"COLLAPSE Of The American Empire..." - Melody Wright

Added: 2026-05-05

[00:00:00]We kind of live in a globally synchronized economy and I think that as one suffers others suffer as well. And I think the current view right now is that the US is going to be fine because we have access to oil, but the problem is, you know, like jet fuel, that's comes from China for the most part. Also, I don't think people have a good understanding of how we refine things here, but we get things from other places. I mean, we've already seen several refineries in the United States get hit in small explosions or like so we're in the fog of war right now and I think that you know, people are holding on to these false hopes like and our administration is fueling that cuz they can't really afford anything else, but you know, we cannot put it past [music] a state actor to take out one of you know, a large part of our supply. So, the situation is crazy and I think it's going to impact the world. It's not about just opening the straight.

[00:00:58]And oil is in everything. Like people's face moisturizers like, you know, in making the contacts and I have on right now. And so I just think people don't even understand. I think Dow Chemical came out and said they were doubling the price of plastic. And that we use plastic to package everything. So, although my long-term thesis is deflation like short-term we are going to see some inflation or at least increased, you know, cost [music] of goods, which is not good for the economy. You know, the cure for high prices is high prices. You know, we can all talk crazy monetary theory and all this blah blah blah, but in reality that's just the truth. And so I think you're going to see kind of a deflationary bust and I think that, you know, it's just getting started. [music] It hasn't really started in earnest. You know, speaking of the housing market in particular, there were record cancellations. I mean, people are getting to the closing table and realizing they can't close. They can't either the property inspection came back with a problem they don't want to deal with or the insurance was too much or, you know, they just can't qualify because of what's going on. So, I think that we are just coming on to the top of the roller coaster and you know, rents had just started to come down, but that's just going to continue and continue cuz nobody can afford, you know, housing right now and especially with layoffs like this is just getting uglier and uglier fast. [music] Yes, so now we go to the top of the K like you and I were just primarily talking about the bottom of the K, but the top of the K there are the people that are invested in these things and when they're told they can't get their money out, that changes their math. You know, just like it changes uh someone's math when their house sits for sale for a year. Like, you know, things just you start and so then your spending starts to change. But breaking this down essentially, I mean, you know, I did some diving into Blue Owl and just the things that these people are invested in. I mean, they give loans out to everybody and I don't think they did any due diligence and we don't know how these companies are doing, but they're not doing very well and you can see the contagion spreading.

[00:02:59]You can see Apollo also gating. You know, Cliffwater, this one I think we're going to hear a lot about. This is the one that just got a rating agency downgrade. You know, and importantly is what Chase did when they wrote down some loans. That is a huge like megaphone to the market like this is a big deal. And it honestly, it's like step one of a credit crisis. You know, and immediately when it happened I said the rating agencies are about to start acting because they don't independently find this stuff. They wait till it it's too much trouble and so and sure enough they did. They started doing some downgrades.

[00:03:35]So, this could be massive contagion and become, you know, kind of a Lehman style event. The housing market has been frozen for the last 3 years. The only transactions have been those, you know, higher priced homes, which is what kept that median price up and so our top 20% has been carrying everything, but it gets to a point where it just doesn't make sense like they've got all the homes they need. Plus when you're staring down, let's say they do have like five homes, especially if they're investors, all of a sudden their rents prices are going down and property taxes going up, insurance is going up, electricity bills are going up, replacement costs are going up. You know, this just math doesn't make any sense anymore. And so the housing market sputtered along at lower than almost 2008 levels based on this top 20% transacting, but they're pulling back as well and these 20% can't sustain the whole housing market, but our previous conversation about the top of the K getting impacted, just think about that.

[00:04:34]If they own 57% of the assets, but a section of them are getting crushed, what happens? Those real estate assets come to market and that is going to happen. I think those cancellations are a big deal. If you want to know where sentiment is, just watch the mortgage rate and what has just happened with all of this war is we had gotten below 6% for like 30 seconds and then now we're to about 6.5.

[00:05:01]So, you know, watch that. That's going to tell you a lot about sentiment because the sellers also realize that rates aren't coming down and so that's why many of them pulled back last year.

[00:05:12]But honestly, at this juncture, it's really going to be about watching those home prices, believe it or not. And I track 85 markets. For the first time ever in my series, we have 45 of my cities are year-over-year negative compared to 17 last year. You are seeing it spread. So, you know, just pay attention to kind of what's going on in your local market and your home prices.

