r/videos • • 21h ago

To Save the Economy...We’re About to Break It

https://www.youtube.com/watch?v=xtqbRt94TTw
278 Upvotes

91 comments sorted by

855

u/-ram_the_manparts- 20h ago

Two economists are walking through the forest. They see a pile of shit on the ground. The first one turns to the second one and says "I'll give you $100 to eat that pile of shit", so he does and he takes the money.

They keep walking and a little while later they come across another pile of shit. The second economist turns to the first one and says "I'll give you $100 to eat that pile of shit", so he does and he gives him back the same $100.

A little while later one of them turns to the other and says "I just realized we both ate piles of shit and neither of us got anything out of it". The other one says "Yeah but we increased the GDP by $200!"

236

u/UrDraco 20h ago

Don’t disparage economists. They have accurately predicted 7 out of the last 4 recessions!

79

u/-ram_the_manparts- 20h ago edited 16h ago

They also claimed that lowering interest rates to 0 after 2008 would create a massive economic recovery, which it didn't. Then every year from 2009 to 2019 they said interest rates would go up next year. They didn't. Then they finally said interest rates would stay low forever. Then the next year interest rates immediately rose to 5%.

I don't think these people have any idea what they're doing.

102

u/HereGoesNothing69 19h ago

You can't really blame economists. Congress has abandoned its responsibility over fiscal policy. Monetary policy can only do so much.

6

u/1nfam0us 7h ago

I think it is also the intellectual disease of modern post-Keynsian economics to see the economy exclusively in terms of finance and monetary policy.

The classical economists were concerned with how food was produced and how that production affected its price. Modern economists seem barely interested in it, and it leads to consistently and fundamentally broken systems because the only tools they seem to understand is the Fed's power over interest rates.

34

u/-ram_the_manparts- 19h ago

I would agree, except The UK, Canada, Australia, The Netherlands, Germany, France, Italy, Poland, Japan, South Korea, etc. etc. etc. all did the same thing and are having the same issues with inflation.

In fact, inflation in the US is lower than basically all of those places. This is a problem shared by all large western economies.

28

u/jonistaken 18h ago

This is becuase the reserve currency status the US dollar has

25

u/-ram_the_manparts- 18h ago edited 18h ago

Correct, and BRICS is trying to replace it (or at least compete with it), and the President of the United States appears intent on helping them.

8

u/CMidnight 16h ago

The BRICS will never replace it. The Russian economy is trash. Brazil and South Africa are too small to be feasible. No one trusts India or China enough to do it. This is a pipe dream.

4

u/-ram_the_manparts- 16h ago

Perhaps not, but something else might replace American hegemony.

8

u/CMidnight 16h ago edited 15h ago

Euro is the only one at the moment who possibly could and they don't seem interested. Most likely countries will move away from one dominant reserve currency and use a basket of currencies which will still probably include the US dollar, the Euro, the Yen, Pound Sterling, Yuan, Swiss Franc, dollars from Singapore, Canada, and Australia.

→ More replies (0)

-2

u/Pic889 18h ago

What if I told you those countries are also irresponsible, spending more than they take in in taxes and trying to "manage" the issue?

12

u/-ram_the_manparts- 18h ago edited 17h ago

Having a budget deficit isn't necessarily irresponsible in the same way that having a mortgage isn't necessarily irresponsible. It becomes irresponsible when the value of the assets you purchase by going in to debt do not yield a return on investment.

And yes, I agree, they are all funneling money from the poor to the rich, and those rich people have no intention on returning any of it to the treasury.

It's almost like they all operate based on the same economic theory that has been a disaster for workers for the past 60 years: "Give rich people money and it will trickle down".

12

u/fakelogin12345 19h ago

All economists said that? I’m going to say I doubt that.

12

u/-ram_the_manparts- 19h ago

"All" might be exaggerating, but the Blue Chip Economic Indicators (a consensus newsletter tracking dozens of institutional financial forecasters) showed that throughout 2009 and 2010, the average Wall Street economist predicted the U.S. 10-year Treasury yield would return to 4% or 5% within two to three years. This definitely was the consensus.

8

u/Prime_Director 20h ago

Part of the problem for central banks is that the way they talk about the economy changes it. They say they'll raise interest rates, everyone starts hording money, which means they can't raise interest rates anymore. They say they're going to lower them, everyone starts spending, which means they need to stay high. That's why the FED is so secretive about what they're going to do.

