If history doesn’t repeat itself, it sure knows how to hum the same old tune. Once upon a time in the land of milk, honey, and infinite credit, folks believed markets only went up, leaders always had a plan, and tariffs were just another word for negotiations. But here we are, staring down the barrel of economic revolution with all the grace of a drunk cowboy in a porcelain shop. They call this Liberation Day. I call it Tuesday in America.
And that’s the funny thing about storms. They pass. Sometimes they pass like a kidney stone, but they pass nonetheless. We may be riding a runaway horse right now, but sooner or later, we’ll hit solid ground. Maybe it’ll be gold, maybe it’ll be AI, maybe it’ll just be the bottom and a long climb back up. Either way, pack a lunch, hold onto your boots, and don’t let the headlines do your thinking for you. Because in the end, whether markets rise or fall, fools always rush in—and the wise wait with a shovel and a plan.
There’s no bottom to this. Things could get way worse from here. Tesla’s down 40% since December, but it could be down 75%, 90%—they could go bust. They’ve got a lot of cash, but that doesn’t guarantee anything.
It’s the second day after Liberation Day, when reciprocal tariffs were announced by President Trump. Markets are still in turmoil. The S&P is down about 5%, the NASDAQ about 4.5%, gold is down, Bitcoin is up 2%. This is the second day of continued volatility.
What’s next for the markets? You’ve been calling for a market correction for a while, and you’ve been right. But what surprised everyone is how volatile things became after tariffs were implemented. Why are people still surprised?
Because no one has seen anything like this since the 1970s. Most people in the market today weren’t around back then. They didn’t believe A would happen, then B, then C—and all of it happening at once. People said, “He doesn’t mean it. It won’t happen. It’s all going to pan out. They’re playing 3D chess.” But if you’re old and cynical, you say, “No, it’s not.”
It’s a trifecta of terrible things. None of them individually would be catastrophic if rolled out over time. But trying to implement four years of strategic change in 12 weeks is overwhelming.
Maybe you could sack 15% of public servants over 18 months. Maybe impose tariffs over another 18 months. Maybe rattle sabers at the Europeans over a few years. But not all at once. The pace—this tempo—is what creates crisis and chaos.
Cutting a trillion dollars from the government budget removes money from the economy—2–3% of GDP. Add tariffs? Another 2–3%. Now you’re looking at a 6% GDP hit. That alone signals a recession. Combine that with geopolitical saber-rattling and you have a situation where risk rises, asset values fall. \
This reminds of the Godfather movie, when Vito kills all his enemies at one time. You deal with it and rebuild from there.
Markets thrive on stability. This is the opposite. Revolutionary governments are historically catastrophic—think French Revolution. Forty percent of France’s population died in that period. Revolutions often destroy the good with the bad. If this administration is truly revolutionary, that’s about the worst thing for markets.
So you think there’s no bottom to this?
It’s only potentially just started. Listen to what Vance said at the security conference in Europe—”Deal with Russia; we’re dealing with Asia.” Is the U.S. de facto abandoning NATO? Not officially, but it certainly feels like it. Defense stocks drop whenever Trump or Vance speaks. How do you spend billions on American equipment in Europe when you’re being cut loose?
The EU is advising the public to hold 72 hours of emergency supplies. That’s serious.
Yes, governments are preparing. They’re not openly saying “We’re going to be attacked by Russia tomorrow,” but the subtext is there. If the U.S. is saying “It’s your problem now,” and Putin is as unhinged as some suggest, now’s his time to act.
Europe will have to become a definitive superpower. It has the numbers, GDP, and capacity to outspend Russia on defense by 12-to-1. But for now, there’s a couple of tricky years ahead. Russia can’t even defeat Ukraine, so how will it defeat all of Europe? The US will no longer maintain the umbrella that costs so much. Good News is Europe is rich enough to do it.
What incentive does Russia have to attack Western Europe?
It’s not about Russia as a country—it’s about the leadership. Historically, they’ve had authoritarian rulers obsessed with legacy. Look at how many biographies exist for Stalin, Hitler, Napoleon. Dictators want to be remembered. If you want a legacy, you don’t do good things. You go to war. Europe is rearming—Denmark is conscripting women. That’s serious.
