The End of Recessions is Closer Than You Think ft. Jordi Visser

26:53Abundance is a very scary thing to me. And I've had to come to terms with what it actually means. And for me, because it's very bad for labor, it's very bad for politics and society. And how do you get through this whole identity breaking thing, which I'm sure you've either thought about or you've had people on which have talked about it. And I've kind of come to the conclusion that when people say, well, there has to be a form of UBI, I actually think, and I don't know who said this first, but someone when I was really doing my research on Bitcoin said, Bitcoin's all about time. You have to understand you're getting your time back.

27:27You know, what's interesting about that is everything in the fiat system takes time. It's all about borrowing money for 20 years out. Well, if every day moves what used to be a year, then you're not borrowing money for the future because the future is completely unpredictable. So it doesn't happen. So eventually what goes on is the entire leverage in the fiat system has to come down. It has to. If the money's moving into stable coins, what's replacing, and this is going to get into something which I'm sure you've had charts of before, but remember how back in the early 2000s, we would look at the money velocity chart and you had to get money velocity up.

28:06Well, with AI agents, you know what's going to happen? The velocity of money is going to go through the roof. Staying with stable coins, those two combined, velocity. That's what I mean, is that the AI agents will be trading stable coins so fast. The other engine, the other fiat system, the one that has cycles, and the reason so people get, I don't think there's recessions, is because I believe the economy is now 70 % the digital economy, 30 % the fiat in terms of growth rates, but the size of the fiat system is still much bigger than the digital one. And so the cycle still exists in the fiat system.

28:38We're seeing that with commercial real estate. We're seeing it just doesn't matter as much because it's not as important as it used to be. And because those digital companies don't have debt, so they can't blow up. I mean, that's point number one. That's the most important thing. And that's why corporate interest payments collapsed when rates went higher. And I remember showing that charts, people going, do you understand this is exactly it's because the mag seven are loaded with cash and all the people that have debt don't equal the size of the cash these people have like you're watching this stealing sound going into these companies it's not that complex um so i've kind of come to the conclusion that by 2030 i do think the the stock market valuation will change um and the reason it will is because theoretically like i'll use Nvidia as an example.

29:24So you probably, I'll give you some numbers. So the current forecast for revenues for Nvidia for sell side, the average is about$425 billion for 2030. They're currently just over 200. Okay. So let's assume it's 225. So they're going to double. The problem is we know there's going to be a hundred gigawatts minimum that needs to be built out globally. So if you do the numbers and it's 50 billion a gigawatt, that's$5 trillion of CapEx. And we need this stuff. Now that's using today's prices. So no inflation. So let's leave it exactly the same. And right now, NVIDIA has a complete dominance on the data center side.

30:01That's for data centers. So you can go do the math. Out of the 50 billion, about 40 % on the low end is for the compute. And the rest of it is the power and the concrete and the stuff like that with power being the majority of it. So when you do the math, they've put in almost a 0 % chance that NVIDIA is going to keep their market share or that the CapEx is going to happen. It's like a 10, 15 % in my probabilistic. That's why until that number gets to the point that it's actually high, then consensus on the AI buildout is just very low. People don't believe in it. Because you can hear it in everybody's voice.

30:35There's a bubble in calling for an AI bubble. Yes. And you're hearing it in the people we know and we talk to, the people with money. The more money you have, the more you doubt it because you've been through this before. And this looks like a bubble. But if you don't have money and you're just trading all day, you're making money on it. Like you're like, all right, I'm, you know, my number one input input is it's called momentum. And then I go on X and everyone says, I buy nuclear. I buy quantum. I buy this. And that's all I do. So you don't have to go do your research. You don't have to go through it.

31:02And as long as that's happening, retail is dominating this. So as long as Nvidia's probability is low, then I think this stuff will go higher. The bubble will occur when Wall Street starts to price NVIDIA at a level where they've built it in. The cynics suddenly realize that this is the end game, right? The greatest invention humanity will ever create. People don't realize that yet, so they're cynical about it. But once they get there, the amount of money is going to get thrown into this. And then after that, I don't know anymore because we've then got AGI or whatever, trading the markets, how do you price markets?

31:42Maybe markets go sideways for 20. I have no clue, but I just see that strength. It's so obvious to me. Sure, we'll get a slowdown and a correction period for a bit, but then after that, everybody's going to have to throw their money into this because there's no other choice. What would speed the process up is if computers were managing the majority of the money. So they would take NVIDIA up because the probabilities, it makes no logical sense, but there's two forces. There's Wall Street, and then there's passive investors who are doing nothing. And so there's a lot of money that isn't actively managed.

