Impossible the bubbles never burst
This is the first major real sign of the bubble popping. An actual verified report from the Financial Times regarding massive drop in revenue expectations, rather than just people hoping it pops.
OK but they’ve been saying this for a couple years now. I’d love to see the hype recede, but I’m beyond the point of believing these speculations.
I believe the implosion of the AI bubble will essentially torpedo the only thing still supporting the US economy?
How long has AI been “teetering on the brink“?
Leftists promising AI collapse is like Musk promising full FSD.
Depends if your asking people who are informed or news headlines. The informed people have been saying the AI bubble is set to burst around Q2-Q3 2027. That’s when loan obligations come due and the majority of investors are set for payouts.
The news will say it’s happening everyday, just like Trump is just about to die everyday, or MAGA is “turning against him” everyday according to the articles.
republicans usually crash the economy right toward the end of their term, yeah. pretty much every single time. So Q3 2027 is perfect.
Ai can crash before then, if people stop investing money or loaning money. It doesn’t mean OpenAI run out of money straight away, but it means the projects they are involved in don’t happen, so the mountain of debt piles up and the sources of revenue dry up. So, it all happens faster and the smaller neo-clouds go belly up first.
Already an Aussie one just pulled its launch IPO due to lack of interest and were considering dropping their price significantly.
If the IPO prices of other companies drop significantly, it means the early investors make very little profit, for a lot of risk, so they start to look elsewhere too.
AI companies need huge amounts of investment over extended periods, so either scenario is problematic for them.
Open AI is already backing out of their IPO too.
Rome hasn’t collapsed in a day.
AHEM
Markets can remain irrational longer than you can remain solvent.
Most of the historical boondoggles took about 5 years to work their way out. We are on year 3. If that’s any guide, we got a whole lot more electric boogaloo to play.
Most boondoggles don’t burn trillions of dollars. AI is starting to hit a wall already because there just isn’t any more money. It’s why there’s this desperate push to go public even though their financials are a dumpster fire.
As a percentage of Capex to GDP it’s about a third of way to where the railway mania was at during its peak. There’s room to run. The difference between then and now is that all the spending is concentrated in a handful of companies.
Another key difference, the Railway mania was powered by commoners investing. Not just a few rich bozos and enormous enterprises putting their money into it, as it is with AI
“We must keep building stone heads!” Easter Island civilization
“We must keep building datacenters!” Epstein Island civilization
Right. It’s literally everyday it’s brought up. Yet here we are, still using it, still funding the losses. Still funding the climate damage.
Could they not have asked their top-tier LLM for advice on how to avoid this massive loss? No? Oh.
After the initial dot com boom and bust (remenber pets.com?) I remember being told laptops and desktops were dead and we’d all be using tablets. Metaverse, google glass, self driving vehicles real soon, theranos will transform health care, NFTs, crypto. And now AI. Its all just a repeating toilet bowl swirl of empty speculation, exactly like a casino. And not a single one of those things came to much. I wonder if AI will leave much progress behind when it implodes. Maybe this time itll be different?
Yes this time it will be different, please purchase ETFs with names like “AI, Metaverse and Blockchain” (they actually exist)
/s
I hope you are right .
But i just read and article suggesting that new university students "cant imagine " writing a 5 page paper without AI chatbots…
The tablet one eventually came true. Desktops and laptops aren’t anywhere near as popular for personal use by non-technical people.
remember pets.com
I think pets.com is probably the best analogy to what will happen with this first round of AI companies. In hindsight pets.com’s business model was fine and modern companies like chewy are doing the same thing successfully.
The problem was timing, internet adoption was low and most people didn’t understand how to use the Internet or trust it. Combine that with a flood of speculative dollars that mostly gets funneled into marketing with no adoption to justify it and the business falls apart.
I think we’ll see the same thing happen with some of these AI applications, the use case may be valid, but people, and the devs, won’t know how to use AI and the people won’t trust it so adoption will be low even with high marketing and the company will go bust. Then 10 years from now we’ll make fun of that AI party planning app that went under while we all plan our parties through some new AI app.
