The United States and investors should be prepared for a future where the dollar is no longer the dominant reserve currency in the world. This shift will likely result in a notable but not overwhelming stream of dollars returning to U.S. shores from foreign reserve accounts. Meanwhile, nationalist policies and the slowing of global trade will further contribute to reducing the low costs of international integration.

Additionally, the aging of the Baby Boomer generation will result in a switch from savings to spending, leading to a reduction in the supply of capital and an increase in the cost of capital. These factors, along with fiscal deficits and the eroding of dollar hegemony, will put upward pressure on interest rates in the long term.

While inflation has cooled since its highs in 2022, the days of interest rates in the 3s and 4s are likely over. It is advisable to be cautious about refinancing old mortgages in the 3s and 4s, even if rates drop back into the 5s, unless one has a viable investment opportunity. Fixed rates are a safer option than adjustable rates, at least once rates come back down from their current high. While the short-term outlook may see a decrease in rates, the long-term trend is for persistently higher interest rates.

As a home buyer, it's important to consider the state of the economy and its potential impact on the housing market. However, it's important to keep in mind that fiscal crises don't always lead to the total collapse of a country. The United States has recovered from major economic downturns before, and while there may be some instability, it's unlikely to lead to the country's downfall.

While some people may worry about the rise of other currencies, such as the Chinese yuan, the US dollar still remains the dominant currency in the world. This is due in part to its strong backing by the US military and the fact that many other countries' currencies are tied to the dollar.

Overall, despite some concerns about fiscal recklessness in the US government, the country still has the largest economy in the world, and the housing market is likely to remain stable. So as a home buyer, there's no need to panic about the state of the economy.