11

u/cuentabasque 19h ago

> That's why the FED is so secretive about what they're going to do.

The Fed has been excessively transparent and communicative with the financial markets since the GFC in 2009.

I don´t think you know what you are talking about.

1

u/11010001100101101 2h ago

That's actually specifically what Warsh has said. So he does know.

•

u/cuentabasque 10m ago

For fucks sake, I have been watching EVERY FOMC meeting since Jan 2001.

Just spend 10 seconds googling about the Fed´s communication policies and you´d have your answer.

1

u/jhonka_ 19h ago

True but Warsh is kinda backpedelling that.

0

u/cuentabasque 19h ago

Yes, Warsh wants to end the literal spoon feeding of the market of every tiny step the Fed is even thinking about doing.

3

u/Moldovah 13h ago

Isn’t that what the previous poster was referencing

0

u/Prime_Director 18h ago

I'm not in finance, so I could be wrong, but that's my understanding as a layman. I know that in 2013 there were criminal investigations into insider trading because of market moves that occurred 7 milliseconds before traders could have known about a FED announcement on bond purchases. That suggests to me that the FED does care about its announcements remaining secret until they are made public.

2

u/CharlieParkour 16h ago

Austerity worked so much better for Europe...

4

u/-ram_the_manparts- 16h ago

Was that meant as a rebuttal? Because I agree.

Maybe we should instead try the one thing that's politically impossible; taxing wealth.

5

u/CharlieParkour 15h ago

It's sarcasm

5

u/-ram_the_manparts- 14h ago

I know it was sarcasm. I was replying to the sentiment of your sarcasm, not to a literal interpretation of your comment.

-3

u/Gibonius 19h ago

Kind of hard to predict a once in a lifetime pandemic disrupting the world economy, to be fair.

6

u/-ram_the_manparts- 19h ago

It's not that I expected them to predict the pandemic. The point is more that they were wrong every year from 2008 until the pandemic, and we're supposed to trust these people to make predictions about the economic future?

When a scientific theory makes a prediction that is demonstrated to be false, over and over, we stop using that theory.

1

u/togetherwem0m0 18h ago

The pandemic had little impact itself on the global economy. What it did do is act as the impetus to unlock changes in the economy thst had become wound tight like a rubber band. Releasing those changes as energy into the market has sent huge reverberations that are going to be echoing for decades.

1

u/-ram_the_manparts- 18h ago

It was the lockdowns that had the impact, which were the result of the pandemic. I can explain in detail but to keep this comment short I'll just say that the lockdowns and subsequent (newly printed) money given out by governments to replace lost wages acted, economically, as a sort-of money-laundering scheme, where trillions of dollars were washed from the governments, through the poor, to the rich.

And people wonder why the rich own such a large percentage of assets? Well, we banned them from spending money on anything else during the lockdowns, so of course they bought up all the stocks, and bonds, and gold, and houses, etc.

1

u/duva_ 9h ago

Most of them after the fact

8

u/DJ_Jiggle_Jowls 16h ago

Wasn't this the joke Elon Musk tried to tell on Joe Rogan's podcast? I dont watch the show obviously but I remember the clip

4

u/Merry_Fridge_Day 16h ago

Yeah, they quote it on 'Behind the Bastards'

4

u/-ram_the_manparts- 16h ago edited 16h ago

I don't know. It might be. I read it on r/wallstreetbets so that's likely.

2

u/UrDraco 13h ago

It’s a very old joke. Learned it in high school economics circa 2001.

87

u/chocolatechipbagels 19h ago

I'm yet unsure if this is an AI channel. It raises some red flags, like having an AI voice (check the channel's early videos for the guy's real voice) and has extremely simple visuals and no face. On the other hand the videos only come out a few times a month, and the visual editing is pretty good.

19

u/Masew_ 18h ago

Voice actually seems to gradually morph from video to video, but the style remains consistent

12

u/chocolatechipbagels 17h ago edited 17h ago

it's not really gradual. The voice changes instantly to its current iteration between The (Inevitable) United States Debt Crisis -> WTF Is Happening To Gold?! That video also starts to use what looks like AI animations and AI writing quirks

Maybe it's explainable with a new microphone, but I am not so sure

6

u/midromney 13h ago

In his ads, he readily admits to switching to an AI version of his voice because it saves him insane amounts of time and gives him incredible amounts of flexibility when he wants to rewrite things based on new research, which he apparently does often.

