28. AI Bubbles, the Falling Dollar, and the Fed’s Next Move

With the Dow crossing 50,000 and AI capital spending reaching historic levels, are we in a bubble—or at the dawn of a new economic era? This week, investor Hunter Craig sits down with Professor Edwin Burton of the University of Virginia to unpack the real economics behind the AI hype. Professor Burton explains why the software sector got hammered after new AI coding tools launched, where AI truly excels (and where it’s dangerously overrated), and why the companies leading the AI race today may not be on top five years from now. They also tackle the falling U.S. dollar, the ballooning national debt, and Professor Burton’s own AI-generated model for predicting Fed interest rate moves. Key Market Data (as of Feb. 11, 2026) 2-Month Treasury Yield 3.69% 10-Year Treasury Yield 4.17% Dow Jones Industrial Average 50,000+ (record high) January Jobs Report 130,000 (above consensus) U.S. National Debt ~$39 trillion Debt per U.S. Taxpayer ~$355,000   Topics & Timestamps 00:00 Introduction to the Podcast 00:28 Current Economic Landscape 01:03 AI and Market Bubbles 02:50 Capital Spending and Economic Growth 04:53 AI's Role and Limitations 08:10 Impact of AI on Industries 13:28 Currency Movements and Economic Implications 17:09 Predicting Fed Decisions with AI 23:50 National Debt and Healthcare Costs 26:14 Conclusion and Farewell   Key Quotes “Claude Code can do it in an hour or less. That’s remarkable. So that’s why I think it’ll make people productive.”  — Professor Burton on AI’s real-world power “If you scrape the whole world for all the economics information and you had all the information at your fingertips, you might not know anything.”  — Professor Burton on AI’s limitations “The genius is gonna be the person who looks at this stuff and says, ‘I see what it can do’—that person’s gonna be the next Uber or Amazon.”  — Professor Burton on the AI opportunity “Those who are looking for 5% mortgages—it’s not gonna happen.”  — Professor Burton on the national debt and interest rates Mentioned in This Episode Supremacy by Parmy Olson (Bloomberg) — history of AI development Our Dollar, Your Problem — by Kenneth Rogoff Claude Code by Anthropic — AI coding tool used by Professor Burton to build his Fed prediction model Companies discussed: Nvidia, Meta, Google, Apple, Palantir, OpenAI, xAI, McKinsey, Bain, BCG, Amazon, Uber, Microsoft   Credits Host: Hunter Craig Guest: Professor Edwin T. Burton, University of Virginia Producer/Editor: Awkward Sage Media Subscribe wherever you get your podcasts.