AI: Where Macro Meets the Exponential Age w/ Jordi Visser & Raoul Pal

26:18But it does come up with answers for where things are today in certain ones. So I've had no problems with writing articles on this. Where I do run into problems if I say where the S &P is today or where oil is today, that it won't do. But it would if I just connect it to a folder that has all the information then in there as well. also there's something about this that i'm starting to realize is it was a conversation with sam altman and lex fridman it kind of stopped me in my tracks because sam said honestly lex you don't think we've actually built agi and lex sat back in his chair and just said, I don't think so.

27:06Right? And that stopped me because one thing I realized is you've seen the movie or read the story of Deep Mind Go. Yep. And how at first it played the game kind of as expected, then it lost the game, and then it never played a game in a way humans had ever played it ever again, and it never lost ever. Yep. So that tells you it learns in a unique way. and i hear these people saying well this is just a stochastic parrot i'm like no no no this is something that learns in ways we don't yet understand which is when you say to me actually i can get current information out of it that tells me it's come from somewhere if the training model doesn't give it yep it's pulling it from somehow and that's what the go thing taught me and we've heard this from people coming out of google x they've kind of said listen we don't know how this learns and we typical humans just impose our own thought process on it so so i i just think it's like speaking to somebody in a foreign language maybe your portuguese isn't great so you're in brazil you can get a half conversation through you can't tell if somebody's smart or not because you don't know how to speak to it correct which is what i think it's is happening here what how intelligent do you think this is so i i don't think it's uh let me break down where i where i've kind of without getting over semantics of intelligence because i don't think it matters yes so i'll take you through just from so when i say i'm using it every day i'm on average i would say three to four hours a day okay so i'm when i'm when i'm commuting when i'm sitting at home so on the weekends right now and i become obsessed with just things of curiosity the more curious you are the more important this tool is.

28:52So this is what I've seen just in the way I write. I don't know if you've read anything that I've ever written, but I write in a way that matches up with, I think, when people say comfort food. So when you hear comfort food, people think about things, memories they had that they grew up with. It makes them feel good. So I think great movies are like comfort food. I think great writings are like comfort food. There's tons of bad movies. There's tons. They don't leave an impact and you're like, oh yeah, I forgot that movie. The ones you remember, there's some touch that touches you, the human. It makes you feel like you went through the experience.

29:27That is where the line is for me with artificial intelligence. And I'll tell you why. So I use analogies for all of my writing. So I was just, as we were talking beforehand for a second, we had a meeting with the interns and the interns were giving a presentation to a lot of people at the firm on the ways that they, as juniors in college, have already used artificial intelligence with inside the firm. So GPT, they've been given projects. They wrote a power presentation. It took them a second. Like literally, they just gave the information. It created a beautiful PowerPoint presentation with all these visuals and stuff.

30:04It took no time. And they just used a bot that exists out there. They didn't have to do anything. They just brought the bot in. They did it. As they're showing this, I'm watching some of the older people and they're not understanding where this is going and they're kind of describing it. And when everything was done, I said, Hey guys, so while we've been doing this, I wrote three papers. Now I'm going to show you one of the ones I wanted to write one of what I was watching in this whole thing, which was older people and younger people trying to come towards the same goals. Now, I don't know how familiar you are with hockey in the, in the U S in the Olympics, but the 1980 US Olympic hockey team has special memories to not only me, but I think a lot of people in the country who were around to see it.

30:48It was one of the biggest upsets in sports history, beating the Russians at their own game and all this stuff. But the thing about that team was it took a group of people from Boston and a group of people from Minnesota. Minnesota was playing more of a freewheeling hockey style while Boston was playing the more aggressive, pounding, forceful game. And Herb Brooks decided that the best way to beat the Russians was to combine these two totally different styles together to work as one cohesive unit because they were different. Well, that is the way I wrote the paper as an analogy for ChatGPT working with humans.

31:23Now, I haven't posted it yet. I didn't finish it yet. But ChatGPT helped me create kind of the, I'm 90 % done. Now, what I'm going to do is I'm going to go sprinkle some salt on it, some pepper. I'll balance out the flavors a little bit to use some cooking analogies. And all of a sudden it's my own paper. And when people read it, they don't feel like it's a bop because it makes them remember what happened with the Olympic team. And that's where I don't think AI can get to yet because it can't understand what people want to buy, what they want to use. And at the end of the day, when you buy market, you're betting that other people are going to buy it as well.