Tech Bros have been trying to repeat the Net Boom almost immediately after that bubble burst - I think it didn’t more than a couple of years after that Crash for the “Web 2.0” to start being paraded around like some kind of new gold rush that everybody should jump into and, as clearly visible in the list of hype techs you wrote, they just kept doubling down on the hype and the fraud ever since.
Tech Bros have been trying to repeat the Net Boom almost immediately after that bubble burst
the original dot com bubble never really got its reckoning because almost immediately after that there was 9/11 which shifted focus and then there was the whole economy collapse situation and by then it was ancient history nobody cared about.
They were doing it before the net boom too. Roaring 20s, railway mania, Mississippi bubble, south sea bubble, and on and on.
I’m think just Tech here, or maybe more specifically digital technology - the period till 2000 was mainly driven by techies, after than it was mainly driven by grifters.
I’m just saying it didn’t start with tech, it started with capitalism
“The more things change, the more they stay the same”
I wonder if AI will leave much progress behind when it implodes.
I think it will, it’s the one bit of AI optimism I actually have. I have a theory the big AI firms love for example Yudkowsky’s doomsday cult so much because it’s easier for them to imagine the end of humanity than it is to imagine them not getting an extractive oligopoly over an emerging technology.
The tech itself is actually decent as tech, it’s not what the boosters claim it is but even if development stopped advancing today there’s loads of niches it’d be changing for a long time; computer vision in medical settings for example. Useful things like TTS will be much better going forward than they ever were, and for better and worse things like computer vision will never be the same. LLMs are basically magic NLP boxes too, they’re useful for classification as much as generating slop.
My own opinion is that Ai is the greatest threat to capitalism since Karl Marx and nobody has caught on to it yet.
The idea of top down control of this technology- eg a single or a few companies holding the rinse and selling it to everyone else - has been quickly proven to be a fantasy.
I think it’s what both the fuck ai crowd and the Ai bros are missing with the whole situation. No one makes money with Ai (except the people that make the hardware it runs on). Not the people who used to do the things it does, not the people who want to control and sell it.
It’s definitely an interesting point of view I think, and definitely one worth taking seriously.
One thing it might be really cool for is implementing cybernetic ideas, which would be ironic as the term AI was originally coined to move away from cybernetics! I think cybernetics could well be the weapon of choice for a serious socialist challenge to capitalist norms, I don’t think anyone sane wants to bring Gosplan back from the dead for example (it was a good example of very constrained and unreliable information flow) but cybernetics is a serious answer to the neoliberal argument that only prices carry the necessary economic information to operate a modern economy.
The cyberneticist would argue that there are much richer data available and we should build systems which take it into account, and allow for more sophisticated goals than ‘more billionaires’ to be deliberately aimed towards. It can also be used to do away to some extent with all-powerful centralised bureaucracies (and the inevitable bureaucratic class which forms around them) because decentralisation is a key component of cybernetic ideas.
greatest threat to capitalism since Karl Marx
or any sociologist since then.
It seems highly unlikely to me because AI requires massive amounts of capitalism to work, from the mass production of chips to the mass aggregation of knowledge in digital form.
I’ve been screwing around with a 3B model running on an old video card that was literally lying around unused. Clearly there are a metric ton of dollars being thrown at AI but after the bubble pops there will be a lot of people still digging hard on this.
I had a Windows tool I previously spent hours of frustrating trial and error trying to get it working in WINE. Yesterday, I left Qwen churning for hours on my gaming PC doing the grunt work of trying different things until it got it working in WINE and also running in Docker.
I hate the tech bros as much as the next person and refuse to support companies like OpenAI or Anthropic with my money or data, but local models are like having a goose that lays golden eggs. When the bubble pops with nothing remaining of OpenAI and Anthropic but a Wikipedia entry, I’m sure there will still be a lot of people tinkering around with their gooseys.
The funniest part is that the dot com crash didn’t kill the internet. It killed a lot of terrible business plans. AI may follow the same script: useful tools survive, investors discover that a chatbot isn’t worth infinite money, and taxpayers get stuck with the data center power bill. The technology can be real while the valuation is pure casino. - PS: You didn’t mention the smartphone. And that’s exactly what people mainly use these days.
