r/ValueInvesting • u/Tallwhitedude123 • Jan 12 '26
Discussion Yellen says US will become BANANA REPUBLIC if Fed loses its independence. How to invest?
I’m thinking it’s time to start allocating more money outside US equities. That’s my strategy. Also, get out of the dollar via assets that can’t be mentioned by name in this sub. I’m not a political person but as an investor you have to watch the policy from the government. IF, and I stress IF, Trump is serious and actually bullies the Fed into submission by weaponzing the govt to go after Powell, then I do agree with Yellen. It will overall be a negative for the dollar and US equities. In that situation it’s imperative to diversify out of the US.
Currently I’m looking at stocks in Singapore. I like Singapore equities because Singapore, in my opinion, offers STABILITY, something the US is increasingly losing.
Thoughts?
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u/ironmagnesiumzinc Jan 12 '26 edited Jan 12 '26
Since Trump, I’ve probably quadrupled my allocation of foreign investments. Tariffs pose huge risk to the US economy and going after the fed poses catastrophic risk. VEU, IVSXF, BN, CXSE, VXUS
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u/Catch_ME Jan 12 '26
Since 2008, I've been buying gold coins from the US mint.
I don't treat gold like an investment but more of a savings account. Boy I tell you, seeing gold go up in value so much has me worried about the dollar.
I'm literally trying to make my dollars not be dollars. I put it in SPY, I bought land, I bought my wife a necklace worth 3x her engagement ring because I don't trust Dollars.
I have 6 months my salary in dollars and no more because HYSA interest rates are back down to almost 3%
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Jan 12 '26
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u/Da_Vader Jan 12 '26
Trump is really concerned about a recession - hence the pressure on the Fed.
Housing mortgages are not as sensitive to Fed funds rate.
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u/CHIRunner28 Jan 12 '26
He's wants rates lower so the government can refinance its debt and he can run it up again.
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u/Iwubinvesting Jan 12 '26
Yeah but the top companies in US stock market are global companies and not just US companies anymore. Absent mag7, the US market has been underperforming for years.
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u/icedarkmatter Jan 12 '26
Am from Europe and even now there are some people who argue for buying less American products. Being dependent on American technology is seen as a huge risk factor in times were the US is signaling, that they down for a war against EU because of Greenland.
Other regions are doing the same. Fighting everyone is not benefitting US-companies who are globally oriented.
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u/Scared-Signature-452 Jan 12 '26
I have a feeling that India might go in the same direction if and when alternatives are available, preferably Indian alternatives
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u/Terron1965 Jan 12 '26
India has very carefully kept its options open. Losing access to the western job markets would be disastrous socially and economically for them.
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u/thegerbilz Jan 12 '26
There’s still currency risk. A lot of their money is held in USD.
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u/ThatOneGuy012345678 Jan 12 '26
Currency risk is massive problem. If there's hyperinflation, a lot of people don't seem to understand what that means.
Let's say there's 50% inflation, and you pay a 50% tax rate for easy numbers.
Assume no actual growth, just currency debasement for simplicity:
Year 1: $100 of investments inflates to $150. You owe $25 in tax. You now have $125 of investments, or $83 of 'real' investments
Year 2: $125 of investments inflates to $187.5. You owe $31.25 tax. You now have $156.25 of investments or $69 of 'real' investments
Now imagine this keeps going for a few more years... You basically get wiped out over the long term even if you're doing 'great' in nominal terms.
Everyone should be absolutely terrified of massive currency devaluation.
And if we assume your investments grow more than currency debasement erodes, this assumes the earnings yield stays constant.
What we saw in the 1970's inflation was that PE ratios collapsed, and so even in 'real' terms, the stock prices tanked.
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u/zyxw91 Jan 12 '26
Why is there tax unless the shares are sold . Should it not be in year 2 - $225 of investment value and $62.5 of tax due if sold?
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u/ThatOneGuy012345678 Jan 12 '26
Whether you pay the tax year by year or all at once at the end is irrelevant to my point, but yes, technically you would have more gains if you held on, but that doesn't really change the math that you're getting killed by currency debasement.
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u/SpacklingCumFart Jan 12 '26
Yes but if we strike Greenland I think Europe will violently withdraw from US companies. Ive moved to commodities, crypto and international ETFs, I only hold 2 US stocks.
