Impact Theory with Tom Bilyeu:

Peter St-Onge Talks Dot-Com Crash, AI Bubbles, and Building Wealth Amid Market Turbulence
Air Date: February 19, 2026
Guest: Peter St-Onge, economist and commentator
Host: Tom Bilyeu

Episode Overview

Tom Bilyeu sits down with economist Peter St-Onge to unpack the hidden realities shaping today’s markets—spanning AI bubbles, echoes of the dot-com crash, and how to build wealth amid ongoing economic turbulence. Through personal anecdotes and economic frameworks, St-Onge offers listeners a no-nonsense guide for navigating boom-bust cycles, understanding central bank influence, and adapting investment strategies for a world rife with government intervention and market distortion.

Key Topics & Highlights

1. Peter St-Onge's Backstory and Early Lessons

(03:00 - 07:07)

• Crash and Recovery:
  • St-Onge shares how he made enough to retire at 25, only to lose everything in the 2000 dot-com crash. He bartended in Japan, then pursued a PhD in economics to avoid repeating his mistakes.
• Key Investing Lesson:
  • Quote: “What I try to do in investing is think as little as possible. Like, the more steps you have in your thesis, the more things are going to go wrong...” (02:30 – St-Onge)
  • Simplicity is crucial; complex investing theses often set you up for failure.

2. Parallels Between the Dot-Com Craze and the AI Boom

(02:30 - 07:07)

• Current AI Market:
  • St-Onge compares the current AI investment fervor to the late 1990s dot-com bubble, deciding we're more likely in the '97-'98 “early to mid-bubble” phase rather than at peak volatility.
  • Usage vs. Value: Internet usage never dropped post-dot-com crash, but company values collapsed. St-Onge predicts AI will have lasting impact but could still face a severe “winter.”
• Advice:
  • Monitor capital expenditures and sudden pullbacks—if major players cut spending, an AI crash could be imminent.

3. Understanding Bubbles, Recessions, and Central Bank Power

(07:07 - 13:09)

• Role of the Fed:

  • Government-induced boom-bust cycles are more consequential than sector bubbles—“most of the time, it’s the Fed.”
  • Wide economic recessions are rarely triggered by technology fads but by monetary policy decisions.
  • Defensive Investing: When risk heightens, St-Onge suggests “flip into really defensive things like canned soup—Campbell’s, not the kind in your basement.”

• Where He Went Wrong Pre-PhD:

  • Failed to recognize macroeconomic triggers, hadn’t learned about Austrian or classical economics.

4. Economic Schools of Thought: Austrian/Classic vs. Keynesian

(07:13 - 17:10)

• Austrian/Classic Economics:

  • “Economics as a field is the study of choice… not just money.” (07:13 – St-Onge)
  • Emphasizes individual decision-making, supply & demand, and minimal government intervention.
  • Quote: “Classical economics generally felt that people are the best judges of what’s best for themselves. So you should let people marry who they want, choose what job they want...” (09:00 – St-Onge)

• Keynesian Economics:

  • “Keynes was willing to be a whore for the point of view that government can make it better.” (08:30)
  • Portrays government as corrective force, a view St-Onge critiques as naive and ripe for corruption.
  • Macroeconomics-rooted Keynesianism, he argues, is “pure propaganda” focused on government solutions, whereas micro still holds to classical truths.

• Contrast in Views of Business Cycles:

  • Keynesian: Recessions are like unpredictable “animal spirits.”
  • Austrian: Recessions follow “knowable” cause-and-effect—mainly interest rate manipulation and liquidity cycles created by central banks.

5. How Central Banking Distorts Markets and Fuels Inequality

(17:10 - 24:47)

• Mechanics of Boom-Bust:

  • Lowering rates increases borrowing and money supply, creating inflation and setting the stage for inevitable rate hikes—thus contractions.
  • COVID-19 Example: Locking down 40% of GDP—yet stocks soared due to $9 trillion in Fed stimulus injected primarily into financial markets (“the people on the top part of the K love the Federal Reserve”—19:37).

• Consequences:

  • “The business cycle does not exist on its own. Business people do not suddenly get really stupid all at once and then get really smart again two years later.” (21:57 – St-Onge)

• The “Fed Put” Phenomenon:

  • “It’s called the Fed Put… Whenever stuff goes down, the Fed’s going to step in and make it all better.” (24:47)
  • This encourages rampant leverage and risk-taking on Wall Street, distorting true market dynamics.

