E131: 2024 Fantasy President picks, debt ceiling agreement, Dollar dominance & more

the atomization of these models is happening, I think, even faster than when you first brought that up.

Yeah, so what took two or three million dollars last year is now taking $200,000 just through software improvements and code improvements.

Parameter reduction and fine-tuning seems to get to the point that we can run these things on small machines cheaply, quickly. And it'll change the applications.

China has real problems. There is no question about it. They have got demographic problems, they have got problems in the banking system, they have got a real estate bubble.

So I think what I'm waiting for, Friedberg, is like in the next two quarters, if AMD, Facebook, Google, Microsoft and Amazon don't announce something substantive, there's a very good chance that Nvidia runs away with this.

So that could flip where the demand could actually decrease because of software efficiencies or hitting some benchmark that's reasonable enough.

Look, I think as performance improves, as cost declines, like any economic model, there's a pretty nonlinear relationship with demand. So we'll find new ways to apply this technology. I think the demand is only going to go nonlinear.

That feels to me, and we did predict here that they would get this done, it does feel to me like this is some amount of progress, right?

So I am just an advocate for cutting revenue, because I do think it's the simplest way to force people, because the next time they go through these machinations and all this theater around a dead ceiling, they'll just have less revenue to play with, and it'll just become a harder and harder and harder problem.

It'd be a high-class problem to have if it ended up being a DeSantis-Kennedy race instead of a Biden-Trump repeat.

Especially if the Ukraine war is still going on because we're that close to being in a direct shooting war with Russia, which could lead to a nuclear war.

That war seems to be contained. I'll be more worried about the relationship with China.

I don't think it's contained. It's escalating. And as of yesterday, there seems to be some conflagration between Kosovo and Serbia. That's kicking up. So all of a sudden, we're talking about a totally different European land war.

I mean, if you saw what happened around the whole banking crisis that I think is still going on in slow motion, I mean, the amount of animosity both towards the banks that went under and the idea of potentially bailing them out, and then also the animosity towards JP Morgan when it actually bought First Republic.

And we have fiscal instability. We're about to talk about it today, but the home market could implode in the United States. The commercial real estate market has already imploded.

So you're going to look to diversify. You're going to look to put your money in gold. You're going to look to put your money in other currencies.

The share of Yuan transactions briefly rose above 3% in 2022 That was the peak and it's now off 26%, down to about 2.2%. So actually the share of Yuan transactions has actually been shrinking in the last year.

And fundamentally, I don't think that there's as safe a haven as there has been historically. And as a result, I think a lot of these governments and a lot of the business leaders in these countries are very much open to doing transactions in multiple currencies. And that's the beginning of the end.

I disagree. I think there will be, will remain the global reserve for our lifetime.

The debt is getting bigger and bigger at the same time that foreign governments and investors in general don't want to fund our debt. So therefore, interest rates will rise. Our interest costs will keep going up.

That's not why interest rates are going up.