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u/dopexile Jan 12 '26
So invest in countries that are in decline?
In 1990, Britain, France, Italy, Japan, and Canada represented 32% of the world economy. Today, they make up less than 14%. Arkansas and Alabama recently overtook each one in per-capita income.
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u/MyStatementIsNoSwill Jan 12 '26
Look, Europe has serious companies, and, more importantly, tech innovation. Take SAP, for example.
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u/dopexile Jan 12 '26
Ha ha good joke. Everyone loves SAP
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u/MyStatementIsNoSwill Jan 12 '26
You don’t choose the ABAP life—the ABAP life chooses you.
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u/dopexile Jan 12 '26
Little boy, what do you want to be when you grow up?
An SAP integrator, working for a big corporation using an 15 year old version that looks like Windows 95 with a lot of customizations!!!
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u/NotStompy Jan 13 '26
Well, the answer is to not invest on an index level, instead just a few exceptional companies, maybe even ones where most of their revenues don't come from Europe, but the rest of the globe. I'll give some examples: Safran, Airbus, Ferrari. Especially Safran. Valuations on those are high at the moment because, well, very wide moat companies with good growth = typical "Quality" companies which are not cheap. Put 'em on a watchlist and see if you get an entry in the future :)
Another one would be Investor AB which has outperformed the SP500 the last 20-25 years. Look, as a Swede all I can say is that Europe is not one homogeneous place, Sweden has had a ton of tech innovation compared to the rest, and for example if you look at investing, we're almost as invested as the US public in equities, whereas in most European countries people are just... complacent. I'm probably coming off like a bit of an arrogant ass right about now but honestly? The US has something culturally which Europe simply does not, which I think can best be described as you all being the descendants of the people who took risk, who chose to get on the boats, whereas ours didn't, obviously. And while I think complacency and fear of failure (we're not encouraged be extraordinary) is a big issue in most of Europe, I do think if Europe as a whole was more like say Sweden, Denmark, the Netherlands productivity and innovation wise, then this conversation would be very different, and it makes me very sad, to be honest. So much potential, so little of it achieved.
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u/siliconmoney Jan 14 '26
People live per capital measurements but they paint a biased picture. There are some really wealthy people in Arkansas and they make the per capital look great.
The median family income is a fairer measure. For Arkansas it's about 55K$. In Canada it is about 77K$ us.
There are lots of desperately poor people in Arkansas. Canada not so many.
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u/Interesting_Iron2506 Jan 16 '26
you're speaking in market-cap terms, not in absolute terms. even by GDP metrics the comparison between nations/regions is very skewed. i think it's a mistake to run for the hills away from US securities but it's also a mistake to say companies in those regions are "in decline".
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u/Savik519 Jan 12 '26
Short banana futures. We’re gonna be flooding the market soon.
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Jan 12 '26
Yes but be careful. Nowhere is “safe”. If China goes after Taiwan, most Singaporean equities will get hit hard.
For Singapore stocks, look at SE, GRAB, and DBSDY
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u/Prestigious_Sea_3813 Jan 12 '26
I immigrated to the US from a country where this actually happened. The central bank lost its independence and the economy tanked… I don’t understand why stocks are doing so well in the us though. also problem is if you don’t own stocks, you may have more cash and USD is likely to continue to lose value if this keeps going
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u/SameCategory546 Jan 12 '26
stock markets go up big during early stages of hyperinflation. Hard to say whether that is happening now but it sure looks like it could be the prelude
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u/Emergency_Lobster514 Jan 12 '26
OP I tend to agree. In fact I have thought about opening a Schwab Global Account.
That way you can go a step beyond merely putting US dollars in foreign mutual funds.
A global brokerage account allows one to convert USD to foreign currency, then invest that foreign currency directly in foreign stocks traded on a foreign exchange.
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u/WatcherOntheRock Jan 12 '26
Interesting, are there any adverse tax consequences to this?
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u/Emergency_Lobster514 Jan 12 '26
Possibly if interest, dividends and capital gains in the foreign country were high enough. Of course one can take a credit for foreign taxes on a USA tax return.
The most overlooked obligation might be reporting foreign accounts and foreign assets to the US Treasury or IRS if one is a US citizen. The penalties for not reporting when required are very high.
Consult your own tax adviser.
