Lee, thank you for the kind words. I love the visuality of this analogy. A great many things will burn to the waterline in the coming decade IMO.
Timmy, yes, a few contrarians don't follow the herd but we're the ones picked off by the predators :-) Risk and reward are linked.
David, yes, I remember 'expert systems" well as the mid-1980s when I started reading books by the AI gurus of that era.
BJ, on your recommendation I borrowed "The Myth of AI" from the library, it's worth a careful read IMO as the author discusses the core flaws in the entire AI model of "intelligence." I may even buy a copy for further study. For sure all these ideas get recycled every few years, starting with AGI in the 1960s.
Jason, thank you for the recommendation. I have yet to read the post but my impression is AI's primary threat is generating bots programmed to do XYZ and posing as humans, overwhelming the digital world with actively malicious spam.
Here is Jason's post on this thread which did not appear here:
"Thank you Charles, for your engagement with your readers in the comments section. Your coverage on Deepseek has been great and I was happy to see you on Thoughtful Money (best financial show out there imo). Can't tell you how many people I've heard steal the "Sputnik moment" phrase from you btw.
I don't have much to add to the AI conversation, but I have felt like it was being way overhyped, with these companies spending billions, pushing it on us and struggling to find a use case. I'm sure plenty of good will come from it eventually, but it seems the ultimate goal of the broligarchy is to put people out of work and fatten corporate profits.
So honestly, I've found the recent events somewhat amusing and satisfying (the hubris, using AI to deny health care claims, the insane amount of energy usage for data centers and crypto, etc... makes my blood boil).
Anyway... speaking of use case and ridiculous amounts of money, have you heard of the eVTOL (electric vertical take off and landing vehicle)? Apparently, flying cars are mere weeks or months away, but it's hard for me to buy into this. I'm still waiting for the butler robots that Musk said will be in every household, or the self-driving cars that don't crash and kill people. Silicon Valley seems like the snake oil salesmen of our time. I mean... we can't figure out how to keep The American Dream alive, but I'm sure Silicon Valley has got this flying car thing all figured out. I fear for what lies ahead."
A good topic to discuss. Technology and hucksterism go hand in hand, just like real estate development and hucksterism. IPOs and hucksterism, etc.
I too see few if any legitimate sources of new revenues and profits from the hype. The hope that Corporate America can lay off a few tens of millions of workers due to automation and all these people will magically find new high-paying jobs in the AI that displaced them is fantasy--but maybe the idea that AI can replace tens of millions of workers is fantasy, too, as the quality of the AI customer service bots is abysmal / pathetically poor, the AI generated podcasts are drivel, etc. etc. etc. The "emperor has no clothes" reality is AI is mostly mediocre, and the few bright spots have either been manufactured / gamed or they're the 0.1% that can be hyped.
Let's check in on how successful AI is in the real world in say four years--2029.
Speaking of subscriber comments, it's always a bit uncomfortable to post comments by subscribers who've given me permission to post their reasons for subscribing, but here are two I will share despite the cloud of self-congratulation that surrounds posting praise of one's work:
Thomas1760
"I listened to your interview with Adam Taggart twice. I sense calm wisdom… need to be specific in my reading and research, so when I come across a resource with calm wisdom (wisdom is making the complicated simple) for a fair price it helps me to organize my intake properly. This area A.I. is obviously extremely important to understand. Now, I have a good resource and I don’t need to shotgun it. "
Anne L. Klieves
"I moved from N Ca to Virginia years ago and saw this same trend about moving electronic manufacturing to China. Lost thousands of job in Silicon Valley. tried to stop them but they simply did not listen. I told them about losing their IP and they did not listen. And now this is coming home to roost.Y our articles say much of this so I thank you for showing great intelligence."
Thank you, Thomas, Anne, and all my other paid subscribers. warm regards, charles
For reasons unknown to me two comments by Jason R. were cc'd to me but did not appear in the comments section. Here is his first comment, on another post but I'm going to respond here:
JASON: "I guess my ultimate question is, how has Japan engaged in QE and repressed interest rates for 30+ years and not seen a lick of inflation? Isn't deflation the natural order of things due to technological advancements, unless corporations suppress wages and push for ever higher profit margins? There are so many factors involved and this may be too much to address in a reply. If so, perhaps you could point me in the direction of an article or author to provide some clarity?
P.S. I love that you take the time to read our comments and reply to some of them. Your last reply helped me to realize that I was in some denial about how I spend my time and I can definitely make better decisions when it comes to that... perhaps less time in the comments section... ha. Thanks so much!"