32:20And then for the stuff that is actively managed by humans, they don't agree with it because they've been through this before. And as I, you know, I've been using the Charlie Munger quote, show me your incentive, I'll show you the outcome. there's no incentive for wealthy people to bet on AI because they've already made money. And the outcome is if they're wrong, they don't want to be wrong. I've learned that only through, why don't you like Bitcoin? And I've been to enough dinners now. I don't know how you handled it for so many years. Why don't you buy it? I can't deal with, there's always one of them at the table.

32:49I was at a Russell Napier dinner recently and there was one guy at the table. I'm like, are you kidding me? Now I have to do the Bitcoin thing. So I just kind of shut down and I laid low. But Tesla is the same thing. I mean, at least Tesla, there's a human being and he's built four other companies that are massive and done all these things and he wants to go to Mars. But Bitcoin and Tesla are the exact same thing. No one believes in them. So, you know, if you've ever wished you could ask me a question, any question 24 seven, well, now you can. The Raoul Pal bot is my AI assistant trained on all of my insights, macro research, macro views, even wine and travel knowledge the row bot is available for everybody who subscribes to either connect alpha or pro it can really change your life you get me as your mentor 24 7 the links in the description i think you're gonna love it it's bizarre um so when i'm also looking at this the energy side has got my attention and i think there's a layup trade when you break down the urgency by which we need the energy that rules out nuclear now of course the investment comes and it takes seven eight ten years before it rolls out sure but by thinking that nuclear is the answer right now it's not the the need is so urgent and so pressing because this is not just the margins for the hyperscalers this is the humanity scale technology that is the game of nations now right there is no way you can lose zero and the u.s government is showing it by buying fucking stakes in companies exactly this is the size of this right this is the most important thing we are china now we are buying companies privatizing because there is no choice right this is the most important thing we will ever go through and so energy so it's like okay fine oils aren't gonna be part of the equation it's just too slow to build anything.

34:50The existing infrastructure of the electricity grid is too crappy. We cannot rebuild it at national scale. So it's going to have to be a decentralized grid and it has to happen quickly. And the only answer in the world is solar. And then you add a bit of gas, gas power plants for the load balancing because they take about two years and gas is abundant, super cheap. You can't get the price of gas up if you tried because there's like infinite supply of this bloody stuff. So that's, I'm like, and then I look at the tan ETF and it's like down 90%. I'm like, because everyone's so cynical from getting burnt in a excess capacity cycle last time around.

35:29I'm like, I know these trades. I love these trades. These are the Lindy effect trades. He's like, is solar going away? No. Look what China's done. They've added more solar capacity in China than all of the world's total solar capacity in one year. and it's like i think they know the game here yeah so what is your thoughts on the whole energy thing so until there's another place where i wanted to make sure i i understood the the complexity so on the gas side theoretically if they could they would try to do all gas because it's quicker and because it doesn't take as much land so the problem with solar is obviously these are big gigantic fields.

36:13Yeah, but not that big. Well, so for the US to get to the gigawatts that are necessary, which is a big build out, like in the case of Nevada, where they're building this big one, they've had to stop it and move it around. And so even though they're not that big in terms of we could do it, they definitely take a shorter amount of time to put together than building out, obviously a plant but in terms of if you could gas turbines if they were all available right now and you could get them all they'd be doing gas turbines and everything because we have available gas it's just do we have it near places and i think they'd yeah do we have pipelines exactly people forget that you've got to pipe the damn stuff exactly so it becomes very politically difficult because you've got to get it through california and they don't want it and they have to get it through you know, wherever.

37:01Yeah. And that's the thing I think for solar is the one big, beautiful bill got people thinking that they don't want solar. The reality is, like you said, it's a race. We have to get it done. And when you realize the shortage we have in transformers and in gas turbines, you have no choice but to go another route. And the solar route is going to be part of it. The battery route is going to be part of it. When you start getting lithium investments, that's them pretty much admitting that, okay, we need batteries. And it's not just for drones, and it's not just for humanoids and defense weapons. It's also for, okay, there's a reason why Elon Musk, when he built Colossus, he's got his big battery packs.

