Jordi Visser on AI, Macroeconomics, and the End of Recessions

The AI-Driven Disruption of Labor

• 💡 Artificial intelligence is rapidly advancing, with models graduating to a 160 IQ, signaling the imminent disruption of knowledge workers.
• ⚠️ Major employers like Walmart, Amazon, and Accenture are already signaling reduced hiring, reflecting a shift in labor demand.
• 📉 Historically, temporary employment and JOLTS numbers have correlated with earnings per share; a decline in these indicators suggests a weakening labor market.
• 🧠 The increasing efficiency and decreasing energy cost of AI models are making them more cost-effective than human labor.

Economic Implications and Fed Policy

• 🚀 The economy is increasingly digital, with AI acting as a deflationary force, suggesting the Fed will likely cut rates.
• 📈 Despite fears of inflation, wage growth has slowed since 2021-2022, and AI's deflationary nature supports a rate-cutting environment.
• 💰 The administration's focus on AI and the potential for fiscal stimulus, especially with upcoming midterms, suggests alignment between monetary and fiscal policy.
• 🏠 The K-shaped economy, where the top benefits from asset appreciation and the bottom relies on credit, is exacerbated by AI's impact.

Energy and Infrastructure for the AI Age

• ⚡ The urgent need for energy to power AI necessitates rapid infrastructure build-out, with solar and gas as immediate solutions.
• 🔋 Bitcoin miners are playing a crucial role in grid optimization by acting as virtual batteries, absorbing excess energy and stabilizing prices.
• 🔌 The existing electricity grid is insufficient, requiring decentralized solutions and significant investment in transformers and power generation.
• 🤖 Humanoids and AI-powered devices will require substantial energy, driving innovation in battery technology and decentralized power sources.

The Rise of Stablecoins and the Digital Economy

• 🌐 Stablecoins are transforming the global financial landscape, enabling seamless cross-border transactions and acting as a digital layer for the US dollar.
• 🏦 The network effects of stablecoins are drawing capital into the digital economy, making it difficult for traditional fiat systems to compete.
• 📉 Emerging markets are particularly vulnerable to stablecoin-driven capital flight, as seen in the rapid evaporation of funds from Silicon Valley Bank.
• ⚖️ The US dollar's dominance is reinforced by stablecoins, creating a powerful financial weapon and a significant advantage for the US in the global economy.

Future Market Outlook and AI's Impact

• 📈 A bullish outlook for asset prices is expected in 2026, driven by rate cuts, accelerating earnings, and massive AI-related capital expenditure.
• 📉 While the Mag 7 (excluding Nvidia and Tesla) may act as a drag, small-cap stocks are poised for significant growth.
• 💡 The commoditization of AI models and the sharing of knowledge across platforms suggest that AGI will be a democratizing force, not owned by a single entity.
• 💰 The increasing efficiency of AI models, even in terms of energy consumption, makes them more cost-effective than human labor, accelerating the shift in employment.