Are We Headed for a Depression? Why the “Hard Landing” Warnings Matter & every American should be aware
By Michael “Mick” Webster — September 2025
I truly thought President trump’s actions were going to slow down the economy until his changes took affect sometime next year. But now I’m not so sure . A growing chorus of economists and market-watchers is warning of more than a garden-variety slowdown: they say the global economy faces a serious risk of a hard landing — and in the most pessimistic scenarios, something that could resemble a depression. At the same time, geopolitical moves by large non-G7 economies, large central-bank gold purchases, and shifts in reserve holdings are changing the financial landscape that underpins retirement plans, the dollar’s role, and the security of defined-benefit programs.
This article pulls together the most credible, up-to-date evidence, explains what it means for retirees and policy makers offers practical guardrails for households facing near future uncertainty.
By Michael Mick Webster
Syndicated investigative reporter
1) The warning signals: why economists talk about a “hard landing”
- Market and economic indicators have tipped toward rising recession risk in 2025 and beyond. Surveys of economists and market moves (weakening hiring, falling business confidence, volatile treasury yields) show elevated odds of a recession and the possibility of a sharper, disorderly slowdown — what many call a “hard landing.” Reuters+1
- High and sticky policy uncertainty is amplifying risk: tariff shocks, abrupt changes in trade policy, and sudden swings in fiscal stances can choke trade and investment quickly, turning an otherwise manageable slowdown into something deeper. The IMF and other multilateral institutions now describe the global outlook as “tenuous” and tilted to the downside because of such policy-induced shocks. IMF+1
- A hard landing is not the same as a depression. Most mainstream forecasting agencies (IMF, World Bank) still see global growth as positive for 2025–2026, not a collapse; but they explicitly warn the balance of risks is negative and that policy shocks or financial stress could push the world into a much worse outcome. IMFThe World Bank
Bottom line: credible, high-profile warnings exist — some commentators and strategists speak of depression risk in worst-case scenarios — but official multilateral forecasts still show modest positive growth absent large shocks.
2) Why retirees, 401(k) holders and beneficiaries are uniquely vulnerable
- Market exposure. Many retirement vehicles (401(k)s, IRAs) are heavily weighted to equities and fixed-income markets. A sharp market drawdown — especially near retirement — can permanently impair what should have been decades of retirement income. (Standard financial planning research shows sequence-of-returns risk is the single greatest threat to retirement nest eggs.) Investopedia
- Entitlement pressure. The Social Security Trustees project the combined trust-fund pressures and long-term financing shortfalls that could lead to benefit cuts or tax increases if Congress does not act; the OASI trust fund projection and related analyses put depletion risk squarely within the coming decade unless reforms or new revenues are enacted. That raises the specter that some expected government income streams may be reduced or reshaped for future cohorts. Social SecurityCenter on Budget and Policy Priorities
- Record household leverage and concentrated exposures. Many baby boomers still rely on the stock market and rising home values for retirement liquidity; simultaneous weakness in both markets would disproportionately strain older households with limited time to rebuild. (See recent reports on rising numbers of 401(k) millionaires even as volatility grows — the gains are real, but concentration and timing risks remain.) MarketWatchYouTube
Elon Musk Says In Plain English: if the economy slumps sharply, market losses + possible entitlement squeezes = serious retirement-income gap for millions of Americans approaching or in retirement is about to take place.
3) The dollar, de-dollarization and “smart money” shifting to gold and silver
- Central bank gold buying is real and material. Central banks continued to be net buyers of gold in 2025 (hundreds of tonnes in recent quarters), driven by diversification strategies and concerns about geopolitical and currency risk. Maybe you should start doing what they’re doing, but in a smaller affordable, way, The World Gold Council documents persistent, sizable net purchases by official buyers. World Gold Council+1
- Reserve reallocation and Treasuries. Major holders such as China have trimmed U.S. Treasury positions over recent months and diversified their reserve assets — not necessarily a sudden dump that would collapse markets, but a strategic, gradual shift that reduces the dollar’s automatic dominance and increases the potential cost of U.S. financing if confidence falls. Reuters and other outlets show measured declines in state holdings. Reuters+1 and American
- Most economist strongly suggest that they move into gold and silver at whatever rate they can afford and gradually build it up as the next year or two could become a real challenge for the individual and families.