37:39There's a reason why his battery part of his side is growing. This also brings the Bitcoin miners in because of the grid optimization, because what the Bitcoin miners are able to do, and this has been something that I learned more about this year. And this is actually an important thing for people to hear, because I I do think it'll bring the traditional finance world. Every day, there's a new way for them to invest in crypto. You obviously had the Circle IPO. So stable coins have finally, I mean, people didn't even hear of stable coins a year ago. That's a lot more I need to talk to you about.

38:05I'm sorry, I'm keep writing notes of things I need to talk to you about. So that got in there. But the Bitcoin miners are another place. And the reason is because they're directly connected to AI. They've built out these data centers. They have this equipment. In the case of Texas, they have four gigawatts of the 80, I think it's about 85 to 88. So it's a sizable portion. Now, the value that they bring to the ERCOT to Texas is the fact that if you have solar, obviously at nighttime, they're not using, they're not producing anything. So what is important is that the prices, even during the lower times, are higher during the off times.

38:42And this is what the Bitcoin miners do because they're arbitragers. So they do things when the price is really low. So it's kind of like having a restaurant where you're closed at night. Well, if you could have orders at night when the tables are empty, then your business is more profitable. So what the Bitcoin miners do is they act as virtual batteries. And so if ERCOT's having a problem like it had in 2022 and pipes are freezing and the electrical prices are going through the roof, then they can call the Bitcoin miners and they'll take their they won't mine anymore. And so the miners have become important.

39:13And the reason that is in there is that more and more people are looking at grid optimization, no matter where they are. And this was a big negative because Bitcoin miners were negative on the ESG side. In fact, everyone, when I got into the Bitcoin side, it's like, oh, my God, this is so inefficient. And so everyone is starting to connect. So I do think when you go through the power side, people have to look at so many places across the power side. We're going to be using batteries. We're going to be using solar. We're going to be using boilers. We're going to be using generators. We're going to be using everything because, like you said, it's a necessity.

39:45and the gas turbine shortage of which there's, I think, four, really four or five companies that make gas turbines of any kind of size in the world. If there's a shortage there, that's five companies that are not supplying the power. They're holding things up. And so a small boiler company, a small battery company, nuclear investments, this is kind of the PMI thing. Those dollars start kind of moving around into other places, and solar is definitely going to to be one of them. Yeah, you just see the scale of which China's doing it and the signal in that that they're not going to destroy capital for the sake of it.

40:20There's a race to get energy. The energy thing is also misunderstood by people. People say, well, solar is rubbish because as soon as the sun goes down, you've got four hours of battery life, then it's all over its shit. OK, what I say is, OK, grid can supply this much electricity. If you try and plug the hyperscalers into the grid grid is finished right electricity price goes to the moon it doesn't work yeah so you take as much off grid as possible so they're only calling for 25 of their needs on grid yep i mean that's that's how it works but people just look at everything in isolation because for some bizarre reason solar is politicized and they're like solar bad oil i'm like fuck it's just energy And the entire game the world is in is intelligence per unit of energy.

41:09That's the game we're in now. The whole world is in one game. Yeah. One of the things you said, an important point there. And I think people have to they have to recognize that as of now, what the hyperscalers have effectively used was excess capacity on the grid. Yeah, we had if we have a recession, which we have outside of the hyperscalers, they were just using what would have been used by manufacturers. Yeah. If the commercial buildings are empty, then they're not using them. If auto, like you can't have the nominal GDP slow down outside of digital and not have electricity usage go down. So where the electricity usage is going up is geared towards the LLMs and towards training them.

41:53So once you get, and I think next year is the forecast that most people have, where we will then be at full capacity, that's where the build out becomes critical. So I think one of the reasons that this hasn't been violent, when you go to Three Mile Island, when you go make all these deals, when Elon Musk imports basically a gas plant from overseas, it's because he can't get through things here. And whether it's the state regulations, which have become an issue, or other things. I think people will have to recognize that when you go through excess capacity, again, you start to get the PMIs go higher.

42:32PMIs at the end of the day are about a diffusion index. And if you have excess capacity and you're not running at a full throttle situation, it becomes an issue. And I think that's where we're going to be at. The other thing on batteries, just so people know, I'm spending a lot more time on the edge problem. The reason I brought up the humanoids is kind of the level where I think the stock market, when people jump into humanoids, because right now most investors are like, it doesn't matter. I'm like, no, it's starting next year. And this is my hot take for here. The first humanoids in full development will definitely happen next year.

