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As a veteran financial advisor, Certified Financial Planner™, business owner, and political leader, I’ve spent over two decades guiding families through booms, busts, and everything in between.
I’ve been a financial advisor for more than 21 years. In that time, I’ve lived through multiple recessions and two full-blown crises — the 2008 Financial Crisis and the COVID crash. But the first bubble I remember wasn’t one I experienced as an advisor. It was the dot-com collapse that hit around 2000–2001, right before I graduated from LSU in 2002. America was still reeling, and it was hard to find a job.
When I started my career in 2004, older advisors told stories about the mania — how anything with “.com” in its name shot to obscene valuations. One client told me about a Puerto Rican hotel company whose stock rocketed from a dollar to hundreds within months — just because it added “.com.” He sold near the top, thankfully, before it all came crashing down.
Every crisis has a story like that — a moment when people forget the math and start believing the magic.
Today, that story has a new name: Artificial Intelligence.
The AI Bubble — An Echo of 2001
Just like 2000, investors are throwing money at anything that sounds futuristic. Seven tech giants now drive most of the stock market’s gains. Nvidia alone is worth over $3 trillion — roughly 12 percent of U.S. GDP — and trades at valuations that assume decades of uninterrupted growth.
But the deeper you look, the more it resembles the shell game of 2001. As economist Grace Blakeley recently wrote [ [link removed] ], companies like Nvidia, Oracle, and OpenAI have created a “circular-financing loop”:
Nvidia invests billions in OpenAI.
OpenAI spends that money buying Nvidia chips.
Oracle builds new data centers to host OpenAI’s models — powered, again, by Nvidia hardware.
Each reports higher revenue, each attracts new investors, and the illusion of infinite growth feeds itself. Everyone looks rich — until the music stops.
Meanwhile, the physical cost of all this growth is starting to show. These new “AI factories” consume staggering amounts of electricity and water, straining local grids and utilities without creating many jobs. As Kyla Scanlon noted in The New York Times [ [link removed] ], AI-linked companies now make up nearly 75 percent of S&P 500 earnings growth and 90 percent of capital spending — a level of market concentration never seen before.
AI may not be the spark that starts the downturn. But it’s the accelerant — the gasoline on the floor.
Trump’s House of Cards
The spark, I fear, will come from politics — and specifically from Donald Trump’s reckless economic agenda.
He’s turning the federal government into a rigged game for himself and his friends. Tariffs are poker chips. Tax cuts are table stakes. Crypto is the bribe method. Health care and social safety nets are bargaining tokens in a match where the house — the already wealthy — always wins.
Instead of stabilizing the economy, Trump is dismantling the very systems that protect it: cutting Medicaid and ACA subsidies, undermining Federal Reserve independence, and choking off federal investment in infrastructure and manufacturing — the same public investment that kept America growing these last few years.
And his short-lived Department of Government Efficiency (DOGE) made things even worse. Under the banner of “efficiency,” it gutted public-sector capacity, eliminating analysts, engineers, and inspectors who kept the government running smoothly. The damage is still being felt today — a slower, weaker institutional backbone just when the country needs competence the most.
He’s also weaponizing tariffs, a regressive sales tax that hits small businesses, working families, and the poor the hardest. We’ve already seen how fast that can backfire. Tariffs raise input costs, worsen inflation, and feed “greedflation” — the cycle where corporations quietly raise prices under the cover of global turmoil.
Even worse, the administration is targeting the immigrant workforce that keeps food, retail, and hospitality running. Mass deportations will shrink the labor supply, drive up prices, and crush small businesses — all while sowing fear across communities that help make America function.
And now he’s holding the government hostage over ACA health-insurance subsidies — the very program keeping millions of self-employed and working-class families covered. When those subsidies expire, premiums could skyrocket. For many, that’s the final straw.
Even major corporations are sounding the alarm. The CEO of Kraft Heinz recently warned, “We now have one of the worst consumer sentiments we’ve seen in decades.” It’s no wonder the Target CEO said their customers are cutting back, trading down, and “making choices based on necessity rather than preference.” These aren’t just retail trends — they’re red flags that the American consumer, the engine of our economy, is running out of fuel.
Credit Cracks Beneath the Glitter
While the stock market rides high, real life looks very different. The top 20 percent of Americans — those with stock portfolios and home equity — are seemingly doing fine. But the bottom 80 percent [ [link removed] ] are straining under rising costs and record debt.
Credit-card delinquencies are climbing to pre-2008 levels. Auto-finance companies are starting to fold. Even “Buy Now, Pay Later” platforms are reporting surging defaults. The illusion of a strong consumer is being propped up by plastic and payday loans.
This is the same slow leak we saw in 2007 — household debt quietly tightening while policymakers insisted everything was fine. Back then, the spark was subprime mortgages. Today, it could be subprime everything.
When consumer credit dries up, spending slows, small businesses lose customers, and defaults ripple outward. Add tariffs, austerity, and political chaos to the mix, and you’ve got the ingredients for a self-inflicted downturn.
The Perfect Storm
In 2008, we had bipartisan will to act — Democrats and Republicans came together to prevent a depression. I don’t believe that would happen today.
If a downturn hits under this kind of leadership, the likely response will be paralysis — or worse, political opportunism. A crash becomes a wealth transfer, a chance for the very rich to sell into the rally and buy the crash, consolidating even more power at firesale prices.
This is how democracies slide toward oligarchy. When people lose faith in fairness — when they watch the rules bend for billionaires and break for everyone else — the social contract frays. Fear becomes fuel for demagogues.
Prepare, Don’t Panic
I hate writing this, but I must. The 2008 crisis changed how I see the world. It taught me how fragile the entire system really is. That politics and economics are inextricably linked.
I don’t know for sure what will trigger the next recession. Maybe it’ll be a tariff war. Maybe an AI implosion. Maybe a credit event no one saw coming. But I do know the fuse is lit.
This is Part One: The Spark.
Next week, I’ll share Part Two: The Shield — practical, disciplined strategies for protecting your finances if the fire spreads.
🛡️ Join Us November 12 — “Financially Preparing for the Potential Fall of Democracy”
Join Danielle Nava, CFP® [ [link removed] ], and me on November 12 for our free webinar, [ [link removed] ]“Financially Preparing for the Potential Fall of Democracy.” [ [link removed] ] We’ll share practical steps to build financial resilience — from liquidity and diversification to avoiding common pitfalls — and discuss why most of the industry isn’t addressing these risks. It’s not about fear, but proactive planning in uncertain times.
Sign up here [ [link removed] ].
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