Cash Under the Mattress Won’t Save Your Retirement

You know it’s serious when the economic conversation spills over onto the usually “fun” side of social media.

A few days ago, a post crossed my Instagram feed with this warning: “The AI bubble is 17x larger than the dot-com bubble,” it read. “And 4x larger than the 2008 Financial crisis.”

People swarmed the comments. They wanted to know what happens to their savings… or the cash under the mattress… if the bubble pops.

“What if I’ve avoided AI this whole time?” one person asked. “How will it affect me?”

They’re not wrong to ask. If we look at the last two bubbles, the effects when they popped rippled beyond people’s stock accounts.

The dot-com crash contributed to an eight-month recession in 2001. By the spring of 2004, an estimated 403,300 jobs had been lost in the IT sector alone.

The effects of the 2008 crash were even deeper. A Frontline article published in 2012 (four years after the stock market’s collapse) showed that:

• There were still 12.5 million people out of work, not saving for retirement, and not contributing to the GDP.

• The government had poured about $23 trillion into a host of programs and bailouts.

• Real estate had lost roughly $7 trillion, stocks $11 trillion, and retirement accounts another $3.4 trillion.

• The Census Bureau’s 2010 estimate said 46.2 million people were in poverty – the largest number in 52 years.

I’m not saying this to scare you. But with the AI bubble getting bigger each day, we can’t afford to bury our heads in the sand.

And what nobody mentioned in that discussion I read last week was the story we’ve been tracking in these pages. Yet it provides the clearest answer to the one question that kept coming up: What can I do about it?

One Market, Two Signals