31:57When you buy a shoe, anything like that, there's some belief that other people are involved. So at the end of the day, we're all just chasing the momentum of human behaviors. And I don't think AI is there yet. Yeah, but I mean, I really agree with that. But I also, and you've probably got there as well, probably before me again, is I've realized the power of memetics and how a meme is everything. And how storytelling is how humans construct our reality. Everything from money to religion to everything we do, what we wear, what we buy every single thing. And once you see that, you can't unsee it.

32:36Crypto really taught me that. As a good friend of mine, Meltem Demira said, we meaned a trillion dollar currency into existence. I mean, it's staggering. Staggering. And I think that, and I've been writing about this for a while is behavioral economics is one of the biggest breakthroughs we've ever gone through. I mean, I can see it behind you on the wall that you will think likewise. And I've always argued that big data sets plus behavioral economics equals, it's almost an extraordinary superpower. And I think AI is going to deliver that because it will see through the human bullshit and realize what is the motivating factor.

33:20Why does one person buy the same t-shirt essentially in cotton? One pays 300 bucks and the others pays 10 bucks outside of their income. You know, it's all storytelling that we tell ourselves. Well, I think so. I completely agree. And actually, in a paper I wrote a month ago, which was all on after SVB, which was about the breakdown in trust and why this would be the Bitcoin moment, which I still believe. I think Bitcoin has benefited dramatically in the last seven months, A, from AI coming out, which I believe increases the inability for people to know what's real. So storytelling, it's breaking down truth.

34:00And so if people can't trust things anymore, then all of a sudden you're breaking down. So I completely agree. And I actually used Sapiens and a bunch of the work that Harari wrote on this thing of the greatest story ever told, money and all the religion, everything. I used the same. Yeah. We're going down the same path. And that's why I actually do agree. And here's the thing. Who still believes the most in stories? It's older people. Younger people aren't as attached to the stories because they're moving their brains so much. And the stories tend to be shorter. Exactly. The memes don't last as long.

34:36Yeah. And they're comfortable with that. But we want to tell ourselves the stories of white picket fences and muscle cars and you know the 1950s and okay what how many let's let's let's just use exactly this so let's take stories and how short they last into our markets stories come up and they become the center focus for like two to three months and then they just disappear so svb there'll be no lending the banks everything will collapse credit will be gone we'll have a recession real quick svb is the story deposits are going to flight, everything's on. And now we just don't hear about it. We've moved on to AI.

35:15AI was one of the greatest things, but it became the new big story. The UK pension problems in November, December was a big story. Evergrande a year and a half ago, the zero COVID, like all these stories happen, they're narratives and they dominate the markets. They just don't last anymore as long as they used to because the markets just adapt to them. They get tired with them and they move on to the next one because it's all about what's going now. And I think that is a representation of what you were saying that the storytelling in the meme world everything's just faster and then it it goes away because people are looking to answer why things are moving and why they're unhappy or why they're losing money and they need a story they need an answer when the reality is there is no answer it's simply not as simple as one thing so i completely agree with you also i went down the the journey of following the whole gamestop story which was i think an extension of Occupy Wall Street, and I think it's an extension of the inequality of society where young people got saddled with debt straight out of university, assets were too expensive.

36:15So YOLO becomes the only way. Buying lottery tickets, I think it's changed the structure of how people invest. They have their 401k, which has created passive flows that are immense, that are ongoing and then it's created this option style culture that i can see what i what i love to observe is the angry people and think why are you angry it's like this is not how you should treat financial markets this is not how you should treat risk i'm like says who that's just the story you told yourself but you know i just find it fascinating so take it take it one step further So at the end of the day, when we use terms in the markets like momentum and I say, okay, so what's momentum?

37:00Let's break it down into narratives. Momentum is just what narrative is working and which one is not working and that's it. And so what AI is really good at, and if you, you know, I always tell people 60 plus percent of the direction of open AI in terms of people coming to open AI comes from YouTube. And YouTube has everything. It's just amazing how much you can find on YouTube. But if people want to go play around on this, go type in how to build a trading bot in ChatGPT. And you'll find videos after videos of kids building them. And they're involved in the markets. Now, if you want to build one, the first question you say is, I want to invest in what's been working.

