- cross-posted to:
- world@quokk.au
- cross-posted to:
- world@quokk.au
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People have been predicting this for a long time. Is anyone buying puts?
The market can stay irrational longer than you can fund a put.
You can be right and still lose everything.
Whether you believe the bubble is currently popping, will pop soon, or will eventually pop - there are strategies that will allow you to massively profit from your insight. You don’t have to spend your entire net worth on a 0DTE.
I’m an economics idiot. But doesn’t general inflation reduce the burden of debt?
Yes, it reduces burden of debt, but it makes taking on new debt a lot more expensive, because interest rates are closely related to inflation.
And if you have to pay back a debt (as you normally have to after a predetermined time), and have to refinance it by taking up new debt, now you might not be able to pay the now higher interest.
So for the one who pays of his credit card debt, inflation is a good thing. For the company that used that credit to invest in something that will only bring revenue at a future point in time, this is a real fucking problem (this is what is happening in Russia currently btw. Bankruptcies are skyrocketing there because of the high inflation and the even higher interest rate - and stalling domestic spending - , and that rate is being artificially kept “low” to boot. There has been an intense power struggle between the russian central bank and the Kremlin this year. Look up Elvira Nabiullina’s “disappearance” this June)
Significant inflation leads to increased interest rates and this makes it more expensive to take on new debt.
Or, if a country has high inflation and does not increase interest rates, this can lead to money flowing out of the country.
Inflation can also affect consumer spending, and therefore, selling of future products. Whether the effect is positive or negative could depend on how much consumer spending is debt-financed.
If your wages do not rise at the same rate as inflation, your debt burden does not shrink.
if you are the one owing money, yes; if you are the one who is supposed to receive money, it is not so great. i would assume the ones worrying about this are the ones who are supposed to be receiving money? i am also an economics idiot
To be expected since none of these AI companies are turning profits.
Nvidia is, but they spent it on the bubble
Nvidia is the guy selling pickaxes to the gold diggers. This enriches only the guys with land that actually has gold (like 3-letter agencies and the military) and the guy selling pickaxes.
…and $235 billion for stock buybacks the next couple years.
I don’t know what the plan is. Double our electric bills, take our water, take our jobs, and expect everyone to pay monthly for your crappy generative AI that most people never asked for?
If the reward isn’t money, it is control. This technology can automatically flag any public dissent, every unwelcome transaction, and with Flock & Co even where you go and who you might meet (outside of the fuckton of telemetry cars come with nowadays, but it’s harder for 3-letter agencies to get their hands on that data)
In the beginning, it was about money. They realized that this is probably not gonna happen since human labor is cheap. But for control, this stuff is epic. And in this use case, who the fuck cares about a hallucination or two? Being able to analyze the online presence of billions of people based on INTENT and not simply keywords is worth fucking gold for them.
or having AI being used mass surveillance.
Uh…yeah. That’s the plan.
This seems to be the proximate cause:
The sell-off came after US data on Wednesday showed stateside inflation jumped to a higher-than-expected 3.7% in September, marking the fastest increase in prices since the consumer price index (CPI) rate hit a three-year peak of 4.2% in May.
Fresh data on Thursday showing US producers increased their prices by 6.3% year on year in September – the sharpest rise since December 2022 – added to inflationary jitters.
The figures have rattled investors who are now expecting fresh interest rate increases by the US Federal Reserve, with some punters pricing in another increase as soon as the end of the month.
It seems that investors are worried AI debt will be even more difficult to pay off once the Fed jacks up interest rates
Well, yeah. It’s usually not the principal that gets out of hand anyway. It’s always the interest that gets ya.
🪡
POP! POP! POP!
Emotionally i am at this stage:
More! MORE! KEEP FIRING!!!
Funny I’m not “seeing” this in the PM’s markets. In fact silver right now is about the lowest I have seen in ages, fighting off the idea of buying some Au/Ag.
EDIT:
But in the spirit of what I think the AI boom is going to do:
Check it with a 1y or 5y window.
Both Silver and Gold climbed massively in the last 3 years (though they’ve been steadily climbing since around 2020) and hit a huge peak early this year and then came back down. Now they’re both sitting at roughly were they were at the start of the year.
IMHO PMs are not really great speculative investments since they’re not all that volatile (though early this year volatility was unusually high) and they’re more mid and long term wealth holding mechanism in the face of Economic problems that hit major currencies making the value of those currencies (and hence all assets denominated in them) go down. It helps that actual physical metals (especially for Gold) are not managed by Governments or Central Banks - you cannot create new Gold beyond the roughly 2% mined per year hence there is no such thing as Gold interest rates so states can’t just make more of it or tweak its long-term returns - hence it cannot be mismanaged, unlike government issued currencies.
In a long-term perspective it’s not as much that you make money from PMs as it is that everybody else around you is getting poorer because their incomes, savings and assets are in a currency which is losing purchasing power, whilst you managed to retain the purchasing power of your savings.
From my own experience in the 2008 Crash, expect PMs to first go down as Markets plummet and traders are forced to sell in more stable and liquid assets (such as Gold) to cover margin calls in other areas, and then turn and start climbing fast as the crash hits the broader economy and hence the value of the main currencies (this time around, especially the USD) starts falling meaning that PM prices in those currencies go up.
Also keep in mind that Silver is very exposed to the status of the broader Economy since it’s mainly used as an industrial metal, so if the Economy slows down, fewer products containing it are made hence demand for it goes down - Gold tends to be more insulated from the broader Economy than Silver.
Investing in precious metals always made me laugh though. All currency around you has become worthless; you gonna shave off some gold for some bread? If I was even anywhere near that point in my life I would rather have tool making stuff like a good mill, a good lathe, and a good welder, not to mention a nice garage to put them.
Oh, yeah, the Goldbug-Prepper ideation of Gold as a way to preserve one’s wealth when society collapses is ridiculous: when things get that bad what matters are the basics like food and water, which for anything more than a few months means growing your own food as you’ll deplete whatever stores you have sooner or later. Then beyond that come all the things needed to (re)build a society and it’s going to be a bartering society, not a “tokens of value” one. Wealth held in some abstract token of “value” only becomes useful much later and it might not even be precious metals.
As I see it, Gold is just a decent insurance for a certain range of systemic risks - think of it as a basket of currencies but simpler and with lower correlation to main currencies. It will insulate you from things like a run of the Dollar (a possible thing when the USD stops being a Reserve currency) or governments continuous devaluating their currency as a way to make up for economic mismanagement (like in India), not from societal collapse.
The AI posters really make me laugh
Pop that pussy pop that pussey pussey
