This is the last month where we're finally going to be solidifying these year-to-date returns. And the question becomes over the next 31 days, how do these returns end up solidifying? How do these returns end up turning out?

S&P 500 right here down in the pre-markets. Unfortunately, we are starting off with a bit of a red day. There's some reasons for why we're red. It started last night with the futures. We'll talk about why it's happening. S&P right there down about 69%. A lot of it has to do with Bitcoin, but Bitcoin is not the real story. I think a lot of it has to do with Japan. So, we'll talk about that.

I have not focused on the markets over the past three days until last night when the futures opened. And I was like, "All right, let's see what the hell's been happening over the past couple days." And quite frankly, not much has happened except for Bitcoin tanking from 91 to 1.84 this morning. And as a risk-on indicator, that kind of took everything risk off as Bitcoin took a little bit of a dump right here.

So, we'll talk about what's going on. We'll talk about Black Friday shopping sales. again the consumer we saw in those retail uh retailer ETFs or retailer uh companies last week the XRT which is one of the largest retailer ETFs was had it had its best 48 hour stretch two-day stretch since May uh Black Friday Cyber Monday sales at least Black Friday and Thanksgiving sales are in and it's pretty damn good. I imagine Cyber Monday is going to be pretty good as well based on the analytics we have in terms of the projections. If that's the case maybe that is a bit of a tailwind for the market as earnings continue to get better as the consumer maybe isn't as weak for this holiday season.

But you've got Nvidia down 1%, Palantir down 1%, Hoodie down 3%, Amazon down a percent, Broadcom down 1.5, Tesla which Michael Burry yesterday in his Substack said is the uh is one of the most ridiculously overvalued companies. So you got Burry who has been taking shots at palantir and Tesla Nvidia. Now he's taking shots at Tesla. And so we'll discuss kind of everything that's going on in the broader equity markets. Again, S&P 500 right there down about 64% on the day. Bitcoin 85,800 falling from 91,000.

I think we should start off with Japan. I think we should start off with Japan to give a little bit more analysis on what's happening. Um, last night Japan's 10-year bond yield shot up and it shot up aggressively and I think that's what kind of caused Bitcoin to immediately take a ugly dip.

So, this is the overall bond yields in Japan. You know, ironically, I was listening to um I I was listening to a a a story or not a story, it was a YouTube video that was talking about Japan's collapse in the 1990s, kind of that lost decade for Japan. and and and this was like a couple hours before the futures open. And then these are all the bond yields. Bond yields going up is not a good thing because that means people are selling bonds which means the yields are going higher. So the market's basically saying, "Hey, we don't trust the rate of inflation. We don't trust the fiscal or monetary policy that the government is deploying." And as a result, you get a lot of wacky things that could happen.

Now, why was this so bad? Well, if you take a look at this chart right here, 1.838% on the Japanese 10-year bond yield. That is the highest um yield for a Japanese 10-year bond since 2008. And that's what I also think is scaring a lot of people here because and the reason this is happening by the way is because Japan has been simultaneously raising rates while they've also been uh printing money which doesn't make a lot of sense.

because you can't and and and this is kind of the video that I was watching and and I'm trying to do more research on like the history of Japan so I'll talk more about it over the coming days but it's like Japan has had some of the weirdest economic experiments in in in human history and it's just stuff that makes you scratch your head like why did they do this in 199 1990. Why did they do this in 2000? At one point, non-performing loans, NPLs, so loans that are basically defunct loans, like they're insolvent. You've got to write them off and and you got to realize that you're just never going to get the money paid because your credit underwriting was probably bad. At one point, non-performing loans were 10% of Japan's GDP. This is back in 2000. Why? because the Japanese government encouraged Japanese banks to prop up these failing companies that had been given loans that they were never going to pay back and they only intervened when [ __ ] really hit the fan going into the end of 2008.

So I mean it's quite incredible what has happened in Japan and now what they're doing the tenure by the way spiking as well doesn't make a lot of sense either with all the stimulus printing which I mean like you could argue that that is important uh for their GDP growth but also raising rates at the same time is is a bit confusing. So, you've got a lot of weird and wonky stuff happening in Japan, which I think is what triggered the the Bitcoin sell-off.

