as the new "safe haven" in times of crisis as evidenced by foreign currency or foreign stock market moves?

Gold has definitely been the fashionable choice so far this year (a main driver of that being central banks shifting allocations from USD to gold) and the Swiss franc is always a popular choice.

But oddly it seems that the Canadian dollar was the major that rose the most yesterday. I can't come up with a plausible narrative for that. Nobody in a big middle east shooting war would pick Canada as a prime target?

Jim

Good morning Jim, you will find this interesting. Who holds our debt? https://www.pgpf.org/article/the-federal-governmen...

Stop scaring yourself. Stop acting like a 13 year old girl. All of you.

The US is not going to annex Canada or invade Canada or make Canada a US state.
You are making stuff up in your mind and deliciously scaring yourself. Like watching a scary movie.

So stop! Just stop.
Stop polluting the Berkshire board.
Take it -- all of it -- to the US Policy board.

And if you think "I'm not going to post on a cesspool like the Policy board." Exactly. Stop polluting this board.

You want to bitch about Trump or Biden or Carney or Putin? Fine. But it doesn't belong here.

Shriek about Berkshire.
ONLY Berkshire.



There are thousands of message boards & sites all over the internet where people can carry on about politics and burn heretics.

There is about 1 (one) message board discussing calmly investing with Berkshire, and investing strategies using BRK.

Shriek about Berkshire.
ONLY Berkshire.

Fair enough.

My best estimate is that Berkshire's growth in observable value per share (with book probably still a not-too-bad proxy) will fall from the inflation plus 8%/year rate of recent decades to inflation plus 3-4%/year in the next decade, measured in trade-weighted currency terms.* Price return is likely to be similar or a hair lower.

Not because of the drag of size, the cash allocation, the change in CEO, or the starting valuation level.

OK, maybe 5% if things go well, the most likely reason for that being much lower US equity valuation levels.

Jim

* or just measure the real total return in a half dozen major currencies and average the results, as a proxy for the real purchasing power of a share.

The US is not going to annex Canada or invade Canada or make Canada a US state.

Jim posted his source on why he considers it a possibility. What is your source to think that it is impossible?

My guess is that Jim's source out ranks your source.

Aussi

He says he wants to annex Canada, he has been consistent on that point for a while, and nothing can stop him if he wants to, so the main alternative is that he simply changes his mind.

Like the rest of us, he may change his mind at any moment. What's most likely to prompt that in his case is doubt that his present course is headed for success as he defines it. Perhaps that's generically not all that different from anyone else. The problem, as his behavior suggests, is that he defines success from a thoroughly egocentric perspective. What we need in leadership is vision of harmonious evolution from present to future; not a greedy grab for as much power and loot as might be within reach.

It's not as though our objectives as a nation have always been beyond reproach. At the outset legitimate voters were regarded as white, land-owning adult males. It took a Civil War and a hundred years beyond that to formally shuck the racial aspect. Women acquired their right to vote little more than a hundred years ago – well within the ever-breaking wave of presently aggregating humanity.

I'd not been aware of the prior stabs at acquiring Canada. Those would surely evoke disdain among most who are aware of them; most acutely Canadians.

Tom

I'd not been aware of the prior stabs at acquiring Canada. Those would surely evoke disdain among most who are aware of them; most acutely Canadians.

And you don't want to get on the wrong side of those folks
https://www.smbc-comics.com/comic/print-2

Admittedly there may be good reasoning behind it all
https://www.smbc-comics.com/comic/2011-11-12
(for those not history buffs, it's a reference to this https://en.wikipedia.org/wiki/United_States_occupa... )
More on that era https://en.wikipedia.org/wiki/War_Is_a_Racket

South, North, same diff.

Meanwhile, got fentanyl?
https://en.wikipedia.org/wiki/Blame_Canada
youtu.be/bOR38552MJAa

Jim

Trump is the type of negotiator who starts with an obscenely ridiculous condition so that he has lots of room to negotiate. Maybe all this concern about Canada is so that everyone will breathe a sigh of relief when he settles de minimis for Greenland?

Jeff

The US is not going to annex Canada or invade Canada or make Canada a US state.

Jim posted his source on why he considers it a possibility. What is your source to think that it is impossible?


I already posted why.

For Canada to become a US state is practically impossible. First off, Americans in general don't want another California. Or another Puerto Rico.

None of the necessary legal steps could happen in the foreseeable future.
* The territory must have a referendum to become a state.
* Then petition Congress.
* Congress must pass an enabling act.
* Both House and Senate must pass legislation admitting the new state.
* This means that the majority of existing states must vote to admit the new state. This simply will not happen, given the current political situation.

Politically, Canada is quite a bit left of the American center. Arguably more left than California.
The present overall political leaning of the American voters would not possibly agree to make Canada a state. It would require half the states to agree to add 2 more Democrat Senators and 45 seats in the House of Representatives.

"It wouldn't be just a 51st state, but multiple states, probably along existing province lines.
That would mean 20 Senators and roughly 45 Representatives. So a combined 65 Electoral College votes."


My guess is that Jim's source out ranks your source.

Would Jim have voted for Trump? Or any Republican? Vance? DeSantis?
No.
QED

Ray: That would mean 20 Senators and roughly 45 Representatives. So a combined 65 Electoral College votes."

Why do you assume Trump would give them statehood? He doesn’t want to give anyone the right to vote against him. Most likely given the opportunity he would make Canada and Greenland territories with no presidential electoral votes. But that’s being optimistic Trump the dictator on day one doesn’t want anyone to have a vote. He certainly wouldn’t let Canada with a total population similar to California be more than one state.

The US is not going to annex Canada or invade Canada or make Canada a US state.
You are making stuff up in your mind and deliciously scaring yourself. Like watching a scary movie.

So stop! Just stop.
Stop polluting the Berkshire board.
Take it -- all of it -- to the US Policy board.

And if you think "I'm not going to post on a cesspool like the Policy board." Exactly. Stop polluting this board.

You want to bitch about Trump or Biden or Carney or Putin? Fine. But it doesn't belong here.

Shriek about Berkshire.
ONLY Berkshire.

There are thousands of message boards & sites all over the internet where people can carry on about politics and burn heretics.

There is about 1 (one) message board discussing calmly investing with Berkshire, and investing strategies using BRK.

Post of the Year.

I know I don't contribute much of anything around here, but at least I don't distract from the purpose of the board.

If you are worried about the US invading Canada, remember what Jim often says about the sound of hooves and zebras.

Ray is right. It is not going to happen. This is only another example of the current administration "flooding the zone". And every erg you spend fretting over it makes that strategy more successful.

Chip

Imagine the scenario of Mr Trump manufactures an excuse and implements the steps sufficient to crush the Canadian economy (depression level) as a prerequisite "softening up" step to a planned takeover. Offhand I would put the chances of that much happening above 10%, eight orders of magnitude higher than your estimate.

So you are comparing apples to oranges. My estimate was for the US annexing Canada, not the the odds of a severe trade war.

I guess there are two main scenarios for an annexation

1. Canada joins the US on its own choice - even with severe economic harm (depression) I still view this as incredibly unlikely.
2. US uses military force - I view this as even more unlikely than the first scenario TBH.

Yes the US can make life very difficult for Canada in the short term; but the Canadian identity is very much defined as "Not American", so even in very extreme scenarios I don't see much of a chance for an annexation.

tecmo
...

Like the rest of us, he may change his mind at any moment.

I rarely respond on political threads, but I have to mention something here.

I grew up in NYC in the 60s, 70s, and part of the 80s (and then moved away). Trump, back then, and now, is what we called a "bullshit artist". The kind of person that spouts off about anything and everything off the cuff, with no knowledge or thought behind what they are talking about. So everything he says needs to be taken while keeping that fact in mind.

