Is he required to buy stock? AFAIK he could just as well hold cash or bonds, and if he believes a bubble pop is imminent (within the next couple months), that would be a responsible move.

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Deegy 15 hours ago | parent | next [-]

Not required of course. This move to finally move some of his cash horde into equities could be a result of the US governments recent announcement that they're ending their quantitative tightening policy. This likely signals a move back to a period of quantitative easing which could cause assets to continue to inflate while the value of the dollar continues to erode.

Basically he could just be trying to protect the value of his dollars by putting them into a very stable company that also has exposure to the upside of AI.

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andy99 15 hours ago | parent [-]

Probably a stupid question, why not buy something like CHF then, if one is concerned about eroding dollar value? Is the thesis that blue chips (if google is one) would rise faster than USD is devalued?

	▲	rubyn00bie 14 hours ago \| parent [-]
		Stocks are going to be better at hedging against inflation than any one specific currency, because they’re able to raise prices. This is something Buffet has talked about which is mildly detailed here: https://www.investopedia.com/how-warren-buffetts-1-rule-can-... How the dollar erodes, and its effect on other currencies will be unpredictable. Corporations raising prices to offset their rise in costs, is predictable. It’s just a matter of finding those corporations and industries which can do so without losing more sales. I’d assume the urge to “cash up” here is driven by the idea of trying to sell the top, and buy the resulting bottom. I highly doubt Thiel thinks AI isn’t worth today’s market cap or several multiples of it, in the long term, and that any “bubble burst” will likely be a generational buying opportunity.

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ncruces 15 hours ago | parent | prev | next [-]

Whose cash or bonds? USD?

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pojzon 15 hours ago | parent | prev [-]

Thing is, people dont know what will happen if this bubble bursts.

Its so big that it could take with it whole global market.

There is no safe asset you can turn into in such a case, digital money would literally mean nothing when whole financial system collapses.

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skybrian 14 hours ago | parent | next [-]

This doesn't track with what happened after previous bubbles.

Investors will be sad, but businesses that still do useful work will still have revenue. Why would they be worthless?

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rubyn00bie 14 hours ago | parent | prev [-]

That sort of crash is what central banks exist to protect against. That could be something like the Fed stepping in as a buyer of last resort and picking up several trillion dollars of equity, and/or pushing rates to zero again to incentivize private capital to more or less do the same.

A global crash of financial systems is unlikely because it’s cause too much pain for everyone. It unfortunately means we plebs are likely the ones paying to bail it out.

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int_19h 14 hours ago | parent [-]

I rather suspect that in the current economic climate, a trillion dollar bailout of Big Tech would very quickly translate to riots in the streets.

	▲	TheAlchemist 12 hours ago \| parent [-]
		Frankly, I would be happy if riots in the streets happen (if there is a bailout of Big Tech in the first place). What's going on recently with OpenAI publicly, and probably most of the 'AI' players not publicly, is disgusting - it's a bubble, everyone and their mother knows it, and these guys try to save their asses by asking for governement backing before the bubble even pops. Privatize gains, socialize losses... It's a shame that no more bankers went to jail after 2008, although I find the situation was much more complicated than here.