37:44I just want to be what's been working. Tell me what's working and create a portfolio that would have been up 30 % so far this year. So if you want to create a momentum portfolio, it's a press of a button now, and then you can send the stuff down and you can have your portfolio on. So momentum sharp ratios over the last two years, last year was a great year for macro. This year hasn't been a great year. And if you look at what's happened to the sharp ratio of momentum, I've said that business cycles went from being fairly circular during my life, and now they're oblong. and they just, they're really like pulled out like a rubber band where they tend to go up, but then they come down very quickly.

38:19And so when people are in trends, I think what's gonna be going on more and more is you'll make money for whatever, two months, and then you'll give back most of that in three days. And then you'll have to decide whether you wanna stay in the trend, put more of it on or switch it and go the other direction. But your Sharpe ratio is collapsing on this stuff. And I think a lot of it has to do with the fact that we've opened up trading in bots with backtesting to everybody on the planet. Yeah. And so I made the decision a while ago, having noticed this, we saw it in high frequency trading. It's been happening over our careers.

38:50And I realized that the edge, I mean, the reason I left GLG in the end was because I realized that even though people say they mark you on an annualized basis, you're marked on a month to month basis. So you manage your positions on a three week basis. And it's like, I'm trying to have a macro view on a three week time horizon. It was Paul Jones who told me that's madness. The best traders have time horizon that matches with their investment time horizon. And so I just went out longer term. Because then when you look at these trends, and particularly I started to use log trends for all of this stuff, it just gives you a much better understanding that the biggest arbitrage I think in life now is the secular trend.

39:37And playing that and not trying to trade the short term. I think there's much, and I think I've proven it out in GMI over 19 years in Global Macro Investor. I think it's probably had the best returns of any single newsletter. And it's not because I'm a genius. It's because I just chose a different time horizon. Yep. No, and that's a fair point. And by the way, when you start bringing up log-normal trends, you really have no choice when you start getting into crypto. So that makes it even easier to kind of justify it. But I completely agree. And I think that is what's happened is there's a mismatch between the investors, what they want from you each month, what they're comparing you to.

40:11But it's the nature of what the hedge fund world has been like. And if anything, I think it's actually speeding up. And now that you've reset risk-free rates up to five and change, that'll be another thing that kind of changes the way people are measured and benchmarked on all this stuff. And in the event that this stays up here, which I think it will for at least another year, if not two years, in terms of I just can't see rates coming down just because I can't see there being enough job losses to justify it. And whether or not that's true, I just think we're stuck at a point where the benchmarks have been reset to higher levels, which is going to force all businesses and companies much quicker to adapt to artificial intelligence.

40:52And that's the reason why we're having all these meetings internally, because I can sit there and look at the business and think, is it easy to start and replicate a business with less people? Absolutely. With artificial intelligence, you can absolutely start a business and replicate many of them with less people. The question is, can you shrink big businesses fast enough by incorporating artificial intelligence? Because there needs to be a buy-in from people. And rather than think about it, we're not a big company. We've got 110 people. But I want everyone here to realize if they use it, it makes the firm more profitable because at a minimum, we don't need to hire more people.

41:31And that's what you're starting to see more and more as people are realizing that it's a productivity boom. And it gets us back into that point of productivity is really important for economics. It's really important for corporate profits. It's really important for a lot of different things, including the balance of life. Yeah. And one of the things I've been thinking about is coming back to this productivity thing and the energy story is inflation adjusted price of a barrel of oil has been about 40 bucks for about 60 years. Now, productivity has been going up from technology, but this has been the anchoring because really it's calorie in, productivity out, kilojoule or however you want to measure it.

42:11The moment that that goes from$40 to$10, that's a 3x multiplier on productivity. That's what people don't get. I think this is actually what Europe's trying to do. I think there's a win-win-win here is, yes, we'll take some short-term pain. but if we can get rid of the need for fossil fuels geopolitically it gets us better off yep and it's going to dramatically lower the cost of energy so we can deal with the aging population by productivity so you this has been a belief i've had for a long time and and i'm sure i don't remember the last time you were in japan but i for a while okay i i had a unique um as someone who loves to travel and and loves to take kind of the old school jim rogers approach which is when I first went to China, I didn't want to go visit the government.

42:58I wanted to go to the clubs and I wanted to kind of go on the road and maybe not with a motorcycle, but go see what the country was like. And I would spend about a month of the year in China in two separate trips. So it was two weeks and two weeks. And I would just travel to various places and see how the change was happening. And it was, I mean, compared to what was happening in the US, it was exponential. The one place I had never traveled to in my entire career was Japan, which is amazing And considering even at Morgan Stanley, I never went. I traveled all over the world. I've been to almost every country, I think, that honestly you could go to through business and through travel, but never Japan.