“ I grew up in NYC in the 60s, 70s, and part of the 80s (and then moved away). ” I grew up in Brooklyn NY in the 50s, 60s, before I moved to Nevada. Trump and Musk are a text book case of, over promising and under delivering. Top that off with, the dangerous habit of tweeting while pissed and you have a recipe for disaster. So far, buying sell offs caused by bullsh$t and selling the rallies has been fine. It will be very interesting to see what Buffett did in q-2 knowing he might not outlive trumps four years.

Trump is the type of negotiator who starts with an obscenely ridiculous condition so that he has lots of room to negotiate. Maybe all this concern about Canada is so that everyone will breathe a sigh of relief when he settles de minimis for Greenland?


A four dimensional chess wizard, who has taken up playing Risk, later in life.

Why do you assume Trump would give them statehood?

The President does not have role in accepting a new state.

Why don't you guys just stop making up stories to scare yourselves?

Enough already! This once great conclave is on the verge of dissolving into stupidity. Don’t think that this was Manlobbis goal upon creating this site. What’s even worse is that some of the more intelligent posters on this board are the worst offenders.Sad 😢

Why don't you guys just stop making up stories to scare yourselves?

"The premise: Through the preparation of the mind for the potential worst-case scenarios, we can more aptly avoid such outcomes." ~Charlie Munger
Munger advocates for mental preparation and realism. He warns against the "ostrich effect"—ignoring uncomfortable realities—and stresses the need to confront and plan for unpleasant possibilities, rather than burying your head in the sand.

"Sometimes the key to great investing is to simply avoid stupidity. One really bad mistake can ruin a year of gains. Poof. Gone. But that’s where I believe inversion is essential.
Don’t act before you’ve thought through the worst of the worst. Work backward and then decide if you can manage it." ~Charlie Munger

"Invert, always invert." ~Charlie Munger

The President does not have role in accepting a new state.

The US president does not have a role in suspending habeus corpus, either, but he managed that : ) The point being, it doesn't really matter any more what is written on an old piece of paper. Besides, the job certainly does come with the power to order invasions with specious justifications, as history demonstrates so regularly. It's not as if (say) it was an issue that Nicaragua wasn't correctly approved as a state during its 20+ year occupation till 1933.

On a more practical note, Berkshire's revenues are essentially all in the US and in US dollars. The current official policies of the US are in the process of trashing the economy of the US by trashing trade (essentially the source of all wealth creation: the division of labour). There is no US prosperity without trade intensity. The tariffs are mostly a sideshow, because the real damage has come from the removal of all trust and the breaking of treaties and alliances, and because that damage is so much more lasting. Trading through a tariff is merely expensive, but trading with and supporting an enemy is odious.

The nowcast for the rate of change of real US exports of goods and services for Q2 is -5.45% versus last year. (-2.77% nominal nowcast, minus MCT TTM inflation 2.68%). It's likely that is just the beginning, as new tariffs always crush exports over time. (no, not a typo, exports, and not because of retaliation. The Lerner Symmetry Theorem)

US products are ubiquitous and unavoidable, and many US firms will carry on. Particularly those providing intermediate and non-branded goods that aren't too visibly American. But personally I am certainly doing absolutely everything I can to minimize the sales and prosperity of every US company I might otherwise interact with. I suspect the number of people behaving that way at the margin is now in the hundreds of millions, as the US is now on the spectrum between untrusted adversary and outright enemy around the world. Nobody paying attention buys from such places if they don't have to. I have friends in about nine non-US countries, and I haven't heard anyone planning to increase their ties, whether in supply chains or investments.

To think this is all just a jest is a grave mistake of the first order, and trying to live in a drive-to-the-mall-everything-is-fine bubble is not going to insulate people from the real world consequences of the definitive end of the trusted US era. The geopolitical implications are awful enough, but (on topic), US companies and stocks are going to do very much worse in the next 10+ years than people have been accustomed to, hitting every town.

A specific prediction would be lower profit growth rates and falling cyclically-adjusted valuation multiples among public companies because of that. The lower profit growth rates would be due largely to low revenue growth rates combined with lower net profit margins. I anticipate average net profit margins falling from the current 12% to around 9% or lower cyclically adjusted, measured as "Corporate Profits After Tax (without IVA and CCAdj)/Gross Domestic Product". A mix of a weaker economy, weaker exports, and higher interest expense. If cyclically adjusted real sales rise at most 1-2%/year and typical net margins fall by a quarter and valuation multiples on smooth real earnings fall by a third, where are US markets in a decade? FWIW, S&P 500 real sales rose 1.45%/year in the 17 years to end 2024.

Berkshire should do somewhat better than the broad US market as it isn't starting from such a high valuation level, which is why I am anticipating real returns as high as 3-4%. But it will still be hit by a weaker economy, a lower currency, poorer customers, and poor portfolio investment prospects. The headline corporate tax rate is a big factor, but I have no idea which way that will jump.

Jim

The tariffs are mostly a sideshow, because the real damage has come from the removal of all trust and the breaking of treaties and alliances, and because that damage is so much more lasting. Trading through a tariff is merely expensive, but trading with and supporting an enemy is odious.

I think you're greatly exaggerating this point. Countries trade with political adversaries all the time. The trade relationship between the U.S. and China is a prominent example, where there is no love or trust lost but it is the largest trading partnership in the world.

Nonetheless, I agree with your general gloomy outlook for the U.S. economy. You seem to focus your outlook on trade, but America is doing much more to shoot itself in the foot. The ICE raids are most visible right now, decimating the labor force in agriculture, personal services, restaurants, hotels, etc. We can also expect a devastating economic effect from the fiscal actions of the Big Beautiful Bill. Set aside for the moment that millions of Americans will lose their health care insurance and their food assistance. The macro-economic effect will be similar to that of the Hoover administration at the start of the Great Depression. Economic dogma at the time said that fiscal constraint is the right answer to an economic downturn, which resulted in a deepening of the depression. This year, drastic cutting of government expenditures will have a similar effect, made only worse by the fact that there is no intention to actually narrow the fiscal budget deficit. Rather, the "benefits" of the budget cuts will all flow to the top 1% of income earners who tend to be hoarders rather than spenders.

Elan

Nonetheless, I agree with your general gloomy outlook for the U.S. economy. You seem to focus your outlook on trade, but America is doing much more to shoot itself in the foot. The ICE raids are most visible right now, decimating the labor force in agriculture, personal services, restaurants, hotels, etc. We can also expect a devastating economic effect from the fiscal actions of the Big Beautiful Bill. Set aside for the moment that millions of Americans will lose their health care insurance and their food assistance. The macro-economic effect will be similar to that of the Hoover administration at the start of the Great Depression. Economic dogma at the time said that fiscal constraint is the right answer to an economic downturn, which resulted in a deepening of the depression. This year, drastic cutting of government expenditures will have a similar effect, made only worse by the fact that there is no intention to actually narrow the fiscal budget deficit. Rather, the "benefits" of the budget cuts will all flow to the top 1% of income earners who tend to be hoarders rather than spenders.

On that front I'm a bit more optimistic than you. Though there are obviously some specific budget cuts being done and specific groups will suffer thereby, I don't foresee the aggregate US federal budget expenditure falling, definitely not in any material way. The budget deficit isn't going to shrink, so the net stimulative effect of federal spending won't in aggregate shrink. Similarly, though lots of individuals will be deported and specific jobs won't get done, hurting a few industries, I don't think it will amount to a very meaningful number in the aggregate labour force.

Certainly none of that is good for the overall economic backdrop, they're all drags. But for someone interested in how their portfolio will do, the things to worry about are corporate profitability (only mildly affected directly by reduced exports but heavily dependent on the broad economic situation), the US dollar (hugely dependent on the kindness of strangers to continue net portfolio=capital account inflows), bond rates (ditto), and valuation multiples (ditto). It is in the sense of that recap that I think the relationship with non-US actors is the dominant concern for investors. They have all been told to get stuffed, and four so far to prepare for involuntary annexation, so the omens are not bright on that front.