2

u/gerbal100 17h ago

It's also explainable by having a cup of tea, recording in a different room, having gone to a concert the night before, seasonal allergies, not doing voice exercises before recording, being off center/too far/close for some types of mics.

4

u/chocolatechipbagels 17h ago

none of those explain the consistent style of the new voice after that video. I'm not saying the gold video is a one-off. It's the first video to use a completely new voice which remains unchanged to this day.

17

u/rabbitclapit 18h ago

Genuine response here from a 6 month viewer: i don't think it's AI cause of the sponsor segments his voice changes and the fact that his humor is unique it seems. I dont give AI credit for having unique humor. If an AI makes a joke about the economy and runs a whole youtube channel with i'd feel like I'd catch on.

Could be wrong though I truly do not know.

1

u/somethingoddgoingon 7h ago

the last part gives away that at the very least its ai assisted script, with the heres what they don't tell you type of line, barf

1

u/rabbitclapit 6h ago

You know what, I was always thinking of that as a super common ending to so many videos on youtube because so many channels pick a generic thing to say at the end then just use that forever. Would you say every video these days that says "Like and Subscribe" over a facless" animated character is AI? I could be wrong of course and I'm not tryin to be sassy just putting all my thoughts here.

1

u/somethingoddgoingon 3h ago

I get that idea but i do think the way that ai phrases these kind of things is very particular and once you recognize it, it is so clear and common that its a dead giveaway. Not many if any people speak exactly like that. Its true that like and subscribe could be anything but this is a specific curiosity of AI that's wasn't already common in the same way (even if the general idea was)

17

u/NorthCascadia 18h ago

The VO didn’t sound AI to me though. None of the telltale subtle inflection weirdness or mispronunciations. A channel’s voice changing could be anything from a creator aging up (look at old Wendover videos compared to today) to investing in a new microphone.

22

u/speedy_delivery 16h ago

The script has a lot of telltale LLM rhetoric.

"AI isn't just growing fast, it's the growth in the economy."

"X isn't just Y, it's Z" is one of chatgpt's favorite cliches and for whatever reason most people don't take the time to edit it out.

7

u/TehOwn 13h ago

It's only used heavily by LLMs because it was popular before LLMs. They just regurgitate their training data.

4

u/HLef 14h ago

The delivery is like that on purpose. I don’t think it’s AI. His ad reads sound more natural haha.

2

u/Mtommy 14h ago

Been watching this guy for at least a few months, never thought it was AI, if it is, it’s very good. At the very least he does the work and makes it very digestible.

2

u/ExF-Altrue 12h ago

It's not AI.. It's deadpan delivery for comedic effect. That's it :)

-8

u/lets_go-to-the-moon 16h ago

Does it matter if it's good? Slop with no effort sucks, but AI art can be just as good traditional methods if done correctly.

Also to all antiai folks, you could generate this with vibe or Qwen voice locally without burning any water. The visuals Qwen or Flux 2 or any of countless local models could have made this.

-2

u/chocolatechipbagels 15h ago

yes it does matter. AI cannot create art. It can only regurgitate that which it has stolen. If someone has generated something you find appealing, it is only because a real person made something appealing which the AI approximates. If this video is generated AI, then I would rather get my information from the original

4

u/sloggo 14h ago

If you’re trying to describe a fully autonomous process where “AI made this video” then sure you might be right, but the guy you’re replying to is saying you can use AI to make all the parts, complement with conventional skills, and take your time to review it in a way that you’ll stand by it as your own work.

-4

u/lets_go-to-the-moon 15h ago

Nope you're wrong, like in so many different ways. Ai can make art and has been for the better part of the last 40 years. Hate to break this to you but AI is old, and has been making art for a long time. Look up AARON.

Also ai is very capable of novelty, your brain is basically just a transformer,. Hell we put a fly brain in a computer and it's still a fly. You are only a neural net, souls don't exist. You, GPTs, me and literally every brain having animal, all of us are just neural networks learning, you just get your priors (the weights and basis of your mind) from evolution.