Yes, because Putin would consider attacking if Europe showed weakness like in the 1930s. But it’s already begun. The question is, will it proliferate or escalate? Ukraine is an abomination. If you think it can’t spread, you’re overly optimistic. America emotionally and strategically cut Europe off. That’s going to push Europe toward unity—toward becoming a true superpower.
Where’s the safest place for investors?
Precious metals, though they’ll take a hit in the short term. When markets crash, people sell gold to cover margin calls. But long term? Gold, defense stocks, banks, agriculture stocks—all will do well. The losers? Luxury goods, travel, retail—anything high up the value chain will get smashed. Think Louis Vuitton, Ferraris, the “Magnificent Seven” tech stocks—they’ll get crushed.
Could this be like the dot-com crash?
Yes. Tesla down 50% could be the canary in the coal mine. What about Nvidia? Google? Apple? A 75% drop reshapes the world. Tesla at \$10? Why not? What’s going to stop it? We are probably going back 2 years.
What about Bitcoin?
It’s about money flow. People might be closing shorts on Bitcoin while closing longs on equities. Bitcoin also pops during flight scenarios—when people need to move money fast. If someone important is about to flee, they’ll buy Bitcoin.
Gold is high right now. Is it overbought?
Gold is where it is because countries are buying it—especially China. Gold is for war. Countries prepare by increasing gold reserves because it’s the currency of last resort. People are selling it cover their stock loses, but it will come back.
What happens to the dollar?
That’s the big question. Tariffs and spending cuts will reduce GDP and tax receipts. That hurts fiscal stability. Chaos devalues risk assets. Stability—however mediocre—supports markets. Genius with instability destroys them.
What if Trump and his team walk back the tariffs?
That era is over. Just listen to how they talk—it’s a new era, a violent era. It’s beggar-thy-neighbor. The only way this turns around is if Republicans get wiped out in the midterms. And I think they will. Then maybe this process slows down.
Any chance for long-term good?
Only if it’s flawlessly implemented, which it won’t be. It’s a bad idea done badly. They’ve already pulled the roof in. They’re not going to admit mistakes. They’re going to ride the buffalo herd off the cliff.
What does the future look like in 20 years?
There’s a foot race between good news and bad. The good? AI will educate the next generation like never before. That could be a golden age. The bad? We may not get there. America’s reputation may not recover. Trust may not return. And right now, risk assets are falling hard. World War 3 could be prevented or started, hard to tell.
How do you know when it’s the bottom?
When people start saying they’re geniuses and luxury goods are normal at absurd prices. I thought there’d be a crazy bubble move—but they’ve shot it down. They’ve wrecked it. It’s a revolution, and revolutions end badly. If they really mean it—and they seem to—they’re going to wreck everything.
What’s your prediction?
The values were too high on everything. A 30% drop is the start. It could go 50%, maybe 75%. That would upend everything. One-in-three chance of a 50–75% drop. It’s going to be rough. This isn’t a drill.
It will get better long term,
BEWARE of the DEAD CAT BOUNCE
A Dead Cat Bounce is a term used in finance to describe a temporary recovery in the price of a declining asset—such as a stock or cryptocurrency—followed by the continuation of the downtrend.
It gets its colorful name from the idea that “even a dead cat will bounce if it falls from a great height.”
Key Points:
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Short-lived Recovery: Prices rebound slightly after a significant drop, giving the illusion that the market or asset is recovering.
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False Hope: Many investors may mistake it for a true reversal, only to get caught as the asset resumes its fall.
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Often Seen in Bear Markets: Dead cat bounces are typical during prolonged downturns, where brief upswings can trap bullish investors.
Example:
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A stock drops from $100 to $60, then bounces back to $70. Some investors think it’s recovering, but it soon falls to $40.
EXTRA CREDIT
The Rising Storm: China’s Military Modernization and the Looming Risk of U.S.-China Conflict
The Three-Day Rule: A Modern Parable for a World in Panic
THE VOTING MACHINE VS THE WEIGHING MACHINE BULLS vs BEARS – GREED
How to Survive and even Thrive in a Volatile Market
Real Estate Crashing in 2025? – NO, but it is changing. Opportunity is coming knocking
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