43:04It's the Tesla RoboTaxi, which is real humanoids on wheels. And that will open up people to do the homework. And the reason that's so important is because we're going to start getting into the brain being in the devices the edge devices so everyone has to realize that elon's even talked about using all of the yesterday which is something i don't know maybe you and i've talked about in the past that they've all got latent computing in all of these cars yeah there's millions of these damn things you just need to connect them which he's happens to own the network oh what a surprise well this is the reason why i do probably last week um or two weeks ago, Andre Karpathy had a podcast come out with Dwarakash Patel.

43:47And I got a bunch of things sent to me going, oh, this must mean, he's saying no AGI till 2035. I guess we have a bubble right now. I'm like, okay, first of all, it's kind of like the recession thing. It depends on how you define it. We're actually in a recession right now in many parts of the economy. He's saying AGI is when the computers in the brain are interacting with the world like a human, which I happen to agree with. If you ask me what is not AGI, it's when a computer can do a bunch of knowledge work, but that's it. It needs to interact. Yeah. Well, I don't, I don't even know. Cause if we'd gone back three years and said where we are today, we'd say, yeah, that's AGI.

44:23Oh yeah. We've got agents acting autonomously. We've got memory, but we just keep moving AGI because when we have AGI, we're declaring ourselves, not the apex species. Nobody's going to declare it because nobody wants to, But that's the fact is the moment we announce it, we have replaced ourselves with a new apex species, which has never happened to all of humanity. Correct. Correct. And again, the robo taxis can already drive better than humans. I do believe that the interaction between a humanoid and human beings, it's not there yet. I mean, they can do stuff. They'll be in mines. They'll be in factories.

45:04They'll be in all of this stuff. But before they go into a house with kids, they actually need to improve a lot. And that was his point. And whether or not it happens, you know, in the future or not. But the reality is we will be sticking these brains inside these devices that don't have time to wait for the latency to go to the cloud and come back down. And that's the whole point of like we're entering a different stage. And for batteries and power, it has huge implications. There's also the semi side where it was one semiconductor that was benefiting from the data center build out. And the reason I use NVIDIA, so NVIDIA is the data center side.

45:37It's the oil. It's whatever you want to do of this thing. But now you're getting into every semiconductor going higher like Micron and SK Hynix and extending into the smaller ones. And the reason is because when you make brains inside an edge device, that is different than a data center. They need different packaging. They need all this stuff to happen. And so I think that's going to be the next phase of AI is that brain part and the battery part. Yeah, I totally agree. And Elon's made this clear as well. It's like, what the hell do you think my satellites are? Exactly. Because they're just a bit of solar and a computer.

46:08You know, if this is not telling you that, then nothing is. That's another thing about the electricity thing. You made a good point that I had not thought of. And I think there's going to be a lot of signal in what you said, is who's going to pay for the increase in electricity if it's caused by the hyperscalers? It's going to be the hyperscalers. Absolutely. We have to tax them in a way to replace the economic rent that they take out of the system and give it back to people in some way, because if not, the system does not work. If the machines make all the money, how do the people? We talked about this a lot, but that feels like it's a really obvious place to start.

46:45Yeah. And that starts to get into this point that I was making about. So if you get to abundance and the robots are making all the money, theoretically. So if they're making all the money, then that means the government's making the money because the government owns the robots and blah, blah, blah. And so the money gets equally distributed. The profits. So it's the country becomes profit sharing, meaning, OK, everyone has a share in the economy and you're all getting a certain amount. That's really what UBI is in abundance. But before we get to that point, the reality is Bernie Sanders has talked about taxing any companies that are using robots.

47:20So actually taxing the companies. Forget the belief in this. I think the first taxation will come from the electricity side, meaning you guys are going to have to pay for it. Because it's much easier than saying to Amazon, that's a robot, that's not a robot. That's really hard to do. And it's cheap, too. We haven't gone through, you know, people don't realize the numbers. But when you go through the electricity spend in a year, I hate to tell everyone, I know it feels bad when you're spending it, but your electricity bill is not as much as your car insurance. It's not as much as your homeowner's insurance.

47:50Like it's not a your life. Exactly. So to the hyperscalers, this is an odd lot for everything. I think Jeff Bezos could play for everyone's electricity bill for like the rest of time and no one would ever know. I think that's a really good way. So as opposed to taxing further down the chain, you just tax at the beginning of the chain. So, well, you can't have compute without electricity. So we'll just charge you for that. Your cost is tax. Whatever it is per kilowatt. And that's your tax. And off you go. Keep doing it. Yeah, I heard someone and I forget where this was on, but you can go go look it up on your own.