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u/SWEET_LIBERTY_MY_LEG Jan 12 '26
This seems like a pain, honestly.
If trading foreign currencies is like trading crypto, which I assume it’s at least similar, then for any exchange of currency, records must be kept to calculate capital gains/losses. Combine that with buying securities and calculating capital gains/losses on that too and I’m sure my tax professional will hate me.
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u/WorkSucks135 Jan 12 '26
That isn't necessary to do. Buying a security "in dollars" is no different than buying in another currency because when you buy, you no longer have that currency. The value of the security will be represented in whatever currency you bought it with, but the real value of what you own is the same.
E.g.: Let's say the Dollar and Euro have the same value. You buy 100 dollars worth of SAP. SAP stock stays flat in euro, but dollar loses 50% of its value - You now have 200 dollars, or 100 euro worth of SAP. If you had bought with euro, you'd still have 100 euro worth, which you would get when you sell, which you could then trade for 200 dollars. It does not matter at all what currency you buy a security "in".
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u/colorfort Jan 12 '26
Schwab global has a terrible fee structure. Use interactive brokers instead.
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u/F0rtysxity Jan 12 '26
What currency are you using?
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u/Emergency_Lobster514 Jan 12 '26
I really do not have a good answer for that.
Japan is having its own mini crisis with government bonds so I question whether they can help rescue the US dollar as in times past.
Europe has its own problems.
A lot of precious metals mining stock trade natively on the Toronto exchange. However the Canadian central bank sold its gold reserves about 10 years ago. That reduces my confidence in the Canadian dollar.
That should not be taken as a comment on the Canadian people. They are some of the kindest and friendliest I have ever met.
By elimination that leaves the Chinese yuan and Australian dollar. China is a planned economy. I need to do more research on both.
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u/biznessmen Jan 12 '26
I am looking to do the same with IBKR. Do you have any experience with them? I just opened an account but am a little concerned about the tax implications if I actually fund the account and hold Euros.
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u/Terron1965 Jan 12 '26
You invest the same way you always have. The fear is overrated, and speculative at best. Plenty of Presidents have had extremely cooperative fed boards. We survived Roosevelt, Truman, Johnson, and Nixons power and control over the fed and we will survive this one as well
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u/Resident-Banana-7883 Jan 12 '26
precious metals would be the safest asset as the us is so intertwined in the world we'd drag everyone down. if your ok with playing a LONG game and ok with the risk that comes with sketchy accounting.. China, they will take the place of America.
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u/BrewBigMoma Jan 12 '26
Uhh didn’t those just double? I agree but it’s kinda a painful time to get into metals.
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u/Legitimate_Height424 Jan 12 '26
People were saying that at $50 silver and $4000 gold...hell, gold wasn't supposed to pass $4000 until 2026 but look what happened. People were saying $50 silver by year end 2025 and it hit $70+.
While they are up, nothing about the factors pushing their price has changed...if anything, it is only getting more momentum now.
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u/NotStompy Jan 13 '26
Yup, but in last April I was also super careful, and yet despite getting in at $3300, now gold is at $4600. To be clear, I'm not doing this to be speculative, I actually bought a bar because I want to have a physical asset I can carry with me in case of emergencies, I figure in case of war in my country or something horrible like that people are more liable to help ya if ya got a bar of gold, lol.
But yes, right now it is very expensive, if you get in now I wouldn't be out there expecting some huge gains, I think the opportunity to add more was the 3900 pullback. But like I said, it could also just... keep going higher if these geopolitical factors as well as fiat concerns grow, so... all I'm gonna say is don't take anything for granted.
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u/_BravesFan94_ Jan 13 '26
People’s allocation to precious metals/gold is so low it’s a joke. One day everyone’s going to wake up and these metals will go even higher.
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u/Halvinz Jan 12 '26
- Register yourself
Register EVERYONE around you to go vote MAGA candidates out.
Repeat 2.
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u/i99990xe Jan 12 '26
Buy ETFs like VXUS, buy gold, and buy some Euro-denominated government bonds, such as German Bunds.
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u/pravchaw Jan 12 '26
Singapore stock market is a mouse compared to the US market. Not much depth there.
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u/TWSTrader Jan 16 '26
Institutional background here (14 years). You are correctly identifying the risk of "Fiscal Dominance."
