30Y-this* is probably the most reliable predictor of AI timelines. It’s essentially the markets estimate of the real economic yield of the next 30 years.
Disagree. To correct the market, the yield of these bonds would have to go way up, which means the price needs to go way down, which means current TIPS holders need to sell, and/or people need to short.
Since TIPS are basically the safest asset, market participants who don’t want volatility have few other options to balance riskier assets like stocks. So your pension fund would be crazy to sell TIPS, especially after the yield goes up.
And for speculators, there’s no efficient way to short treasuries. If you’re betting on 10 year AI timelines, why short treasuries and 2x your money when you could invest in AI stocks and get much larger returns?
The problem is AI stocks will go up a lot even if transformative AI won’t happen (and it instead just has a lot of mundane utility). You can short treasury futures relatively easily too. I imagine the people shorting these futures will have TAI priced in before it’s obvious to us through other metrics.
Can’t see the graph for some reason. But I don’t agree with your characterization. It’s the market’s estimate of CPI-measured inflation. I suppose you could call that “real economic yield’, but I don’t think there exists any such measure, especially if you’re expecting it to be comparable during a strong-AI revolution.
This may be a definition disagreement. IMO, there are a LOT of changes, economic and otherwise, that go into “AI timelines”, which won’t be priced in to CPI-inflation predictions.
https://www.cnbc.com/quotes/US30YTIP
30Y-this* is probably the most reliable predictor of AI timelines. It’s essentially the markets estimate of the real economic yield of the next 30 years.
Disagree. To correct the market, the yield of these bonds would have to go way up, which means the price needs to go way down, which means current TIPS holders need to sell, and/or people need to short.
Since TIPS are basically the safest asset, market participants who don’t want volatility have few other options to balance riskier assets like stocks. So your pension fund would be crazy to sell TIPS, especially after the yield goes up.
And for speculators, there’s no efficient way to short treasuries. If you’re betting on 10 year AI timelines, why short treasuries and 2x your money when you could invest in AI stocks and get much larger returns?
The problem is AI stocks will go up a lot even if transformative AI won’t happen (and it instead just has a lot of mundane utility). You can short treasury futures relatively easily too. I imagine the people shorting these futures will have TAI priced in before it’s obvious to us through other metrics.
Can’t see the graph for some reason. But I don’t agree with your characterization. It’s the market’s estimate of CPI-measured inflation. I suppose you could call that “real economic yield’, but I don’t think there exists any such measure, especially if you’re expecting it to be comparable during a strong-AI revolution.
It’s the estimate of real economic growth. If AGI has a good chance of happening in the next 30 years and it’s priced in, that graph should go up.
This may be a definition disagreement. IMO, there are a LOT of changes, economic and otherwise, that go into “AI timelines”, which won’t be priced in to CPI-inflation predictions.
30y-TIPS seems like a better fit.