48:22Of the margin inside what they get. So like for the 20 bucks they charge for using chat GPT, the electricity cost is zero. It's literally nothing. Here's an interesting one. So I was talking a lot about, okay, it's commonly accepted that humans are the most efficient compute that exists, right? Like we take in very little food. Out of it comes whatever IQ, consciousness and all of these things, right? Pretty amazing. Plus all this biological stuff. So we're pretty amazing. And I mentioned it to Emad and he's like, you don't get it. I'm like, why? I'm like, this is true. He's like, no. And it's dawned on me.

49:13These models, if you think of the share that my instance of ChatGPT uses in electricity, let's assume they break even from charging me for what services. I pay$200 a month for the pro. So for$2 ,000 a year of food, the entire cost, I get 160 IQ in every subject known to humanity. Exactly. So these things are already more efficient than humans. And I don't think people are ready to understand this yet, which is why, to go back to your earlier conversation, well, every company is going to replace humans because they're so much more efficient. Not just in terms of employment costs, just the pure energy costs.

50:02They're now cheaper than us. Yeah. And since you've had since you referenced him, Imad has spoken many, many times. And one of his one of his best quotes is when you're at work and all of a sudden you have an AI person in a team. So let's assume it's one AI and four humans. Well, the smartest person is the AI and the other four. I mean, that's all you need to think about. Like that is the reality. And so the marginal cost of those employers, everything that goes associated with it, like someone had made the argument, well, these humanoids are going to be expensive. I'm like, you're not listening to Elon Musk and you're not thinking about it clearly.

50:43A human being that works at a company, at a Fortune 500 company with health care, with everything is very expensive compared to a humanoid is very few businesses, particularly on Wall Street. I mean, the lowest level person at one of the banks is making more than what a car costs. Well, a car is far more complex to make than a humanoid. It's bigger. Aside from them developing the hand and getting the pieces, once they do that, it's much easier to make those than it is a car so it's just a very very weird thing that people haven't put to context how much money you're saving by having them including the fact they work 24 hours you don't have like they don't complain i want to get back to we're talking about companies and how people don't understand something um circle right so circle ipo'd and it rockets up in value and everyone's like what the fuck how can how can a stable a money market fund business essentially be trading at this and i'm like i've seen this before and i'm like there's one of two answers either it's a massive bubble in circle and you know every retail wants to buy it and everyone's got it wrong or none of us understand but this is a network stock because as we know, Metcalfe's law values things very differently.

52:02Most things are network stocks nowadays. And then we saw that announcement yesterday. They've got like a gazillion partners building on top of a network. I'm like, well, there you go. Because everybody tries to value this stuff by cash flows and it's the wrong way of doing it. I mean, you hit on the important thing. And one thing I said this year, so I did believe stablecoin would be the big thing this year. I'm very surprised Bitcoin's only up whatever it is, 18 % year to date. But stable coins have been the reality check for everyone and understanding. And it was because of the network effects.

52:37You can't actually grow. And the visual or the analogy I've tried to give to people is, let's assume there's two casinos right across the street from them. One of them is this old, like rotted down one, but it's the one you go to all the time. And it's the one you're familiar with. You know everyone in the place and you're a boomer going into that casino and that casino has most of the money. And then across the street is this very shiny casino, brand new, all, you don't know anyone though. So it's scary. But once you go over one time and you play in that casino, you're never going back to the old one.

53:13And that's what the digital economy is. And that's what the network effects are. The network effects will allow wallets to be open easier. And once the wallet's open and your money's in there, I've asked people the same question. Hey, the money you've brought into crypto or the digital economy, have you ever brought it back? No. Nobody ever brings it back. And that's why I keep saying it's like you can have two casinos. You can be gambling in both. But at some point when the other one's all old and rotted and it's just not fun, you just move over to the one that's young and shiny and everything's better.

53:43And maybe it takes everyone dying before the money moves over and you hand it to the kids and they're already over there. but it's happening. And I think what Circle and all of these things are is they're just, they're getting more financial volume going through this system. And once more money is in there, once, and we're not going to get to talk about this this way, but this is another macro thing we could have talked about. And I don't know what your view is on this. I was very interested to see what happened with Malay this weekend. And the reason was - Yeah. How did you read that? Well, the way I read it was this.

