Reminder - We are still in a Vibecession. Net worth is at an ATH, unemployment is near its lowest, Stock market is at a new ATH, crypto is near an ATH, median net worth is at an ATH, USD inflation is back down to 3-5% annual. But people still feel that th

Note: This is mainly a US-specific post

I was listening to "How much do presidents ACTUALLY influence the economy?", which said that presidents have little influence on the economy compared to other factors such as companies, private citizens, Congress, and the Fed. How people feel about the economy is almost entirely based on whether or not their own party is controlling the government, regardless of how their government is actually doing. (This seems to affect Trump supporters and Republicans much, much more than Democrats.) In other words, most people are delusional. No surprise there.

The economy is actually doing really well

• Household net worth (nominal) is at an ATH and nearly 50% higher than what it was before COVID-19
• The S&P 500 is near an ATH and almost DOUBLE what it was at the start of 2020
• Unemployment is near an all-time-low around 3-4%
• Even parts of the world that have historically had high unemployment are now experiencing extremely low unemployment. Even Greece is allowing a 6-day work week because they can't find enough workers
• Inflation is back down to 3-5% annually. Gas prices in my area are almost back down to prices from 10 years ago. Milk, eggs, cereal, meat, and other groceries have only risen 50% over 10 years, which is about 4% inflation, and nearly all of that happened due to COVID-19.
• Bitcoin and Ethereum are still near their ATHs. (Unfortunately, most other older altcoins ... not so much)

But we're still in a Vibecession

Despite all this, consumer confidence is very bad, nearly as low as it was during the Great Recession of 2007-2009. This is known as Vibecession, where people feel the economy is much worse than it actually is. They tend to focus on the things that are bad or have high inflation while ignoring the parts that aren't.

What's bad?

• Housing prices are high. This happens in every bull market. They can be steadily climbing as people have more disposable income to spend on housing. And builders are not keeping up with demand.
• Healthcare costs are high. We don't have enough doctors, and we have an aging population. Nothing we can do except either encourage more healthcare workers or subsidize costs.
• Restaurant prices are high. Well, their wages have increased 100-200% in many parts of the country over the past decade. For what it's worth, many restaurants have reduced their prices in the past 2 months.
• The poor are more vocal, and generally vote for politicians who introduce policies that hurt them.

However, these are not signs of a recession. In contrast, this happens more during bull markets.

Crypto market future

This crypto cycle has been a bit weird. It seems to have started earlier than normal (is "normal" even possible with crypto cycles?). We don't really know whether it'll start pumping during the typical 6-12 months after a Bitcoin halving.

But with interest rates expected to decline later this year and next year, there is a good chance that markets will continue to rise. The SEC is losing lawsuits left and right, and Congress generally seems much more willing to allow crypto to operate than ever before. It's a good time to be bullish.

Of course, there are still many external factors that could tank crypto prices. While the US government is far from the biggest influence on the economy, there are 3 main things that the President and Congress can do to screw up the economy over the next 4 years and increase inflation:

• Increase tariffs, increasing prices for all tariffed goods
• Decrease low-wage immigration, increasing prices of goods and services offered by low-age earns, especially farm produce and construction
• Lowering taxes could go either way. It increases inflation because it increases disposable income, but it also increases retail investments in crypto. Hard to tell how this will turn out

Just some things to keep in mind.