[00:05:36]That'll tell you where we are. This is why I've been talking to people for 3 years. Like get ready for this. You know, pay down your debt, save your money. And you know, I'm not an idiot and think that not buying Starbucks every day is going to get you a down payment in a year, but it's a mortgage payment almost, you know, so just save your money, earn what you can on it because you can still get interest on that money and just wait. But, you know, the people that are going to be crushed unfortunately are the people that got are over-leveraged and they got into debt and they, you know, believe the hype and spent on credit cards and buy now pay later to do vacations and experiences that they're probably going to wish they hadn't done because there is going to be, in my opinion, a real opportunity here in the future for people with steady work, steady income, low debt to be able to afford homes again. I think right now everybody's got whiplash because they actually believe these headlines. These headlines are ridiculous. This is a psyop. This is what happens in war. But when you watch us let infrastructure get hit, then it seems to me like we are taking a wrecking ball to our current world order and that includes fiat. And honestly, if I just look at the facts, we're on the road to actually defaulting on our debt and bring back gold as the world currency. Why would you invest in long-term US Treasuries when we're acting like this? And again, things are changing so quickly you can't even keep up that we're going to take some funds that other nations put together for Ukraine. We're going to take it and replenish, you know, our weaponry. It's like, who wants to play with that bully?

[00:07:16]And so I think they know it. And so it's not necessarily that oh, BRICS is going to take over or this or that, but I think we know we have come to some sort of conclusion that this debt is not sustainable because every action that's being taken right now makes no sense.

[00:07:32]Not if you care about international law, not if you care about order. So, I do think that perhaps, you know, they might have wanted to get there a different way, but this is how we may get there. I think we're being fed about 15 layers right now and I think that one of the topper layers is this China narrative.

[00:07:51]If Iran saying you can have some oil like, you know, they can also partner with Russia although Ukraine has [music] hit some oil infrastructure in Russia, but I mean, honestly, I think it's going to happen to us as well. I just don't believe that. This isn't how you do it.

[00:08:05]I think though that blaming them as the bad guy, I mean, they are collapsing demographically. And anybody who's spent time over there, I don't think that you walk away saying they're going to take over the world. And I don't want to get into all that, but you know, I've been there. I lived in Taiwan. Like we have a very big misunderstanding of Asia and I think that's on purpose. I think the timeline would be different. I think we would have waited a little bit longer.

[00:08:31]This feels very different. Yeah, it's a sell everything. And plus we know there was a ton of speculation in gold. Like when it just started rising, you got to know everybody went in there and did some sort of speculation. So, I think everybody that's really in gold knew to be cautious because it had gotten a little crazy and all the wrong people were getting involved. And so I think that's what this is. It's a sell everything. I mean, that's it in my opinion. And you know, I got to be honest, in all my years thinking about macro, like I never even thought this was a possibility. It has taken this to really change my mind because it's like you just sit and you think and you think and nothing else makes sense why we would do this. And I feel like we're changing world order and you know, maybe we want to go to this multipolar world where our interests do come first, but I think that there's always going to be a part of in its current form our administration that's going to be interested in what's going on around the world and will probably participate in other ways, but I do think this is we're breaking the system is what it feels like to me. I think that there has been a pinprick in the bubble since Deep Seek, right? And I think that you've had a lot of people that know better getting out and all these data centers are coming to a halt. And I think that's a part of the narrative that kept everything going was when Trump came in on a cloud after winning and getting all this investment from the Middle East.

[00:10:01]Well, that's [music] gone. So, everybody's going to be having to take care of their own for, you know, the foreseeable future. And I think, you know, with Sam Altman coming out and saying no porn, thank God. I mean, and I haven't had time to think about this cuz it just happened, you know, they just announced that Sora was closing, like which is really one of the first products that got people interested in so the metaverse, you know, they're hanging up. So, I think that yeah, we're watching the transformation of the AI bubble starting to collapse. And I think, you know, people are going to cycle into energy and military and defense. I just saw somebody tell me that and this is an anecdote is that they're seeing people like paying penalties and cashing out of their 401ks early. Like it's so the AI bubble has been held up by narrative for almost really 3 years and it's slowly leaking and I do think we'll probably get some violent movement. And, you know, this war with Iran is perfect cover to let that happen, right? Take out a few people, take them off the stage, put them in jail like Sam Bankman-Fried, and let it collapse and then let it be what it's going to be. Because my biggest thing with AI is not that I don't think that there's potential in the technology, it's that we lack a will to actually implement it. That's what I saw when I was in fintech. Companies no longer had that kind of perseverance.

[00:11:22]Cuz it takes a lot of work to implement.

[00:11:24]And the ones that don't do it right, you end up now calling and you're in, you know, chatbot hell, people are going to walk away from that. And so, I think we're in the correction period and we probably will get a more violent drawdown, but the bubble, I think, leaking is continuing and then we'll finally burst.