Some non-US groups matter more than others. When it comes to China, as the expression goes, the US doesn't have the cards. China could lose the US as the buyer of that 14% of their exports and survive (uncomfortably), but the US economy can not survive without Chinese imports. At least not without a depression so deep that it causes civil war. A pickup truck should not challenge a type 99A tank to a game of chicken, no matter how big the tariff wall protecting the pickup.

Bottom line, I conclude that the outlook for the US economy, US profits, and US stocks in the next 10-20 years is poor, and likely to deteriorate further.

Jim

Whiplash Enough already! This once great conclave is on the verge of dissolving into stupidity. Don’t think that this was Manlobbis goal upon creating this site. What’s even worse is that some of the more intelligent posters on this board are the worst offenders.Sad

It would be fine with me to move some of the political discussions to the USpolicy board on Shrewdm.

But there is plenty of good analysis going on here that has political content. Of necessity. I hope Manlobbi doesn't feel the need to start censoring messages. I think that's unlikely.

Useful, if political content that I appreciate...just a snippet from a recent post by mungofitch:

On a more practical note, Berkshire's revenues are essentially all in the US and in US dollars. The current official policies of the US are in the process of trashing the economy of the US by trashing trade (essentially the source of all wealth creation: the division of labour). There is no US prosperity without trade intensity. The tariffs are mostly a sideshow, because the real damage has come from the removal of all trust and the breaking of treaties and alliances, and because that damage is so much more lasting. Trading through a tariff is merely expensive, but trading with and supporting an enemy is odious.

Whiplash This once great conclave is on the verge of dissolving into stupidity Nope, not at all.

Elan: The ICE raids are most visible right now, decimating the labor force in agriculture, personal services, restaurants, hotels, etc.

Some of Trump's wealthy donors must have gotten to him. Also, he probably worries about alienating some of his base that depends on cheap immigrant (legal or not)labor.

He's done a 180 course change on just the areas that Elan mentions above.

"Bottom line, I conclude that the outlook for the US economy, US profits, and US stocks in the next 10-20 years is poor, and likely to deteriorate further."

Seven-year to twelve-year forecasts for US stocks by GMO Funds, Research Affiliates and Hussman Funds agree with you. Their forecasts average around a -2% percent real, annualized return, based on growth and valuations, and not taking into account tariffs, USD exchange rates and the other factors you mention. GMO forecasts a -4.3% real return over the next 7 years; Research Affiliates forecasts a 1.1% real return over the next 10 years, and Hussman sees a -6% nominal return over the next 12 years. Hussman provides the most detail supporting the forecast. The metric that he has found that best correlates with forward return is market cap/gross value added.

https://www.hussmanfunds.com/comment/mc250613/

I have great respect for GMO and their analysis.

But John Hussman? Exactly when has he been right?

"You seem to focus your outlook on trade, but America is doing much more to shoot itself in the foot. The ICE raids are most visible right now, decimating the labor force in agriculture, personal services, restaurants, hotels, etc."

That is definitely going to hurt in the short to medium term.

It should also be noted that there is some very long term damage being done to the U.S. economy by the immigration actions at attacks on universities. One of the reasons the U.S. economy was so strong was it attracted an outsized share of the best and the brightest in the world to come to the U.S. to study, conduct research, and develop amazing technologies. The current administration's policies are discouraging the best and the brightest from coming to the U.S. Couple that with drastic cuts in federal research spending and it is pretty clear that the next Google is going to be developed elsewhere. TFuture medical breakthroughs will be developed elsewhere. Future defense technologies will be developed elsewhere.

That has a huge long term cost to future economic activity.

Another forecast comes from "The Single Greatest Predictor of Future Stock Market Returns" (Philosophical Economics, Dec 2013). Mark Hulbert updated this analysis on March 25th of this year and got a forecasted, 10-year, real return for the S&P of -4.2%.

Another approach would be the one John Bogle used, simply

expected return = GDP growth + inflation + dividend yield +/- valuation change

= 2.0% + 2.4% +1.3% - 4.2% (assuming P/E falls to 17)

= 1.5% nominal.

Bottom line, I conclude that the outlook for the US economy, US profits, and US stocks in the next 10-20 years is poor, and likely to deteriorate further.

Jim


Jim - You are such a honest, generous, extraordinarily intelligent person that I choose to study your posts in detail for quite some time. I have a 200 page document of your posts way going way back 15+ years. I did not find any mentors so I spent years studying Buffett, Graham, Damodaran and a couple of others. I would put you right up there.

In the spirit of speaking honestly to someone who has given so much and who I benefited so much from, I gently suggest that you give the pessimism just a second thought.

I quote you below not to make you look bad, but how pessimism might not be a good idea even when based on what seems very solid reasoning because macro is too tough.

You have provided solid reasoning way back in 2011, 2012, 2013 why S&P at 1000 is overvalued. To expect flat returns for the next decade. It turned out to be one of the best ever for stocks for whatever reason.



I started with all the inflation-adjusted earnings through history (two different data sources).

...


The average earnings yield is simply the on-trend real earnings for
each date in the past each date in the past divided by the then-current
real market price (index level). This gives an average earnings
yield of around 7.32% since 1940, or a P/E of 13.66x.


...

Obviously the on-trend earnings figure can't be calculated the same way for today,
as we have only half the required data: the past. However, looking
at how earnings varied in the past, one can come up with various
more-or-less likely scenarios for what earnings might do in the next decade.
Earnings never rise for long periods at record breaking high rates, nor
at record-breaking low rates, so something near the middle is most likely.
That gives me a reasonably tight range of the likely on-trend level for today.
As it turns out, the range of possible trajectories of earnings
you choose, varying from optimistic to pessimistic, doesn't change the
estimation for today very much. We already have the past, and we
already have the central value for today, and we know that the figures
don't change extremely rapidly over time, so the range is pretty tight.

I validate that by using some other metrics. I tried quite a large
number of different ways of estimating the on-trend value for each
date in the past based only on the earnings up until that date,
and looked at which estimation methods gave the lowest RMS errors
when tested against the past where we know the right answer.
Then, I applied those methods to today to see what they say now.

...


For example, one popular method is the average earnings in the last 10 years.
The error of this method is minimized if you adjust it to be the
average real earnings times 1.067. That calculation gives you $64.46
for today's on-trend level. A similar method with a lower error
estimate (a better model) is the 12 year WMA of the real earnings,
increased by 1.0492x. That suggests $66.02 right now.
(WMA=weighted moving average=wedge-shaped weighting on the data points,
with the most recent weighted most strongly, weights decreasing
linearly back to the minimal weight on the oldest data point).
A very long run linear fit to the log real earnings suggests a figure of 51.63 right now.
A couple of methods using a constant times the 90th percentile of
earnings in the last 40 years gives a good model; that suggests $64.87.
No method I've looked at gives a figure over $66 at the moment for its estimate
of the October 2011 on-trend earnings level measured in October 2011 dollars.
Throw in an extra pinch of unknown errors and I'd put the absolute
upper limit at maybe around $68, and the lower limit perhaps low 50s.
Hence my serious doubts about folks claiming $90 (or whatever) is the new normal.


...


One side effect is that, since I expect the returns to be very modest
at best in the next several years, since that has what happened in the
past starting from periods of similar overvaluation, I expect that the
market will spend some of the next decade at index levels quite a lot
lower than today's level. So, I have added some long term hedges,
shorting the broad US market. In normal times this would lead to
pleasantly smoother returns but would have an expected cost to overall performance.
However, since I'm pretty darned sure the market will be a lot lower at
some point, I can close my hedges then, giving me both much smoother
returns in the mean time and an ultimate profit on the hedging too.
e.g., a guy could put on a hedge right now, and maybe close 20%
of it each time the S&P hits 1050, 950, 850, 750, and 650.

...