43:35And so I went to Japan for the first time probably in 2016. And after hearing for 15 years in the business how Japan never grew, how they've had deflation, nothing's happening. And it functioned better than any country I had been in. And it was amazing to think that a country that had decreasing population, every restaurant you ate in, the food was great. Every place you went, everything was clean. The bathrooms in the airport, everything functioned perfectly. And that was when I realized that, oh, so maybe declining populations is not going to be bad. But also, Japan had invested an enormous amount in artificial intelligence, in robotics, and was preparing for that day.

44:20And that made sense that that would be the solution. So I completely agree that there's a labor shortage right now in Europe and the US because of demographics rolling off and because younger people are more drawn towards flexible hours and building their own stuff and crypto. And I don't see that ever changing. So we're going to continue to lose people in jobs that they don't want. They don't want to be truck drivers. They don't want to be the stuff. So we have to accelerate innovations in technology and artificial intelligence absolutely is speeding up because we need this stuff now. And that means as a business, you have to focus on how not to grow with people, which is what we always did is grow with people.

44:57Oh, I need another person to do this. I need another person to do that. And I've heard that internally, even with AI, where people are like, well, why don't we hire someone to go build the AI stuff? I'm like, no, you can do it yourself. We can actually use this to get more productive. So I'm in agreement with you. This is a game saver for what was a labor shortage problem. yeah and i think gdp per capita over time will go up um which i think is a is a is a very big deal because that's the swiss told me this i went to see the swiss national bank many years ago and they're like we don't really care about deflation we don't really care about gdp growth i'm like why is that because we're rich we're rich we just want to stay old and rich and that's where japan was for sure it was going through the same point so But that gets back to the inequality.

45:44That's only good for the countries that are rich at that point. It doesn't help the countries that are poor. Yeah, exactly. So what people are struggling with, and I'd love to hear your views on this, is right now people are assuming that it's all going to accrue to a few mega companies like Microsoft and that we're going to be slaves to the machine, essentially. Yes, we can all utilize it. But that GDP per capita is going to be a misleading number because it's actually going to accrue to these giant corporations and wages will never go up and we'll continue in the same trap. So talk me through your equality, how we can solve equality theory.

46:23All right. There's a bunch of things in here, but first I'm going to start with, let's just start with not with wages. Let's just start with net worth around the globe. So the numbers, according to most places, are somewhere in the neighborhood of$400 to$500 trillion of net worth, which includes everything. I've used this for one of the reasons why when people want to think about crypto, which is$1.2 trillion as of today, well, you got$500 trillion in this game being played over here called the fiat capitalist system, and then you have a trillion over here. As time goes on, more of that money will come this way for a really important reason, and that's inequality.

47:06So how does it move from - And trust as well. Exactly. And that is the, we've obviously had a populist movement. We've had the masses not be happy with what's happening. But at the same point, as I mentioned, 70 % of crypto users are in Asia. They're not wealthy. This is because of the numbers, the rule of really big numbers when you have most of the people and the people are, don't have jobs. Well, then guess what they get to do? They get to use chat GPT a lot more than I do. When you hear me say I use it three to four hours, if a kid in the Philippines that's out of school and not working said he used it three to four hours, it wouldn't, it wouldn't affect you the same way, but well, you work at a company.

47:48How do you have time for this? Where is this going to be? And I have to do it in my commute time and in my weekend time, because I like it because I do have things to do here. So my son taught me this when Axie Infinity, and I'm kind of going through this in a long route as I sometimes do, but we'll end up in the equality and it'll involve 3D printers, nanotechnology, Picasso's no longer knowing which one's real. It'll go through the whole thing. But I want to get this point out. You tell the story. I'm pretty magnificent. On Axie Infinity, which was something that was introduced to me, I got really interested in what what it was doing from an economic standpoint.

48:24And when I started to see it, I asked my son, I said, Hey, I'm going to sponsor you. I want you to go play the game. He was, you know, loved Fortnite, told me he was the best Fortnite player. Everything was great. And I said, all right, I want to get you on this. He lasted about a day. And I said to him, what do you mean? You're done. He went, I can't win. Wait, you're going to give up on day one. He's like, no, this, you have a good brain for pattern recognition. If you would have seen how insane these players were, I just couldn't do it. And I remember sitting there and I go, why do you think that is?