Now, what's the syllogism about the Bitcoin sell-off? If Japan yields rise, the yen appreciates against the dollar. When the yen appreciates against the dollar, people have to sell their uh yen or sell sorry, sell their tech stocks or whatever other asset they're in. Most of the types of assets that immediately get sold off are crypto assets because those are the most liquid at that moment because they trade 24 hours. that ends up being Bitcoin to cover the short on their yen because again there's a very convenient yen carry trade that I think people know about by now which is shorting the yen borrowing in yen and then going long tech or going long crypto or going long something risky when the chickens compose come home to roost for a trade like that it ends up leading to a blood bath in the US markets at least from a risk-on perspective and so I think that is what happened over the past 24 hours

you've also got a lot of reports of just deleveraging so there's $800 million ion dollars of deleveraging that has happened uh in the Bitcoin markets now or in the crypto markets. No one knows exactly why there's been so much of a deleveraging effect. Again, one could argue it is the yen carry trade, but maybe it's something else. Maybe maybe it's not just uh yen yen carry trade. Maybe there's a different macro thesis going on for why

I mean if you take a look at it XRP Salana Salana's at 127 Bitcoin 86,000 Ethereum unfortunately is not able to maintain any momentum above 3,000 800 million as of this morning in liquidations. You would think after all the leverage that that happened on October 10th which led to that $20 billion liquidation and then again in November that there wouldn't be as much leverage in the system. It looks like there is and it looks like people continue to to leverage up. So unfortunately this might be another issue with what's going on in crypto which is that there's just a lot more leverage that is not wiped out of the system yet.

And I know that's a terrible or that's an people don't want to hear that because you know they they've heard for the past month and a half that there's leverage there's too much margin but quite frankly there might just be way too much freaking margin in the system.

And this brings up the question of Sailor. Now, Sailor, I don't know exactly what he announced today. It still doesn't fully make sense to me, but he announced a 1.44 billion USD reserve, which I guess that's just a reserve filled with a billion dollars. And then they bought a little bit more Bitcoin. I didn't get time to fully analyze what exactly happened today, but they bought another 130 Bitcoin, 89, 960. They now have 650,000 Bitcoin. By the way, they updated in their 8K their projections for Bitcoin. They don't think it's going to 150,000 anymore by the end of the year. They're now assuming 85,000. So, a lot of their projections came down,

but uh Sailor continues to buy and you got a lot of people asking a question, wait a second, could Micro Strategy become one of the most distressed assets on the planet in terms of debt just given the amount of obligations they have? They have about, if I'm not wrong, $730 million per year in interest that they have to pay on all their preferred and all the other types of equities they put out. Um, and a lot of that works when Bitcoin's going up. When Bitcoin is not going up, that becomes an issue.

Now granted, if you listen to Sailor, his perspective is they have tons and tons of money or not tons of money, they have tons of leverage to be able to pay off their debt. And a lot of the clauses, if you actually read through the preferred equities they put out, allow them to issue more stock to be able to pay off the creditors instead of having them giving them cash and selling their Bitcoin is kind of the last resort uh in in a lot of their filings. That it is a possibility, but you know, given Sailor's commitment to Bitcoin, it feels rather unlikely.

So you got a lot of different narratives boiling up, but I think that yen carry trade is kind of the core reason why Bitcoin's getting hit and as a result that took down Nvidia down 1.2%. We'll talk about Nvidia. You had a lot of different things over the weekend about Nvidia, a lot of new reports about what's going on with Nvidia from a competitive perspective. So we'll talk about that. But obviously Google, Nvidia, Broadcom Pounder Hood, Tesla, all of them getting hit as Bitcoin takes a uh takes a bit of a dip from 91,000 to 85,000 here on the day. VIX is up as well, up about I think what 7% in the pre-markets.

Yeah, around about 7%. Okay, Tom Lee was just on. Let's take a look at what he had to say this morning as well and then we will get into Nvidia

>> in the next couple of weeks is around central bank. The Fed is set to cut uh in December, but also today is the day that quantitative tightening ends. And as you know, the Fed's been shrinking its balance sheet since April 2022. It's been a pretty big headwind for market liquidity. The last time we had an end to QT, quantitative tightening, was September 2019. And if you look back at that period, the markets really responded well. I think within 3 weeks, rallied more than 17%. So I do think the timing of QT ending which is now essentially QE starting >> and the Fed and at a time when November kind of was topsyturvy. So I think people got cautious but now have to performance chase and then you have a a really typically a seasonal tailwind. So I I'm pretty bullish into December even with maybe the first day being rocky.