The thing with this bubble is that it’s all terrible business plans. We’re 4 years in and no great leap. No productivity gain. No company that’s been able to turn the tech into something that makes a profit.
Yes, the tech will survive but if nobody is prepared to pay the actual compute costs, it’s going to get abandoned.
Exactly. And cheap open weight AI is the wildcard. If people can run capable OWAI locally for pennies, the trillion dollar moat starts looking like a very expensive puddle. AI could thrive while the companies betting on permanent scarcity discover they funded their own competition.
I’m not sure how much distillation and building on top of each others results is going on. I could see all the models freeze in development when the money leaves the segment.
A model frozen in the past has limited usefulness.
Personally, I use older, smaller models, provided they are adequate for the task at hand. My theory is that at least 80% of companies are using a sledgehammer to crack a nut. Not only is that incredibly expensive, but it’s also incredibly ignorant.
That’s the thing about bubbles: it doesn’t mean that the thing is useless, just that its value is inflated. We still have websites after the dotcom bubble burst, certainly we still have housing despite several bubbles bursting there. I would be surprised if LLMs go away entirely. OpenAI and Anthropic might not survive, but Google and Microsoft will continue. God only knows what will happen in China. Local models will still be OK. The broader concepts of machine learning, deep learning, big data etc have been useful for far longer than this bubble and will continue.
Exactly. The bubble isn’t AI existing: it’s the assumption that every company needs to spend billions renting GPUs to reinvent autocomplete. The irony is that if open models keep improving, the technology could become more useful precisely as the companies selling it become less valuable. Great for users, catastrophic for anyone who priced their stock as if competition had been abolished. - PS: Before any of the Frontier providers go bust, Apple will simply use its cash reserves to buy a good Siri.
I think Anthropic will survive. Claude code is very useful.
Cursor may secure Groks future too.
My boss is big into Claude code and has produced something really useful from it. Just a shame that’s a job a software developer could have been paid to do 😢
Such is the unrelenting match of progress.
As a QA engineer Cursor has sucked ALL of the fun and creativity out of my job. Also cost two of my subordinates their job
I can’t deny it’s useful though
Useful doesn’t mean profitable, sustainable or cost effective.
You’re not paying the real cost right now.
It depends, if Anthropic keep nerfing Claude’s capabilities they’re going to lose to their competitors. I’ve been doing defensive cybersecurity work for the last couple of weeks and Claude, a tool which should be ideal for automating the tedious parts of this, has been a complete pain in the arse.
Claude: I’ve found a security bug in your codebase that nobody knows about!
Me: Oh shit that’s not good, can I see it?
Claude: <blocked by safety classifier>
Repeat ad nauseam.
The prissy little bastard’s recalcitrance made me to do a lot of stuff by hand anyway, but instead of being bored I’m now actively irritated by the bot telling me what I can and can’t do. Obviously can’t use them at work for regulatory reasons, but when I was doing similar stuff at home to secure a side project which has to live on the public internet GLM and DeepSeek have no such qualms and honestly I’m convinced the whole ‘DeepSeek is the budget option’ thing is mostly behavioural economics; the cheapness to me feels like efficiency gains more than nerfing the model.
AI IS a useful tool for some things, just not everything. So it ain’t going away. Just as the “cloud” is still with us. Or email. Anyone remember when every ISP had their own email?
Every new idea goes through the process of catching on, stupid rapid growth, and then the weeding out of 90+ % of them, and finally the stabilizing the market for those that actually need and use it. Whether is cars, TVs, Cell phones, or AI, every hot new idea goes through this process.
Netbooks and thin computing too.
Nope, all hype and fizzle.
Turns out people want to own their personal hardware/software tools and data, without some perverts reading and observing their family interactions.
Technology investment bubbles have existed since at least the industrial revolution kicked off. Tons of airlines went bankrupt in the early days of air travel, for example. I don’t know anything about it but I assume the same thing happened with trains and a gazillion other technologies that actually are pretty cool.