48:56He's like, I don't know how long they play, but I don't have time for this. I've got school. So I'd have to do so much practice to catch up to this. And that's when I realized that emerging markets have a huge ability or let's go back. The people who have nothing actually have an advantage right now because they have more time to use technology to learn and to not be driven by making what we all went to school for. So if you go to school and you go to an Ivy League, then you go back and you want to have more money than your classmates. What did you accomplish? What went on? If your bar is really low, when you're the son of a core driller, I remember when I got paid$33 ,000 my first year at Morgan Stanley, I said, I can't believe it.

49:37I'm close to$100 ,000. Once I get to$100 ,000, I might retire. And that was because I thought I could live off nothing because I didn't grow up with anything. Well, I can relate to the people who have nothing in the fact that, hey, we don't need as much money, but we're going to have the time. But here's the other thing. They would never work for the big companies. And this is the part where when people talk about like Microsoft and these guys, you're still going to need some employees. And none of the talented employees want to work there. And they want to move into this other world. And this crypto world where it gives you more freedom.

50:08I've called it in country terms. It's what America was to a lot of people a long time ago. Well, that's what this world is, and it's going to keep drawing more people, especially as Bitcoin is going higher, because then the currency of it, of that little world, is working, and it's bringing the advertisement. Well, I think AI fits into the same side. And what I said to George Weiss, who has been a hedge fund person for 45 years, and he's done well enough that he has paintings by very famous painters. And one day I said to him, George, how do you know that Picasso was really painted by Picasso?

50:40and he said well I got it at wherever Sotheby's, Christie's and I went alright and I don't know have you seen the Lost Leonardo okay so the most expensive painting sold in the world was only like a$10 ,000 painting in New Orleans about 20 years, 15 years ago and then it was eventually proved after some work on it and everything oh this is a Leonardo da Vinci and then it gets sold and it gets purchased for$400 million. Nobody knows if it was really DaVinci. So if you wanted to replicate a Picasso with nanotechnology, artificial intelligence, and all technology, you'll be able to have an exact replica where you cannot tell the difference.

51:26So authenticity is one of the important parts of the fiat system. The$500 trillion depends on the ability to have things authentic. So I said to George, overnight, if they can make a thousand Picassos, how much does your net worth go down if we can't tell the difference between them? So for all wealthy people there, one of the things that they as well are wealthy on is scarcity. It's what they've made their money on. And the problem is in a world of too much, or as Peter Diamandis called abundance, I just don't see how the normalization of equality happens where people don't care as much. They have the ability of not working for these big companies.

52:07They're creating things and they're balancing out their life while the people that have worked really hard to make this stuff, they have more to lose. And so I've said equality will end up happening because the people who have more to lose realize they're dependent on scarcity right when we're entering true abundance. Yeah. I mean, brilliant. I've also noted that everything in a digital world goes to zero in cost. Yes. And blockchain technology was the one thing that stops it. You can have digital scarcity, Just at that very core level, that's the single most important thing, because if not, nothing has value in this world.

52:41But also, the digitalization of assets, digital assets or physical assets, doesn't matter, but let's assume digital assets, allows for tokenization and fractionization, which means that everybody can participate on an equal basis. We can all put in 10 % of our net worth. So it's not the Picasso because what happened is the rich people can afford the scarcest assets because they're super expensive. And rich people like to tell each other stories about how rich they are. So they want to buy more and more of these scarce assets. And they all benefit. Nobody else gets to buy these things. But crypto changed that entire equation that I think is really important.

53:23And the other importance is authentication now with AI is like, it is so important. We've got to get to the US election without authentication of content or people online anymore. And AI can make you different content, me different content. It can do it for a million people instantaneously. So it can manipulate us. And without digital ID, whether it's using zero knowledge proofs or something, we have to get to that. So there is a zero to a billion people, well, not zero, 300 million to a billion people phased from crypto that just comes out of authenticating humans in concept. This is where when you start getting into this, it becomes very philosophical for people because they don't think about these things this way.

54:09But the reality is everything we said, I mean, scarcity, authenticity, the fact when the Bitcoin paper was written. And then eventually when I first started to kind of pay attention, when I read about the blockchain, that's when I became very excited because I was like, oh, this is amazing. So this will be the gateway to finally having proof of what something is, which is necessary in everything that we have. And we've entered a point where technology is going so fast that it's getting harder and harder to know what's real and what's not real. And I just did a podcast where I talked about Taylor Swift and her kind of impact on the blockchain.

