$S&P 500(.SPX.US)📈 "A textbook AI asset bubble"

Dalio believes that the current market frenzy for AI is very similar to the electrification of 1929 and the internet bubble of 2000, specifically manifested as:

· Typical bubble characteristics: Funds drive up valuations through leverage, creating a false prosperity of "paper wealth."

· Fragility: Once interest rates rise or investors urgently need cash, the bubble may burst. At that time, selling assets to repay debts will lead to a sharp drop in prices and an economic recession.

🌍 The decline of the "Great Cycle" once every 80 years

Dalio points out that the "Great Cycle" since the end of World War II in 1945 is entering a stage of decline, mainly facing three major challenges:

· Debt crisis: Huge government deficits and depleted funds.

· Internal polarization: Widening wealth gap and intensified social contradictions.

· External conflict: Disintegration of the international order and intensifying geopolitical conflicts.

💎 Asset allocation advice

In terms of coping strategies, Dalio has given clear advice:

· Cash is the worst, prefer gold: He believes that cash is the worst in the long run, and prefers gold bars over Bitcoin among safe-haven assets.

· Beware of the social divide: AI's replacement of labor will further tear apart the distribution of social wealth.