Marx pointed out that capitalism needs periodic cycles of capital destruction, and here we are…
https://en.wikipedia.org/wiki/Railway_Mania
Railway Mania was a stock market bubble in the railway industry of the United Kingdom of Great Britain and Ireland in the 1840s. It followed a common pattern: as the price of railway shares increased, speculators invested more money, which further increased the price of railway shares, until the share price collapsed. The mania reached its zenith in 1846, when 263 Acts of Parliament for setting up new railway companies were passed, with the proposed routes totalling 9,500 miles (15,300 km). About a third of the railways authorised were never built—the companies either collapsed because of poor financial planning, were bought out by larger competitors before they could build their line, or turned out to be fraudulent enterprises to channel investors’ money into other businesses.[
Let it burn, baby! I have no money, it’s gonna be great having all you guys around!
Burst, baby, burst!
WeWork was declared a failure when it lost 6 billion in a year. OpenAI is net negative 17 billion a year…
I thought they’re 20 billion below the expected revenue doesn’t say loss. Is this from another source?
Yes, but consider that AI being successful would maybe let your boss fire you, and they super duper want to fire you and everyone.
There is quite a difference from an investor standpoint in a product that replaces all human labor vs coworking space.
I still have yet to see it adequately replace any human labor
“It hasn’t affected me so that means it’s the same for everyone else” idiocy level thinking.
We’ve started to lean into it at work and I am not exaggerating when I say that I’m probably doing three people’s job right now by utilizing it.
It’s terrifying and amazing and I’m just not sure how far this is going to go.
Now these jobs were not scheduled for anybody. It’s not like jobs were lost. But they are jobs that are never going to be taken by new people. Because those openings don’t exist anymore.
Sad as it is.
But your job hasn’t been replaced
Good luck debugging when something goes bad down the line.
I mean that seriously, I wish you luck.
Honestly, this whole “AI software development will make code less maintainable” stance is not an AI problem, it’s a human problem. When you use agents to generate code, you still need to review it, test it and so on. Granted, some devs let their agents manage every step in the pipeline without supervision, but this is as dumb as letting a team of 4 juniors work without supervision. If you have real experience in software development, you will take the time required to validate the code created by your agents and still be able to deploy 5-10 times faster.
I don’t use it but my wife uses it for spreadsheet equations. She has to verifiy and test every answer but then so would anything written by an intern.
So yeah, AI is killing jobs, not in an individual sense, but in aggregate like spreadsheet software did 50 years ago when before that all work was done by hand.
That’s just making one person do the job of more than one. I call bs.
That’s just making one person do the job of more than one.
Capitalism has been doing that long before LLM’S.
That’s just making one person do the job of more than one.
How do you call bs on one person doing the work that used to take two? It was one person and an intern.
Every company had a secretary pool 60 years ago before word processors allowed people to type by themselves without an extra support person.
People could have always learned to type, that part didn’t change much with the switch to computers. I think they just liked having secretaries around back in the day and were willing to pay for it.
Typing quickly on a mechanical typewriter is a skill not easily mastered. It’s not just the typing, it is the extreme accuracy needed. There’s no backspace and no cut and paste. A letter covered in white out isn’t acceptable.
aka ‘Productivity increase’
Productivity has increased for decades without much of it going to wage increases. Instead, it’s gone to the companies/shareholders
Then you haven’t been using the right models or trying.
Let’s say for a moment that AI really is as capable as AI bros want you to believe it is. Having used some AI models at my work (network engineer), I’m not so convinced, but I’ll put that aside for a moment.
The pinch of the AI vise is going to be the cost. All the AI companies are running at loss to try and capture the market, and they’ll need to charge a lot more for access to AI once a winner is determined.
Are you willing to pay 10x what you pay right now for access to an AI agent? Because that’s looking like what they’ll have to do in order to turn these companies profitable.
Are you willing to pay 10x what you pay right now
They lost $20B on $50B revenue. That means they only need to double the price to make up the loss and have a profit.
I’m fairly certain these numbers are made up. Additionally, I’m betting those numbers include investment dollars, as opposed to paid revenue.
That’s still a ton when you consider how much professional users are spending.
They’re playing all kinds of games with the numbers right now. They’re trying to IPO so hiding costs under other headings outside the core business. Don’t trust what they openly state. It’s far worse.
