Brace for Impact: The Crash is Coming

It may make 1929 look like a warmup round

The United States stock market is atrociously overvalued, and to make matters worse, the country is gearing up for a global trade war - “the likes you’ve never seen before!”

Spearheaded by the convicted felon who proudly proclaims that he knows the “Art of the Deal”, we are supposed to applaud the pressure tactics, which will soon isolate us from former allies. (Video below)

Be that as it may, “alea iacta est” - “the die have been cast” - and the events that will unfold are outside of our control.

Alea iacta est is attributed to Julius Caesar, who said it on January 10, 49 BC. Caesar said this as he led his army across the Rubicon river in Northern Italy, which marked the start of a civil war. The phrase conveys the idea that once the die is cast, there's no turning back. Unfortunately, we’re missing the “Et tu, Brute” part of the equation.

Before you dive into this article:

If current trends continue without substantial intervention, a recession is highly probable by mid-late 2025, followed by a deep depression in 2026-2027. The severity of the destruction will depend on policy responses, corporate reactions, and global economic shifts.

Suffice to say, presently none of the reactions are adequate. On the contrary, it’s almost as if they want to sink the United States into irreparable harm. Thus, preparing now is critical.

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The Looming Economic Catastrophe: Why This Recession Could Eclipse 1929

The financial world is already preparing. A storm is brewing in the global economy, and the United States stands at the epicenter of what could be the most devastating financial collapse in modern history. A collapse that is set to surpass the stock market crash of 1929.

The signs are all around us: a wildly overvalued stock market, an AI bubble teetering on collapse, and a financialized economy detached from real production. The difference between 1929 and 2025, is how intricately the systems are woven, the interdependence, and the inflated market position of publicly traded companies. If history has taught us anything, it’s that unsustainable economic euphoria always ends in catastrophe.

Marcus DiPaoloa below (direct TikTok link)

The Biggest Bubble in History

We’ve seen bubbles before. The 1929 recession, the dot-com crash of 2000, and the 2008 financial crisis. But today’s economic environment dwarfs them all. The Buffett Indicator, a key measure of stock market valuation that compares total market capitalization to GDP, currently sits at 208%.

For perspective, the dot-com bubble peaked at 130%, while 1929’s market crash preceded an 80% ratio. These numbers suggest that we are far beyond mere overvaluation; we are in an era of financial insanity.

Adding fuel to the fire, the price-to-earnings (P/E) ratios of major tech stocks have reached historically unsustainable levels, mirroring the frenzy before the dot-com collapse.

Financial experts and Wall Street insiders, typically the last to sound the alarm, are already unloading their holdings. Musk, Zuckerberg, Bezos, and Warren Buffett have been dumping billions in stock over the past two years. They know that the market is running on fumes. Most of them are “traditional” investors, outside of the high-tech, artificial intelligence bubble.

The AI Bubble Is Already Deflating

AI has been heralded as the next great industrial revolution. And while this is true concerning the impacts on employment, from an investment perspective it’s just another speculative gold rush.

In recent days, Nvidia, the chip manufacturer providing most of the high-performance hardware of the AI boom, has seen its stock price plummet. Even though the US has locked up the highest-performing chips, Chinese firms, particularly DeepSeek, have produced superior AI models at a fraction of the cost and with inferior chip technology. As DeepSeek splashed onto the market on January 27, 2025, more than $1 trillion in market value evaporated from U.S. and European tech companies in a single day.

The AI sector, much like past tech booms, has been overhyped. Companies are trading at valuations that cannot be justified by their actual earnings. They spent billions in developmental costs, while their revenue generation doesn’t support the investment.

What we missed is the dissociation between impacts on the employment world, the function of computing, and the actual economic value of the organization.

Yes, OpenAI’s ChatGPT is a great product, the same is true for Perplexity, Claude, DeepSeek, etc. - they’re all good. They are all mainstream. They all compete. With increased competition and reasonably similar utility, come price reductions.

Investors, driven by FOMO (fear of missing out), have flooded capital into these firms without considering whether the technology is sustainable, revolutionary, or defensible.

