They are explicitly predicting that if there is massive AI productivity growth, there is no guarantee that the government will take the opportunity to print and spend to generate enough inflation to prevent the breakdown of basically all loans to extreme deflation. Somebody who found a way to exit into something safe from extreme deflation was fine, but everyone who misidentified it is soaked.
it might be that the only safe asset is datacenter shares, or something, and everybody who is not in that has whatever they are holding deflated to nothing.
The deal they predict looks like
We play musical chairs with all the claims on future production
There is way more future production to claim.
Even with a fairness guarantee, that can still be scary.
They are explicitly predicting that if there is massive AI productivity growth, there is no guarantee that the government will take the opportunity to print and spend to generate enough inflation to prevent the breakdown of basically all loans to extreme deflation. Somebody who found a way to exit into something safe from extreme deflation was fine, but everyone who misidentified it is soaked.
it might be that the only safe asset is datacenter shares, or something, and everybody who is not in that has whatever they are holding deflated to nothing.
The deal they predict looks like
We play musical chairs with all the claims on future production
There is way more future production to claim.
Even with a fairness guarantee, that can still be scary.