Luke

I should have specified, of course we have millionaires that live paycheck to paycheck. What i am talking about is that 1. 15% of the US population lives in poverty, this number didnt change since 1960 (bottom should see rising of living standards in a working capitalistic system) 2. Capital flows have been hugely distributed upwards since 1975 (https://www.rand.org/pubs/working_papers/WRA516-1.html) Same counts for my homecountry germany btw, end of the 1980s the average DAX-30 Manager made 14x of the average worker, today it is 50x. These people are not as poor as someone in a Kenia Kibera Slum but the numbers do show that the average workers has been hugely disadvantaged compared to the capital the US generated over the last 50 years.

When in 2020/2021 the economy was shut down, a lot of money that was not spend went into the stock market combined with a bubble/euphoria because too many sat at home and saw crypto and tech stocks multiply. Supply chain issues and the ukraine war/energy prices pushed prices high, we see a profit price spiral now and the fed raising to slow the system down. For now i think this thing will slow down and as @gregmal said, the inflation will calm. What has to be done about the huge financial disadvantages is another story.

The US economy and more than half the population there runs on austerity and deficits, barely money left, 60% paycheck to paycheck, lots of things financed on credit card debt, huge loans etc. The problem is not that they arent saving enough, they dont earn enough. The capital flows go to little into the hands of these people and too much goes into financial engineering. Indices had a huge run since 2008 but the real economy looks different. Varoufakis put it nicely: "a majority of people in the majority of advanced countries are struggling to make ends meet,they work soul destroying jobs. They work plenty of hours and there is absolutely no connection anymore,the end of the American dream if you want to put it that way, there's no connection anymore between how hard you work and the probability that you will manage to rise up in their social mobility, however hard you work, you will never make it these days, at least for the median brit and median german. Huge inequality is the other side of the coin of high asset prices" We discussed this in another thread i think, about keynes theory of 15 hour work week by the end of the 20th century. Didnt happen, instead we have an overblown financial sector with more funds than stocks in the US... What needs to happen are real investments into the real economy by international capital, growing wages so that these investments can be absorbed, business has to offer good well paying jobs--> less debt for the average american, more political stability in the US, better quality of life, higher productivity etc reinforcing the cycle. Unfortunately, the capital currently is still too concentrated and then inactive/not increasing growth/multiplying.

There is also a profit price spiral which is a reinforcing driver here...the american worker had to live with bad wages for a long time and is not the one to be blamed.

5% growing wages are a real nothing burger, we dont see any productivity gains because when wages stagnate and human labor is too affordable, why innovate? Pressuring wages are an innovation driving factor. You also have to consider by how much wages did not grow over the last 40 years. Arguing for a wage price spiral here is just trying to keep people poor and maintaining or increasing corporate margins...imagine what would happen if the average american could afford some more toys, may it be a newer TV or another iPad for little Johnny. Growing wages would lead to higher demand, investments for Jobs and growing Sales. Its business that decides to increase prices more and more so we dont have any real rising standard of living while gushing out the dividends to people who are mostly well off and dont increase consumption in sectors that would really grow GDP...at some point the macro economy is important even for the micro shareholder investing perspective mindset.

I doubled my BN Position and sold some Micron and Amazon for it

Do you remember why they were shut down?

Well said, Noam Chomsky said something similiar in this YT Video. He says that these two global superpowers have their own ,,Party Lines" also regarding the ukraine war. The global south thinks the West is ridiculous with their moralization of russia, there have been plenty of brutal wars where US played a role and killed thousands. Why do we suddenly have to be so mad against Putin if the US is hypocritical? India buys more gas and doesnt see the points. Of course putins war is horrible but similiar acts have been done by the US in the past. As westerners, we just dont see it (manufactured consent, biased media, Western Party Line). China has their own criminal things going, human rights problems, trying to get access to key technology with patents etc. Its not innocent either but as you said, they are growing their own alliances pretty well and have satisfied customers. They copied the US imperial strategy and are now almost more successfull then the US.

As Munger said it: ,,I think its off the table for a long time,, Taiwan wont declare independence because they dont need to. Tsai Ing Wen said it herself, they ARE ALREADY independent. No need to announce anything here.