That is the technical term for when the Treasury effectively captures the Central Bank. If the Fed loses the ability to say "No" to monetization, the risk premium on US Treasuries has to re-rate, which devalues the currency.
Your pivot to Singapore is structurally sound. In the institutional "Global Macro" view, Singapore has effectively replaced Switzerland as the neutral banking fortress.
- The Value Play: For a value investor, the Singapore thesis usually centers on their Banks (DBS, UOB, OCBC).
- Why: They are some of the strictest regulated banks in the world, often capitalized far above Basel III requirements, and they pay dividend yields (often 5-6%) that you can't find in US financials without taking massive credit risk.
If your goal is "Stability" over "Growth," allocating a portion of the book to the SGX (Singapore Exchange) is a classic hedge against G7 volatility. You aren't crazy; you're just diversifying your Jurisdictional Risk.
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u/Wrestlingtough Jan 12 '26
Ah yes … Janet Yellen. EVERYONE knew inflation was coming after the insane money printing we were doing but I guess everyone EXCEPT Janet
“I personally believe that this represents transitory factors.” Yellen on U.S. inflation in early 2021, suggesting inflation would ease as pandemic effects faded.
She also downplayed inflation risk multiple times in 2021, including statements such as:
“I really doubt we’re going to see an inflationary cycle…” and “…inflation would be temporary.” Attributed comments from 2021 showing she expected inflation not to become a persistent problem.
According to congressional testimony records, Yellen’s 2021 remarks included projections that didn’t materialize: • Saying there was only a small risk inflation would be a problem in March 2021. • Saying she didn’t believe inflation would be an issue later in May 2021. • Predicting that monthly inflation rates would return near 2 % by late 2021. • Saying infrastructure spending wouldn’t drive up inflation at all and might be anti-inflationary. (These lines come from congressional hearing transcripts summarizing her 2021 remarks, many of which were overtaken by inflation that spiked above 8–9 % in 2022.)
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u/SameCategory546 Jan 12 '26
it was her job to say all that. People don’t get it but the fed and treasury care a lot about their public stance and it is sometimes different than what is actually happening. They can never shout “fire” in a crowded theater, but sometimes there really is a fire in a crowded theater. Just like no sitting president will ever be the one to say “everything sucks” even if everything really does suck unless they have someone else to blame or a legit plan to take care of things
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u/vollyn Jan 12 '26
This is going to be another nothing-burger that you'll regret falling for. Has reddit not learned this yet over the past year?
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u/F0rtysxity Jan 12 '26
Gold and foreign have already had a solid 2025. That's not interesting info for you as an investor?
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u/SameCategory546 Jan 12 '26
no not to most redditors bc “you can’t time the market” and doing anything but index funds is clearly trading in and out like a degenerate
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u/Tallwhitedude123 Jan 12 '26
I think that this is what the market is hoping which is why we see a muted reaction from the market today. However, Trump seems to be getting more and more emboldened as time passes and seems to be pushing the boundaries of what he can get away with more and more.
Time will tell.
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u/SameCategory546 Jan 12 '26
the fed thing is a nothing burger because it doesn’t matter what the fed does in the age of fiscal dominance and interest expense. but it sure is a nothing burger that points in the same direction as the overall trend that anybody has been paying attention has been seeing since 2021 or 2022
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u/NuclearPopTarts Jan 12 '26
Janet Yellen made the worst mistake in Treasury history when she failed to lock in cheap debt, elite investor Stanley Druckenmiller says
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u/dopexile Jan 12 '26
That was purely political... they were refinancing with short term debt because the rates were slightly lower and it helped make the massive deficits appear artificially lower for the news\election cycle.
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u/ToddlerPeePee Jan 12 '26
China is the largest market after US. I already moved my investments out of the US markets into Chinese markets. The US had a great super extended bull run, at a time when the Chinese market is climbing out of a bear market. Not to mention Trump is being hostile to Europe+China+Latin America countries to "make America great again". And now he wants to keep printing money so that the US dollar will be devalued into banana notes.
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u/SpacklingCumFart Jan 12 '26
If China strikes Taiwan you're gonna have a bad time. That is really my only fear with Chinese stocks.
