Part 5/17:
A significant theme discussed is the overinvestment in AI technology, which, according to Scott, is driven by both artificial demand and momentum trading. AI companies have been responsible for around 92% of recent GDP growth, but this growth is largely engineered through inflated valuations and circular deals, creating a false sense of sustainability.
The narrative suggests that the rise in assets like gold and Bitcoin, as well as AI stocks, may actually reflect momentum trading rather than genuine safe havens. Momentum traders are driven by the expectation that central banks and institutional investors will continue pouring money into these assets, further inflating prices regardless of underlying fundamentals.