- The voices of economic doomsayers are growing louder, claiming that the economy is headed for collapse.
- There is a disconnect between what experts say is a healthy economy and what many individuals experience.
- Severe sense of financial ruin and depression
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Daniel is a Washington, DC-based Reddit user who has been reading the subreddit r/economiccollapse for about four years. Although he says he is no prophet, he sees an economic collapse in the United States that could mirror the collapse of the Soviet Union at the end of the Cold War.
Daniel, who asked that only his first name be used to protect his privacy, has taken steps to prepare for a grim vision for the future. He refuses to keep his savings in cash, instead investing all his money in a portfolio of defensive stocks, gold, cryptocurrencies and other assets he believes will maintain value.
“The guarantee of our economy is a wartime economy,” Daniel told Business Insider in an interview. “Time will tell how bad it actually gets.”
While observers may be quick to dismiss such stories as conspiratorial or alarmist, in online communities such as Reddit, fears about the U.S. economy and material situation are hinting at a coming collapse. More and more people are saying that.
Experts say sentiment is high amid the frustration and anxiety surrounding the pandemic and shows no signs of letting up, but most economists agree that the economy is probably in good hands at this point.
Based on raw search data, there is growing interest in super bear markets and economic conditions in the market. Searches for “stock market crash” on Google increased 17% from the previous quarter, and searches for “economic collapse” increased 15%, according to search analysis firm Glimps.
Search interest in economic crisis rises
Google Trends/Glimp
The number of members of the r/economiccollapse subreddit has also increased in recent years, increasing by 80% from the end of 2021 to the end of 2023. The broader doomsday bulletin board r/collapse also saw an increase in membership, increasing by 26%. According to the analysis site Subreddit Stats, since the end of 2021.
In both communities, users are sounding the alarm about all kinds of apocalyptic scenarios for the economy. stock market crash, housing market crash,or Complete collapse of the US financial system.
One Economic Collapse member associated with Business Insider, who declined to be identified to protect his privacy, said the stock market would “plummet” and the hyperinflation problem would spread throughout the economy if the Fed continued to raise interest rates. He said he believed it. .
“Only a handful of people have ever met someone in person who really knows what’s going on,” they told BI. “I’m very pessimistic because I don’t have much control over it and I don’t see any signs of things getting back on track.”
Another user warned that the recent rally in AI stocks could lead to a dot-com crash.
“Irrational exuberance and greedy speculation. Should make a lot of money in the short term, but leaves you with a terrible hangover when the party is over,” they wrote in the post. “You don’t want to be left holding the bag when everything goes well.”
Many catastrophic people claim that they are just presenting a more realistic version of the situation. Freddie Smith, a Florida-based real estate agent, says he’s not a big alarmist, but he regularly posts economic warnings on his social media accounts. In one of his TikToks, he speculates: The economy is now worse than it was during the Great Depression. Because the cost of living increases.
Smith said of the government’s treatment of the middle class: “They’re still kind of siphoning money and pushing people down.” He predicts that without economic reform, homelessness will increase and more people will be living on paycheck to paycheck.
Jonathan Rose, CEO of commodities company Genesis Gold Group, said he too has noticed increased anxiety among customers. Rose estimates that the number of investors who have purchased physical gold, particularly as a store of value, has increased by about 40% to 60% since the pandemic.
Rose said some of his customers looking to hold on to their gold are preppers and homesteaders who are preparing for a major disaster or who want to live an “off-the-grid” and completely self-sufficient lifestyle. He said he believes there are people who are.
“People are trying to prepare metal,” Rose said. “There’s always been a constant influx of people who are always looking for protection and diversification. But I think it’s definitely increased in recent years.”
perception and reality
The economic reality just doesn’t match what many in these forums say they’re preparing for.
The United States avoided the recession predicted for the past two years. The labor market also remains relatively strong, with the unemployment rate remaining near historic lows in March.
Rose suspects that economic pessimism has skyrocketed since the pandemic began. This experience of uncertainty and fear has heightened people’s awareness of the risks facing the economy, including high government debt levels, rising geopolitical tensions and persistently high inflation, he said.
“I think there are more problems happening today than there were 10 years ago. So people are concerned about these problems and people are saying something must happen. And I think that I agree,” Rose said.
Many may also be reacting to the fact that their actual experience with the economy may not match the strength of the reported data.
Rising costs of living are beginning to weigh on America’s middle class, with a Northwestern Mutual survey finding that Americans’ financial anxiety remains at its highest level since 2012.
“We’re certainly noticing higher prices at restaurants and grocery stores and the cost of living because of inflation,” said Richard Sila, a financial historian at New York University. “Others may not be so lucky and may be constrained, which could impact the stock market and economic outlook.”
Smith said he makes videos to educate people about the economy and to vent frustrations with the working class.
“I saw 23-year-olds talking online about how they were working 40, 50 hours a week and living with their parents,” Smith told BI. “The whole world has changed in the last 10 years…I think the frustration is that we don’t recognize broken systems,” he says.