As I show in the book Coming Into View: How AI and Other Megatrends Will Shape Your Investments, the odds of non-consensus outcomes for the US economy exceed 80% over the next five years. This high probability reflects the growing tug-of-war between the transformative potential of AI and the structural drag of mounting fiscal deficits. My research, based on 130 years of new data, points to a bifurcated economic diagnosis (one that is consistent with the rise in both gold and US stocks). Not only do two likely paths emerge, but neither is what most economists may expect.
What are we to make of gold and US stocks, especially tech-heavy indices, recently hitting record highs around the same time? Traditionally, gold surges when equities correct; but this time, both have risen together, defying conventional wisdom. Faced with what look like increasingly frothy prices, analysts and commentators are wondering which asset is more overvalued.
But short-term considerations aside, the simultaneous rise in gold and AI-themed tech stocks may signal something deeper, opening a window onto our economic future and revealing something that economists, policymakers, and investors should not ignore. The prevailing outlook — steady GDP growth around 2% per year, with the inflation rate heading toward 2%, as projected by the Federal Reserve and others — does not align with a dual ascent for gold and stocks. Instead, the market is beginning to contemplate a future that is more complex.