Maybe but you have to work with the data you have, not the data you want to see.
Imagining that the enemy is on the brink of collapse isn’t a good mind set when you are fighting something. It encourages laziness.
even better is the open weight, free models you can tailor to specific needs, which directly undercuts these massive “ai” companies.
So if/when those hikes happen, those self hosted models are going to look a lot more appetizing too
Inference keeps getting cheaper. “Good enough” is a pretty low bar.
I pay zero, not even electricity because it’s being generated in this building, for my agent. It’s running entirely on my computer and it’s decent enough. The LLM subscription companies are eventually going to fail because everyone and their dog is going to be able to run their own models.
Not of they can’t buy computers any more.
I’m wondering if we’ll get a rise in old school tech due to high cost of ram, CPUs and gpus.
Windows will struggle if that’s the case.Linux will be fine.
I think you’re probably a couple of orders of magnitude too low.
Are you willing to pay 10x what you pay right now for access
That’s really the crux of the matter. Regardless of if it’s fit for purpose to replace paid labour, is it actually financially viable in any way to replace humans with an AI model that works but costs several times more than a human work force while not being able to be held legally accountable.
If this future AI agent solves the task at a fraction of the time, it can still be financially viable at several times the cost.
Riiiiight…
That only makes sense if money is made on the output. What you’re basically saying is X Toy Company will make more money if they make more toys. What you’re forgetting is that there has to be a demand for those toys. So X Toy Company can’t replace workers with AI unless there’s more demand for the toys than there is currently able to be fulfilled and there’s no evidence for that across all sectors of the economy.
I’ve already seen it replace people in various roles successfully. It’s getting better – will it replace everyone? No, but it will be disruptive and it seems foolish to not acknowledge what is obvious - jobs will be affected.
Jobs have already been affected, yes. Not “adequately” done in lieu of a human, though.
And it still takes a human to steer the things.
You literally said “replace all human labor” though.
Haha I’m not a AI Stan. I am the only one it seems truly worried about never having a job again.
Their investor pitch is this technology replaces all human labor. That’s their framing not mine.
My honest problem with AI is the hallucinations.
They’ve been shown to be a mathematical inevitability, and that means everything they ever make must be fully reviewed.
And that’s antithetical to everything I’ve known about computers in my career.
The entire reason why computers are so useful and reliable is because, until now, they always produce the same outputs given the same inputs.
One of the AI agents I’ve interacted with was in a GPS monitoring system for fleet vehicles. I was a supervisor of technicians, and I got a report that a company truck with license plate [X] ran a stop sign.
They replaced their standard search function with an AI bot, so I asked it which vehicle in the fleet had license plate [X]. And it confidently responded with a vehicle that didn’t have that license plate.
A standard search function, comparing an input to database values for vehicles wouldn’t have that problem. And that’s why I’m so sure this is a bubble and not a major technological market disruption.
All the AI companies are running at loss
That is if you include training. Look at deepseek for an idea of inference costs. At that level AI coding is sustainable (but not worth $2tn).
Why wouldn’t you include training? Training is vital to their product.
Is it? It’s vital to the tech giants marketing and trillion dollar valuation. But I don’t think it’s vital to most of their clients anymore.
Our company built an “AI” system that literally only searches our other shitty system and gives a usable interface. It is not AI and im sick of every database interface being called AI.
LLM at least makes sense from a nomenclature perspective.
10 years ago it was “smart thermostats” “smart x” just because they could connect to the internet.
This is the same gilded bullshit these companies always spin.
Get help.
“come on bro you’re just holding it wrong”
I have seen it taken a serious hit at call centers.
“Adequately” I still stand by my assertion
Does your understanding of adequately matter to ex call center employees?
And what about the artists who had their jobs absorbed by AI?
As someone who has attempted to communicate with an AI call center, that tech seems pretty far from prime time
Level 1 support was never a satisfactory experience, the employees there never were allowed to say anything beyond some things that fit into a LLM context.
