The Apex of Idiocy (A.I.)

We are in a fraudulent AI financial bubble that is covering up rampant economic fraud. As long as the bubble remains inflated, the Idiocracy at large will question none of it. Both frauds - financial and economic - will be revealed at the exact same time.

This is the largest quarterly gain for semiconductor stocks in history.

The whole market has turned into one MASSIVE pump and dump.

There is no doubt that this is the most difficult time to be an astute investor since the 1930s. Investors face a choice to join the super bubble and cast all fear aside knowing that it will crash and burn at some point. Or, fade the bubble and likely get their head ripped off. Although I have pointed out that there have been multiple pump and dumps along the way from cryptos, to metals, to hyperscaler stocks, and the last and biggest pump and dump is in semiconductor AI stocks.

The last choice is to sit on the sidelines in cash and watch the insanity from a distance, which is what Warren Buffett is mostly doing right now with one third of his portfolio in cash:

"We've never had people in a more gambling mood than now"

So far, all of Trump's record corruption has gained ZERO attention from his own party, but that will change the moment the bubble collapses.

Robert Prechter of Elliott Wave fame explains that social mood dictates the mores of the day. So when greed and FOMO are running hard, investors are willing to overlook all manner of malfeasance. But when the bubble crashes and the pain spreads, people look for someone to blame. In other words, for MOST people, morality is totally relative - If everyone else is doing it and they can get away with it, then it must be ok.

Everyone knows that Trump is the most corrupt president in U.S. history and he is looting the country non-stop both to his own benefit and to the benefit of America's corrupt billionaire oligarchs.

Everyone ALSO knows that the AI bubble is riddled with fraud and is an economic disaster. Just this week the Bank of International Settlements (global central bank) warned what will happen when the bubble implodes:

"The global economy remains caught in the crosscurrents of progress and peril," Basel officials said in the report. "Resilience is being increasingly tested and strained."

"Repricing of risk this time, whether triggered by higher interest rates or an AI bust, has the potential to be similarly disruptive" in that segment to the 2008 Global Financial Crisis, the BIS said."

On AI specifically, officials highlighted vulnerabilities linked to funding, including complex arrangements such so-called "circular financing" deals"

Some of those aforementioned risks are already showing up in markets.

I understand why younger generations ignore all of these risks, because most of them were in elementary school when the Global Financial Crisis took place. Many were not even born during the DotCom bubble.

However, older generations have ZERO excuse.

Pundits point to the 401k retirement paradigm shift in which individuals are now responsible for managing their own retirement funds. Most of that money is on auto-pilot and hence it's bidding up global markets regardless of valuation. Financial advisors are ALSO on auto-pilot and constantly making up garbage excuses for why buy and hold will always pay off in the long run. After the 1929 bust it took 25 years to breakeven on a NOMINAL basis. Inflation-adjusted it took much longer.

As the chart below shows, after Y2K it took 15 years to breakeven on an inflation adjusted basis. We can expect that inflation will be much worse in this coming bust, because for the first time in U.S. history the debt is now larger than GDP and growing 3x faster. In a recession, the debt will sky-rocket leading to further Fed monetization and higher inflation than what we saw during the pandemic. When the bubble bursts, the ultra-wealthy will once again be in need of a financial bailout at the same time that the middle class will be in need of economic assistance. During the pandemic EVERYONE got bailed out. However, given the level of fraud that is being widely ignored AND the lack of financial resources that will be available, one can assume that the ultra-wealthy will be the ones NOT getting bailed out this time around.

So investors are now facing the dual peril of higher inflation AND less policy support for markets.

What it all comes down to is that people have been PROMISED by their financial advisors that the next 100 years will be just like the last 100 years. Despite the fact that WE are all personally witnessing record levels of corruption never seen before in 250 years of U.S. history. Therefore, it's INEVITABLE that extrapolating record corruption into the indefinite future will not have a happy ending.

But people always ask me, when is inevitable?

So for now we can celebrate the best Tech quarter in history, while knowing full well that rampant financial fraud is now masking rampant economic fraud. And both types of record fraud will be revealed at the exact same time.

When all of the sheeple say: "No one saw that coming".