Yet another in the avalanche of warnings to BATTEN DOWN THE HATCHES before the imminent crash arrives.
Includes some emails, charts, and a video.
What if the AI revolution isn’t the unstoppable force it seems to be? While headlines celebrate breakthroughs in machine learning and the meteoric rise of companies like OpenAI and Nvidia, a less glamorous story is unfolding beneath the surface, one of unsustainable spending, speculative investments, and financial entanglements that could unravel the entire industry.
Consider this: OpenAI has committed to infrastructure spending of $1.15 trillion over the next five years, yet its projected revenue for 2025 is a mere $20 billion. This staggering imbalance isn’t just a red flag for one company, it’s a warning sign for an entire sector that’s chasing growth at all costs, much like the dot-com bubble of the late 1990s. Could the AI boom we’re witnessing today be little more than a house of cards?
https://www.geeky-gadgets.com/openai-infrastructure-costs-ai-bubble/
That's generally true, and it's certainly true that the exact timing of a crash (and most other large, chaotic events) is impossible to predict.
Trends and imbalances, on the other hand, can be seen pretty well, and their eventual results become more clear as those two factors become more pronounced -- as in the years leading to the 2007-2008 crash, and as before EVERY major crash, the imbalances are now vast and unsustainable and the TRENDS are mostly going in the wrong direction.
I don't know if the crash will happen tomorrow or two years from now, but I DO know that the situation is ripe for a big one. I predicted (in print) the 2007-2008 debacle (and not just because of real estate shenanigans) several years before it happened, but didn't predict an exact year because, again, exact details of the future are not predictable. Exactly when will a particular event kick the crash off? There are always coming future events one can point to but you never know which of those, or more likely something else you didn't see coming, will really get the ball rolling.
The ball is ALREADY rolling right now, of course -- the incredible upswing in precious metal prices are a neon sign in that regard -- $217.70 to $4413.98 on the 5 yr gold chart as I write this; see https://www.kitco.com/charts/gold and select "5 Y" under the chart. Gold BEGAN 2025 at ~ $1400. But things haven't reached the "can't sweep it under the rug anymore" crisis point yet.
One potentially (and I hope) large positive force here will be Trump's efforts to counter the crash and to remake our economy, our regulatory burden, our tax situation, our trade situation, and much else. We can all see (some) of what he's doing, but the outcome is certainly not clear (to me at any rate). I expect a rough ride for most people during the transition. A short period of difficulty, I hope, but honestly I don't even want to guess how bad and how long it'll be.
Your gold numbers are a bit off, gold was at $2650 in early 2025 and $1400 in early 2020. Precious metals are starting to look overbought as well though, silver and miners are up even more than gold recently and show no signs of stopping, it can't go on forever. I'm liking the returns but I don't like performance chasing and no asset class is cheap anymore.
Holy crap, you're right -- completely misread the moving-cursor chart. Thanks for setting me straight.
I'd agree with you that both gold and silver seem overbought except that the ratio of actual dollars (digital and otherwise) out there -- not that anyone really knows what the number is -- is clearly large enough that every oz of gold or silver is worth far more, based on the ratio of metal to dollar, than what we're seeing now. Yes, other factors are an issue, but my guess is we'll be seeing MUCH higher numbers over the next year or two. I don't trade metals and I don't have any reason to sell what I have, so it makes no difference to me -- I'm a buy-and-hold guy. But again, I doubt the climb in price is over.
The bittersweet reality of every real PM stacker is, that the value and loss of buying power of FRNs is inversely proportional to that of the PM gains...
So... yanno...
At least you can hold shiny in your hands unlike the majority of these TulipCoins...