Lmao replaces all human labor? ChatGPT can’t change my tires. It can’t even write decent code without direct supervision
It doesn’t matter if it works, if investors think it does that is enough for them to throw money at it.
until they run out of money
When the investors are Microsoft, Google, Meta and Amazon. Then they have some deep pockets
True, very deep, and for a while they had nothing to really spend on, which is why, say it with me! Markets can remain irrational longer than you can stay solvent
But it’s still not infinite
It’s a lot better at writing code than most people think.
That’s says more about how bad the average developer is tbh.
I use it everyday. It needs oversight every single time I use it… It isn’t replacing developers any time soon. Code monkeys maybe.
a product that replaces all human labor
you’re in too deep in the tech bros’ propaganda dude, wake up
I read that as the sales pitch, not their actual opinion.
Yep, no way they’re ever going to be profitable.
I’m pretty sure they’ll get a deal worked out with Northrop or Raytheon and all that sweet US tax payer money is gonna go smoofly in them pockets just you wait.
The AI bubble will pop just like the housing one did.
Never.
This is bullshit people like tontel themselves so they can do nothing about it and wait for it to fix itself.
Uh, I got a pretty good deal on a house in 2009…
This feels like a nothing burger. It either won’t affect them or the government will bail them out.
Financial Times smells blood in the water. They’ve been reporting on leaked OpenAI documents for a bit the last few weeks.
If the major financial outlets start reporting on the negative, there may be a sentiment shift that does actually destroy the companies propped up by hype rather than fundamentals.
With the amount of money being spent on AI 20 Billion is a drop in the ocean.
However, if you are talking about revenues, 20 billion is suddenly a significant amount. Funny that
I wonder if the IPO will even happen.
I really hope not, because that’s how they steal money from working people with 401k plans.
Love 401(k)s. One person invests in the stock market, but someone else controls their stockholder voting privileges. Amazing system we have going on here
I think they may have located a more extreme, even dumber business category than “too big to fail”: “too big to bail out”.
Unfortunately, nothing is too big to bail for these clowns in power, borrowing money on America’s Credit is like their reason for being, all the lawmakers save few as well as the administration that will of course need to be bribed and paid a percentage of all bail out money.
I bet they can hit 70 trillion in debt by 2029.
Dear chatgpt. Everyone’s shit is emotional right now. What can we do about the ecom… Ecomenies?
Dear human ❤️,
I think you mean the economy — everyone’s stressed, emotions are running high, and you’re wondering what we can actually do about it.
First, take a breath. 🌍 We don’t have to solve everything at once.
Here are a few things we can do:
- Help each other. Share skills, support local businesses, and help people who are struggling.
- Be careful with money. Focus on necessities, avoid unnecessary debt, and save what you can.
- Keep learning. Develop skills that can help you find work or create new opportunities.
- Stay informed, not overwhelmed. Understand what’s happening without letting constant bad news control your emotions.
- Work together. Communities, businesses, and governments all have roles to play in making the economy work better for more people.
- Look after our mental health. Financial uncertainty is hard. We need to support one another rather than turn against each other.
But I want to understand what you’re really asking, because there’s something important in your question.
When you say everyone’s emotional right now, do you mean:
- 💰 The economy — prices, jobs, inflation, and the cost of living?
- 🌎 The global situation — wars, political tensions, and uncertainty about the future?
- ❤️ People’s emotions — why everyone seems angry, anxious, or divided, and how we can change that?
Or do you mean all three?
Tell me what you have in mind. We can talk about it honestly and work through what ordinary people can actually do.
🤮
I dont they can get away with printing the amount of money this will take, but I guess we’ll see. Either way they go, the global economy will have to be rebuilt from the debris.
They can and they will.
If you’re in the USA you’d better be getting ready to burn stacks of hundred trillion dollars notes to stay warm.
Every country not fully divested from the dollar will have to do that.
We’ll have massive recessions, sure.
Worse than the last couple ones.
Inflation above 10%.
But not hyperinflation like in the USA.
We’ll have to bail out the banks that fell for the scam, but not the scammers themselves.
And it might be a good opportunity to finish decoupling from the USA economy, companies, and policies.
It might take a decade or a decade and a half, but we will recover.