-Jim (Sometime in late 2011)

Jim:
Bottom line, I conclude that the outlook for the US economy, US profits, and US stocks in the next 10-20 years is poor, and likely to deteriorate further.

So Jim, what is your outlook for the rest of the world economy? Materially better than the US? What would you expect to be some bright spots out there?

In the past I have done nearly nothing with international (or should I say, non-US) investing. And over the last 20 years looking backwards, I don't regret that.

But the case that "this time it is different" seems stronger than it has ever been in my lifetime.

For the first time in my investing life, I am significantly out of US stocks, ~50% still in. At the moment, the rest of my money is in cash at about 4% nominal return.

But Jim I would love to hear your thoughts: what is the best (or probably even better: what is the simplest) way for me to expose myself to any goodness that the non-US market might provide to an investor in the US?

***

And do your predictions include any thoughts on AI? Up till now I've been thinking that the tailwind from AI could be soon enough and hard enough to overcome the headwinds from the US unilaterally abdicating from receiving $150 billion/month of investments from the rest of the world. Are you considering AI when you predict the successful self-destruction of Pax Americana, or does this just make things wierder?

TY in advance for any thoughts,
R:

I know that a lot of the some of the old timers here still want to focus on BRK which
I’ve always appreciated in the past, but I no longer believe the individuals in power have
a rational perspective of the economy nor even science. It’s painful, but at this point I feel
it’s more rational to consider other countries to hopefully just temporarily invest in.
Perhaps we need an international investing board. Maybe Jim could help us out there.
Meanwhile here are some of the ETFs I’ve been looking at.
VGK Europe Equities- Vanguard FTSE Europe ETF YTD 22.8%, 1Y 15.1%, 3Yr 14.34%
IEFA International Equities-iShares Core MSCI EAFE ETF YTD 17.4%, 1Y 13%, 3Yr 10.35%
EFV iShares MSCI EAFE Value ETF YTD 22.2%, 1Yr 20.9%, 3Yr 15%
IEMG iShares Core MSCI Emerging Markets ETF Ytd 12.8%, 1Yr 14.8%, 3 Yr 7.6%
The strong recent performance might seem to indicate that there is some movement from US to foreign equities.

Perhaps we need an international investing board.

Here ya go:

https://www.shrewdm.com/MB?bid=26

<<The trade relationship between the U.S. and China is a prominent example, where there is no love or trust lost but it is the largest trading partnership in the world.>>

China must have been wondering isn't it foolish to sell products to the US, accumulating a few trillions dollars of paper money, which can't be used to buy high-tech chips it really needs and someday may lose it all. It may actually be searching ways to decouple from the US, at least from the US dollars.

China must have been wondering isn't it foolish to sell products to the US, accumulating a few trillions dollars of paper money, which can't be used to buy high-tech chips it really needs and someday may lose it all. It may actually be searching ways to decouple from the US, at least from the US dollars.

They probably are, but it isn't easy. The USD is the still the top dog when it comes to liquidity and convertibility. Other currencies can do the job situationally, but nothing works as well universally as the USD. And trade is a whole lot easier if everyone is using the same, or at least similar currencies. That means many countries either use the dollar, have strong pegs to the dollar, weak pegs to the dollar, or pegs to a basket of currencies, which is effectively the same as a weak peg to the dollar. China is in the latter category.

If China wanted to do more business in renminbi, it would have to allow access to its capital markets, which it doesn't want to do because as an exporting nation that would cause the renminbi to strengthen, make Chinese exports less attractive. So they are kind of stuck for now. They need to either use dollars or something dollar adjacent.

Nothing last forever. The chaotic US policies have caused many to rethink the notion of the US being a safe haven. Undoubtedly many countries are reviewing ways to decouple from the dollar and conduct trade in more stable currencies.

<<If China wanted to do more business in renminbi, it would have to allow access to its capital markets, which it doesn't want to do because as an exporting nation that would cause the renminbi to strengthen, make Chinese exports less attractive. So they are kind of stuck for now. They need to either use dollars or something dollar adjacent.>>

If China continues to move up in the value ladder, they will start to open up the capital markets and let renminbi strengthen. Before world war II, the pound to dollar ratio is above 5, it quickly dropped to about 2.5 after the war now it's about 1.35. Such thing can change slowly and then suddenly, it could be triggered by wars, by economic crises, or by shooting at self.

You have provided solid reasoning way back in 2011, 2012, 2013 why S&P at 1000 is overvalued. To expect flat returns for the next decade. It turned out to be one of the best ever for stocks for whatever reason.

Simple explanation: My bearish pronouncements have been wrong!

I do try to say at every juncture that **IF** valuation levels in future are like those in the past, **THEN** the returns will necessarily be poor. This is not quite the same as predicting that returns WILL be poor. Valuations have emphatically not gone in the direction of old norms, (no matter how likely I though it seemed) so the "then" part hasn't happened.

Over time I have given up having much of an opinion at all about what the valuation level of the S&P 500 would be at any given time in the future. As it turns out, valuation levels did not go back in the direction of old norms, they just keep going higher and higher. Caution has not been a good stance. I don't think that it was predictable that valuations would climb to this level, and I certainly wouldn't count on that trend of multiple expansion continuing, but who knows?

(quick spot check: in the tech bubble, US market cap to GDP peaked around 138%, and it's currently a nice round 200%)

For a specific example of the if-then thinking, if the market were priced at the same level today that corresponded to its average valuation level since December 1996, the S&P 500 index would be at 4425 instead of 6033, a drop of -27%. And that is a fairly generous choice of time period for the baseline, since it starts the day of Mr Greenspan's "irrational exuberance" speech and covers at least three stretches that were considered bubbles at the time. It's also generous because it's based on cyclically adjusted earnings evaluated during a stretch of historically amazing net profit margins. But that if-then sentence is not saying that the market will now drop to that level...just that the valuations are a lot higher than even the modern era norms, so EITHER valuations will stay higher than those modern era high norms, OR the market will slide. (or be flat for a whole lotta years)

Quite aside from mean reversion, even if valuations remain this high it remains certain that longer run returns will be poor from here, for the simple reason that you're not getting much in the way of (cyclically adjusted) earnings for your investing dollar from the broad US market. Over long periods price will have a strong interest in intrinsic value, and intrinsic value comes from owner earnings. If you pay twice as much for the unchanging sum of all future earnings, you'll end up with half the value in the long run no matter how long you hold...half the owner earnings you would otherwise have purchased.

Looked at another way, ignoring one time changes in valuation, the simplest estimate of your long run return is the (nominal) dividend yield on the day of purchase, plus the (real) rate of future GDP growth. (that works because stock price gains should track their earning power, which will roughly track GDP growth). Fill in your own estimate of whether valuation levels will be higher or lower in future.

In one sense, "it's different this time", in that I am actually predicting weak returns for US equities in the next decade or so. But my warning about poor future returns is not based on the usual, being some unknown degree of mean reversion. This time around, it's because I perceive that there has been a drop in aggregate intrinsic value. I anticipate a materially weaker US economy than previously expected measured in constant currency terms so stocks will be worth less. Perhaps with a mild negative feedback loop between that and weaker valuations (and perhaps currency) because of lower incremental investment flows to the US. That is a much weaker line of reasoning that merely expecting some mean reversion, but that's the end result of my thinking.

I don't have a lot riding on the accuracy of my prediction because a few months ago I sold the vast majority of my US stock positions, bills and cash, so it's just an intellectual exercise. I rather expect my portfolio to do more poorly as a result of eliminating most US securities as possibilities.

There is some hope for the notion that valuation levels matter, though. The usual expectation for an investor in the US stock market has been Siegel's constant, around inflation plus 6.5% including dividends: what you'd have got from the average stock in the average year in the least century or so. For the time horizon I usually look at of 7 years forward with the end date very smoothed, nobody who bought the S&P 500 between October 1996 and March 2008 managed that number.

Jim

Elan: The ICE raids are most visible right now, decimating the labor force in agriculture, personal services, restaurants, hotels, etc.