54:17It was a very interesting thing that the administration basically said, we'll give you 20 billion. They're trying to impact the election. They're trying to get the voters to go that you have the U.S. help. Now, if it didn't work out, everyone who is a local is going to take their money and put it into dollar stable coins. So the money's coming back in the U.S. Either way, the U.S. wins in this. So by using the swap, and I believe 100 % that this is the mindset now. It's one of the reasons why I think the big sellers in Bitcoin are absolutely out of China. I think it's Bitcoin miners. I think it's family offices that are in mining.

54:54I think it's people that have held a lot of this stuff because I think China's cracking down on this whole situation. It's been part of it. And even though the crackdown has been happening, I don't think enough people are realizing the flow dynamic that's going to happen with stable coins. Stable coins allow for what I didn't see when I lived in Brazil, which is there was a black market, but it was very difficult to get your money outside the country. With stable coins, any individual that's worried about the depreciation of the peso can take it out in a second. So we learned that with Silicon Valley Bank.

55:22I don't know why people didn't think about what could happen in Argentina, very similar to Silicon Valley Bank, because a bank in the U.S. which took in all of this money, it was all evaporated in a matter of 48 hours. And the reason was because of the version of stable coins, meaning it was digital money that was able to be taken out very quickly. The same thing will happen at some point with emerging market country where someone loses the and you're going to have a run on the country and it's going to happen at some point. And you've seen the ECB and China both publicly talk about the fact that they're worried about the dollar stable coin situation.

55:58They don't know how to handle it. China wants their own CBDC. They want their own digital yuan. But the problem is, I think, for these countries, it's going to be an issue. So that's the reason why I think Argentina was an interesting test case. He won. It didn't go out. But you give money to get the votes. And if it doesn't happen, the money is going to come right back into America. Yeah. And I think there's a there's a obviously a geopolitics game that finally is getting played in South America, which is like we need all of this as part of our center of sphere of influence. The other thing that's interesting, because we were talking about Circle and its IPO and the network effects.

56:31Stable coins are now network effects on the US dollar. You've made it a digital network layer, which can be built on instantaneously at scale by anybody permissionlessly. Holy shit. People have no understanding what that means. It's the financial guard rails are, I mean, they're going to change rapidly now. So it's a little surprising that the market cap hasn't grown faster. But I think some of that has to do with clarity not being done yet. I think clarity is a big event. When that occurs and with the timing of everything that's gone on, you're already seeing all these, oh, JP Morgan allows collateral, Citi.

57:05Everyone is kind of already starting to think about how the guardrails will be and they have to compete. They have no choice. And today in the market, Fiserv was down huge. It was down 40 percent, this fintech company. And I immediately go into an LLM and go, what is their stablecoin plan? and it said in there, well, their stablecoin plan is as of June 23rd, 2025. I'm like, okay, did they have one before that? And they didn't. And so the reality is if you don't have, if you haven't had a stablecoin plan for the last at least few years, that's what made Stripe very important October of last year when they went out and bought Bridge.

57:43That was a very - And Visa had the plan. Exactly. They're all there. They're all there already. The banks are trying to catch up, but I think the financial guardrails are changing. Tokenization is really the most important part is the next step. And I don't think people have fully grasped the tokenization side, how important it is. And also just what we're saying is that we're now allowing anybody in the world to build on US dollar rails at scale in any country for any person. I mean, what does that do to the US as a source of capital? I mean, It becomes the world's capital only. I mean, this is why China and Europe are terrified, because this is so powerful, because everybody uses it.

58:27It gives the US the largest weapon ever known, which is the currency. But you just think of what that does for crypto rails, the whole thing. It can't be overemphasized how big this is. And we barely started, as you said. Next year, it's going to be all about stable coins. have you ever had marco papich on yeah he's on a lot i don't speak to him as much one of the other guys does but i like marco so marco wrote a very very good piece which he he doesn't talk about much because he wrote it i think at the end of 2021 and it was on the metaverse and i think it was a brilliant brilliant piece and marco is a he's a young guy a young geo macro you don't see a lot of young geo macro alpha and he's not a doom monger he's he's a pragmatist he's very very smart.

59:17Love him. He wrote this thing, and I'm going to bring it back to what you said, which is he wrote about a borderless world and that the metaverse is kind of that symbol of that borderless world. So when we talk about the dollar, I think there's a valuable lesson I learned. So I had the privilege a couple of times to spend a couple hours with Michael Milken, two separate occasions. And we brainstormed, we talked about a lot of different things. But in one of the conversations we were debating the dollar. And he got me off of the concept of the dollar and it being like this thing that matters. And what he said to me in the middle of an argument was, you're wrong.