>> Yep. Um, so it's still all about the Fed because I was thinking there there is a time when a market can hit an inflection point where the reason the Fed is cutting um becomes a problem for the markets. That's what I thought with the jobs and everything else. it there might

>> uh I mean I'd say that the shutdown put a blackout on data and I think that created a bit of anxiety because you know markets like visibility but to me the fact that claims have been behaving and that this the the September jobs report kind of showed a a bit of a recovery. I think the labor market's probably holding fine but the Fed doesn't want that to worsen but I think the inflation story is actually weakened a lot. So to me the the Fed would be cutting for the right reasons which is as they look at the next 12 months the tariff inflation impacts are fading but there's risk on the job market. So I mean I think it's cutting for the right reason which is you know real rates are tightening if they don't cut.

Here here's what concerned me about a couple of weeks ago, Tom, with the market's behavior, and that was watching all of the AI high-f flyers dip and drop pretty precipitously in some cases because it looked like the Fed wasn't going to cut. That raised questions about what was happening in the private markets. And it made me start to wonder, okay, are we looking at a lot of business models that don't work if the Fed doesn't continue to cut rates? are are these and are these the business models that are are driving empowering the market right now? That that that's the one thing that made me sit up and say, "Huh, that's a little different."

>> Yeah. I I think there was a lot a bit of soularching, Becky, in November because we know leverage rose. Um and we know there was deleveraging in in some markets like crypto and we know margin debts high. And I think that there was essentially a reset in November because, you know, the market had a 6% decline, but the AI stocks and the meme names and a lot of other names fell even more. So I I think that that position reset has been healthy. And I think many fund managers we talked to in November in the midst of all that kind of threw in the towel, thought the year, rest of the year was sort of a write-off. And and now if December is strong, there's going to be a a bit of a performance chasing. And I I think that's what you should typically expect in the final weeks of the year.

I thought it was um when we saw Bitcoin sell off and sort of the the high-f flyier selloff on the notion that Pal got hawkish at that one whatever it was that one meeting and then Williams totally turned that around and and the Fed futures jumped and it became clear they're definitely cutting again and we got very little for that uh with Bitcoin should be back at 100 if it really is totally dependent on uh Fed easing and and if if it's a debasement trade, which people say it is, we didn't get much for now. Everybody you're sure that they're going to cut. Now, there was a time where we thought they weren't going to cut. What do we get for going back to cutting mode?

Uh yeah, I mean uh Bitcoin and crypto have been disappointing because they really took it in the gut in midocctober and then kind of got hit again when you're right when the odds of a Fed cut dropped um Bitcoin fell and then now that the odds have recovered of a cut they haven't quite recovered. >> I mean I think that that's still the lingering effects of that deleveraging that happened on October 10th. It's not that different than the wipeout that happened in 2022 with FTX that took eight weeks. So, we're kind of emerging from that. We're now that's seven weeks in the rearview mirror. So, maybe in another week or two, I think crypto has fully washed out and that's when it starts to participate.

But um you got Tom basically making the argument right here that we're going risk off on crypto. The same sort of deleveraging argument he made a couple weeks ago. And unless that changes then it does seem like crypto is probably going to be stalled out for a bit.

All right. So, Tom's still calling for 7200o um on the S&P 500. Obviously, it does or at least 7,000, right? It's two and a half% away. It's not that crazy. We ended at 683 on uh Wednesday. I know there was low volume, so now we're going to have full volume come into the markets as we approach the first trading week of December, but it it's not crazy to think we have a 2 and a half% month.

Now, there are some hurdles to get there. One of the biggest hurdles over the past couple weeks was clarity around if we're going to get rate cuts. I mean, probabilities are the highest they've been even since all of last week when we got the nod from Fed President Dally and Fed President um Williams that we're going to be likely to cut. I mean, 87.6% on the Fed futures probability. So, if we're going to continue to get the market expectation that a rate cut is happening, I don't see that as bearish. Does that mean we're going to pump? Not necessarily. But it does mean there is a chance we don't easily dump or the bottom doesn't fall out like it was happening in November.