6. Tariffs, Regulation, and the Reshoring of Industry

(29:53 - 36:53)

• Tariffs as Economic Force:

  • Tariffs are sales taxes, generally negative, but can have strategic uses—pressuring other countries to lower their barriers or to reshore production.
  • “Tariff inflation has been almost non-existent… almost all the tariffs have been eaten by China.” (30:20 – St-Onge)

• Reshoring and Factory Investment:

  • Not all company commitments are sincere; some are stalling tactics, but major moves (e.g., by German automakers and Taiwan Semiconductor) are real responses to US policy.

• Regulation as a Hidden Tax:

  • “One out of five employee minutes in Germany is dedicated to regulatory compliance, which is insane.”
  • St-Onge says cutting regulation or income tax could double the economy.

7. The US Dollar’s Status and Global Shifts

(36:53 - 46:51)

• De-Dollarization Worries:

  • Dollar’s share of global settlements declining; other currencies (yuan, BRICS basket) and gold rising in prominence.
  • The biggest risk: loss of the dollar’s value as a “store of savings,” especially if a major currency credibly backs itself with gold.

• Impact if Dumped:

  • “If foreigners no longer want to hold those, they come dumping back here, we get inflation. That ultimately… would be about 100%” (44:20 – St-Onge)

8. Investment Outlook – How to Navigate Today’s Market

(46:51 - 52:07)

• Core Strategy:

  • “Assume that the good things are going to be reinforced. They’re going to try to turn good economic news into inflation by printing extra money on top of it. Assume that if something bad happens, they’re going to try to bail that out as much as they can.” (47:58 – St-Onge)
  • St-Onge remains “optimistic for asset values because the world is run by thieves and it will continue to be run by thieves.”
  • Own assets—even if the system is “rigged”—and hedge with hard assets like gold and silver.

• No Illusions of Fairness:

  • “You can sit it out and bitch about how the rich get rich and here I am. Or you play it.” (52:07 – St-Onge)

9. The Fed as Engine of Corruption

(52:07 - 58:25)

• On Immorality and Corruption:
  • Tom: “I always say that the Fed is immoral… We can’t just save our way to prosperity.”
  • St-Onge: “The Fed specifically is a banking cartel… it’s a counterfeiting cartel. It’s unconstitutional.” (52:45)
  • The Fed prints money disproportionately for Wall Street; the game is “absolutely rigged.”
  • Book Recommendations:
    • Murray Rothbard’s The Case Against the Fed
    • Ron Paul’s End the Fed

Notable Quotes with Timestamps

• Peter St-Onge:

  • “What I try to do in investing is think as little as possible. Like, the more steps you have in your thesis, the more things are going to go wrong.” (02:30)
  • “Classical economics generally felt that people are the best judges of what’s best for themselves. So you should let people marry who they want. You should let them choose what job they want.” (09:00)
  • “The business cycle does not exist on its own. Business people do not suddenly get really stupid all at once and then get really smart again two years later.” (21:57)
  • “It’s called the Fed Put… the Fed’s going to step in and make it all better. That has really, I think, turned Wall street into a casino.” (24:47)
  • “Regulations are absolutely massive. I think if you were to rank the top interventions, the top ways that you could make the American economy prosperous… double the economy.” (34:00)
  • “You can sit it out and bitch about how the rich get rich… Or you play it.” (52:07)
  • “The Fed is a counterfeiting cartel. It’s unconstitutional… It is absolutely a rigged game.” (52:45)

• Tom Bilyeu:

  • “I look at the current state of the market right now and... it feels skittish. So it feels skittish up and down, like they’ll see gold—Oh, like China’s buying all the gold… But then gold will plummet and that narrative starts falling apart.” (22:09)
  • “Getting people to understand what’s really going on becomes the thing that I’m trying to scream into the void.” (52:07)

Practical Guidance from the Episode

• Track liquidity and Fed policy above all else—both as signals for recession and as cues to shift between offense and defense in your investments.
• Own productive and scarce assets; don’t rely on cash savings, which erode under current policy.
• Hold hard assets (e.g., gold, silver) to hedge against monetary system vulnerabilities.
• Recognize the “rigged” nature of the current system, and position yourself to benefit rather than be left behind.
• Stay informed of global developments (tariffs, currency shifts, regulation), but zoom out—long-term trends matter more than short-term volatility.

Connect with Peter St-Onge

• X (formerly Twitter): @profstonge
• Substack (Newsletter): Prof. St-Onge

This episode demystifies macroeconomic forces, exposes government and central bank intervention, and gives listeners actionable strategies to survive—and thrive—in turbulent markets. Essential listening for anyone seeking to understand the root causes of economic cycles and how to build real, lasting wealth amid uncertainty.