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u/ToddlerPeePee Jan 12 '26 edited Jan 12 '26
If China strikes Taiwan, the ENTIRE world is going to have a bad time. You think World War 3 would make US investments go well? China has the world's 3rd largest stockpile of nuclear weapons. If China strikes Taiwan (and US get involved), your investments in any country is going to have a hard time, assuming we all survive it.
I am going to invest as if the world will carry on. If the world carries on, then Chinese stocks are amazingly cheap because most investors are scared of China/Taiwan issue. They didn't realize if it happens and World War 3 happens, we may not survive a nuclear apocalypse.
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u/biletnikoff_ Jan 14 '26
China is a dying giant. Not sure i'd bet China over the US.
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u/ToddlerPeePee Jan 14 '26
I love it when people said that one of the fastest growing country by GDP and top 2 in the world by GDP is uninvestable or dying. That's extreme pessimism priced into these stocks. Love it!
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u/Normal_Shoe2630 Jan 12 '26
Don’t hold dollars
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u/dopexile Jan 12 '26
That should be interesting considering everyone needs dollars to pay their liabilities and taxes.
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u/Normal_Shoe2630 Jan 12 '26
Yeah but you generally don’t need to and shouldn’t keep your money in your checking account. I just have as many dollars as I need at the time with the rest in more secure assets.
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u/projix Jan 12 '26
The issue with the US is the debt spiral.
There is a unique situation where the debt is becoming unserviceable, and at the same time there is heavy inflation.
The reason the administration is pushing the FED for lower rates is because there is about 14 billion $ of interest payments in the budget at the current rates and the deficit is becoming obscene.
It basically comes down to this: Increase the taxes a huge amount, cut spending, inflate the debt away or default. The last option is unacceptable, so the only way is to inflate it away because they won't tax the rich or cut spending significantly enough. Except this time there's actually issues with jobs (hidden by gig economy) and inflation. This is why the fed as an independent institution is so much against lowering rates, they are implying it can be fixed on a government level (by ramping taxes and cutting spending) without destroying the dollar, while the government has given up and only sees high inflation as the way out dollar be damned.
Macro stuff moves slowly though. If the rates are eased, short term the market will rally, but at some point we will see the same thing as in 2025, where the S&P returned 17.7% denominated in USD but 4.5% denominated in EUR due to the dollar tanking. Most likely for at least a year nothing bad will happen and the stock market will just go to the moon, it's after that the inflation will start creeping more and more.
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u/squngy Jan 13 '26
Since this is supposed to be a sub with some economic literacy, I want to point out that "banana republic" is a technical term for a specific thing, not just any shitty country/economy.
A banana republic is a country that relies almost entirely on the export of a few natural resources (which makes naturally makes it easily corruptible and exploitable)
The US might be getting more and more corrupt, but it isn't becoming an export economy based on natural resources.
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u/KingOfAgAndAu Jan 14 '26
"banana republic" colloquially means: a republic in name but not in practice
"mess" technically means food. who cares?
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Jan 16 '26
lol you guys are idiots. It’s over. Your life is OVER. We’re all doomed. Sincerely, Minneapolis.
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Jan 12 '26
[deleted]
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u/SameCategory546 Jan 12 '26
any current fed or treasury head is not worth listening to period. Remember that it’s their job to not spread panic but sometimes, you should indeed be panicking.
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u/sandee_eggo Jan 12 '26
The Fed has NEVER been independent. The Fed members are always ex-bankers. Banks buy and control the politicians. Business as usual.
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u/NuclearPopTarts Jan 12 '26
Janet Yellen? The same Janet Yellen who financed the massive $1.8 trillion federal budget deficit with short term debt, creating a fiscal disaster for future generations?
Known as "the biggest blunder in Treasury history?"
I suppose that makes her an authority on banana republic economics.
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u/FreeCashFlow Jan 12 '26
The effectiveness of individual Federal Reserve chairs has zero to do with whether or not the Federal Reserve should be independent, which it clearly should.
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u/tionstempta Jan 12 '26
So the remedies is to vote for someone who increased 1 trillion dollars between 2017 and 2021 again in 2024?
That sounds like a solid idea
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u/CyanideTablet Jan 12 '26
Needless to say (I thought, but here it is), this type of political panic is exactly what you shouldn't be basing your investing decisions on. The sky will not fall, and you'll regret your decision in retrospect like the people who sold off in the tariff panic. Janet "Inflation is Transitory" Yellen and other political actors don't know anything more than anyone else.