It turns out that with the appearance of DeepSeek, it is none of the above, and we are now witnessing the moment the air starts escaping this balloon.

Just as happened in 2000 and 2008.

The Irrationality of the Tesla Mirage

In full disclosure; I HATE to drive a Tesla (2017, Model S), and if I could, I’d blow the car to pieces - for public entertainment. Alas, like any other Tesla owner, I am hopelessly upside down. Thus, unless I can start a GoFundMe to pay for blowing this thing into the stratosphere, I’ll be stuck with the WankPanzer.

Nothing encapsulates the current market irrationality more than Tesla. Despite producing a fraction of the vehicles of traditional automakers, Tesla’s market capitalization has, at times, exceeded that of Toyota, Volkswagen, and Ford combined.

The answer lies in speculative euphoria, and Musk’s continued overpromising and underdelivering, rather than economic fundamentals. Tesla's price-to-earnings ratio has been astronomical, propped up by government subsidies (courtesy of the taxpayer), aggressive marketing, and Elon Musk’s cult-like status among retail investors (They still haven’t learned that Musk is not a genius, but merely a back-alley gangster).

Meanwhile, competitors like China’s BYD have surpassed Tesla in electric vehicle production, and technological advancement, at a MUCH lower MSRP, yet Tesla’s stock remains in a stratosphere detached from reality.

Investors who believe Tesla’s rise is permanent may soon face the same harsh lesson that Enron and Pets.com shareholders learned decades ago.

The Financialization of Everything

The U.S. economy has undergone a fundamental transformation since the 1980s, shifting from industrial production to financial speculation. Real wages have stagnated since the late 1970s, while the financial sector has ballooned.

Today, finance, insurance, and real estate (FIRE) account for more than 22% of GDP, while manufacturing has dwindled to just 10%.

The consequence? The economy is increasingly dependent on asset bubbles. When these bubbles deflate, as they inevitably do, the fallout is severe. We saw it in 2008 when overleveraged banks and speculative mortgage-backed securities wiped out trillions in wealth. Today, it’s AI, big tech, and real estate that are at risk of imploding.

Who Holds the Risk?

A staggering 93% of all U.S. stocks are held by the wealthiest 10% of Americans, with the top 1% controlling 50% of stock market wealth. The bottom half of the country? We hold just 1% of the market.

This means that while billionaires may diversify their portfolios and hedge against market downturns, the average American, whose retirement is tied up in an S&P 500 index fund, will bear the brunt of the collapse.

Billionaires can diversify, short stocks, etc.

We, The People, Cannot.

The S&P 500 itself is dominated by just seven tech behemoths:

1. Apple

2. Alphabet (Google)

3. Amazon

4. Meta

5. Tesla

6. Nvidia

7. Microsoft

Dubbed the “Magnificent Seven.” Together, they represent 35% of the entire index. This level of concentration is unprecedented and incredibly dangerous; if just one or two of these companies falter, the entire market could unravel.

The House of Cards is Wobbling

The warning signs are all there. Interest rates, which were held artificially low for over a decade, have risen sharply, making debt more expensive. This is a death knell for speculative companies that rely on cheap borrowing to sustain their sky-high valuations. We are also seeing credit markets tighten, an ominous signal that liquidity, which is the lifeblood of financial bubbles, is drying up.

Additionally, government subsidies that have propped up companies like Tesla and various AI startups may soon be cut as political priorities shift. Except, for Tesla, SpaceX, Starlink, etc., since Musk has a booster seat right next to the Resolute desk in the Oval Office.

With an administration absolutely beholden to big business, and insider deals, taxpayer-funded government contracts may temporarily cushion the blow, but they cannot stop economic gravity forever. Once the bubble of overvaluation bursts, we will all need to batten down the hatches.

The Reckoning is Coming

When financialized economies collapse, the impact is not limited to Wall Street. The ripple effects will hit everyday Americans hard. Mass layoffs, plummeting home values, pension fund declines, economic contraction, and an unwinnable trade war.

Also, when the AI hype bubble bursts alongside the broader tech selloff, and if global competitors like China continue outperforming American firms, we are likely to see a financial downturn worse than anything in living memory.