And you know, November ended barely down. We peaked at 689. We ended Wednesday at 683. I know right now we're down about half a percent. But as as crazy as Wednesday was, it was not uh one of those months where we actually ended, you know, four or five% down. In fact, it was the largest reversal in November's history since 1950 on the S&P 500. um we lost four and a half percent and then we recovered 75% of that by regaining three 3.5%. So quite incredible how we ended out November. The question is just will that play out for December.

Now one of the reasons some people are skeptical for December is because of Nvidia. So let's get into that topic. Nvidia right here 174.99 down about 1.15%. It was down 1.8% on Wednesday. So actually on Wednesday when the S&P closed uh not at all-time highs but close to all-time highs, Nvidia unfortunately was not able to close higher. It was one of the only stocks that was red on Wednesday, which I thought was pretty peculiar. Like, why is Nvidia red when the entire market is pumping?

I think it's healthy because Nvidia going red, but the market pumping means that there's other things that are propping up the S&P 500, which is good. You had Google, Apple, a bunch of different names, healthcare, that's starting to play a role. But what's happening with Nvidia?

Well, Semi analysis, which is a consulting firm for semiconductors. A lot of people probably know Dylan Patel. He is a uh thought leader and he's the founder of that boutique consulting firm. They put out a report and that report I have not fully read the report. It's like 10,000 words. I did not do that over the weekend. Uh I am planning to try to get deeper into analyzing what they're saying. But this graphic is what he posted which summarizes the entire report.

And as you can see right here from the graphic, it's basically Google TPUs are coming for Nvidia's launch. Now he is not saying Nvidia is dead. He's not saying Nvidia is not going to survive. He's actually incredibly bullish on it. I think people are painting his perspectives uh as a semiconductor analyst in the wrong light. I mean, he he he's by no means bearish on Nvidia. And if you've listened to any of his podcasts over the past like six months, he's very very bullish on their trajectory. Everyone knows Nvidia is the leader here.

But his argument is there might be a little bit of margin compression and there might be a little bit of market share that is being taken away. And one of the reasons he points to that is because of the early adoption that he's seeing in these LLM companies with Google's TPU fleet. So for example, he said OpenAI hasn't even deployed TPUs yet and they've already saved 30% on their entire labwide Nvidia fleet. This demonstrates how the perf per TCO advantage of TPUs is so strong that you already get the gains from adopting TPUs before they even turn on.

A TPU tensor tensor processing unit from Google once again is another form of ASIC. And there are a lot of debates online going on around the energy efficiency of these TPUs and the ability for them to be at least somewhat on par with Blackwell if not quite frankly just as good in a specific use case, maybe not a general purpose use case, which is where, you know, Jensen's kind of retorts the ASIC argument comes in. And as a result, it's a massive opportunity for Google.

You've already had a bunch of investment firms like in like Morgan Stanley, JP Morgan, Goldman Sachs. They came out over the weekend. They said, "Hey, we don't think Nvidia is going anywhere." But if Google were to take even three to 4% of this market, we're talking about massive upside to their earnings and revenue potential over the coming years, which is why I think Google is holding this $300 level that it's staying at right now.

So, look, I'm trying to do more research on the TPUs. I'm trying to understand them at at a fundamental level, but at its core, I do not think Nvidia is dead. I think Nvidia is very attractive. If I bought more Nvidia at 170, if we go back below 170, I will be buying more. I think in a year we will be laughing at the idea that Nvidia was supposed to die because of Michael Burry substack or because of Google TPUs.

At the end of the day, if you believe demand is insatiable for AI and compute, you have to be bullish Nvidia. It's just that simple. Because if demand is not insatiable, even if Google starts selling some TPUs, yeah, they'll make some money, but the sustainability of the earnings of that business line of them like consistently selling TPUs is not going to exist. Same thing for AMD. Obviously, all the Core Weaves, Neb, I ren those go out the window. Like, you either believe the demand is there or you don't.

