• 70 Posts
  • 975 Comments
Joined 3 years ago
cake
Cake day: February 17th, 2024

help-circle


  • There are a lot of predictions going around, but to be fair, everyone is biased, because they either want to see it pop, or they want to see it succeed, and not be a bubble at all. Everyone who says it’s going to last about five years because that’s the average for bubbles is plain wrong because averages are sneaky, because the canal mania lasted way longer than that and had very different development than the other bubbles. or the .com bubble being a very short-lived one. Suffice to say averages are useless for this stuff, because it’s not predictable, a round-trooping scam can keep going as long as there’s fresh outside money going in. Because the USA are desperately trying to finance their shit spending with new bonds and by avoiding countries such as Japan, which have a lot of US bonds, selling them, it could pop tomorrow or in 5 years, who knows? It’s not a simple y = x2. Also, the bears always have been quicker than the bulls, to call a pop.

    What I’d like to say with that is, no one knows. We can see a lot of bad things happening in the economy right now, the fat bond spread, the markets which are still hooked on fossil fuels, having massive energy cost problems, the AI bubble being a round tripping scam, the safety mechanisms of indexes being deactivated to keep the bubble going, the private credit crisis, which again feeds into the bubble and the USA having already trouble with their economy way more than everyone else. We can see these signs, recognise that there is a problem, but we don’t know when that problem will reach us.

    My personal biases are that I come from the EU (the USA bring our #1 trading partner) and I called bullshit very early on on the AI bubble. Do with that what you will.




















  • IMHO: one of the biggest dangers of data centers that are understated at IMO is the financial risk. Because they’re essentially just materials in a round-tripping scam that has the potential to take an entire state pension fund with it. Because, not only are they being financed with borrowed money in a round-tripping scam, which is already bad. But on top of that, this money comes from private credit, which oftentimes has none of the safeguards normal credit has. And what happens is when multiple private credit entities lose liquidity at the same time, because they have taken too much risk in the AI bubble, then the entire system can fall, like we have seen in 2008. Because that’s when the banking sector had as little oversight as private credit does today. IMO, after the bubble pops, the data centers and their immediate vicinity will look like Detroit and the American Rust Belt. The neoliberals weren’t lying, the free market really has taken care of these areas.