54:49It's amazing how some people and some artists in particular, because the artists are the ones that care so much about their ownership. So when Scooter Braun was selling, said he was selling off her songs, which are literally her diary basically, and she got angry and then she said, fine, I'm going to rerecord all of them so that the ones that you have have almost no value that he sold. And it's amazing when you go through the numbers of the success she had doing this, where because of her community, the people who bought her albums, when they see, hey, you can have the original Taylor Swift download that she doesn't own or the one she owns and everyone picks the one she owns and the rerecord.

55:33It's an amazing thing that really got back into the power of authenticity, the power of the artist and what they own. And this will extend further and further, but it brings up your point of all of these things kind of come together. And I did this whole podcast because Taylor Swift has a community. She has gone through the blockchain in terms of saying, hey, this is mine. I'm going to prove that these are mine and it's there. It's not the official blockchain, but it's a way to do it. So I think all of these things are happening already and artists will be one of the driving forces behind it. Yeah, again, totally agree.

56:05I'm starting to think along, and I've been thinking about this for a while, but Balaji's book, The Network State, I think makes a lot of sense that we are fragmenting into a multi-state world where we live in multiple states. One of them is a physical state. I live in the Cayman Islands, you're in the United States. But we live in online communities. And some of them are passing communities. Others are really meaningful communities, particularly if there's culture involved. So the tokenization of culture, I think, is a huge thing. and I think all cultural assets, music, entertainment, sports, all of these things, tokenization is a big part.

56:42But that led me down another path that I think that in a world where AI is one of the citizens of these digital states that we're living in, we might choose to do the most human thing to earn a living, which is to be a society member. and web 3 activates that so i can be a taylor swift fan i can promote taylor swift i can make tiktoks of her i can be a good community fan i can buy tickets and get rewarded in digital assets whether it's a cryptocurrency or whether it's nfts or whatever it may be and so now i've got something of value that i can sell and use and barter and change so i can i can have a value exchange within that community.

57:26And it doesn't have to be fully fungible in the outside community. There's ways of therefore using that, which is why Axie Infinity was so interesting. You started to see a currency being used for a reward system in a way that hadn't happened. And I think that could bring like it's a universal basic income mechanism where we can pay an active positive role in a community and get paid for it and not have to work for Microsoft. Yeah. And the example I've tried to give to people who don't jump into the Web3 world and kind of think about this is to use Justin Bieber as an example where, you know, again, Scooter Braun goes looking, finds this talented kid on YouTube and basically signs him to a deal where he owns the majority of Justin Bieber.

58:10because Justin Bieber, he's a nobody, but he has, say, a million viewers that are watching his stuff. He already has a community. But this is before this kind of concept that you said about people understanding what they could do, where instead of Scooter Braun, let's say owning 70 or 80 % of Justin Bieber, the viewers, the million viewers could all have royalties to the first album he puts out. And he goes, I'm going to put the first album out. everyone who gives me a dollar will own the royalties, some percentage on the royalties of every down. And you're investing in something that you believe in.

58:46It's something you like. And that is this sense of community where it defeats the capitalist system and it happens almost overnight. And that's the one thing I will say, and you know this because I'm pretty sure I've read some stuff that you went through this too. One of the things that has become very evident with technology is the lifespan of a company. So where the Fords and the GEs, which are still trading or from the 1900s, the average lifespan of a company with inside the S &P 500 used to be in the 30 to 40 years during the 70s. And then it's gradually gone down as computers have come and it got down into the 17 year number.

59:19Well, when I talked to the person who did the podcast with me, who is part of OpenAI, and I said, well, what do you think is going to happen with this kind of concept of a trillion dollar company? He goes, I think five years from now, at least a third of the S &P companies at that time don't even exist yet. There's still ideas. And that's what I've said at the end for tokens and for everything. What is a token? It's not money, people. It's an idea. Everything about you're creating something, it's an idea. You sit in a garage and you create an idea and eventually that becomes Apple. Well, now you come up with an idea and a community of people agree with it and they want to be participating in it.

59:57And maybe it's only in this tiny little place. And like you said, it has no borders. It could be a few people in Africa, a thousand people in Brazil, a bunch of people here. There's no more borders. The network state, all that stuff kind of fits into where you don't need it. And everyone just is part of that community. And there's a little ecosystem that goes, well, that sounds like the opposite, all of it to globalization to me. So deglobalization, how fast companies and ideas can come and having these little communities all over that are part of the world in a different globalization world, but without borders.

