Nostr Web Client

Here’s what I’ve been thinkg recently. If ai wipes out a big chunk of jobs by making everything far more efficient… is that inflationary or deflationary? I’m betting on deflation.

If 1 in 5 people are out of work, what happens to housing prices? How much is a car worth if commuting gets cut in half?

Vinod Khosla predicts that in 20 yrs, $10k will buy more than $50k does today and his track record on this stuff is almost scary. With over $35T national debt, current interest rates and massive money printing, I almost find this prediction an insulting joke. But again, his track record scares me.

So if ai makes the future massively deflationary, the real question is what happens to capitalism when humanity finally meets with true abundance again after several centuries?

Reply to this note

Please Login to reply.

Discussion

Zach⚡️ 4mo ago

Deflation has little to do with AI because most jobs are unproductive already, and therefore increases in productivity gained from AI won’t translate into any meaningful gains.

The unproductive jobs could go away with or without AI if the fiat economy stopped funding them through taxation and monetary manipulation.

That would cause massive deflation, but is also not in the interest of the government, the fed, and all the people who depend on the unproductive system, so it will not happen. USD debasement is inevitable and is a product of government corruption and the incentives behind it.

bitcoinlimit 4mo ago

i think this kinda underestimates the scale and speed of change ai also brings. it’s not just about removing servitude jobs that exist because of fiat distortions, it’s about dismantling productive jobs too, or radically reducing the cost of producing actual goods and services.

Zach⚡️ 4mo ago

Let’s say unemployment is 20%. Just imagine how much money they would print and how many fake jobs they would create.

AI is a marginal improvement, but we’ve been making huge global productivity gains for 50 years. We could’ve had massive deflation that entire time if it wasn’t for taxation, government spending, and monetary manipulation.

The economy will continue to be completely fake until hyperbitcoinization. Atlas Shrugged is essentially non-fiction.

bitcoinlimit 4mo ago

Agreed that fake jobs can definitely mask unemployment but ai impact isn’t marginal imo in the same way past productivity gains were. Over the last 50 yrs or even more gains were often offset by labor shifting into new industries or by regulatory drag. Now ai threatens all industries at once manufacturing, logistics, finance, law, healthcare, software, you name it. removing both skilled and unskilled simultaneously. Fascinating to witnesses all of these.

Zach⚡️ 4mo ago

To be clear, you think that because of AI, things like the consumer price index and real estate will fall 80% against the US dollar?

bitcoinlimit 4mo ago

This is what I’m questioning, yes. Some reputable minds predict this outcome, though the numbers could change. But as i said, given the money printing, current rates, and national debt, i almost find this prediction an insulting joke.

Zach⚡️ 4mo ago

I predict that they are going to print so much money your face is going to melt off and we will enter a soft mandibles-like situation.

And a chatbot which makes pictures and indexes things fast won’t affect that outcome.

bitcoinlimit 4mo ago

Agreed on the money printing part. But i think you’re underestimating just how fundamental the changes from ai are going to be. it’s not just another tech upgrade or a chatbot. we’re about to witness a complete rewrite of how the economy, labor and even value creation itself work.

Zach⚡️ 4mo ago

AI replaces the jobs which were the most useless and least labor intensive. Which is to say, it will replace very little because you can’t keep your big government budgets if you get a chatbot to work for you.

But let’s see how it plays out! My money is where my mouth is.

DevinNButterBall 4mo ago

I enjoyed this back and forth

CTarian 4mo ago

Doesn't have anything to do with inflation, which is but one thing..... An Increase In The Money Supply.. Politicians borrow. The FED creates the money out of thin air. That fake money is the inflation. So no, it wouldn't be inflationary but it could cause some prices to go up. But then I'll bet you we could see others prices go down. Plus who knows what new kinds of jobs could be created over all of an economy? Innovations seem to always bring new industry. AI truly is amazing.

Kevin 4mo ago

So, I understand and agree, AI will be deflationary. Your arguments are sound. The part I disagree with, is when things get deflationary the government MUST print to out pace it. Which is the framework laid out by nostr:nprofile1qqsg86qcm7lve6jkkr64z4mt8lfe57jsu8vpty6r2qpk37sgtnxevjcpr4mhxue69uhkummnw3ez6ur4vgh8wetvd3hhyer9wghxuet5qy2hwumn8ghj7etyv4hzumn0wd68ytnvv9hxgudymgz

Government debt can't let deflation take over. So you'll see a flood of money so that the common man never sees the benefit.

You and I see efficiencies where it'll lower costs for everyone. Government sees it as a runway to print and steal all that lower cost away by adding more monetary units and people think prices are just staying stagnant and will applaud the policy makers as they're robbed blind by them.

bitcoinlimit 4mo ago

I think this is the most likely outcome.

Globe99 4mo ago

Approaching post-scarcity economics, which is basically what you're getting at, is "deflationary" in terms of real value. Real prices get driven to zero.

What happens... Ever see #startrek?

bitcoinlimit 4mo ago

Exactly! In a post-scarcity economy, people no longer work for money in the traditional sense because their material needs are automatically met.

Globe99 4mo ago

Right... Overall a free market society trends in this direction. More leisure time and wealth.

This is the place where capitalism and communism meet and become the same thing. Marx's ideal of "Baker in the morning, stonemason in the afternoon, poet in the evening" etc.

But it takes a big shift in mindset. It requires people to be self-motivated rather than being told what to do and how to live their life by external forces, government, the Church, family, etc.

bitcoinlimit 4mo ago

The scars in today’s society run deep. Young people aren’t motivated because effort no longer guarantees a better material life. Changing that mindset will be the hardest challenge of all.

Zach⚡️ 4mo ago

Bitcoin fixes that

bitcoinlimit 4mo ago

that’s my biggest hope. i couldn’t care less about a bigger house or a nicer car. i want, for myself and for society, more time, more innovation, more exploration, more freedom. bitcoin will give this to all of us.

nomadshiba⚡ 4mo ago

also dont forget in deflation would also make you work harder early in your life.

because more you wait, less you can earn.

there's a difference between not being hungry and being more richer or wealthier than others which works with ratios.

and the wealth of people themselves effects prices of many things.

so there's always competition between ratios.

and there's no way you can have deflation with fiat for too long. maybe with bitcoin.

nomadshiba⚡ 4mo ago

you still need power as well. create families and clans etc are the best way, because longer you preserve your wealth, more powerful you become. so its best you preserve your wealth for more than one lifetime with a family.

ratio is the king.

Neve Farms 4mo ago

Probably one of the hardest to predict questions I’ve thought about as well. One thing if for certain as Jeff Booth says, they will print money because deflation cannot be allowed to collapse the credit system. Though ideally in 20 years we move to a bitcoin standard where prices actually fall according to efficiency gains

Ava 4mo ago

The Pegged stablecoin will be the main currency 🤣

SwapMarket 4mo ago

true abundance of angry mobs

Neo ⚡️ 4mo ago

https://www.youtubetrimmer.com/view/?v=qfeMas1zU6Q&start=2327&end=2512&loop=0