Investing General Discussion
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Flobee
Vyemm Raider
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IMO to understand the market you need to change your denominator in value calculations to Gold instead of USD. With that view we've been through a ~80% correction or essentially flat depending on where you measure from. So essentially the Great Depression, just papered over with money printing. Changing how you look at value helps one to understand real vs nominal returns. I tend to replace Gold with Bitcoin as a denominator but that skews things cartoonishly just due to how Bitcoin has performed against everything else.
First chart is from a year ago, but you get the idea. Worth looking at charts in the entire thread for more context.
First chart is from a year ago, but you get the idea. Worth looking at charts in the entire thread for more context.
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Asshat Foler
Chief Philosopher
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Flobee
Vyemm Raider
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$1 trillion every 100 days being added to the deficit. They are required to debase USD mathematically, so yea that's gunna make stonks boom in nominal terms, but in real terms I kind of doubt it with the exception of AI/Robotics outliers, and maybe some commodity adjacent stuff, if I had to guess. That's the entire point of the charts we just posted. Being invested is leaps and bounds better than not being invested, but if you think its making you rich you're incorrect, you're simply outperforming people who can't/don't invest
Asshat Foler
Chief Philosopher
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With gold flat that’s implying that the increase in sp500 which is backed by usd is majority inflation? I’m not as economic savvy as some of you so just trying to understand
Flobee
Vyemm Raider
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Correct, its nominal gains, not real gains. Stated another way you've basically only maintained purchasing power to some degree vs actually making a profit. SP500 gains is essentially just an indicator of how much USD has been debased since 1971
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Asshat Foler
Chief Philosopher
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Asshat Foler
Chief Philosopher
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I’ve upped my emergency fund reserves to about one year. I absolutely hate having that much money sitting in SPAXX. Are there any better ways I can take say 20-40% of it and make it work better for me? It almost seems like just putting it into SPY is a safe bet at this point but I want to hear if anyone has alternatives to SPAXX. AI says 3-6 months t-bills or brokered CDs could be a good option
Jysin
Bronze Baronet of the Realm
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SPAXX isn't terrible to park cash in, as you are getting just under 4% yield (minus fees). Better than sitting in a bank account.
You can always buy 3 month treasuries currently yielding 4.04% (no fees). The return likely drops after Fed rate cut next week though. There is a 3 & 6 month bill auction on Monday, which is probably the last time you can lock in that >4% rate, Unless Fed does something crazy.
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Asshat Foler
Chief Philosopher
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Thanks. Difference on SPAXX and treasuries doesn’t really seem worth it outside of the benefit of getting locked in, unless I’m missing something
Jysin
Bronze Baronet of the Realm
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You're not necessarily locked in. You can sell on the open market if absolutely necessary. And if we get Fed rate cuts, the underlying value of the bond will increase.
(Inverse relationship price vs yield)
Cad
scientia potentia est
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How do we analyze this in real terms for people who live and spend in the US though? The dollar going down will make all foreign goods more expensive, and it can make domestic goods more expensive for those goods that rely on foreign parts/workers for subassemblies or whatever. But 70% of the US economy is domestic, so if the dollar drop 10%, how much of that 10% actually translates to increased prices for Americans?
I.e. I have 10% more money but now shit is 5% more expensive, thats still a 5% win? Just making up numbers here but you get the idea.
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Captain Suave
Caesar si viveret, ad remum dareris.
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As far as goods, essentially nothing is produced without some overseas resources or labor. Even for food we're still exposed to real price movement due to import/export pressure. How that shakes out numerically, I don't think anyone knows. A weaker dollar means we're objectively poorer as consumers but there may be some balancing upside in growth for exporters.
Cad
scientia potentia est
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This is what Grok 4 said for what its worth:
The impact of a currency depreciation on domestic prices depends on several factors, including the share of imports in the economy, the extent to which exchange rate changes are passed through to import prices (which is often incomplete due to pricing strategies by firms), and spillover effects to domestic goods via imported inputs or competition. The US economy does have a large domestic component—consumer spending on services (largely non-tradable) accounts for about two-thirds of GDP, while goods (more exposed to imports) make up the rest—but the overall effect is diluted further by low pass-through rates.
For a broad-based 10% depreciation of the US dollar against a trade-weighted basket of currencies (using the euro as your example, but assuming a similar scale across major partners), empirical estimates from economic studies indicate that only a small fraction translates to higher consumer prices for Americans. Specifically:
- The pass-through to overall US inflation (e.g., CPI or PCE) is typically in the range of 5% to 15% of the depreciation amount. In other words, a 10% dollar drop would lead to roughly a 0.5% to 1.5% increase in consumer price levels over 1–2 years, with the effect building gradually.
- This low translation reflects incomplete pass-through: for instance, import prices themselves might rise by only 3–4% from a 10% depreciation (a 30–40% pass-through rate), and since imports represent about 15% of US GDP (with even lower direct weight in the CPI basket after accounting for services and domestic goods), the economy-wide impact is muted.
- If the depreciation is isolated to the euro (which has about a 21% weight in the US trade-weighted dollar index), the effective broad depreciation would be roughly 2.1% (10% × 0.21), scaling the inflation impact down to about 0.1% to 0.3%.
These estimates can vary based on economic conditions—pass-through tends to be higher during periods of elevated inflation or uncertainty—but recent decades show a decline in the effect due to globalization, stable inflation expectations, and dollar invoicing in global trade. The 70% domestic share you mentioned helps explain why the full 10% doesn't flow through; most economic activity (like healthcare, housing, and education) remains insulated from direct currency effects.
Gravel
Mr. Poopybutthole
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I can't decide what to do with that information. The economy outside the top 10 companies is shit, so do I cut out the bottom (currently in total market funds) and just go all in on the winners (or at worst, just the S&P 500)? Or is it something where I hope in the rest of the economy does...anything?
Edit: Also, since I didn't read the rest of the thread, it means that outside of the top 10 companies that are propping up the markets, every company is getting fucking decimated right now. Not just by a weakening USD, but also they're not even keeping up with it. When IWM is flat for half a decade but the USD inflates 300%, it's really that every company is getting brutalized and the entire economy is on the brink of collapse.
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Captain Suave
Caesar si viveret, ad remum dareris.
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