The Indicator from Planet Money How to make $35 trillion ... disappear
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Dec 11, 2025 Gita Gopinath, a former chief economist at the IMF and current Harvard expert, discusses the alarming parallels between today’s AI-driven stock market and the dot-com boom. She reveals chilling projections that a potential crash could wipe out $35 trillion in global wealth, significantly impacting the U.S. and European economies. Gita emphasizes the high valuation risks, the limitations of fiscal responses due to debt levels, and the need for diversification as capital shifts into emerging markets. A fascinating mix of caution and insight!
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U.S. Market Became A One-Way Bet
- U.S. stock-market gains over the last decade made the U.S. a one-way bet for global capital.
- The Magnificent Seven tech firms account for a large share of recent valuation increases.
Valuations Near Dot‑Com Peak
- The price-to-earnings (CAPE) ratio is near its second-highest in 100 years.
- That level echoes the run-up just before the 2000 dot-com crash, signaling elevated valuation risk.
$35 Trillion At Risk Globally
- A dot‑com–scale crash now could erase roughly $35 trillion of global wealth.
- Gita Gopinath estimates about $20 trillion lost in U.S. households and $15 trillion abroad.