By Christopher Chantrill
American Thinker
November 25, 2025
I passed by a bunch of little kids recently, chasing after bubbles emitted by a bubblicious toy. What a delightful time they were having.
That's all very well, but right now experts are worrying about an AI Bubble, as the stock market retreats some 8-10 percent from a peak at the end of October. Here's one take from Niall Ferguson worrying about the crazy plans of the AI promoters:
Sam Altman "recently told employees that OpenAI wanted to build 250 gigawatts of new computing capacity by 2033... a plan that would cost over $10 trillion by today's standards." That would be equivalent to a third of current U.S. peak energy usage.
Then there is David Dayen at American Prospect. He's worried that "Silicon Valley and Wall Street are in sync: conjuring up sketchy credit deals that are pointing us toward another financial crash."
Last month, the big focus was "round-tripping," the way that sundry AI and tech companies were investing in their own customers - with Nvidia giving AI companies the investment necessary to buy their graphics processing units (GPUs), and so on.
But really, why stop there? Whatabout the Green Energy Bubble that is almost certainly popping right now, President Xi? Won't that lay waste to devoted Extinction Rebellion activists all over the world? And then there's the real estate bubble as homeowners have charged into homebuying in the aftermath of the Fed increasing the money supply by 40 percent in 2020-21. Whatabout the stock market bubble? SPY is up from $77 in May 2009 to $659 last Friday. That's up 755 percent since the bottom of the Great Recession. Mind you, M2 is up from $7.2 trillion to $22.2 trillion, a healthy 208 percent, in the same period.
There's only one thing to do: check with Elon's Grok on Financial Bubbles. The first bubble was the Dutch Tulip Mania in the 1630s. Like I say: the Dutch invented the modern world with their Dutch Finance. And you can't have modern finance without bubbles. So the Brits got in on the action with the South Sea Bubble that popped in 1720. Recently, according to Grok, we've been experiencing bubbles every ten years, from the Dot-com Bubble of 2000 to the Real Estate Bubble of 2008 to the Crypto Bubble of 2021. And now the AI Bubble. Where will it end? When will it end?
I don't know if you have noticed, but these bubbles didn't start until after the advent of central banks, invented by the Dutch and passed on to the Brits when the Dutch William of Orange became king of Great Britain, and brought to the U.S. by Alexander Hamilton, known to all as the "bastard brat of a Scotch pedlar." Do central banks and bubbles go together like ham and eggs? I wonder what the culinary experts and the Federal Reserve System think about that. It could be that bubbles only occur when the central bank in incompetent, as in 1929 and 2008. Probably there is nothing to fear about the AI Bubble, now that the Fed has 400 economics PhDs at work. And in the latest bubble, the crypto bubble starring Sam Bankman-Fried, the Fed went in and fearlessly bailed out all the greedy regional bankers before Sen. Elizabeth Warren (D-MA) had finished breakfast.
I wonder how all this bubble-ology has influenced the angry Groypers on the Right and the Mamdani activists on the Left. They are probably right to be angry. Think of a Boomer nicely decked out with an IRA devoted to SPY. If it amounted to $100,000 at the end of 2008, it is now $757,500, not counting dividends and RMDs. And if our Boomer recklessly invested his IRA in QQQ, his $100,000 would now be $1,900,000. But Gen Z? They got zip, zero, nada. Still, when our student Boomer was calling home from Italy in 1970 his three-minute phone call to Mom cost about $6.00. In 1970 dollars.
But I tell you what, dear Gen Zers. The worst bubble in human history is the government spending bubble, up from about 8 percent of GDP in 1900 to about 40 percent of GDP today. And let me tell you, after Social Security and Medicare for Boomers, and the money for the Military Industrial Complex and the Education Industrial Complex and the Climate Industrial Complex and the Migrant Industrial Complex and the Debt Industrial Complex, there will never be much left for you. And when the biggest bubble of all eventually pops, as all bubbles - and empires - eventually do, then you are going to see a scramble for the crumbs like you've never seen.
On the other hand, maybe Elon Musk is right and AI will make work optional and, per Marx,
[we will] hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner[.]
So, maybe we better Occupy Mars.
This article was originally published on American Thinker.