1:00:30And I completely agree that that's the direction we're heading. It's just a question of how long it takes. But the issue is, I mean, again, we share the same vision. The issue is, is how the hell does the global infrastructure, the kind of rules based global order system deal with this? Because it's all built around the nation state, and it doesn't exist. Not really. I don't know if you've ever had Marco Papich on, but he wrote a great, okay, he wrote a great paper on this on the metaverse breaking down the nation states. And I always leave this stuff to him. He's a good friend. But I think your point, and this is the way I kind of view it with everything, I use autonomous driving as an example.

1:01:12If you go back to a McKinsey report on disruptive technologies in 2013, and you go read through all of the ones and how when things will be in place, autonomous driving should already be in place. Everyone sees that car with the funny thing on it driving around New York at some point. The reason it's not there is because the politicians won't allow it to happen fast enough because until nobody dies, we can't have it in there. So I agree that politics and the regulatory side will make it more challenging for these things to get through. and it is one of the reasons why artificial intelligence is so important because they can't keep up with this one.

1:01:51I don't know how they regulate it. It's actually funny whenever they try to regulate it. The UK I just saw was trying to like content is now data and if you use content from the internet you got to pay this person and I just don't know how they're going to possibly be able to try and get this through. So the inertia will be there but that's why I say It'll take longer than it should, but it will happen. Yeah, that's my argument with like US crypto regulation versus others. Like it doesn't care. It doesn't matter. Capital is global. It will find a way. Something like AI, also genetic sciences. We've tried to do that as well.

1:02:28Stop that happening. It's like you can't because if the prize is that big, it will just move everywhere until you have to give in and let it into your country. Yeah. And this is, again, where emerging markets should benefit because they'll allow people to come in and do this if people are going to pay the money and give them some ownership and things like that. So I have viewed it. It's one of the things about this that I don't think that mega cap companies are the biggest, the people that benefit the most. I don't think that's any way, shape or form. I think smaller businesses, again, that don't have people that can take little bits and pieces of the businesses.

1:03:03I think year one, absolutely. And for the people that have the fuel like NVIDIA, absolutely. It's really hard to get around the fact that some people have a monopoly on certain parts of it. Microsoft to some degree too because of their investment in open AI and the fact that this will be brought into, I mean, they already have office in so many people's hands already that it will be distributed quickly. but the reality is you can't stop people if they want to go someplace else around the world and find the regulation where it's less and crypto and ai both offer that exact same thing so i'm definitely going to get you back because there's so many things i still haven't talked to you about but i want to a lot of people struggle with okay what do i do now how do i invest in some of this stuff now you would say i'm sure same way i would invest your time in learning it because you can really move the dial much more than buying a stock that goes up.

1:03:59I think that's the size of the opportunities. Your trade-off of time is you're doing yourself, showing people the way and even telling me I need to do more of it. It's super interesting. But if not, I mean, I've nailed it down to some things like semis because everything has to go through a semiconductor right now. And a couple of the big companies, because it's obvious, Tesla seems really wildly obvious to me no what are your thoughts on or just even the nasdaq alone yeah so i i've kind of gone between this for the time being uh when innovation is working and if you believe innovation is working i 100 want bitcoin as my favorite thing whenever innovation is working the same i'm the crypt crypto is my biggest bet i'm more eth than bitcoin but other than that it's the same It's the fastest horse in the race.

1:04:53It's the fastest horse. And I've kind of broken it down to a few things. So money supply is shrinking right now. And yet Bitcoin's doing fine. Now, one of the reasons is because Chinese money supply is growing or was growing for a period of time. But the yuan is now weakening again. So you're in this weird period. But innovation's working, meaning the Nasdaq's outperforming the S &P and you have everyone focused on an innovation. And when that's happening, Bitcoin should go up. when the dollar is weakening, Bitcoin should go up. And only because it's not a hedge against the dollar, but the dollar is the most important currency on the world.

1:05:26It is the currency of the fiat system. And so if you believe money is transferring from one into the other, which I do, then you should go. I wrote a paper on this at the beginning. Oh, no. And the one I wrote on recently, I highlighted the Morningstar stats that if you included just 1 % of Bitcoin with inside a 60-40 portfolio, no matter what time period you look at, you're outperforming. And that's the point about it's gradually getting more introduction and what's happening now with Fidelity, the rumors around BlackRock, everything. You're going to have more ability to get it in a way that you can feel more comfortable.