59:58The dollar can never weaken because you're equating the dollar with something. If tomorrow you opened up the borders of the United States of America and offered people a green card, there'd be 7 billion people in the country tomorrow. And the reason that was important to me in this conversation is because he's right. I've lived in Brazil. I've lived in countries, but it's not America. It's the concept of America. It's the freedom. It's the not oppression. It is the entrepreneurs. It's the capitalism. It's the reason why I say Bitcoin reminds me of what people left other countries to came to the US for originally.

1:00:35Yeah. The whole crypto thing is just the new frontier economy that's faster, growing, more dynamic, more efficient. Yes. Now, what that means is for the dollar, I'm going to take it back. So I believe if AI accelerates to AGI, that's a democratizing event and it knocks down the fiat assets. The problem is the US not only benefits from the digital economy growing, but that's global. Like you said, that's actually built around the world. The money has no home now. So we view it as treasuries. It gets us out of the debt problem. But theoretically, if I'm right, it's also democratizing for stocks.

1:01:10The U.S. is 70 % of MSCI world. I don't think U.S. companies are going to win the AGI battle, not because they're not great, but because already last week, Airbnb CEO came out and said they're using Quen. There's models being used, Chinese models being used. This is no longer a monopoly on code. We don't have it anymore. They're actually doing open source and commoditized. So I think the world is going to be building stuff. The world is going to be benefiting from the democratization of intelligence, education, everything that comes along with it. And that's all great for crypto and it's great for the digital economy.

1:01:46It happens slowly to some degree. But I think next year is the year that the governments start to go. If you want an interesting part, when I was this weekend, when I did my YouTube video, I had an overlay of El Salvador's debt versus the Argentine debt. Completely correlated all until September when the Argentine debt broke down. And if the election had gone wrong, I thought there'd be a run on Argentina while El Salvador's debt was at all time highs. And that's Bitcoin back. So I think the pressure that Michael Saylor has talked about where when inequality continues to worsen because of AI, you don't buy Bitcoin because you don't need it.

1:02:25You buy it because you need it and you need it to survive. And I think more and more people are going to continue on a country level, an individual and company to be zombies, where if they want to take a chance, they have to get involved in the digital economy. So I think you're right. I think more and more companies are going to do it and be on those rails. Just a final thought for you, because you've mentioned it a few times, is like AGI won't be an owned private thing. Not one company is going to own AGI. What I've noticed is that in the end, all of the models become pretty interoperable, the same thing.

1:03:00One has a marginal edge over the other, but really they all do the same thing. yeah they're tuned differently so one has a nicer voice that you might like or you know whatever it makes more citations the other one basically they're all the same and reason they're all the same is because we're sharing everything on the internet of everything we're doing with all the models anyway so they all see each other's models so they're all learning from the same thing and my point about this is that AGI is a state and not a thing because all of them get to the same point where they're basically all interacting with each other in ways that we don't even know that we're doing but when you're showing you watch it on x all the time all these people showing their prompts and what it does and how it works and how claude was different to that every one of those models sees all of that stuff and it learns it it's it they all learn everybody else's stuff you know when it sees like there's those group of people now running the trading competition amongst the models well the next training run they'll all know that people don't understand how this thing works and therefore agi is a state of being across all of ai it'll start somewhere first but it'll be everywhere i completely agree and i forget who said this but someone who is going through the doomer side of when we get to agi blah blah blah and they said this and it was kind of a joke but he said it he went you just pull the plug and I laughed because at the end of the day for AGI now eventually maybe we get to a point where the power has been created and is in some tiny little thing but the reality is if you want to get rid of AGI just blow up all the data centers that'll take us back there's no AGI there's no nothing it's not sitting in the palm of your hand it's not something that's there and so I happen to agree with you that if there's an end game for this where it can be destroyed I don't think so my friend we're compressing these files so big that we can get pretty much the entire history of the internet on a mobile phone there's no reason we can't have agi on a single chip what i mean is by the time we would get to that point because we're not anywhere close to that yet by the time we get to that and again forget agi in and this is where we could be talking about the same thing which is two different definitions yeah it's complicated but agi meaning it goes out of control and it does its own thing and goes on we're already at the point where we're solving cancer and we're doing things that are just beyond anything you're talking about an autonomous ai thing that thinks and acts for itself yeah that's more artificial super intelligence exactly than artificial generalized intelligence which is the broad concept of big basically being smarter than humans at every single subject.