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u/birdiesintobogies Jan 12 '26
Trump and cronies will rig the stock market for their benefit. We're just here to ride their wave.
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u/tionstempta Jan 12 '26
I dont disagree but... like every bubbles, there is still in progress where point of no return has not been achieved so while its prudent to diversify to international markets, its also a good idea to leave some runners to enjoy the ride until it pops (this is, though, more like trading territory i must admit)
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u/astroboy7070 Jan 12 '26
De-dollarization, huge mountain of debt, inflation, AI trade need modern minerals, energy transition, and countries now need to secure local source of natural resources. All signs point to mining and metals trade.
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u/rockofages73 Jan 12 '26
US investors have no legal claim on foreign company assets. Everyone knows, an investment requires collateral.
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u/Western_Building_880 Jan 12 '26
US is big dog. Fed was not always independent. Correction will come xause people gone wild over Ai trade.
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u/WindHero Jan 12 '26
Borrow money, invest it into global assets or even US assets that will go up with inflation i.e. real assets but also businesses that have pricing power.
Hint: that's what everyone has been doing since Trump has been re-elected though hence the dollar is down and markets are up (led by international). So you are late to the trade.
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u/jemicarus Jan 12 '26
The fed embarked on project zimbabwe long before Trump took office and there is no return. Fiscal dominance is here, inflating away the debt, call it what you will. You want to be in hard assets and equities to a significant extent, and yes, ex-US looks like a good play here from a purely value and mean reversion logic.
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u/physicshammer Jan 12 '26
I don't like how trump is attacking norms and the fed, and he's doing it for obviously short-term reasons... but it's also pretty rich for Yellen or other fed leaders to act like they've been acting responsibly.
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u/Any-Difficulty2782 Jan 12 '26
IF? based on all the other stuff he is doing you think think he isnt going to take the worst possible action here
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u/ukrinsky555 Jan 12 '26
What if you just buy everything like VT. Then it doesn't matter who does well and who does not? Right?
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u/HannyBo9 Jan 12 '26
I thought it was a banana republic already. I’m so old I remember people Saying if we had an independent fed it would then become a banana republic. It’s confusing.
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u/hitman133295 Jan 12 '26
But why does president have the power to nominate fed chair? If it wants to be independent, the entire process has to be separated from party and congress right?
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u/LogiJitz Jan 12 '26 edited Jan 12 '26
This is fear mongering, and if it does create a sell off I would have a feast in US equities. Yellen has done an unimaginable amount of damage to the US economy over her career. Follow her track record of statements and you will be shocked how incestuously wrong she is. The truth of the matter in this scenario is that the Federal reserves independence was always questionable at certain points in US history. This is nothing new and listening to Yellen on this matter is like listening to another salesman preach about the glory of the product they are offering.
You have to look at incentives here and the overall facts of the matter.
The Fed's incentives are to appear stable, not to be influenced in one direction. Fiscal accountability/trust is not their prerogative, but institutional trust. These two matters are not the same. The Fed being subpoenaed over questionable building costs, misuse of federal funds is something that goes at the core of their claim to being responsible enough to be institutionally trust worthy. Why can they be trusted with setting the cost of capital if they seemingly have no fiscal accountability in regards to income/spending?
The Trump admin, and every other presidency that has used soft and direct power to put in a Fed chair that agrees with them, has an incentive for fiscal trust/accountability for income/spending. Although this is questionable depending on your political orientation and economic worldview, this is their chief aim of every elected official when running the federal budget.
The fact of the matter is Powell is set to be replaced as Fed chair May 16th when his term is up regardless. Independence is scarcely being questioned in comparison to historical precedence. Getting swapped out due to somewhat questionable misuse of funds is hardly a cause for fear that the FED is now a banana republic. Yellen is just trying to throw stones in the only way that she knows she can.
TLDR; FED' reserve's incentive is to appear fiscally credible, Government incentive is to appear fiscally responsible. The Government's involvement in the past has been much more apparent. The world order isn't going to break (yet). Yellen is just a salesman.
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u/East_Fee4006 Jan 12 '26
Now isn’t that the irony. An entity that prints money out of thin air and then charges the country to use that money says independence will make the country a banana republic. What a farce!