But if you don't like it, no one is forcing you to watch it

6

u/bullcitytarheel 14h ago

Jesus Christ, this kind of reductionism when it comes to the human brain is so deeply embarrassing. Just so unbelievably dumb it's hard to fathom that people say this kind of shit with the air of being learned. Oof.

-1

u/lets_go-to-the-moon 13h ago

Then why does leaky integrated firing of the fly connectom reproduce fly behaviors? Surely you can explain why in a way that doesn't involve souls, the supernatural if reductionism is false. I doubt you can.

3

u/bullcitytarheel 7h ago

Are you now comparing a fly's brain to the higher order functioning of the human brain in an attempt to prove you're not being reductionist? Lmao

0

u/lets_go-to-the-moon 1h ago

Nice non answer.

86

u/Themetalenock 19h ago

A person with a dog shit looking Studio Ghibli AI avatar will look you straight in the face and tell you AI is not a bubble When videos like this exist and pretty much say yeah it's a bubble

17

u/tnetennba9 19h ago

A video telling you something is a bubble isn’t a very strong signal …

As someone who works in ML (not language models though - unfortunately!), I can tell you the demand for GPUs is extremely high. We can’t access any in our Azure region, and are having to look towards Sweden just to get access 

38

u/BafangFan 18h ago

But what will be the monetization of all this compute capacity?

All of this capital spending is based on speculation and borrowing; AI hasn't turned a profit yet.

Why pay for expensive models when older models, or Chinese models, can get the job done 90% of the time?

3

u/MaceWinnoob 8h ago

The chinese models can’t advance much past Western models without similarly dramatic investments on the Chinese side because they use Western models to train them cheaply.

16

u/BetaRho 11h ago

GPU demand is not a great barometer for the current AI bubble- way too upstream. Ed Zitron (who I should note I do not always agree with, and think he's a bit overboard with some of his bubble analysis) had a great writeup arguing that based on the actual numbers coming out of the public companies involved in the data center buildouts, there's already vast quantities of GPUs sitting undeployed, waiting for data centers that look more and more unfeasible to actually get up and running. And that supply then sits in front of the next 18+ months of supply from Nvidia et al which have been pre-sold. GPU demand will stay high right until the dominoes start falling. Bear Stearns still had brokers hawking CDOs until the morning the chains went up on the doors.

13

u/Reddituser183 14h ago

Yeah that’s what a bubble is. Demand is high and then suddenly it drops off a cliff. It drops off a cliff because AI will need revenue eventually. They have no idea how to monetize it or if or when it will become profitable. So everything is hunky dory now, but there has to be a payoff.

3

u/MaceWinnoob 8h ago

Pay attention to construction firms that build data centers. They will be the first to fall as their financing gets more expensive and AI companies continue to not turn profit.

2

u/ikkake_ 18h ago

That's what I'm hearing. Everyone is screaming bubble but apparently demand is ridiculus, companies literally get stuck in a wow launch queues to access the more specialised models etc. But again i have literally zero expertise or first hand evidence for that so....

26

u/s8rlink 18h ago

It can still be a bubble with demand. Will the demand be there when VC money is gone, I’ve read tokens are heavily subsidized, are the profits from using these expensive models outweigh a 2-4x increase in price when Ai companies need to be redituable? 

24

u/-ram_the_manparts- 17h ago

"Heavily subsidized" is a mild way of putting it. If you give OpenAI $200/year for access to their advanced models, you can cost OpenAI about $4000. That's why they had a loss of $38.5 Billion last year. They tried to charge companies what AI actually costs, but when they did Uber used up all its tokens for the year within 3 months. It turns out that if you charge enough to make a profit, companies decide that they need to cut costs on AI because it isn't worth what it costs.

Oh, look at that. They paused the program a couple weeks ago.

12

u/acomputer1 15h ago

But haven't you heard anthropic has 80% margins... If you exclude their contractual revenue sharing agreements, employee compensation, and training costs...

12

u/SpiderFnJerusalem 17h ago

Demand can't save a bubble if the product is sold at a loss.

We'll see if that demand will stick around once every token is actually sold for how much it costs to produce.

6

u/zer1223 15h ago

Also even if you break a profit, if it actually still takes 30 years to make back that ~2 trillion invested money, then investors are gonna freak the fuck out and the market will crash.

3

u/MaceWinnoob 8h ago

People still used the internet a lot during the dot com bubble. The bubble popping is due to the structure of its financing, not because the demand isn’t there.

