Bubbles don’t collapse under their own weight

They end when some event leaves people with less money to speculate and invest. 

For the past century, the popping of every significant bubble from the US in 1929 to Japan in 1989 and China in 2015 has been preceded by central bank tightening.

The AI bubble can stay inflated until liquidity begins to dry up, but that risk is not limited to the Federal Reserve hiking short-term interest rates.

If for some reason the Fed loses credibility or capital flows to the US slow, then longer-term rates are likely to surge, and that too could be the pin that pops the AI bubble.

The US has never been more dependent on hot money inflows. In 2025 foreigners poured money into US stocks and bonds at a pace of $1.7tn — enough to finance the entire US current account deficit, and doing more to balance America’s books than at any point since the data began.

Ruchir Sharma FT 5 January 2026

https://www.ft.com/content/fd7ec67a-fdea-4b14-9452-beba468bcf24

Inlägg som matchar sökningen efter sell america

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Ruchir Sharmas högaktuella bok visar att kapitalismens problem är en stor och växande stat

Mattias Svensson SvD 23 augusti 2024

https://englundmacro.blogspot.com/2024/08/ruchir-sharmas-hogaktuella-bok-visar.html