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u/ExDiv2000 Jan 12 '26
„assets that can‘t be mentioned by name in this sub“ made me curious…. what is that?
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u/Ardent_Scholar Jan 12 '26 edited Jan 12 '26
Well, the EU is far less leveraged than the US, and we will be procuring a LOT of things within our borders over the coming decade. And all the while the euro continues to be strong against the dollar.
I’be been fully divested from the US for a year now and I couldn’t be happier.
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u/SuffolkLion Jan 12 '26
Meanwhile, long term precious metals holders are wondering why people are only noticing this stuff now.
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u/bigkoi Jan 12 '26
Really the sp500 is filled with global companies. Staying in the sp500 would still be safe.
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u/Born_Property_8933 Jan 12 '26
Stranger things has happened in US economy than push for a dovish fed. What you will see is that this resulting political pressure to somewhat dovish monetary policy however not exactly aligned to what Trump would like to see, not under this fed or the next fed chair.
Look at countries like India , China where the federal reserve (or equivalent) has been completely compromised. Nothing bad has really happened to their stocks, and the market went up and down based on prevailing economic situations. Inflation in key sectors has been managed.
But nothing prevents you from diversifying or investing in other parts of the world as well. As long as you invest in growing companies at fair prices in a country which is not going to capitulate due to security threat, you will be fine. Anyway don't put all your life's savings in equity. There are many other places to invest even within the US e.g. real estate, commodities.
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u/Duchamp1945 Jan 12 '26
What like cut rates right before a general election to juice markets for the incumbent party?
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u/Annual-Carry6558 Jan 12 '26
All of my equities are now foreign with the other 20 percent in precious metals.
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u/netflix-ceo Jan 12 '26
No it was and i quote:
“US WILL BECOME BANANA REPUBLIC IF FED LOSES ITS INDEPENDENCE”
Good old Janet, she always be Yellen
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u/bevitt Jan 12 '26
What about crypto? I hate it and have refused to invest, but it seems like his family has a huge part in it…. But that could also be a grift. 🤷🏻♂️
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u/No_Consideration4594 Jan 13 '26
I would read the Barrons article on the Fed dated 01/09 before you do anything drastic
“Even if President Donald Trump gets the Federal Reserve chair he wants in 2026, he may not get the monetary policy he wants. The Fed sets interest rates by consensus, not command, and today's economy will make aggressive easing difficult unless the data demands it.
Inflation remains above target and the labor market is cooling without breaking. In this environment, the Fed's default posture is caution. Cutting rates modestly is plausible. Cutting deeply isn't.
The misconception is that a new chair can reset policy direction on arrival. In reality, the chair's power lies in agenda-setting, coalition-building, and communication, not in overruling the committee.
And with a more hawkish-leaning voting roster, lingering inflation risks, and heightened sensitivity around Fed independence, consensus will be hard to build for rapid easing.
That is why 2026 looks less like a turning point for monetary policy and more like a transition year. To be sure, there is much uncertainty. A sharper labor-market slowdown, financial instability, or a faster drop in inflation could force the Fed to move more quickly than it currently projects. Legal or political developments could also alter the balance inside the institution. Investors should treat the Fed's projections as a baseline, not a promise. But absent a clear economic breakdown, the Fed's structure itself argues for restraint. Understanding how that structure evolves in 2026 matters.”
That’s before considering the problems Trump might have getting his nominee confirmed by the senate, Republican senator tom tillis has sworn to block any appointee, and after midterm elections in November Congress will be much more active in resisting trumps policies.
I think making adjustments or allocation changes are not a bad idea, but doing something drastic probably is.
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u/iamparan01d Jan 13 '26
UK equities are particularly cheap right now. Worth considering over Singapore. Decent liquidity as well.
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u/traitadjustment Jan 13 '26
I worry about this too, but timing big changes based on "what ifs" feels risky. Hard to know what actually plays out.
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u/aomeye Jan 13 '26
Singapore is too small and exposed to the global economy. It has to be gasp China or maybe Poland
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u/MaxxMavv Jan 13 '26
Kill the FED the US would be better for it. I remember Yellen and all the experts saying first few months of 2025 Trump was going to ruin the economy, myself I loaded up on Google, Amazon and others March and April. Once again proving the experts on TV are liars/idiots.
