Hyperscalers are set to spend $700 billion on AI infrastructure this year.

Investors are already comparing today’s AI boom to the 2001 internet bubble.

But the underlying economy may be telling a completely different story…

A thread 🧵 2/ Microsoft, Amazon, Meta, Alphabet, and Oracle are expected to spend $700 billion this year alone on AI infrastructure.

That's more than the entire GDP of developed nations like Sweden or Singapore.

Major market drawdowns have proven to be exceptional buying opportunities

But the forces behind this buy-the-dip psychology are now reversing…

A thread 🧵 2/ The stock market has often recovered quickly from major macro shocks, including:

- 6 months after the pandemic
- 12 months following 50-year high inflation
- 3 months after a trade war disruption

Recently, the Iran war has disrupted global oil supply, but the market recovered to ATHs within just a few weeks.

Oil shocks have systematically coincided with a rising unemployment rate

This happened in the 1970s, 1990, 2001, and even 2008

But there is one big difference this time around…

A thread 🧵 2/ The US stock market has just made its fastest 10% jump since May 2025.

We’ve only seen similar moves 4 other times since 2009: April 2020, January 2019, October 2011, and March 2009.

And each of these rallies were followed by more upside on the stock market.

The US stock market just hit record highs despite a major oil shock

Historically, such oil shocks have triggered economic recessions

Is this time different?

A thread 🧵 2/ After some talks of a ceasefire, oil prices went down and stocks reached new ATHs.

But oil is still 40% up from its pre-war levels.

Shouldn't the economic drag of a 40% oil jump prevent the stock market from hitting record highs?

Inflation is closely following the footsteps of the 1970s

Economists are wrong about what’s coming next…

A Thread 🧵 2/ The price of oil is up nearly 70% over the last few months.

And at the same time the prices of many other raw materials that power the modern economy have jumped up as well:

- Wheat → 14%
- Cotton → 15%
- Soybean → 17%
- Aluminum → 29%

1973, 1979, 1990 - all 3 of them saw an oil shock

Each one triggered major market stress and led to an economic downturn

With oil spiking 60% in just 1 month, is history repeating itself?

A thread 🧵 2/ Since the start of the war in Iran the price of US treasury bonds have declined by nearly 5%.

That may not sound like a lot, but it translates to roughly $1.2 trillion being wiped out.

And any further weakness from here could quickly escalate into a bond market panic.

A $2 trillion financial market is suddenly showing signs of stress

The largest private credit firms are now down by more than 30%

What happens next is going to catch a lot of investors off-guard

A thread 🧵 2/ This is what it looks like when a $2 trillion industry collapses in real time.

Together these companies make up 2/3rd of the entire private credit market.

All of them are down more than 30% from their highs.

Blue Owl Capital has permanently halted redemptions on its private credit fund.

The US now spends more money on interest payments than defense.

And this could get worse with 50% of government debt maturing by 2028.

This leaves the US government with only 1 option…

A thread 🧵 2/ In the next 12-months, nearly $10 trillion worth of US government debt is coming due.

That is approximately $830 billion required to be paid back every single month, representing 34% of all outstanding debt.

Leverage on gold has just hit RECORD levels

This has often preceded major gold crashes

Is this time different?

A thread 🧵 2/ Since the start of 2026, gold has added roughly $4 trillion to its market capitalization.

That’s more than the entire GDP of the UK, flowing into an asset that offers essentially 0 yield.

The yield curve has now steepened by 150 basis points in 3 years

This has historically marked a MAJOR turning point for the US economy

A thread 🧵 2/ Something quite rare has been happening on the US treasury market.

For more than 2-years, the short-term government bond yields stayed above longer-term yields.

This time is NOT different.

A thread 🧵 2/ The National Bureau of Economic Research has 3 specific conditions to define an asset bubble:

- The asset needs to rise by >100% over a 2-year period.

- It needs to outperform the broader market by at least 100% over that same period.

- It needs to deliver a 5-year return of >50%.

Japan’s $10 TRILLION debt meltdown is about to hit the US

Buckle up.

A thread 🧵 2/ For years, Japan was seen as the epicenter of global sovereign debt risk, but this has now changed.

In just the past few weeks, we’ve seen a major shift, with currency and debt risk moving from Japan to the US.

The US stock market is near all-time highs in dollar terms

But is down 45% when measured in gold terms

What does this mean for the economy and financial markets?

A thread 🧵 2/ The shifts unfolding today in the global monetary system, the geopolitical order, and global trade have major implications for the markets.

Yet most people are completely misreading what is truly happening in the financial markets.

Donald Trump wants the US economy to keep outperforming

But he also wants a weaker dollar to support re-industrialization

This would require breaking a major relationship that’s existed since the 1960s

A thread 🧵 2/ The US government has a problem.

For decades, interests of the government and the Federal Reserve were aligned.

But these interests are now diverging and this could lead to the single greatest shift in US financial history.

The US bond market is beginning to break

Long-term yields are still rising

While short-term yields are falling

History shows this is a MAJOR warning signal

A thread 🧵 2/ 1 of the most fundamental relationships in financial markets is breaking right now.

In the last 1-year, the 30-year Treasury yield has been rising while the 3-month Treasury yield has been falling.

This divergence signals that the monetary policy is breaking.

Truck sales are collapsing, but stocks are hitting record highs

The last 3 times this happened were in 2000, 2008, & 2020

All of them saw an economic recession and a major market crash

Is this time different?

A thread 🧵 2/ This chart shows the aggregate economy index.

When we mark the exact peaks and troughs, they line up precisely with the official start and end dates of recessions.

Japanese bond yields have just hit 20-year highs

This could trigger a Global Debt Crisis…

A thread 🧵 2/ The yield on Japan’s 30-year bond is starting to close in on the yield of the US 30-year bond.

This narrowing gap could be 1 of the most important global macro developments right now.

Many believe the moment these 2 lines cross could be the trigger that sets off the global debt bubble.

Every bull market in the past 70 years has been ended by 1 key Macro factor

This should NOT be overlooked

A thread 🧵 2/ Something unusual is happening in the stock market right now.

The total daily volume of options traded on the US stock market just hit $3.5 trillion.

That is roughly equal to the entire value of the Russell 2000, meaning all US small-cap companies combined.

Cash on the sidelines has just hit 25% of US GDP

History shows this does NOT end well…

A thread 🧵 2/ This chart shows us the share of total US GDP comprised of cash.

Right now, 25% of the economy, or roughly $7.5 trillion, is invested in money market funds.

This is the money sitting on the sidelines.

That’s the highest level since April 2020, before that January 2009 and October 2001.

The yield curve has now been steepening from an inversion

This has historically been a very reliable recessionary signal

It’s pointing to a MAJOR economic turning point in just 3 months

A thread 🧵 2/ The yield curve has officially begun a countdown that will bring the economy to a major turning point in 3-months.

You see, exactly 1 year ago the yield curve did what we call a steepening.

It came out of one of the longest inversions on record, crossing back above the 0-line

Michael Burry just revealed 2 MASSIVE short positions tied directly to the AI Bubble

The last time we saw something similar was right before the 2008 Financial Crisis

This won’t end well…

A thread 🧵 2/  This chart compares the euphoria of the 2025 AI boom with the Bitcoin frenzy of 2017 and the housing bubble of 2005 using Google search trends

What stands out are the dates:

August 2005 = housing market downturn

December 2017 = Bitcoin beginning an 80% drawdown