The speaker made a very convincing argument that the exponential technological advancement is very deflationary. In many cases such as AI and software the marginal cost of production approaches zero. In the case of more material aspects, the cost is rapidly dropping as in the case of computer chip processing power.
The existing financial system is based on several huge debt bubbles. Deflation is very bad for debtors, so the system tries to keep some level of inflation in play.
He puts out the notion that we are actually having a lot of technological-based deflation now, but that the rate of currency debasement more than offsets this deflation. However, he predicts that if the rate of technological innovation hits the hockey stick curve and takes off exponentially, the deflation will come to the fore.
Many have predicted that the technological innovation will increase productivity but will massively eat away at lower and middle level jobs. This could become a very large problem and might lead to the need for some form of universal basic income.
Raoul Pal made a very convincing argument that this sort of societal change is already underway. We are certainly seeing a push for this sort of thing by the very liberal members of congress. Raoul said that he felt that the central bank digital currencies (CDBC) would serve as a mechanism to transition from the current situation to the UBI situation. He felt that the money printing would have to continue but if it was done in the form of CDBC, it could be more precisely controlled and more of the excess money would be directed to the general population instead of being snatched up by the well-connected few as is the case now.
I think the interplay between the potential for technologically induced deflation and currency debasement inflation if very interesting. It is as if we are on the knife edge and can go either of two ways, into a abundant utopia or a scarce distopia.
A lot of this change is probably not going to be really visible for 20 or 30 years, so I suppose a case could be made that it will not affect most of us here, since I get the feeling that the median age on this forum is over 65.
The existing financial system is based on several huge debt bubbles. Deflation is very bad for debtors, so the system tries to keep some level of inflation in play.
He puts out the notion that we are actually having a lot of technological-based deflation now, but that the rate of currency debasement more than offsets this deflation. However, he predicts that if the rate of technological innovation hits the hockey stick curve and takes off exponentially, the deflation will come to the fore.
Many have predicted that the technological innovation will increase productivity but will massively eat away at lower and middle level jobs. This could become a very large problem and might lead to the need for some form of universal basic income.
Raoul Pal made a very convincing argument that this sort of societal change is already underway. We are certainly seeing a push for this sort of thing by the very liberal members of congress. Raoul said that he felt that the central bank digital currencies (CDBC) would serve as a mechanism to transition from the current situation to the UBI situation. He felt that the money printing would have to continue but if it was done in the form of CDBC, it could be more precisely controlled and more of the excess money would be directed to the general population instead of being snatched up by the well-connected few as is the case now.
I think the interplay between the potential for technologically induced deflation and currency debasement inflation if very interesting. It is as if we are on the knife edge and can go either of two ways, into a abundant utopia or a scarce distopia.
A lot of this change is probably not going to be really visible for 20 or 30 years, so I suppose a case could be made that it will not affect most of us here, since I get the feeling that the median age on this forum is over 65.
Last edited: