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AI boom risks global financial crash, warn central bankers

telegraph.co.uk

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Re: AI boom risks global financial crash, warn central bankers

#201

Post by scoofy »

civet_java wrote: post #175
scoofy wrote: post #159

Earlier quoted context omitted.

You are describing altruistic gifts, not investment meant to generate a return. All this money is being deployed to try and turn a dime into a dollar. The biggest area I can see where money could be deployed into building something useful -- while generating a positive return -- is real estate development in cities with massive housing shortages. That's basically not allowed in the same cities. In large part, because…

It doesn't generate private returns but investing in your worker population definitely nets returns for the public. Also, some might say that upending the de facto copyright regime in favour of AI companies was an altruistic gift.

If you want to "invest" in society and get a return, by all means, buy government bonds and support the government's policies to do these things. You get a return, and the government gets money to invest in society. It's a $30 trillion dollar industry.

Re: AI boom risks global financial crash, warn central bankers

#202

Post by scoofy »

intended wrote: post #188
scoofy wrote: post #159

Earlier quoted context omitted.

You are describing altruistic gifts, not investment meant to generate a return. All this money is being deployed to try and turn a dime into a dollar. The biggest area I can see where money could be deployed into building something useful -- while generating a positive return -- is real estate development in cities with massive housing shortages. That's basically not allowed in the same cities. In large part, because…

Yes, that is what the money could have been used for. Altruistic or otherwise, this is what could have been done with that degree of money. Let’s pull on this thread though. This money is investment, in the hope that it grows into more than a trillion. Right now, this looks like it’s mostly going to displace workers. Some of it will address demand that cannot be addressed directly; you couldn’t afford an editor to lo…

>Yes, that is what the money could have been used for. Altruistic or otherwise

If we take peoples' retirement investments, and spend it on puppy dogs and ice cream for veterans and children, we're going to be in a worse place than we started a few years down the road.

Maybe the market will crash. Maybe it will grow. It's hard to say, but that's the point if investing.

Re: AI boom risks global financial crash, warn central bankers

#203

Post by thot_experiment »

Alex_L_Wood wrote: post #44
thot_experiment wrote: post #23

Surely this time we'll learn our lesson and disempower the parasites that create these situations, right? Right guys?

Which parasites?

All the people with zero sum jobs that serve to shuffle money to those with leverage.

Re: AI boom risks global financial crash, warn central bankers

#204

Post by intended »

scoofy wrote: post #202
intended wrote: post #188

Earlier quoted context omitted.

Yes, that is what the money could have been used for. Altruistic or otherwise, this is what could have been done with that degree of money. Let’s pull on this thread though. This money is investment, in the hope that it grows into more than a trillion. Right now, this looks like it’s mostly going to displace workers. Some of it will address demand that cannot be addressed directly; you couldn’t afford an editor to lo…

>Yes, that is what the money could have been used for. Altruistic or otherwise If we take peoples' retirement investments, and spend it on puppy dogs and ice cream for veterans and children, we're going to be in a worse place than we started a few years down the road. Maybe the market will crash. Maybe it will grow. It's hard to say, but that's the point if investing.

That isn't what is happening though.

None of this is based on anything that stands up to scrutiny. This isn't investing, this is buying the story being sold for AI.

Lest we forget, A story whose bull case, automates the jobs of many people who are currently employed, creating a gig economy for white collar work.

Anyone who is buying this, is buying this for the potential future payoff. The firms themselves bleed money at scales that makes the destruction in outright war look like a responsible use of resources.

Re: AI boom risks global financial crash, warn central bankers

#205

Post by forgetfreeman »

skulk wrote: post #100
gruez wrote: post #59

Earlier quoted context omitted.

>in a questionably-legal fashion Maybe in the eyes of seething artists/programmers seeing their jobs getting automated, but courts have so far ruled that AI training falls under fair use. Moreover it's not hard to think of vaguely similar objections to fertilizers. They're often produced at some harm to society, as well as their use. They're also in some sense, a "heavily discounted" versions of that they replaced, b…

re: questionable legality https://arstechnica.com/tech-policy/2025/02/meta-torrented-o... > Moreover it's not hard to think of vaguely similar objections to fertilizers. It's completely different. If LLM companies pulled this out of thin air it would be also different, but no; they've effectively plundered the commons and locked up all the profit for themselves. If intellectual labor goes the way of agricultural labo…

"Automating agricultural labor brings vast material benefits for all since it lowers the cost of tangible goods needed for life"

In point of fact a loaf of bread is not significantly cheaper now than it was 40 years ago. What has changed significantly is the total number of participants in the industry is greatly reduced, and the bulk of profits from agriculture accrue to AG services companies. There is no evidence that AI will buck this trend.

Re: AI boom risks global financial crash, warn central bankers

#206

Post by scoofy »

Freedumbs wrote: post #169
scoofy wrote: post #155

Earlier quoted context omitted.

I sold in May. I'm in the largest cash position (t-bills) I've ever had. I might be completely wrong. I just looked at the situation with the oil crisis, and without any obvious way to end it, I just figure, if there was every a more obvious "sell in May and go away" year, this is it. Maybe I miss out on some gains and buy back in December or January. Maybe I'll increase my Berkshire position. I don't know. But compa…

If we assume the play is the same as MAGA 1, the economic fallout happens post-2028. They'll keep inflating the bubble until MAGA cedes power. If that occurs.

I don't understand this thesis beyond: "the past predicts the future"

Re: AI boom risks global financial crash, warn central bankers

#207

Post by ozgrakkurt »

rawgabbit wrote: post #200
ozgrakkurt wrote: post #9

Earlier quoted context omitted.

I just checked 2007 and 1999 reports [1] a a bit and doesn't seem like they made such obvious warnings at those times. I don't know much about economy and I just did some ctrl + f skimming, but this new 2026 warning is obviously more clear to me. [1] https://www.bis.org/annualeconomicreports/index.htm?annualec...

The BIS report actually compares the AI boom to the dot Com bubble and earlier manias. " Historical episodes of investment booms offer instructive parallels (Graph 11.C). The canal mania of the 1830s, the British railway mania in the 1840s, the electrification exuberance of the late 1920s (roaring 20s) and the dotcom boom of the late 90s all shared one common trait: a genuine technological breakthrough that attracted…

The discrepancy is that they didn't have the same reaction before 2000 and 2008 so this seems like hindsight.

Also seems suspiciosly similar to LLM maxxing guys saying things like "this is just like the internet, bro"

Also like someone else wrote in a comment, another aspect is that there is a very large sentiment that this is will crash this time so not sure if it could even crash like before, assuming people werent so aware of the risks in past cryses.

Re: AI boom risks global financial crash, warn central bankers

#208

Post by Freedumbs »

scoofy wrote: post #206
Freedumbs wrote: post #169

Earlier quoted context omitted.

If we assume the play is the same as MAGA 1, the economic fallout happens post-2028. They'll keep inflating the bubble until MAGA cedes power. If that occurs.

I don't understand this thesis beyond: "the past predicts the future"

There's a lot of moving parts one of which includes the destruction of the concept of truth itself, so it's tough to describe. TLDR: we get to see how powerful modern propaganda systems are compared to those that existed prior to the great depression.

Re: AI boom risks global financial crash, warn central bankers

#209

Post by sleight42 »

thelastgallon wrote: post #142
overgard wrote: post #58

I'm not usually for arguments of "this money could have been better spent elsewhere", but here's a thought experiment. Lets say instead of injecting $2 trillion and counting into a few AI companies, we instead injected $2 trillion dollars into things like infrastructure (real infrastructure, not GPU warehouses), education, helping out communities ravaged by globalization (I doubt most people on Hacker News venture ou…

This is 100 manhattan projects. Lots and lots and lots of things that can be done. Reminds me of the quote "water water everywhere not a drop to drink" ==> Money, money everywhere, not a cent goes towards something remotely useful. 1) Could've added nifty features to roads (rf beacons?) and make it super easy to build autonomous vehicles. This would've solved so many problems, but most importantly 45,000 lives every…

I was going to say: develop practical widely deployed fusion energy far far faster.

Not sure about all of your choices in particular but "100 Manhattan projects" caps it all nicely.

Re: AI boom risks global financial crash, warn central bankers

#210

Post by brendoelfrendo »

whall6 wrote: post #33
brendoelfrendo wrote: post #27

Earlier quoted context omitted.

Unless that money is being spent on more tokens, it'll probably be used for stock buybacks.

Which enrich existing shareholders who can use that capital to invest in other economically expanding projects.

You can only expand the economy so much by building yachts and bunkers.
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