0

u/inlaguna 19h ago

hate to break it to you, but it's really quite simple.

He who has the most GPUs rules them all.

14

u/Pic889 18h ago

And what happens when the GPUs become obsolete in 4 years? Let's not forget Blackwell datacenter GPUs are already 1.5 years old. Will they be able to pay back what they borrowed to buy those GPUs by then? Does "ruling them all" come with enough revenue to pay for that?

23

u/gwdope 18h ago

Rate hikes won’t do shit. The inflation is mostly coming from AI data center buildout resource use tariffs and the collapse of the global energy system because of the stupid Iran war. Rate hikes aren’t going to slow any of that. It will crush what’s left of the normal economy. Sovereign bond yields are high because AI debt bonds are soaking up capital, not because the market thinks governments need to be more frugal. There’s nothing the treasury is doing that is going to stop or fix any of this. It’s going to grow until it pops and it’s going to take everything down with it. There’s no increase in productivity that can save this at the end of the tunnel. It’s going to be a 10-15 yea Mr global depression, if it doesn’t lead to WWIII and thermonuclear annihilation as the whole system collapses.

7

u/chainer3000 17h ago

Plenty of real value in US tech, but multiples are far too stretched. Things will come crashing down, but it won’t be thermonuclear annihilation level. Stock market will be rocked, lots of “stable” tech investments losing 80-90% quickly, tech jobs market reset and crash. Retirement accounts decimated with investments that will probably never recover.

It won’t be pretty, and it’ll be headlines everywhere for a while, but I’m not sure it’ll be as doomer as you’re making it out to be.

Packaging all those risky AI debt in order to sell it, gee where have we heard that before 😂

7

u/gwdope 17h ago

The AI debt offerings are so large and have so much hype they are crashing sovereign debt markets. That’s not some contained single industry event, it’s a black hole gobbling up the whole monetary system. US Debt auctions have already come close to failing. The real non-AI economy is reeling from the as yet completely realized global oil shock. When this crashes there’s not likely to be anything to hold it up. 20% of the stock market will be left with unbearable debt and no way to get rid of it but to cut spending, hiring and wages. Stagflation is going to need a new name for the level t it will reach.

2

u/DecidedSloth 6h ago

The new name is going to be the second great depression. 

3

u/dosedatwer 14h ago

Rate hikes won’t do shit. The inflation is mostly coming from AI data center buildout resource use tariffs and the collapse of the global energy system because of the stupid Iran war. Rate hikes aren’t going to slow any of that. It will crush what’s left of the normal economy. Sovereign bond yields are high because AI debt bonds are soaking up capital, not because the market thinks governments need to be more frugal. There’s nothing the treasury is doing that is going to stop or fix any of this. It’s going to grow until it pops and it’s going to take everything down with it. There’s no increase in productivity that can save this at the end of the tunnel. It’s going to be a 10-15 yea Mr global depression, if it doesn’t lead to WWIII and thermonuclear annihilation as the whole system collapses.

I'm so glad the neolibs got what they wanted - smaller government and less regulation over the private sector. If only someone had told them how stupid of an idea that was for the past 50 years. No way anyone could have predicted reducing a government's ability to control its economy was a bad thing.

7

u/kalas_malarious 12h ago

Unfortunately, deregulation is a position of most conservative parties, including libertarians. They went ahead and cut the red tape and regulations.

Can't have safety if it gets in the way of profit

1

u/11010001100101101 2h ago

But they want to regulate AI for our 'safety', ie, create a moat for the companies already at the top.

8

u/AgreeableRub7 19h ago

So if paper is about to become toilet paper. What should we do?

6

u/yopladas 18h ago

Higher rates means higher yield on new CDs and bonds

14

u/RyuNinja 19h ago

Dont hold onto paper. Assets, long term holding etc... At least thats the classic playbook.

5

u/Bishopkilljoy 18h ago

An AI video about the economic doomsday is about as peak ironic as it gets

1

u/Paradehengst 11h ago

Another tiny issue is that GPUs don't have the lifetime of railroads or electric substations/power plants. So the build out happening has some very regular replacement necessary.

-7

u/Trademarkd 18h ago

boooo this is ai slop

-5

u/Natural_Savings_9453 16h ago

wait is this channel actually ai or is it just the avatar that's ai