Some of Trump's wealthy donors must have gotten to him. Also, he probably worries about alienating some of his base that depends on cheap immigrant (legal or not)labor.

He's done a 180 course change on just the areas that Elan mentions above.


"Trump officials reverse guidance exempting farms, hotels from immigration raids"
https://wapo.st/43PPwus

Stephen Miller gets the last word.

+TACO -TACO = 0

Elan

"You have provided solid reasoning way back in 2011, 2012, 2013 why S&P at 1000 is overvalued. To expect flat returns for the next decade. It turned out to be one of the best ever for stocks for whatever reason."

I asked Gemini the following question:
It can be argued that the us stock market is over valued and the over valuation keeps getting bigger. It can be argued that despite the challenges that might have been expected to effect stocks, the market has remained resilient due to incredible levels of liquidity that came from emergency government actions to stimulate after covid 19 and the great financial crisis but have been unable to remove the emergency liquidity due to extreme government deficits. can you help me draft a short note that describes this back drop and then introduces an analogy of weighing scales that demonstrates how there are always two sides and two forces in markets as prices get discovered. On the one side are high valuations and major concerns around inflation and slowing economic growth but on the other there is extreme government support and the rise of passive investment flows. With that backdrop, I then want to introduce an extension of the scales analogy: what if the scales fracture (use that word fracture which I like) causing the weights to hit the floor. Maybe the fracture is the bond markets breaking. Maybe it is a turn in investor momentum. Maybe it is a return of inflation, perhaps brought on by a rising oil price from the war in the Middle East, or the US tariffs. Or something else. But my point is, despite the current balancing of the scales, the weight on both sides is now so extreme, that it could completely fracture the scales and cause an event, or sequence of events that might be impossible for the Government to rescue investors from. It is for that reason, I believe it is worth being prepared for both a continuation of the surprising exuberance over recent years but also being prepared for the major kinds of events that happen form time to time over the decades. It is noteworthy that Berkshire Hathaway is much more prepared than most.

If you are not an AI fan you can stop reading now.

This is the polished Gemini version:
"The US stock market has shown remarkable resilience, arguably defying gravity as valuations continue to climb, leading to a growing sense of overvaluation. This surprising strength, despite economic headwinds, can be attributed in large part to the unprecedented levels of liquidity injected into the system through emergency government actions following the 2008 Great Financial Crisis and the COVID-19 pandemic. The challenge now lies in the inability to withdraw this emergency liquidity, exacerbated by persistent and significant government deficits.

To understand the delicate balance at play, consider the analogy of a set of weighing scales, where market prices are discovered through the interplay of two opposing forces. On one side, we place the significant concerns: lofty valuations, persistent inflationary pressures, and the specter of slowing economic growth. These are the weights that typically pull markets down. However, on the other side of the scales, we find equally formidable forces: extreme government support, manifested in continued liquidity and fiscal measures, coupled with the relentless upward flow of passive investment, which often chases past performance.

Here's where the analogy extends to a more concerning scenario: What if these scales, currently holding a precarious balance, were to fracture? The sheer weight on both sides is now so extreme that a fracture could cause the weights to hit the floor with destructive force. This fracture might manifest in various ways: perhaps a breaking point in the bond markets, a sudden and significant shift in investor momentum, or a resurgence of inflation, potentially triggered by a soaring oil price due to geopolitical tensions in the Middle East or the impact of US tariffs. It could, of course, be something entirely unforeseen.

The critical point is this: despite the current, seemingly stable, balancing act of the scales, the extraordinary weight on both sides has created a situation where a complete fracture is a distinct possibility. Such an event, or sequence of events, could unleash consequences that might be impossible for governments to mitigate or rescue investors from.

It is for this very reason that I believe it is prudent to be prepared for both eventualities: a continuation of the surprising market exuberance we've witnessed in recent years, but also, crucially, to be prepared for the major, cyclical events that periodically reshape markets over the decades. As a notable example, it's worth observing how Berkshire Hathaway appears to be significantly more prepared for such eventualities than many other market participants."

I then asked Gemini to provide some statistic on both stock market valuations and government stimulus and liquidity and passive investment flows.

"The Extreme Backdrop: Government Liquidity, Fiscal Stimulus, and Passive Investment Surges
The US stock market has shown remarkable resilience, arguably defying gravity as valuations continue to climb, leading to a growing sense of overvaluation. This surprising strength, despite economic headwinds, can be attributed in large part to the unprecedented levels of liquidity injected into the system through emergency government actions following the 2008 Great Financial Crisis (GFC) and the COVID-19 pandemic. The challenge now lies in the inability to withdraw this emergency liquidity, exacerbated by persistent and significant government deficits, all while a powerful structural shift towards passive investing continues to gain momentum.

To understand the delicate balance at play, consider the analogy of a set of weighing scales, where market prices are discovered through the interplay of two opposing forces. On one side, we place the significant concerns: lofty valuations, persistent inflationary pressures, and the specter of slowing economic growth. These are the weights that typically pull markets down. However, on the other side of the scales, we find equally formidable forces: extreme government support, manifested in continued liquidity and fiscal measures, coupled with the relentless upward flow of passive investment, which often chases past performance.

Here's the statistical backdrop illustrating this extreme environment:

1. Federal Reserve's Balance Sheet (Quantitative Easing - QE)
The Federal Reserve's balance sheet is a direct measure of its asset purchases, primarily through quantitative easing (QE), which injects liquidity into the financial system.

Pre-GFC (around 2007): The Fed's balance sheet was typically under $1 trillion.
Post-GFC (QE1, QE2, QE3): In response to the GFC, the Fed embarked on multiple rounds of QE. By October 2014, the balance sheet peaked at around $4.5 trillion, a roughly 4-5 fold increase from pre-crisis levels.
COVID-19 (QE4): The response to COVID-19 saw an even more dramatic expansion. From roughly $4.2 trillion in February 2020 (pre-pandemic) to a peak of nearly $8.9 trillion by May 2022. This was an increase of approximately $4.7 trillion in just over two years, effectively doubling its size from pre-pandemic levels, and reaching nearly 10 times its size before the 2008 financial crisis.
Current (as of early June 2025): While the Fed has been engaged in "quantitative tightening" (QT) since June 2022 to reduce its balance sheet, it still remains elevated at around $6.68 trillion.
2. Government Fiscal Stimulus Packages
Beyond monetary policy, the US government enacted massive fiscal stimulus measures to directly support individuals and businesses.

Great Financial Crisis (2008-2009): The American Recovery and Reinvestment Act of 2009, while significant at the time, totaled around $840 billion.
COVID-19 Pandemic (2020-2021): This period saw an unprecedented level of fiscal intervention:
The federal government provided approximately $4.6 trillion in total funding for pandemic response and recovery.
Key bills included the CARES Act (March 2020) at approximately $2.2 trillion, the Consolidated Appropriations Act, 2021 (December 2020) at around $900 billion, and the American Rescue Plan Act of 2021 (March 2021) at approximately $1.9 trillion.
These packages included direct payments to individuals (totaling over $800 billion across three rounds), enhanced unemployment benefits, and significant aid to businesses and states.
3. Budget Deficits and National Debt
These massive stimulus efforts have naturally led to ballooning budget deficits and a dramatic increase in national debt.

Budget Deficits (as a percentage of GDP):
During the GFC: The deficit peaked at 9.8% of GDP in 2009, the highest proportion since World War II at that time.
During COVID-19: The deficit surged even higher, reaching 14.9% of GDP in 2020 and 12.4% in 2021, surpassing the GFC peak and setting new post-WWII records.
National Debt (total and as a percentage of GDP):
Pre-GFC (2007): US national debt was around $9 trillion.
Post-GFC (2014): By the time QE3 ended, it was around $17.8 trillion.
Pre-COVID (2019): Debt held by the public was around 79% of GDP.
Post-COVID (as of March 6, 2025): The total federal government debt has surged to over $36.56 trillion. Debt held by the public was roughly $29 trillion.
Debt-to-GDP Ratio: This ratio climbed from 79% of GDP in 2019 to 97% of GDP in 2022. The Congressional Budget Office (CBO) projects it to rise to 116% by 2034 and potentially 172% by 2054 if current policies remain unchanged.
4. The Rise of Passive Investment Flows
A structural shift in how investors allocate capital has also provided a persistent tailwind to markets, particularly large-cap stocks.