Yes, for sure I too have to manage my time very carefully, but I prioritize responding to paid subscribers' comments here b/c you are the people who support my work.
Inflation-deflation is complex, and various dynamics feedback into other dynamics. I have a fairly informed view of Japan, having studied the language, culture, economy, history and literature in university, plus lengthy visits and friends in Japan. Japan has certain unique features worth noting, some are shared by other economies. First and perhaps foremost, China "exported deflation" to every participant in the global economy, particularly Japan, the EU and the US. That cycle has come to an end for various reasons.
Japan's population is aging and older people spend less. Less spending, less money velocity = deflationary forces. Japan is also in a misunderstood / ignored "social depression" that has economic consequences.
Per David Hackett Fischer's book "The Great Wave," humanity has once again expanded its consumption to absorb all available resources, so scarcities will arise, driving prices higher. This dynamic doesn't care about monetary policy. the gold standard, bitcoin, or if oil is scarce or infinite.
This comment is already too long :-) More on this in a future post.
CEOs are just as prone to fads as the rest of us, and this is how the AI fad gathered momentum. A decade ago the warm-and-fuzzy tech fad that enamored every corporate HQ was fuzzy logic, one of the long line of precursors to the current AI mania. So labels touting "fuzzy logic" were slapped on rice cookers as everyone scrambled to cash in on the latest tech fad.
Unquote
Back in the 1980s they said expert systems were going to replace medical doctors never happened
So called "AI" has gone through many phases over many decades. "AI" spring and summer will turn to winter (when the funding fades out). But rest assured it will return. I've been impressed with some of the applications this cycle has spawned. They are rather useful tools. Check out this site for a selection of possibilities. I've quite enjoyed learning to properly prompt.
But they are all very narrow. A book titled The myth of Artificial Intelligence has many interesting insights into the details and history of "AI". https://www.hup.harvard.edu/books/9780674278660
Check out an article called "We Are in DeepSeek" by The Cosmopolitan Globalist here on Substack. She discusses the doomsday clock, the current threat level of AI, and has a bit of a discussion with DeepSeek about the threat AI presents. It is eye opening.
"...we remain a herd animal." Speak for yourself CHS. The readers of your articles are not herd animals. I am a contrarian. That's how one makes money and survives well.
Lee, thank you for the kind words. I love the visuality of this analogy. A great many things will burn to the waterline in the coming decade IMO.
Timmy, yes, a few contrarians don't follow the herd but we're the ones picked off by the predators :-) Risk and reward are linked.
David, yes, I remember 'expert systems" well as the mid-1980s when I started reading books by the AI gurus of that era.
BJ, on your recommendation I borrowed "The Myth of AI" from the library, it's worth a careful read IMO as the author discusses the core flaws in the entire AI model of "intelligence." I may even buy a copy for further study. For sure all these ideas get recycled every few years, starting with AGI in the 1960s.
Jason, thank you for the recommendation. I have yet to read the post but my impression is AI's primary threat is generating bots programmed to do XYZ and posing as humans, overwhelming the digital world with actively malicious spam.
warm regards, charles
Before I even get to the first word, I applaud your title, “Burned down to the waterline”, golden!
Here is Jason's post on this thread which did not appear here:
"Thank you Charles, for your engagement with your readers in the comments section. Your coverage on Deepseek has been great and I was happy to see you on Thoughtful Money (best financial show out there imo). Can't tell you how many people I've heard steal the "Sputnik moment" phrase from you btw.
I don't have much to add to the AI conversation, but I have felt like it was being way overhyped, with these companies spending billions, pushing it on us and struggling to find a use case. I'm sure plenty of good will come from it eventually, but it seems the ultimate goal of the broligarchy is to put people out of work and fatten corporate profits.
So honestly, I've found the recent events somewhat amusing and satisfying (the hubris, using AI to deny health care claims, the insane amount of energy usage for data centers and crypto, etc... makes my blood boil).
Anyway... speaking of use case and ridiculous amounts of money, have you heard of the eVTOL (electric vertical take off and landing vehicle)? Apparently, flying cars are mere weeks or months away, but it's hard for me to buy into this. I'm still waiting for the butler robots that Musk said will be in every household, or the self-driving cars that don't crash and kill people. Silicon Valley seems like the snake oil salesmen of our time. I mean... we can't figure out how to keep The American Dream alive, but I'm sure Silicon Valley has got this flying car thing all figured out. I fear for what lies ahead."
A good topic to discuss. Technology and hucksterism go hand in hand, just like real estate development and hucksterism. IPOs and hucksterism, etc.
