Here are my Thursday Thoughts, a short list of the most interesting things that I’ve read, heard, and/or watched over the past week.
What I Heard:
Derek Thompson has a conversation with his colleague at the Atlantic, Charlie Warzel, about AI. They cover the recent release of GPT4 and the implications it will have on the world.
The most fascinating part of the podcast was their use of the Manhattan project as an analogy. There is a real fear amongst the creators of generative AI on the potential downsides of the technology.
Balaji Srinivasan made a bet that Bitcoin will be worth $1 million in 90 days. His thesis is that the current banking crisis is worst than it looks. A wide range of banks are at risk of becoming insolvent. This is due to the sharp raise in interest rates after the huge influx of money for COVID relief.
Although the bet is ridiculous, Balaji makes great points throughout the podcast. There is fear that parts of the US financial system is underwater due to the policies of the Fed. I haven’t panicked yet, but am taking some precautionary measures like moving my remaining cryptocurrencies off centralized exchanges and buying short term US treasury bonds.
What I Read:
Arthur Hayes pens a long article about the current economic situation. He uses the metaphor of Kaiseki as the backdrop for the current economic state. He theorizes that there will be an upcoming recession followed by money printing. This will increase national debt and continue to inflate the US dollar.
Hayes thesis is similar to Balaji’s view. But he doesn’t think the entire financial system will collapse. His view is that assets like Bitcoin and gold will outperform equities and bonds due to being hedges against inflation.