Dramatic Growth: Passive funds (like index funds and ETFs) have grown from less than 5% of the U.S. equity and bond mutual fund and ETF markets 30 years ago to more than 50% by the end of 2023.
Assets Under Management (AUM): In 1993, passive funds invested in US stocks managed $23 billion. By 2021, passive assets had risen to $8.4 trillion, representing 53% of combined active and passive funds and 16% of the US stock market.
Continued Inflows: In 2024 alone, passive investments recorded a global net inflow of around $1.1 trillion. For US equities specifically, passive US equity funds took in a large sum ($244 billion) in 2023, while active funds suffered widespread net outflows.
ETF Growth: The global ETF market reached $11.1 trillion in AUM as of December 31, 2023, demonstrating a cumulative annualized growth rate (CAGR) of 19.8% since 2008. As of May 2024, global ETF AUM was around $13 trillion, with the U.S. accounting for approximately $9 trillion of that.
Here's where the analogy extends to a more concerning scenario: What if these scales, currently holding a precarious balance, were to fracture? The sheer weight on both sides is now so extreme that a fracture could cause the weights to hit the floor with destructive force. This fracture might manifest in various ways: perhaps a breaking point in the bond markets, a sudden and significant shift in investor momentum, or a resurgence of inflation, potentially triggered by a soaring oil price due to geopolitical tensions in the Middle East or the impact of US tariffs. It could, of course, be something entirely unforeseen.

The critical point is this: despite the current, seemingly stable, balancing act of the scales, the extraordinary weight on both sides has created a situation where a complete fracture is a distinct possibility. Such an event, or sequence of events, could unleash consequences that might be impossible for governments to mitigate or rescue investors from.

It is for this very reason that I believe it is prudent to be prepared for both eventualities: a continuation of the surprising market exuberance we've witnessed in recent years, but also, crucially, to be prepared for the major, cyclical events that periodically reshape markets over the decades. As a notable example, it's worth observing how Berkshire Hathaway appears to be significantly more prepared for such eventualities than many other market participants."

And then I asked for some statistics that suggest the stock market is over valued:

"While the market has shown incredible resilience, a look at several widely accepted valuation metrics suggests that the U.S. stock market, particularly the S&P 500, is indeed wildly overvalued by historical norms.

Here are some key statistics:

1. Shiller Cyclically Adjusted Price-to-Earnings (CAPE) Ratio
This is one of the most respected valuation metrics, developed by Nobel laureate Robert Shiller. It divides the S&P 500's price by the average of 10 years of inflation-adjusted earnings. This smoothing helps account for business cycle fluctuations.


Current Shiller CAPE Ratio (as of June 2025): Approximately 36.06.
Historical Average (since 1870s): The long-term average is around 17.1.
Implication: The current CAPE is more than double its historical average, indicating extreme overvaluation. It has only been higher during the dot-com bubble (peaking around 44 in 1999/2000) and briefly during the COVID-19 stimulus frenzy (reaching over 38 in late 2021). Historically, high CAPE ratios have been followed by lower long-term returns.
2. Market Capitalization to GDP (The "Buffett Indicator")
Warren Buffett famously called this "probably the best single measure of where valuations stand at any given moment." It compares the total market value of all publicly traded U.S. companies (often using the Wilshire 5000 index) to the country's Gross Domestic Product (GDP).


Current Ratio (as of March 2025): Approximately 200%.
Historical Average: Warren Buffett suggested a range of 75% to 90% as reasonable, with 120% signaling overvaluation. The long-term average is generally considered to be in the 100-110% range.
Implication: At 200%, the market cap to GDP ratio is at historically elevated levels, similar to or even exceeding the dot-com bubble peak. It indicates that the size of the stock market is far outpacing the underlying economic activity.
3. Price-to-Sales (P/S) Ratio for the S&P 500
The P/S ratio measures a company's market capitalization relative to its total sales or revenue. For the S&P 500, it's the aggregate market cap divided by aggregate sales.

Current S&P 500 P/S Ratio (as of December 2024): Approximately 2.985.
Historical Average: The historical average for the S&P 500 P/S ratio is typically much lower, often cited in the range of 1.0 to 1.5. Even during the dot-com bubble, the P/S ratio peaked around 2.2-2.3.
Implication: The current P/S ratio is significantly above its historical average, suggesting that investors are paying a much higher price for each dollar of company sales than they have in the past. This points to extreme overvaluation, as sales are generally less volatile and less susceptible to accounting tricks than earnings.
4. S&P 500 Earnings Yield (Inverse of P/E Ratio)
The earnings yield is the inverse of the Price-to-Earnings (P/E) ratio (Earnings per Share / Price per Share). It represents the earnings generated for every dollar invested in the index. A lower earnings yield means you're getting less earnings for your investment, implying higher valuation.


Current S&P 500 Earnings Yield (as of December 2024): Approximately 3.57%.
Historical Long-Term Average: The long-term average earnings yield for the S&P 500 is around 4.68%.
Implication: A current earnings yield of 3.57% is considerably lower than the historical average, translating to a higher P/E ratio and indicating that investors are willing to accept a much lower "return on earnings" compared to historical norms. When compared to bond yields (like the 10-year Treasury, which is currently around 4.25% as of mid-2025), the equity risk premium (the extra return expected from stocks over bonds) also looks historically compressed, making bonds appear more attractive on a relative basis.
Summary of Valuation Extremes:
These metrics collectively paint a picture of a market that is exceptionally expensive by historical standards.

Shiller CAPE: More than double its historical average.
Buffett Indicator: Roughly double its historical "fair value" range.
Price-to-Sales: Nearly double its long-term average, even exceeding dot-com bubble levels.
Earnings Yield: Significantly lower than average, suggesting higher prices relative to earnings.
While proponents argue that low interest rates, technological innovation, and strong corporate profits (driven in part by government stimulus) justify these elevated valuations, history suggests that such extreme valuations often precede periods of lower long-term returns, or even significant market corrections."

And then for entertainment I asked: so where will the S&P 500 and Berkshire Hathaway stock be in 5 years. I have not read the response yet but will guess, Gemini is as much in the dark as we are.

"Predicting stock market movements, especially 5 years out, is notoriously difficult and no one can do it with certainty. The analogy of fracturing scales is particularly apt here because the current environment presents such extreme and conflicting forces.

Given the knowledge of extreme overvaluation by historical norms, unprecedented liquidity, high government deficits, and the rise of passive investment, here's a qualitative assessment of where the S&P 500 and Berkshire Hathaway stock might be in 5 years, along with the rationale:

S&P 500 in 5 Years
The Highly Probable Scenario (Based on Historical Valuation Reversion):

Given the current extreme valuations (Shiller CAPE, Market Cap to GDP, P/S ratios all well above historical averages), the most historically consistent outcome for the S&P 500 over a 5-year horizon would be significantly lower real (inflation-adjusted) returns, possibly even negative returns or a period of prolonged stagnation/decline.