And if you believe the demand is there, then the company with the supply chain, with the infrastructure, with the ecosystem, with the ability to actually negotiate the deals that allow them to have the margins that they have is Nvidia. Not saying th that that monopoly or that pseudo monopoly is going to exist forever. But I am saying given the level of compute constraints we've seen and energy constraints we've seen over the past year and and based on just Jensen's guidance for from uh Q3 going into Q4 and now Nvidia is trading at a 20 times EBID of value with a 25 times EPS for 2026. It just seems like a no-brainer in my opinion.

You did have a uh a familiar face do a new podcast over the weekend, Mr. Elon Musk. here is what he said about where he would put his money if he was an investor.

>> I mean, I don't really I don't really, you know, buy stocks, you know, so it's not like uh I'm not I'm not like an investor in I don't like look for things to invest in. I just try to build things. Um and then there happens to be stock of the company that I built. Um but I I don't I don't think about should I invest in this company or I don't have like a portfolio or anything. Um so I I I guess um AI and robotics are going to be very important. Um so I suppose it would be AI and robotics that that you know aren't related to me. Um, I think, you know, Google is going to be pretty valuable in the future. They they've they've laid the groundwork for an immense amount of uh value creation from an AI standpoint. Um, Nvidia is obvious at this point. Um, I mean, there's an argument that companies that do AI and robotics and maybe space flight are going to be overwhelming overwhelmingly the all the value almost all the value

>> Elon obviously takes some time as he's uh answering questions so that is how Elon tends to engage in interviews but uh it was a decent interview I watched a little bit of it last night and you got Elon saying hey hard to imagine that Google is not going to be a winner here I think the sheer amount of evidence Google has put out especially with Gemini 3 has captured Elon's attention pretty heavily and for you know Elon competes with Google in a variety of different ways for him to be able to be like yeah these guys are setting up a foundation to really win uh I think is important and then you know he says Nvidia is obvious so sundar Elon you had that Google deep mind researcher on Wednesday tweet that the Nvidia selloff is stupid I I I do not think there is a fundamental problem here with the Nvidia thesis

Macro news. Bank of America tweaking our call. 25 basis point cut in December. Terminal rate unchanged. They believe we are going to get this rate cut. Bank of America originally did not think we were going to get this rate cut and they've changed their mind. Why did they change their mind? Well, it seems kind of obvious now that we are going to get this Fed rate cut as Fed President Williams and Fed President Dolly have signified that we're going to get a rate cut. And as a result, it's hard for some of these big banks to continue to imagine that this rate cut is not going to happen.

On top of that, you had a really successful Black Friday. Here's what Toby Luke, the CEO of Shopify, had to say as well. Merchants total Black Friday sales were 6.2 billion, up 25% year-over-year. The Edge peaked at 489 million requests per minute, which is kind of crazy. App servers handled a peak of 117 million requests per minute. the peak database queries reached over 53 million per second and 2 million uh were reached as well over a second from the queries on the database and the API uh process over 31 million requests per minute at their peak. So Shopify had a massive massive Black Friday 25% year-over-year. Every year they've been compounding at around 20 to 25% showing again maybe the consumer isn't as weak as we think.

Adobe Analytics say that US online Black Friday sales hit a record 11.8 8 billion up 9% year-over-year with another 5 billion expected on Saturday, 6 billion on Sunday and Cyber Monday which is today projecting 14.2 billion. Salesforce is spent is imagining Black Friday spendable coming in at about 18 billion up 3% year-over-year. So look, if we think the consumer is okay and we think we're getting rate cuts, you can understand why Bank of America is saying, "All right, we have to kind of tweak our call on how we think the rest of the year is going to end up playing out and why a lot of these firms continue to have this like $7,000 to $7,500 target because there just might be a chance for the macro to tune in in the favor of the bulls."

>> Right? I think that when you first introduced this to me, you explained to me over and over again because I was so fascinated by by what could happen with a chat GPT with the prompts was Jim that's business to consumer and it's really really important. But you better start thinking enterprise. Enterprise is you were using a number that is 10 times the size of what I was thinking about. Are you still standing by that?

