Will The AI Bubble Further Inflate?
The AI bubble may very well further inflate should the Trump Administration cut $2,000 checks for every American as Trump has said he may do in recent days.
$2,000 for every American, that’s approximately $700 billion in stimulus which is sure to drive prices higher for goods & services and most likely for equities.
The average day-trader is likely to allocate a portion or perhaps all of that $2,000 stimulus check toward some combination of overvalued equities such as NVIDIA (NVDA), Microsoft (MSFT), Oracle (ORCL), Palantir (PLTR) or maybe even AppLovin (APP).
You can’t make this stuff up. The U.S. is $40 Trillion in debt and ran a $2 Trillion fiscal deficit this year. Rather than allocate all discretionary capital to the Public Debt, Trump will ignore the lessons of the CARES Act and related stimulus checks and make the same mistake, further stoking price inflation.
Both Parties are killing the Dollar and Americans’ standard of living with profligate spending. But hey, the U.S. only grew M1 by 372% from January 2020 through today. No big deal.
To sum:
Price inflation will move higher;
The AI bubble is likely to inflate further;
Private markets and investment have been crowded out by Government interventionist policy - both fiscal and monetary. Disgusting.