Six-Chart Sunday – On Bubble Watch
6 Infographics + 1 Video (NYT bestselling author David Gelles explains how Yvon Chouinard "Built Patagonia, Made a Fortune & Gave It All Away)
It’s more than AI. Everywhere you turn, experts are debating whether we’re in unsustainable bubbles: AI infrastructure, China exports, debt, gold, commercial real estate, Presidential power. This week we look at those six, while bearing in mind:
“If something cannot go on forever it will stop.” (Herb Stein)
“Markets can stay irrational longer than you can stay solvent.” (John Maynard Keynes)
“I may be going to hell in a bucket, babe, but at least I’m enjoying the ride.” (The Grateful Dead)
Upcoming live discussion, this Thursday, 10/23 at 4pm ET, register here
1. AI Infrastructure
Gavekal’s Louis Gave sees a bubble:
But Scott Galloway cautions:
“The arc of the growth of OpenAI is kind of mimicking what happened with Netscape, and it’s at a point where it’s still two years away from the bubble bursting… the economists called the dot-com implosion perfectly, but they called it in 1997 before those stocks went up another 30 or 40%. So do we know they’re going to come down? Yeah, the hard part is figuring out when.” Galloway offers this chart of bubble risks:
2. Chinese Exports
China’s trade surplus with the world increased 400% over the past seven years, from $0.35T (US$) in 2018 to an estimated $1.4T in 2025. That’s good news if you rely on Chinese imports, but bad if you’re a global manufacturer trying to compete. Are such global surpluses sustainable — the new norm — or a bubble soon-to-be popped by trade restrictions?
3. Gold and/or US Treasuries
Gold is up nearly 60% in 2025 and over 1,200% since 2000 (roughly twice the S&P500 return with dividends reinvested). Are we watching an epic gold bubble? Or are we merely reverting to the mean, with gold returning to its previous role as the store-of-value most widely-held by central banks (rather than Treasuries, which replaced gold in this role for the past few decades)? Perhaps we just lived through a U.S. Treasuries bubble, one that inflated starting with the end of the Cold War but then burst due to COVID & the Russian invasion of Ukraine?
4. U.S. Debt
Billionaire Ray Dalio believes America’s $37 trillion nation debt, expected to grow by $2 trillion per year via annual deficits for the next decade, with $1 trillion per year in interest payments alone, is a bubble… the national equivalent of “clogged arteries” in a body.
“The great excesses that are now projected... will likely cause a debt-induced heart attack in the relatively near future—I’d say three years, give or take a year or two.”
5. Commercial Real Estate
The delinquency rate for office commercial mortgage-backed securities (CMBS) reached a historic high of 11.7% in August 2025, surpassing the peak of the 2008 financial crisis. This surge is attributed to factors like increased remote work reducing office demand, difficulty refinancing at high interest rates, and a large volume of maturing loans that borrowers cannot repay.
6. Presidential Power
Starting with the Constitution, the history of America is the story of balancing powers between executive, legislative and judicial branches. There are periods of expanding Presidential power, typically during wartime emergencies, and eras when presidential authorities got constrained by Congress, courts or the voters (via amendments). So far the 21st century has seen consistent expansion of Executive branch power in response to crises (9/11 attacks, Great Financial Crisis, COVID). No President has been more aggressive in asserting power and challenging limits than Donald Trump, especially in his 2nd term, where he has already declared 10 national emergencies to unlock maximum authorities. Is this time different, with Trump permanently resetting the balance of power between branches? Or are we amidst another “imperial presidency” bubble, with the pendulum likely to eventually swing back as it always has?
VIDEO
NYT business reporter & bestselling author David Gelles joined me this week to discuss his brand new book on Patagonia founder Yvon Chouinard, “Dirtbag Billionaire.” Smart guy, fun discussion.