- Geopolitics and blocs. BRICS expansion, cross-border payment alternatives, and currency-swap
- arrangements are accelerating efforts to trade and settle outside the dollar system. That trend doesn’t instantly “kill” the dollar, but it increases the complexity and tail-risk to a dollar-centric global financial order if geopolitical tensions escalate. BRICSOMFIF
- Private investors follow “smart money.” Alongside central banks, institutional investors and some sovereigns have been increasing allocations to precious metals as a hedge — a driver behind 2025’s strong gold price performance and record central-bank purchases. ReutersWorld Gold Council
What this means: a multi-year, strategic shift away from exclusive dollar reliance — together with aggressive central-bank gold buying — raises medium-term inflation and reserve-currency risks for holders of dollar-denominated assets.
4) Are the BRICS and non-G7 economies already outperforming the G7?
- The global economic center of gravity is shifting. BRICS and other emerging markets account for a rising share of world GDP (especially on a purchasing-power-parity basis), and IMF growth forecasts show emerging markets outpacing advanced economies in 2025. Still, the G7 continues to dominate in per-capita income, advanced financial markets, and capital flows. Public data and reputable compendia show the BRICS bloc accounting for a large and growing share of global output — a structural change rather than an overnight replacement of G7 primacy. Visual CapitalistReuters
5) How likely is “the failure of the dollar”?
- Not immediately imminent, but risk is rising. Most mainstream analysts say the dollar’s reserve role is durable in the near term because of market depth, liquidity, and the rule of law in U.S. markets. However, sustained geopolitical fragmentation, persistent U.S. fiscal deficits, and coordinated moves by big blocs will likely over years, erode the dollar’s exclusive role—raising borrowing costs and increasing inflationary pressure if fiscal policy is not aligned with credible financing. Reuters and the IMF flag de-dollarization as an important strategic risk—one should monitor the banks closely. Reuters+1
6) Practical implications and prudent steps (general guidance, not personal financial advice)
For retirees and near-retirees relying on 401(k)s, IRAs, pensions or Social Security:
- Understand sequence risk. If you’re within 5–10 years of retirement, consider strategies that reduce the risk of large portfolio drawdowns near retirement (rebalancing, de-risking glide paths, increasing cash cushions). Seek a certified financial planner for tailored guidance. Investopedia
- Diversify exposures. Concentration in a single stock, sector, or market leaves you exposed to shocks. Diversification across asset classes (bonds, equities, TIPS, alternative allocation, short-duration fixed income) lessens volatility. Precious metals are used as a hedge by central banks and institutions, but they carry their own risks. World Gold CouncilReuters
- Plan for entitlement volatility. Social Security’s trustees show trust-fund pressures; plan assuming potential adjustments in future benefit indexing or eligibility and consider how tax or benefit reforms could affect your income plan. Social Security
- Keep liquidity. A larger emergency/cash buffer can prevent forced withdrawals into low markets for those approaching retirement. Consider phased retirement or annuitization of part of the portfolio for guaranteed income. Getting into gold or silver is highly recommended by certain economist and financial wizards.
- I am not a economist. I am just reporting the news but I would think getting professional help is a good idea.If you have large exposure and limited time to recover from losses, sit down with a fiduciary adviser (CFP®) to run stress tests and income-protection scenarios.
7) The policy angle: what governments should do (short list)
- Fiscal sustainability plans to reduce long-run public indebtedness.
- Strengthening social-safety nets and stabilizing entitlement funding with bipartisan reforms before severe shocks occur. Center on Budget and Policy Priorities
- Diplomacy to manage trade frictions and avoid abrupt tariff shocks that can trigger synchronized global slowdowns. IMF
- Enhanced financial-market contingency planning to ensure liquidity if major reserve shifts accelerate.
Conclusion — the plausible scenarios
- Soft landing: policy makers navigate tariff tensions, markets calm, and a modest slowdown gives way to recovery (IMF baseline remains modestly positive). IMF
- Hard landing: a policy shock (tariff war, sudden Treasury selloff, banking stress) plus already high debt and weak confidence could tip the U.S. and major economies into a pronounced recession — hard on retiree portfolios and entitlements. Reuters+1
- Low-probability extreme: coordinated financial fragmentation and rapid reserve shifts could, over time, substantially weaken the dollar’s dominance and spark prolonged global disruption — the “depression” scenario some commentators warn about. This is not the consensus baseline, but it is a non-zero tail risk that deserves your planning attention. Reuters+1
Final thought: the evidence shows rising risks — not a foregone collapse. The wisest course for retirees and policy makers alike is prudent planning, honest accounting of entitlement risks, diversification, and policies that reduce the odds of the worst outcomes.