1:05:53Exactly. And again, for AGI, for people that then believe it has to be in humanoids too, which just being smarter than subjects just means you're the smartest student in IQ. That doesn't mean that you're able to interact in the physical world yet. So there's a difference because we haven't trained anything on that yet. Alamos is trying to do that. It's going to take some time. We'll get there. But that's where, yeah, I'm talking more about ASI and more focused on when - Yeah, ASI is a whole different thing. Yeah. AGI will be there fast enough. And it does mean we solve all science problems. We solve all math problems.

1:06:25We have Einstein's unlimited Einstein's, which means every problem you've ever come up with, including, you know, hacking Bitcoin and all of these things. It's not a quantum thing. It's really a math thing. And we're actually making enough progress on this. So I think for everyone who's worried about this or thinking about it, we're on the same page in this. I think it's coming. I think it's a 2030 type thing of at least getting to that. And the thing that should be worrying people is just this company Merkur and the story with OpenAI last week, which is, as is the case, and maybe you haven't seen this, but the reinforcement learning that's going from experts to make sure that there's artificial and general intelligence.

1:07:06so let's say there's super intelligence for every vertical as opposed to them understanding everything so by doing reinforcement learning for doctors for lawyers for bankers which is what's going on that is speeding up the process so the one thing about capitalism that never goes these companies are trying to make money and they're making money by hiring the employees that get fired by goldman and then bringing them in and going we'll pay you hundreds of thousands of dollars and we want you to train the model. Basically, you're going to be redoing your job the way you would have Goldman Sachs and now you're going to train this model.

1:07:39So it's an expert in what you're doing. So we can sell it back to Goldman. I mean, that's capitalism. So. So final thing, looking forwards into the end of the year and through to next year, generally bullish assets. We've never had a time where the Fed has cut rates with double digit earnings. We've been growing. We've never had a time that the Fed has cut rates. And if we don't go into a recession the following year, that the stock market doesn't go higher. So I feel very confident that the stock market's going higher because I expect profit margins to boom because of the CapEx side. And then for everyone listening, again, the economy will still grow because unfortunately, when you're in a K-shaped economy, most of the growing is because of the consumption at the higher end.

1:08:27And the higher end is completely stable because they benefit their wages are growing because of the stock market going higher. And so I envision that I do think it's a midterm election year. I think the labor versus capital story is the major theme. I think you're seeing it at play out in New York City with the mayor. I think young people and people that are on the bottom end of the K-shaped economy are upset for valid reasons. And I think the government has to find ways to write them checks, whether it's a rebate check on the revenues. I don't really care. So I do think everything is lined up with the rate cuts and everything going on.

1:09:03And so I'm leaning more towards what you're saying, which is we'll have corrections and we might have a 20 % correction. But I do think stocks around the globe will be higher. I think the Mag 7X, NVIDIA and Tesla, I'm just not, I think they're going to be a drag on the market. I just think it's they're not going to go down much. They're fine, partly for accounting reasons and partly because they'll find efficiencies and get rid of people. But I don't see them as being explosive stocks. And the problem is they're this heavy, heavy weight. So I'm not positive on those. I think small caps are going to do phenomenally well at the index level.

1:09:37But that's only because they have so many companies that are going to benefit from some of those macro themes that we just talked about. But I think global stocks will continue to do well. Perfect. All right, my friend, I think we've probably blown everybody's minds with the amount of things we've talked about in an hour very fast as well as ever. We like to do that. We love to do it. All right, my friend, great to see you, and we'll see you soon. You as well, Rob. Okay, another brilliant conversation with Geordie. Just love the guy. Love how he thinks. I love how we have a commonality of language because of our macro backgrounds that we can understand using a similar type of framework of understanding of what this all means for us.

1:10:18Hopefully you got a lot out of this. This is the stuff that I spend a lot of my time thinking about, whether it's writing the exponentialist, the research service that's on the Real Vision platform, or at Global Macro Investor, or even within Real Vision Pro. These are the conversations that really matter for us, our futures, and our family's future. See you next time. You obviously enjoyed the episode because you're here with me at the end. But listen, don't forget to go to realvision.com forward slash join and grab a free membership. It's an incredible community packed with alpha, great investment ideas, and the research that you need to help you unfuck your future.

1:10:55So get started now. Go to realvision.com forward slash join.