AI Is Hiding A Weak Economy, Argues Lyn Alden

In this episode of Monetary Matters, Lyn Alden discusses the two-speed economy, highlighting the boom in AI and data centers versus weakness in other sectors like commercial real estate and lower-income segments. They explore the unsustainability of AI companies' profitability, the difference between data center AI and portable AI, and investment strategies favoring profitable areas like chip makers and Alphabet. The conversation shifts to the Fed's balance sheet, liquidity management, and the potential for balance sheet expansion amid above-target inflation. Bitcoin's consolidation, the exhaustion of crypto narratives, and the impact of ETFs and treasury companies on its market are examined, along with the long-term viability of Bitcoin mining and potential technical challenges like quantum computing. Finally, they touch on gold's bull market, the overvaluation of AI stocks, and the likelihood of a consolidation or shakeout in the AI sector within the next few years.