Get Your Money Out of Private Equity If You Can, Former Fed Insider Warns

Private equity "forever funds" and AI-driven corporate borrowing present significant risks to pension funds and market stability due to a lack of transparency and circular financing models. These funds often lock investors into long-term commitments without reliable price discovery, while AI infrastructure build-outs rely on debt that may not be supported by future earnings. Christopher Whalen, a former New York Fed official and institutional risk expert, highlights that the U.S. fiscal deficit and potential currency inflation necessitate a strategic pivot toward hard assets like gold and income-producing investments. With mortgage markets contracting and interest rate volatility persisting, investors must prioritize liquidity and independent valuation over the speculative valuations currently dominating the tech sector. Protecting retirement capital requires moving away from opaque private equity structures and anchoring portfolios in assets that maintain value regardless of central bank monetary policy.