Rationale: Markets tend to revert to their historical means. When valuations are this stretched, future returns are typically suppressed. This doesn't necessarily mean a straight line down, but rather that the compound annual growth rate (CAGR) over the next five years is likely to be much lower than the historical average (around 10% annually) and could easily be negative after accounting for inflation.
The "Fracture" Scenario: If the "scales fracture" (e.g., a bond market crisis, a severe inflation shock, or an abrupt shift in investor sentiment leading to significant outflows from passive funds), the S&P 500 could experience a substantial correction or even a bear market. In this scenario, it could be significantly lower than its current levels. The more extreme the current overvaluation, the deeper the potential fall in a severe downturn.
The "Muddle Through" Scenario: The current liquidity and passive flows could continue to prop up the market for longer than historical models suggest. However, even in this scenario, returns would likely be muted as earnings growth struggles to catch up with inflated valuations. The market might drift sideways or experience smaller, more frequent corrections. This would likely result in an S&P 500 that is modestly higher, but with much lower annualized returns than the last 5-10 years, and still susceptible to a significant drop.
Key Factors that will influence the S&P 500's trajectory:

Inflation and Interest Rates: The Fed's ability to tame inflation without triggering a severe recession will be paramount. Persistent high inflation or further aggressive rate hikes would likely depress equity valuations.
Corporate Earnings Growth: Can companies continue to grow earnings to justify current valuations? Economic slowdowns or recessions would severely impact this.
Government Policy & Deficits: The ongoing need to finance large deficits could crowd out private investment or lead to more inflationary pressures, further complicating the Fed's job.
Geopolitical Events: Conflicts (Middle East, Russia-Ukraine), trade wars, and other global instabilities could trigger market downturns.
Investor Sentiment and Passive Flows: A reversal in the strong inflow into passive funds, perhaps due to sustained underperformance or a loss of confidence, could remove a significant prop from the market.
Berkshire Hathaway Stock (BRK.A / BRK.B) in 5 Years
Berkshire Hathaway is a different beast due to its unique structure and management.

Possible Scenarios:

Outperformance in a Bear Market/Correction: This is the most likely scenario where Berkshire Hathaway shines. Warren Buffett and Charlie Munger (until his passing) have historically excelled in acquiring assets at distressed prices during market downturns. Berkshire's massive cash hoard (over $180 billion as of early 2025) positions it uniquely to make significant acquisitions or invest in undervalued public companies if the S&P 500 experiences a major "fracture." In such a scenario, Berkshire's stock could hold up significantly better than the broader market, and potentially even rise as it deploys its capital shrewdly.
Underperformance in a Continued Bull Market: If the S&P 500 continues its upward trajectory driven by speculative fervor and growth stocks, Berkshire, with its value-oriented approach and large cash position (which acts as a drag when assets are overvalued), might lag the broader market. Buffett has consistently stated he won't pay exorbitant prices, even for great businesses.
Leadership Transition Impact: Warren Buffett is expected to step down as CEO by the end of 2025, with Greg Abel taking the helm. While Buffett has been preparing Abel for years and will remain Chairman, the psychological impact of his departure should not be underestimated. This transition could lead to short-term volatility but is unlikely to derail the long-term prospects given Berkshire's strong culture and decentralized structure. The investment philosophy is deeply ingrained.
Steady but Slower Growth: Even if there isn't a massive market downturn to exploit, Berkshire's underlying operating businesses (insurance, railroads, utilities, etc.) are generally stable cash generators. This provides a resilient foundation. So, even in a less dramatic environment, Berkshire could see modest, steady appreciation driven by these businesses, though perhaps not the kind of outsized returns it delivered in its earlier decades.
Key Factors that will influence Berkshire Hathaway's trajectory:

Opportunity to Deploy Cash: This is arguably the biggest driver. If market dislocations or attractive private acquisition opportunities arise, Berkshire's cash pile becomes a huge asset.
Performance of Operating Businesses: The continued health and profitability of its diverse portfolio of wholly-owned businesses.
Success of Management Transition: How smoothly Greg Abel takes the reins and continues the disciplined capital allocation.
Interest Rates: As a major insurer with significant float, Berkshire benefits from higher interest rates on its fixed-income investments.
Conclusion:

While specific price targets are impossible and irresponsible to give, the current valuation landscape strongly suggests that the S&P 500 faces headwinds for substantial returns over the next 5 years, with a significant risk of a correction.

Berkshire Hathaway, on the other hand, appears uniquely positioned to weather potential market storms better than the S&P 500, and potentially even thrive if market valuations revert to more reasonable levels, allowing it to deploy its massive cash reserves. Its preparedness, as you noted, is indeed a key differentiator in this extreme and potentially fracturing market environment."

" Berkshire's massive cash hoard (over $180 billion as of early 2025) positions it uniquely to make significant acquisitions or invest in undervalued public companies if the S&P 500 experiences a major "fracture." In such a scenario, Berkshire's stock could hold up significantly better than the broader market, and potentially even rise as it deploys its capital shrewdly."


Thanks for sharing that but why get the cash so wrong?

that's AI for you...confident answers but sometimes spectacularly wrong.

I did notice that Gemini is more bullish on Berkshire than the S&P 500. I agree with that. Altough, no doubt that is because of my bias in the questions. With the right questions, I'm sure it would favour Tesla or Microstrategy (or Strategy as it's now called) over Berkshire and I wouldn't agree with that.

Nobody knows anything, including AI.

Just for fun, I used the same set of questions to ChatGPT that EVBigMacMeal submitted to Gemini to see if there was an agreement between the two or not. Since the ChatGPT respo nse was as ling as Gemini's, I asked for "a clear, integrated summary that combines your original points with the valuation statistics" and will start this post with the summary (followed by the full Monte):

Jeff

Here’s a clear, integrated summary that combines your original points with the valuation statistics:

A Note on Today’s Market Backdrop and the Fragile Balance of Forces

By many measures, the US stock market appears significantly overvalued relative to its historical norms. The Shiller CAPE ratio for the S&P 500 is currently around 32–34, nearly double its long-term average of 17, and comparable to levels seen only during the 1929 bubble and the dot-com boom. The standard price-to-earnings ratio sits near 26–28, well above its historical mean of about 15–16. Meanwhile, the market capitalization of US stocks now exceeds 180% of GDP, far above the roughly 100% that has historically signaled fair value. Revenue multiples tell a similar story: the S&P 500’s price-to-sales ratio is around 2.5–2.7, versus an average closer to 1.5.

Despite these stretched valuations, the market has remained resilient. One reason is the extraordinary level of liquidity and support unleashed during the 2008 financial crisis and the COVID-19 pandemic. The Federal Reserve’s balance sheet, for example, remains over $7 trillion, compared to under $1 trillion before 2008, while US government debt has ballooned past $34 trillion, with persistent deficits running at recession-like levels year after year.

Adding to this, passive investment flows have grown enormously: index funds and ETFs now control more than 50% of US equity fund assets, up from about 35% just a decade ago. This steady stream of indiscriminate buying has helped push prices higher, concentrating returns in a handful of mega-cap stocks that now make up roughly 25–30% of the entire S&P 500’s market value.

One way to visualize this dynamic is as a set of weighing scales: on one side are extreme valuations, inflation concerns, and signs of slowing growth; on the other is massive government liquidity and relentless passive buying. For now, the scales balance. But the weight on both sides has become so great that the scales themselves could fracture. A fracture might come from a break in the bond markets, a reversal in investor momentum, a resurgence of inflation driven by energy shocks or geopolitical conflict, or some other unexpected catalyst.

If that fracture happens, the weights won’t just rebalance — they may crash to the floor, creating a market shock that even large-scale government rescue efforts might not easily contain.

This is why I believe it is wise to be prepared for both the possibility of continued exuberance and the reality that every few decades markets do experience seismic shifts. Notably, Berkshire Hathaway remains one of the best examples of prudence today — sitting on record cash reserves while others chase the rally at any price.

If you’d like, I can tailor this further for an email, a memo, or a presentation slide. Just say the word!

*********************************************************** The Full Monte:


A Note on Today’s Market Backdrop and the Fragile Balance of Forces

It can be argued that the US stock market is significantly overvalued — and that this overvaluation has grown ever larger in recent years. Despite multiple challenges that might have been expected to weigh on equities, the market has remained remarkably resilient. A key reason for this resilience has been the unprecedented levels of liquidity injected by emergency government actions in response to the Global Financial Crisis and the COVID-19 pandemic. Years later, despite intentions to unwind these extraordinary measures, persistent large government deficits have made it practically impossible to fully remove this emergency support.