While Wall Street analysts and politicians will inevitably claim “no one saw this coming,” the truth is that all the warning signs are flashing red.

The U.S. economy is running on borrowed time, and when the house of cards falls, it will be the most vulnerable who suffer first and the most.

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Prepare accordingly.

This is my, admittedly, half-assed attempt to provide some form of solution-oriented perspective. Once again, in full disclosure, I will need to take my own advice to heart.

If you can, get land. If you can, become self-sufficient. If you’re already there, I applaud you, and most of the points below are likely painfully obvious to you.

Nevertheless, here goes:

For Rural Residents:

1. Self-Sustaining Agriculture – Establish a home garden with high-yield crops, invest in greenhouse solutions for year-round food production, and raise chickens or goats for meat and dairy.

2. Energy Independence – Install solar panels with battery storage, secure a backup generator with fuel reserves, and explore wind or hydro alternatives for off-grid power solutions.

3. Community Collaboration – Build relationships with other local farmers, barter essential goods, and develop a mutual aid network to strengthen local resilience.

4. Income Diversification – Learn self-sufficient trades such as carpentry, mechanics, or repair work that will be in demand regardless of economic downturns.

5. Debt Minimization & Asset Protection – Pay off high-interest debts, convert savings into tangible assets like land, tools, or precious metals, and consider securing essential property rights.

6. Community Communications - know who you are collaborating with, what their skills are, and how each community members can interface with each other. Shared labor and skills, on a barter system, will remove the economic burden of cash compensation.

7. Arm Up - once resources get scarce, city folk will be driven to the suburbs, and from there, to rural areas. Most are only trying to survive. Some will pose threats. Ensure that you and your community are protected. Unless the newcomers have valuable skills and/or resources to offer, the “unit economics” of providing long-term shelter will endanger the community. This sucks, but it’s reality.

8. Harvest & Hunt - Harvesting, ideally more than once/year, will be a staple in survival. The other is to hunt. The latter isn’t everyone’s ideal solution. However, these are different times. Raise animals for the express purpose of consumption, or hunt animals with the same in mind.

For Urban Residents:

1. Emergency Preparedness – Stockpile non-perishable foods, clean water, and first-aid supplies while identifying local food co-ops and alternative grocery sources.

2. Financial Safety Net – Maintain liquid savings outside of traditional banking systems, consider credit unions, and establish emergency funds in multiple accessible forms. However, consider that traditional currency will lose in value as time goes by. Thus, having goods and resources that can be bartered is a good moat against the loss of value of the Dollar.

3. Skill Development – Invest in trade certifications, coding, or gig economy skills that allow for flexible work opportunities outside of traditional employment structures. The employment market will contract, and only the best will be able to sustain employment. The broader your skillset, the greater the opportunities for collaboration, gig jobs, or independent work.

4. Housing Stability & Security – Seek cooperative housing arrangements, research rent control policies, and strengthen relationships within tenant unions. Moreover, consider that landlords themselves will feel the economic constraints.

5. Crisis Readiness & Safety Planning – Stay informed on civil unrest risks, develop emergency evacuation routes, and form community security measures for mutual protection. We have seen this during the protests after the murder of George Floyd. Some of the main streets and through routes were blocked off, and others were heavily “protected” by National Guards.

6. Community Communications - know who you are collaborating with, what their skills are, and how you can assist each other. Assistance is not confined to a barter system, but also a system of collaborative protections.

7. Arm Up - once resources get scarce, we’ll get desperate. Once desperate, we may resort to doing things that are out of character. The level of desperation will be directly proportional to the measures we are willing to take. I am aware that this sounds very much like the “end times” - however, if we have learned anything from 1929, the lines that have formed when food was rationed, and we compound for today’s absence of humanity across American society, I’d advocate for the “better safe than sorry” approach.

8. Harvest & Hunt - If you can participate in a community garden, or you have a backyard where you can grow produce, perhaps even some chickens, then now is the time to start experimenting. However, where there is food and other resources, there may be vulnerabilities. Protect your stuff.

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~Z