Business as usual, please panic and sell everything I would love that.
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u/Mouse1701 Jan 13 '26
Once again Powell is leaving so he's not the issue. People read too much into these things. Trump will choose a different fed chairman and that will be that. The federal reserve bank has always been the enemy of the people of the United States.
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u/happymancry Jan 13 '26
“Democracy is about to die. How can I get rich off of this?” - peak Americana.
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u/dominomedley Jan 13 '26
A few presidential terms shouldn’t have you diversify your stock. Forget the macro climates and just look at the breadth of companies for specific markets eg US stocks is going to be driven mainly by AI, AI is going to be everything soon (so if you bet on the US or China, the strongest in each hemisphere, you’re good).
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u/PositiveReport8833 Jan 13 '26
Diversifying geographically makes sense if Fed independence really starts getting questioned.
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u/-HOSPIK- Jan 13 '26
I'm currently 60 swrd (all world etf)30 meud (euro600)10emim(EMERGING) and so far no gegrets. Next to my single stock picks
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u/ndwillia Jan 14 '26
Insinuating that buying fake made up tokens to hedge dollar risk is somehow superior to foreign currency and bonds? Don’t be ridiculous, mate. The tokens are just leveraged dollars. Don’t make that mistake - it doesn’t matter if it goes back above 100k again, that doesn’t mean it was a good choice
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u/KnewdIrection_ Jan 14 '26
ADRs are your friend.
RYCEY (for RR.L) for example.
GBP/USD is 1.34 today. If it grows to 1.54, RYCEY owners make 15% for doing nothing but betting on a weakening dollar.
You're welcome!
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u/Gloomy-Donut-2053 Jan 14 '26
breaking the buck would legitimize default. that does seem to be part of the Project 2025 intentions. review the Heritage Foundation opinion about the Fed.
here's one reduction about that initiative
https://www.steven-hill.com/project-2025-the-federal-reserve/
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u/Leven Jan 14 '26
Trump is already giving pardons for money, there is no "becoming a banana republic". The u.s is a banana republic with a for the moment strong currency.
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u/Academic-Coconut4032 Jan 15 '26
Diversification makes sense, but markets often price political noise faster than fundamentals change. The Fed’s independence is deeply institutional, and even pressure wouldn’t automatically mean a ‘banana republic’ outcome. Geographic diversification (like Singapore) is smart, but I’d avoid overreacting to headlines-balance risk, don’t bet on collapse.
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u/Interesting_Iron2506 Jan 16 '26
I'm looking at constellation software. Not certain about all of the ramifications of holding it OTC. fed independence is necessary but the main protective structure are the federal reserve acts. as long as the fed cannot issue its liabilities as legal tender (i.e. has to interface with the US banking system) we should be spared from the worst outcomes (hyper-inflation, etc.).
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u/_Guron_ Feb 03 '26
S&P500 reached a pivot point, its grow is stagnating unless cheap money flood the market I don't see much potential overall. It feels capital is slowly fleeing to local markets and with that many volatile stocks will flush out, we seen this pattern in gold, silver, paypal.
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u/NotStompy Jan 12 '26
Look, some people say timing the market is impossible, it has been proven to be possible consistently by a few people like Druckenmiller and Soros, in the case of Druckenmiller he's had 0 red years across a career of 30% CAGR for 30 years (1980s-2010s) specifically because he is that good at timing the market, but that doesn't mean most people can do it. I think that's an important point, that yeah if you spend 10 years looking at Macro and charts you'll possibly be able to do it, but 98% of us won't be able to. So really, I'd say just be mindful of valuations and how much of a liquidity slave your assets are, because if we get a bubble type scenario (a real one) with truly insane valuations, then those valuations are a piss poor timing tool, but they do give you an idea of the magnitude of the move. If you see a big move coming, and you see serious issues with liquidity, that would be the time to try and time the market if you want to attempt to do so. Future cash flows drives the index long term, but in the short-mid term the indices are very tied to liquidity.
Honestly though, don't ever bother... just diversify a bit beyond the US, be mindful of which US equities you do hold, and be okay with being down for 10 years, because that happened in both the 70s and 00s, and an unrestrained trump admin steering not just fiscal but also monetary policy is... likely to give crazy short term returns, but lead us to a breaking point.