An analogy helps illustrate the delicate nature of this situation: imagine the financial markets as a set of weighing scales. On one side sits high valuations, stubborn inflation pressures, and signs of slowing economic growth. On the other side rests the immense force of government support and the relentless rise of passive investment flows that continue to push capital into markets almost regardless of price.

For now, these opposing weights have balanced — sometimes uneasily — and price discovery continues. But what happens if the scales themselves fracture under the sheer weight they now bear? Such a fracture could come from any number of sources: a break in the bond markets, a sudden reversal in investor momentum, a resurgence of inflation sparked by rising oil prices due to conflict in the Middle East, or new economic shocks like the impact of trade tariffs.

When the scales fracture, the weights no longer balance — they crash to the floor. At that point, we could face an event or series of events so severe that even massive government intervention might not be able to shield investors from loss.

It is precisely because the weight on both sides is now so extreme that I believe it is prudent to prepare for both possibilities: that the market’s surprising exuberance may persist for longer than many expect, but also that rare, seismic shifts — the kind that happen every few decades — remain very real risks. Notably, Berkshire Hathaway’s large reserves show that some of the most respected investors in the world are prepared for this dual reality more than most.

I then asked ChatGPT to provide some statistic on both stock market valuations and government stimulus and liquidity and passive investment flows.

Absolutely — here’s a concise set of key statistics you can use to ground your note in data, updated to reflect recent trends as of mid-2024:

📈 Stock Market Valuations

Shiller CAPE Ratio: The cyclically adjusted price-to-earnings (CAPE) ratio for the S&P 500 is currently around 32–34, well above its long-term average of about 17. It’s among the highest readings outside of the dot-com bubble era and the immediate COVID rebound.

Market Cap to GDP: The so-called “Buffett Indicator” — total US stock market capitalization as a percentage of GDP — is over 180%, compared to a historical average closer to 100%. This suggests stocks are very expensive relative to the size of the economy.

💵 Government Stimulus & Liquidity

US Federal Debt: US federal debt has surpassed $34 trillion, with annual deficits running at around 6–7% of GDP, levels usually seen only during recessions or wars.

Federal Reserve Balance Sheet: Although the Fed has attempted “quantitative tightening,” its balance sheet remains over $7 trillion, up from about $4 trillion pre-COVID and under $1 trillion before the 2008 financial crisis.

Emergency Support: During COVID, direct fiscal stimulus totaled over $5 trillion in spending, tax breaks, and direct payments, with the Fed adding trillions in asset purchases to stabilize markets.

📊 Passive Investment Flows

Passive Ownership: As of 2024, passive index funds and ETFs now control over 50% of US equity fund assets — up from about 35% a decade ago.

Inflow Momentum: In the last three years alone, passive funds have attracted more than $1 trillion in net inflows, while actively managed equity funds have seen consistent net outflows.

Market Impact: Studies show that passive flows can push up prices indiscriminately, contributing to reduced price discovery and greater market momentum in both directions.

Sources: S&P Global, Robert Shiller Data, Federal Reserve, Investment Company Institute (ICI), US Treasury Department.

And then I asked for some statistics that suggest the stock market is over valued:

Absolutely — here’s a focused list of current statistics that suggest the US stock market is overvalued, with explanations for each:

📈 Key Overvaluation Indicators
1️⃣ Shiller CAPE Ratio (Cyclically Adjusted P/E):

Current: ~32–34

Historical average: ~17

Context: The CAPE ratio is double its long-term average. It has only been this high during the peak of the 1929 bubble and the dot-com bubble (late 1990s/early 2000s). A high CAPE suggests future returns may be lower than historical norms.

2️⃣ Price-to-Earnings (P/E) Ratio (Trailing 12 Months):

Current S&P 500 P/E: ~26–28

Historical average: ~15–16

Context: This shows investors are paying nearly twice the historical multiple for each dollar of company earnings.

3️⃣ Market Cap to GDP (“Buffett Indicator”):

Current: ~180%

Historical average: ~100%

Context: Warren Buffett has said this is one of the best single measures of market valuation. Levels above 150% have historically signaled significant overvaluation.

4️⃣ Price-to-Sales (P/S) Ratio (S&P 500):

Current: ~2.5–2.7

Historical average: ~1.5

Context: Revenue growth is harder to manipulate than earnings. A high P/S suggests companies are richly valued even before considering profit margins.

5️⃣ Equity Risk Premium (ERP):

Current: Near historical lows (~3% or less)

Historical average: 4–5%

Context: The ERP measures the extra return investors expect for owning stocks instead of risk-free government bonds. A lower premium means investors are accepting less compensation for more risk, often associated with overoptimism.

6️⃣ High Concentration in Mega-Caps:

Top 5 stocks (Apple, Microsoft, Alphabet, Amazon, Nvidia) now make up over 25–30% of the total S&P 500 by market cap.

Context: Extreme concentration can signal crowding into a handful of expensive stocks, driving up the index valuation.

Sources: S&P Dow Jones Indices, Robert Shiller Data, Federal Reserve, FactSet, Yardeni Research.

" Berkshire's massive cash hoard (over $180 billion as of early 2025) positions it uniquely to make significant acquisitions or invest in undervalued public companies if the S&P 500 experiences a major "fracture." In such a scenario, Berkshire's stock could hold up significantly better than the broader market, and potentially even rise as it deploys its capital shrewdly."


Thanks for sharing that but why get the cash so wrong?

Just a guess:

328 cash + 24 bonds - 173 float = 179 available for permanent investment.

Alternate perspective is that US would do just fine and US stock market returns are going to be similar to international returns going forward even with higher starting valuations.

Valuation which necessarily must incorporate future growth rates, required returns, changes to profit margins, etc. cannot just be based on the past.

It is like using the average of the last 500 years of human life expectancy to estimate future life expectancy. We know there are advancements in health care and why it is increasing. So it does not make sense to just base it off past.

Same applies to valuations. We used to have businesses that were highly cyclical, and profit margins used to mean revert, in addition business cycles were better managed today (QE to infinity!) which makes overall consumption less cyclical which means less cyclicality in business earnings.

What Jim has missed in the past is not just valuations, but missed the entirety of the changes happening in Tech. Google, Facebook, Amazon, Microsoft, Apple, Nvidia, etc have helped S&P 500 grow earnings at a rate that made mockery of "best case 1.7% real growth in EPS over next decade".

So the question is what gives anyone the confidence to predict going forward, when every single factor that was estimated ended up being wildly inaccurate?

It seems politics is influencing the investment decisions. I don't think it's a good idea.

No, I am not MAGA and voted for Harris holding my nose.

" It seems politics is influencing the investment decisions. I don't think it's a good idea.

No, I am not MAGA and voted for Harris holding my nose."


Sadly, many of our old friends are making major investment decisions without even understanding why 5 million liberals refused to vote for Harris Walz. You held your nose and voted Harris, 5 million others held their nose and voted Trump. The calculus of who sucked worse should not have been a toss-up. A small part of the facts.

"Zuckerberg says the White House pressured Facebook to ‘censor’ some COVID-19 content during the pandemic."


https://www.pbs.org/newshour/politics/zuckerberg-s...

" “I believe the government pressure was wrong, and I regret that we were not more outspoken about it,” Zuckerberg wrote. “I feel strongly that we should not compromise our content standards due to pressure from any Administration in either direction — and we’re ready to push back if something like this happens again.”



Zuckerberg also expressed regret for Meta’s downplaying of content related to coverage by the New York Post about Hunter Biden ahead of the 2020 election that the FBI warned may have been rooted in a Russian disinformation operation."


https://www.politico.com/news/2024/08/26/zuckerber...

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