Buzzberg Cup Live

The First Great Depression: Lessons from the 1873 Global Financial Collapse | Liaquat Ahamed

Watch on YouTube ↗  |  June 29, 2026 at 17:39  |  55:05  |  Monetary Matters
Speakers
Liaquat Ahamed — Author, Financial Historian

Summary

Liaquat Ahamed discusses his book on the 1873 financial crisis, drawing parallels between the 19th-century railroad boom and today's global AI/data center investment boom. He warns that intense competition will lead to poor returns and mini boom-bust cycles, flags speculative bubbles in crypto, gold, and silver, and expects persistent inflation to hurt bonds, while noting that the AI theme has global opportunities beyond the US.

  • Explains how Germany's abrupt demonetization of silver during a financial panic triggered a global scramble for gold and severe deflation in 1873.
  • Details the railroad investment bubble fueled by bond market expansion and the corruption scandal around Crédit Mobilier.
  • Compares the 1870s railroad capex peak of ~5% of GDP to today’s AI/data center investment at about 3% of GDP.
  • Warns that fierce AI competition could lead to poor returns for the sector and a series of mini booms and busts.
  • Sees speculative bubbles in crypto, gold, and silver, describing financial markets as overroought.
  • Fears systematic inflation from loose central bank policy, making long-duration bonds unattractive.
  • Argues that the AI boom is global and benefits non-US companies, countering a US-centric investment bias.
Ideas
Liaquat Ahamed Author, Financial Historian 38:36
AI infrastructure boom will produce poor returns
The current AI and data center infrastructure investment boom, driven by intense competition to be number one, is likely to lead to poor returns for the whole sector and a series of mini boom-bust cycles, similar to the 19th-century railroad booms. The AI companies have not yet developed a business model to generate sufficient revenues on the trillions being invested.
AI infrastructure and data center companies HIGH
Liaquat Ahamed Author, Financial Historian 43:32
Systematic inflation makes bonds poor investments
Going forward, we are likely to end up with systematic inflation rather than the deflation of the late 19th century. As a result, being a bond investor is not going to be a good place to be because interest rates will constantly be spiking up.
Long-duration government bonds MED
Liaquat Ahamed Author, Financial Historian 48:04
Global AI companies ex-US offer opportunities
The AI boom is a global phenomenon that is tapping into a full range of global companies, and US investors are too parochial, missing the mini boom in the rest of the world driven by AI. Non-US AI-related equities offer opportunities.
Non-US AI-related equities MED
Liaquat Ahamed Author, Financial Historian 49:29
Crypto, gold and silver are speculative bubbles
Speculative bubbles have formed in crypto, gold, and silver over the last two and a half years. The financial markets are overroought and this is not healthy, making these assets unattractive.
GLD SILVER HIGH
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This Monetary Matters video, published June 29, 2026, features Liaquat Ahamed discussing AI infrastructure and data center companies, Long-duration government bonds, Non-US AI-related equities, GLD, SILVER. 4 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Liaquat Ahamed  · Tickers: AI infrastructure and data center companies, Long-duration government bonds, Non-US AI-related equities, GLD, SILVER