The question is, where does China benefit in an Invasion and will they act just to set a statement. China will lose access to high end chips as will the US (some will be able to come from samsung but its a small amount). Whole world will fall into a great depression for at least 5-10 years until semiconductor supply chains were able to be built elsewhere (if they can even run them as well as the TSMC team does and if they manage to pull enough talent into these foundries since taiwans engineers and workers could die in the war when the reserves are mobilized. China will likely not have access to ASML machines at all for the future, i doubt they can advance in EUV without the european supply chain. They will have killed ten thousands of their own soldiers, many depressed mothers, brothers, sisters and family members, questionable impact on their own political stability.

230109_Cancian_FirstBattle_NextWar (1).pdf From Center of strategic and international studies: https://www.csis.org/analysis/first-battle-next-war-wargaming-chinese-invasion-taiwan They ran an interesting simulation and looked at different outcomes of invasion in Taiwan. 80 Pager research. I think its quite accurate, i will also post what Chris Miller, the Professor who wrote the Book Chip War said about a Taiwan Invasion.

A lot depends on interest rates here and how well they make their bets, past performance is quite decent already. Future has a lot of economic and geopolitical uncertainty, wouldnt surprise me if we go away from the peaceful 0% growth mode. How do you guys personally see interest rates developing?

Sorry, the US has how many people living in that country? If China attacks europe, obviously we will have problems just because of the population difference, its plain math. That germany went havoc on europe and then needed to be attacked by the whole World shows that europe is not some powerless US base, not that it was any good what happened in WW2. Fine, if you dont want have discussions where people have different viewpoints.

I think, and i can only speak for germany, that everybody here wants freedom. But we understand that in order to have freedom, you need regulation, otherwise corporations can take away your freedom with bad wages, bad products etc. We do defend our freedom and the system we have and we are getting more and more independent from the US (see germans extra funding for the military). Where did the US defend germany in WW2 exactly Sir?

Lol, he was down 50% in a marketcrash and so were his partners? Why would Munger care? This is literally all there is in this article: This sounds like a big nothing burger, where did he lose everything? Money and House? He did use a little bit of leverage and it was fine for DJCO? Berkshire owns chinese equity?

Spot on. And bad culture is everywhere in US politics...

Just to throw in some words from Chomsky:

Its not that simple, europe has capitalism, china has capitalism, the US has capitalism. Each country has different forms of regulations and state interference, in the US you have bailouts too? Is that marxist? If you think capitalism should be a complete free market and government only doing the slightest of intervention (police, military, holding up constitution but not changing it), you dont even have that in the US and a complete free market system wont survive long anyways. Id argue that Europe understands the US and China, The US does not understand China.

And its not an anti elitist movement per se, China welcomes entrepreneurship that increases the live of everybody in the society, good paying Jobs, well made products, higher quality of life etc. What they hate are bragging billionaires that abuse workers, pay bad wages, harm the economy by monopolising etc. Ray Dalio also streched that chinese dont like rich people, they dont like rich people that got rich by abusing others...

What China is trying to do is to flatten out the huge wealth gaps they have, by means of higher taxes/redistribution, forced higher wages etc. Its still a marketbased capitalist economy but with more regulation. If you think higher taxes for billionaires, forced wages in specific sectors or that states buy businesses, germany is also a marxist system haha. This is what is done often, its a ridiculous black and white picture. As if china tries to achieve an equal outcome for all, all they try to do is not to end up like the US is ending up right now. Increasing political instability, stagnating economy, no prosperity for the little guy etc. Why does he need help with risk management? He invested in two great big, well run businesses in one of the largest growing economies that gains partners all over the planet in rapid speed. A country that is at the top in many of the futures fields. He rightfully agrees that the valuations compensate for the slight increase in geopolitical uncertainty but as he said, it would be bonkers if there is war between US and China. Why would anyone be so stupid and risk a war, Ray Dalio puts it perfectly, its not in the interest of anybody. Credits to @Dave86ch for this:

Sold some more Meta and added to FFH