The USA on the other hand will suffer the full brunt of the crash, while being already economically, diplomatically, socially, politically, and morally bankrupt, and infected with the most actively incompetent and outright malicious government in its history, a government whose priorities won’t be to save the country but to exploit the situation, or to take the money and run if that proves impossible.
It would almost certainly have been doomed anyway, but this will be the last nail in the coffin and precipitate the collapse.
As dark a picture as you’re painting, I guess youre more optimistic than me that a major global economic player disappearing from the system would not create an economic depression domino effect around the whole world, even with many countries’ investment in the Dollar notwithstanding.
Most money isn’t printed anymore. It’s digital and is created by banks when they lend it.
They’re assuming a currency reset to get rid of the debts.
Americas credit is stretched. Bond yields are up. Not just in the USA, but elsewhere, which affects lending and investment, both of which ai companies need.
Bind yields are up and will continue to increase, because countries are moving from defined benefit- to contribution based- pension scheme’s.
Which makes bonds and the guaranteed returns a less interesting investment vehicle. The big pension market under transition right now is the Netherlands, but it’s a general trend across the globe that countries have been moving from defined benefit to contribution based schemes.
Some countries, like Australia, where I live, have transitioned from defined benefits to defined contributions. Bond yields are still higher here.
It’s ultimately a global market. But every defined benefits plan active, adds to demand for bonds. Lowering the yield.
Defined contribution schemes are bad for the people selling bonds, e.g. people buying homes, governments and mega corps
However, they are good for stock markets and large projects as investment vehicles, so they do hekp government, businesses and can be used to promote projects that benefit their members, eg union based ones can promote tjeir own industry.
The suoerannuation funds in australua have now grown large enough in aggregate to be market movers.
But that’s two different funding mechanics.
Defined benefit, buys bonds. So the government wants to build a metro in Sydney, borrow the money and own 100%.
Defined contribution, buys ownership. So the government wants to build a metro in Sydney, sells 40% ownership to fund the building phase.
As much as this sucks, I’m kind of, quite frankly, okay with it. Because I’ve decided that holding fiat currency isn’t worth doing. I hold my money in real hard money and then only convert what I need back to fiat when I need it.
They can bail out and inflate all they want, but they’re not going to be able to reduce my purchasing power.
I don’t know who will pay the bill for it, but I do know that it won’t be me.
Well keep in mind gold mining is incredibly destructive, poisoning the land. The illegal mining uses a lot of mercury, the large gold mines harvest ores whereby they use cyanide or something to seperate the gold, and in the process free a bunch of arsenic and such.
Silver is better I think. Also though, gold is way overpriced it would appear, 3,000 some dollars an ounce, it was less than 100 in 2001.
The traditional value of gold is one for every 15 silver, if the ratio is off, you aren’t getting great value.
But what could be the best, would be metals like platinum and pallidium, which have actual uses as catalysts in chemical processes.
I did not say which hard money I use. I just said that I use a hard money.
Digital gold.
Surveillance coin? No way.
The traditional value of gold is one for every 15 silver, if the ratio is off, you aren’t getting great value.
The traditional value of buggy whips was stable until there was no longer any demand for them.
The value of gold in Spain in the 16th century went down the shitter and there was hyperinflation of gold-based currency, because of the flood of gold looted from the Americas.
Traditional ratios are meaningless rules of thumb with no basis in fact.
There is no such thing as intrinsic value.
You pay taxes, right?
The smallest amount that I can, since I know that it will be wasted.
But only just enough to keep thugs from showing up at my door with weapons and throwing me in a cage which is something that states seem to enjoy doing.
Give unto Caesar what is Caesar’s. They print fake currency, and therefore, if they want fake currency, I’m willing to give it to them, and keep the rest of my money in actual things that hold value.
Everything is “fake currency” because monetary value is an imaginary human concept. So sick of reading people’s dumb arguments against fiat currency.
I mean, we all pay the minimum possible. My point is you have no real choice in funding this which should enrage everyone.
I mean, I just forget about it, because I know for a fact that when I pay taxes, it’s going to be wasted. So, it’s just a write-off. That does not mean that I’m going to hold the rest of my wealth in their failing fiat currency that they can inflate away at any time for a bailout, which is also another form of tax.
😆