I too see few if any legitimate sources of new revenues and profits from the hype. The hope that Corporate America can lay off a few tens of millions of workers due to automation and all these people will magically find new high-paying jobs in the AI that displaced them is fantasy--but maybe the idea that AI can replace tens of millions of workers is fantasy, too, as the quality of the AI customer service bots is abysmal / pathetically poor, the AI generated podcasts are drivel, etc. etc. etc. The "emperor has no clothes" reality is AI is mostly mediocre, and the few bright spots have either been manufactured / gamed or they're the 0.1% that can be hyped.
Let's check in on how successful AI is in the real world in say four years--2029.
warm regards, charles
Speaking of subscriber comments, it's always a bit uncomfortable to post comments by subscribers who've given me permission to post their reasons for subscribing, but here are two I will share despite the cloud of self-congratulation that surrounds posting praise of one's work:
Thomas1760
"I listened to your interview with Adam Taggart twice. I sense calm wisdom… need to be specific in my reading and research, so when I come across a resource with calm wisdom (wisdom is making the complicated simple) for a fair price it helps me to organize my intake properly. This area A.I. is obviously extremely important to understand. Now, I have a good resource and I don’t need to shotgun it. "
Anne L. Klieves
"I moved from N Ca to Virginia years ago and saw this same trend about moving electronic manufacturing to China. Lost thousands of job in Silicon Valley. tried to stop them but they simply did not listen. I told them about losing their IP and they did not listen. And now this is coming home to roost.Y our articles say much of this so I thank you for showing great intelligence."
Thank you, Thomas, Anne, and all my other paid subscribers. warm regards, charles
For reasons unknown to me two comments by Jason R. were cc'd to me but did not appear in the comments section. Here is his first comment, on another post but I'm going to respond here:
JASON: "I guess my ultimate question is, how has Japan engaged in QE and repressed interest rates for 30+ years and not seen a lick of inflation? Isn't deflation the natural order of things due to technological advancements, unless corporations suppress wages and push for ever higher profit margins? There are so many factors involved and this may be too much to address in a reply. If so, perhaps you could point me in the direction of an article or author to provide some clarity?
P.S. I love that you take the time to read our comments and reply to some of them. Your last reply helped me to realize that I was in some denial about how I spend my time and I can definitely make better decisions when it comes to that... perhaps less time in the comments section... ha. Thanks so much!"
Yes, for sure I too have to manage my time very carefully, but I prioritize responding to paid subscribers' comments here b/c you are the people who support my work.
Inflation-deflation is complex, and various dynamics feedback into other dynamics. I have a fairly informed view of Japan, having studied the language, culture, economy, history and literature in university, plus lengthy visits and friends in Japan. Japan has certain unique features worth noting, some are shared by other economies. First and perhaps foremost, China "exported deflation" to every participant in the global economy, particularly Japan, the EU and the US. That cycle has come to an end for various reasons.
Japan's population is aging and older people spend less. Less spending, less money velocity = deflationary forces. Japan is also in a misunderstood / ignored "social depression" that has economic consequences.
Per David Hackett Fischer's book "The Great Wave," humanity has once again expanded its consumption to absorb all available resources, so scarcities will arise, driving prices higher. This dynamic doesn't care about monetary policy. the gold standard, bitcoin, or if oil is scarce or infinite.
This comment is already too long :-) More on this in a future post.
warm regards, charles
Wow Charles you showed no mercy
Quote
CEOs are just as prone to fads as the rest of us, and this is how the AI fad gathered momentum. A decade ago the warm-and-fuzzy tech fad that enamored every corporate HQ was fuzzy logic, one of the long line of precursors to the current AI mania. So labels touting "fuzzy logic" were slapped on rice cookers as everyone scrambled to cash in on the latest tech fad.
Unquote
Back in the 1980s they said expert systems were going to replace medical doctors never happened
So called "AI" has gone through many phases over many decades. "AI" spring and summer will turn to winter (when the funding fades out). But rest assured it will return. I've been impressed with some of the applications this cycle has spawned. They are rather useful tools. Check out this site for a selection of possibilities. I've quite enjoyed learning to properly prompt.
https://graydient.ai/
But they are all very narrow. A book titled The myth of Artificial Intelligence has many interesting insights into the details and history of "AI". https://www.hup.harvard.edu/books/9780674278660
Check out an article called "We Are in DeepSeek" by The Cosmopolitan Globalist here on Substack. She discusses the doomsday clock, the current threat level of AI, and has a bit of a discussion with DeepSeek about the threat AI presents. It is eye opening.
"...we remain a herd animal." Speak for yourself CHS. The readers of your articles are not herd animals. I am a contrarian. That's how one makes money and survives well.