1:06:01And that's one of the things that's amazing that it's actually up 80 something percent and 60 percent year over year, despite everything that's happened with FTX and everything else during that time period. that's another one of those things that wow could the news have been any worse and it's still you know at one year highs as of today so i do think bitcoin i think the semi stuff is a no brainer because it has to i'm going to throw i always like to find some stuff that is not part of the equation right now i really do think brazil is a phenomenal place for this uh the main reason is from living there brazil might be the most sophisticated country on the planet with with economics.

1:06:40They live through hyperinflation. Their biggest trouble has been about corruption. It's about the lack of education. Crypto and AI offer an enormous potential for this, and education in particular, I couldn't figure a way for Brazil to catch up because their biggest problem was they just didn't have enough teachers. They couldn't get the education system going. But that's what YouTube is for. The ability of learning this stuff, it's now ubiquitous again, and you can get it. And the stay at home and the Zoom thing really picked up during COVID. And so Blula takes over. I learned my lesson in 2002 when he took over and everyone was worried that the world was gonna end and EWZ was trading below 10 bucks and everyone was panicked and I had just come back and Morgan Stanley was sitting there and they had a meeting and they went, we wanna pull out of Brazil.

1:07:27And I'm like, you don't wanna pull out of Brazil when it's below 10 bucks. You wanna pull out of it when it's at 100 bucks. They stayed in, it continued to go higher. And we just came off an incredibly weak period in Brazil, and their currency got above five. And I think if I had to pick something for the next 18 months that maybe people don't identify as an AI crypto trade, it would be Brazil. And just type in Brazil crypto, Brazil artificial intelligence, and you'll see a lot of creative people building a lot of stuff there. It's a great, it's a misunderstood country, and I think they're going to benefit dramatically from this.

1:08:01We're also seeing quite a lot of Argentina, same thing. A lot of Web3 developers are coming out of Argentina because they need it. That's the whole point is they need it more than anyone. And that's the way you have to look at this. And maybe not more than anyone. Well, let's just go through. When you have inflation and you have corruption, you need this stuff. You really do need it. And so I just think these countries and those two in particular, they're beautiful countries. They're massive. They've got tons and tons of beautiful countryside. They just have always been the countries of the future.

1:08:38And I just think if that's the way you think about them, well, then AI and crypto is going to speed up the pace for them. I really do believe it. So maybe it's three years from now you really start hearing about it. But I know that it's kind of the seeds have been planted there. And I like to look for things that are trading at 25-year lows and things that look interesting. And I think Brazil is the place. So I'll get through Argentina in there too. Jordi, fantastic conversation. Really, really amazing. I can't believe how many similar rabbit holes we've gone down and conclusions. That's hilarious.

1:09:09But I'll definitely get you back. We've got lots more to talk about, but I really, really enjoyed it. I enjoyed it too, Raul. It's a pleasure being here. I'm very, very happy for all the success you've had in building this stuff. And the content you put out is great. And I'm happy just to be a part of it. Fantastic. Okay. That was not what I quite expected. Jordy and I had come from similar backgrounds. But we seem to have gone down exactly the same thought path. And he's the only other person I know who's done that. I mean, the similarity of our views was staggering to me. And it's kind of weird.

1:09:48It was a bit freaky. But he's amazing. What an amazing thing to learn, to see, and to see how he is. He feels like he's got the edge on me because he's using chat GPT more. He's come across some of these ideas earlier. I think I've got some more fleshed out on some things. He's got a lot more flesh out on others. But wow, I think that was an incredibly useful interview. I'll definitely get him back because I think there's a lot to talk about because we barely got into the companies and other innovations. We just talked at top level. And he's come to the same conclusion. It's all about crypto first and then technology second.

1:10:25And AI was the fire that exploded and is going to light this whole thing alive. Anyway, I hope you enjoyed it. Thanks for joining us, everyone. Today's Real Vision Daily Briefing is sponsored by CraneShares. Learn about their KRBN ETF at craneshares.com forward slash KRBN. Have you ever wanted to trade Bitcoin but haven't dared try? With Plus 500 Futures, you can trade crypto without the hassle of opening a wallet. With just a few clicks, you can register and start practicing with their free and unlimited demo. See a trading opportunity? you'll be able to trade it in just two clicks. Feel ready?

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