This was a great listen. Thank you, Jim. I particularly enjoyed your explanation as to why miner stocks are so volatile (in both positive & negative directions). Cheers!
Great stuff as usual. Do you know of any 'experts' or political leaders who are at least considering accepting this understanding of money creation? Or do many of them understand it, and just don't care to follow the logical consequences of what they are doing?
Good question! I am pretty sure Thomas Massie gets it in full. I was surprised at the Rand Paul flub, as he is pretty good on the economy. In the Trump cabinet, Stephen Miran (who wrote the "Mar-a-Lago Accord" and is now going to the Fed Open Market Committee) definitely understands money and banking. Scott Bessent, of course, gets it completely and wants to deregulate the small banks to get them lending more aggressively to small businesses. This is how money creation grows GDP instead of causing asset bubbles, and is the only way to get the GDP to grow faster than the debt. I am not sure if Trump fully understands money and banking - I suspect he has gaps in his knowledge. I'll need to give this question more thought and watch for signs of understanding or confusion.
One other comment on Fred Hickey... I would echo your sentiment that he's very, very good. I just completed my first full year as a subscriber based on your recommendation. I have followed much of his advice to my benefit. So thank you!
My only small caveat would be when it comes to AI, Fred strikes me as overly pessimistic. In my two businesses, AI has ALREADY been a game changer in terms of reducing headcount while increasing output. The gains feel very real to me, though perhaps not relative to the sunk costs of the hyper-scalers. In other words, it seems to me quite possible that for one or more of the hyperscalers, great economic benefits fail to accrue, while simultaneously for the businesses using the tech (like mine), great benefits do accrue.
It reminds me perhaps by analogy of what Munger said about being in the textile business. Munger & Buffett got out of the textile business because they realized all the technology investments would accrue to the consumer, not to their business, and some industries are just like that.
I use all of the big AI models for various different tasks, and some are better than others for certain tasks, but in general there is much more overlap than difference. It feels a little like gasoline, where generally I just look for the cheapest, most efficient option.
I suspect Fred is basing his pessimistic judgment on the sheer amount of money that has been invested in AI, a massive investment that might (as you imply) benefit users much more than the creators. Many, including Hickey, use historical over-investments in the railroads, the airlines, and fiber optic cable as historical caveats against this kind of a capital "arms race." I use THTS strictly for the mining stock recommendations.
This was a great listen. Thank you, Jim. I particularly enjoyed your explanation as to why miner stocks are so volatile (in both positive & negative directions). Cheers!
Thanks!
Great stuff as usual. Do you know of any 'experts' or political leaders who are at least considering accepting this understanding of money creation? Or do many of them understand it, and just don't care to follow the logical consequences of what they are doing?
Good question! I am pretty sure Thomas Massie gets it in full. I was surprised at the Rand Paul flub, as he is pretty good on the economy. In the Trump cabinet, Stephen Miran (who wrote the "Mar-a-Lago Accord" and is now going to the Fed Open Market Committee) definitely understands money and banking. Scott Bessent, of course, gets it completely and wants to deregulate the small banks to get them lending more aggressively to small businesses. This is how money creation grows GDP instead of causing asset bubbles, and is the only way to get the GDP to grow faster than the debt. I am not sure if Trump fully understands money and banking - I suspect he has gaps in his knowledge. I'll need to give this question more thought and watch for signs of understanding or confusion.
One other comment on Fred Hickey... I would echo your sentiment that he's very, very good. I just completed my first full year as a subscriber based on your recommendation. I have followed much of his advice to my benefit. So thank you!
My only small caveat would be when it comes to AI, Fred strikes me as overly pessimistic. In my two businesses, AI has ALREADY been a game changer in terms of reducing headcount while increasing output. The gains feel very real to me, though perhaps not relative to the sunk costs of the hyper-scalers. In other words, it seems to me quite possible that for one or more of the hyperscalers, great economic benefits fail to accrue, while simultaneously for the businesses using the tech (like mine), great benefits do accrue.
It reminds me perhaps by analogy of what Munger said about being in the textile business. Munger & Buffett got out of the textile business because they realized all the technology investments would accrue to the consumer, not to their business, and some industries are just like that.
I use all of the big AI models for various different tasks, and some are better than others for certain tasks, but in general there is much more overlap than difference. It feels a little like gasoline, where generally I just look for the cheapest, most efficient option.
I suspect Fred is basing his pessimistic judgment on the sheer amount of money that has been invested in AI, a massive investment that might (as you imply) benefit users much more than the creators. Many, including Hickey, use historical over-investments in the railroads, the airlines, and fiber optic cable as historical caveats against this kind of a capital "arms race." I use THTS strictly for the mining stock recommendations.
I agree on all points!