Absolutely. If you look at what we're doing today, if you look, we've been partnering with Synopsis for a very long time. You NVIDIA was built on a foundation of design tools from Synopsis and of course many other companies like Cadence and and uh uh Seammens and Dau. These are very important companies that the entire engineering industry is built on top of as a result of what we're able to do today. We're able to bring GPU accelerated computing, Nvidia's CUDA into the world's industrial sector for the very first time. This is this is uh physics, physical AI. This is AI that obeys the laws of physics that AI that interacts with the physical world. This is extremely complex stuff. It's taken us years to be able to do this. And now if you look at the world's industrial sector, it's measured in trillions of dollars. So for both Nvidia and Synopsis and the entire industry, this is a giant expansion of opportunity.

>> Okay. So last question, right now we spent a lot of time talking about Google and what they're doing uh with their own their their own TPU and we talk about whether Metal will do it, but one thing that you taught me was you like to think 20 years forward and then backward. I I'm thinking about Vera Rubin. I had to go read that Richard Feman book because you mentioned he's a pretty funny guy. But I mean, when I look at the Beer Rubin and the Fineman, am I going to be saying, you know what, that was a great thing those other guys had during that nine-month window that Jensen allowed him to have.

>> You know, listen, we've been uh we've been competing with AS6 now for quite a long time, and Google has AS6 for a long time. Nvidia's Nvidia and they did a great job as you know, and I've always been complimentary. What NVIDIA does is much more versatile. Our technology is much more funible. Notice the announcement today. Accelerating synopsis design tools, the EDA, the SDA, the CAE tools requires a computer architecture like CUDA. It's not available for AS6. And so NVIDIA can address markets that are much much broader, not just chatbots. We are also everywhere. We're in every cloud. We're in every single OEM. We're on prem and we're also at the edge. And so the NVIDIA opportunity is much much larger. And you're now seeing a real tangible experience example of an opportunity that we could do with our platform that nobody else can. And so this is a very big opportunity for us,

>> I was just all right. That's how Jensen answered the Google question. And this was his first public response to what's been going on with Google. As Julie says right there, Jensen never trashtalking, always pretty respectful, nice. He understands how to handle things very diplomatically. And uh I think his response is is pretty reasonable right there.

The the sort of precursor to his response was the explanation he gave around the TAM of digital simulations on prototyping. That that's an you know that's something he talked about on the earnings call, but I haven't thought about it too much. These companies that are in the real world creating physical products spend billions of dollars on prototyping and the data required to be able to create those prototypes. if you could synthetically create those or at least train on that synthetic data via the Omniverse and Cosmos platform which is what they're helping Synopsis do in terms of designing that uh from a CUDA architecture perspective which again Jensen goes you know pretty deep every single quarter speaking about why CUDA is the developer application of choice across every single OEM every single on-prem or cloud computing module

I mean that is a moat right like that is a legitimate moat outside of just their their monopoly on on the hardware that you know is getting chipped away as you have these AS6 come out but those AS6 don't have that CUDA infrastructure that actually integrates the ecosystem in one place I mean to get on Google TPUs from my understanding you have to be using Google cloud and that might not be suitable to every single customer in the world but then again that's the characteristic of an ASIC which is why Jensen has been so bullish on the sort of GPU versus the variation of the GPU like a TPU or any other type of variation so I think it makes a lot of sense what he's saying right there

Did you watch Andre's video on it? Yes, I actually did watch Andre's video. So, Andre's video actually has a really interesting point from a technical analysis perspective, and you can either hate technical analysis or love TA, but um his argument was that like there's a specific amount of days for Bitcoin to go up and down. And as a result, you have 365 days until the next peak.

He's looking at the historical patterns on how Bitcoin has sold off, 50 days for this cycle. But what's also very interesting is that the last cycles, cycles three and four, also took the exact same amount, 1,50ish days. Now, check this out. I know it looks complicated, but this chart shows kind of the same thing. Bitcoins followed the same pattern, but alternating from the all-time low to the all-time high and then all-time high to the all-time low. So, for example, in 2015, from the all-time low to the all-time high, it took Bitcoin 1,50ish days. And then in 2017, from the all-time high to the all-time low, it took Bitcoin about a year, 364 days. Then in 2018, from the all-time low to the all-time high, it took again 1,50ish days. And again, from the all-time high in 2021 to the all-time low, it took 364 days. Well, guess how long it took us to go from the all-time low to the all-time high in this cycle? 150 to 1,64-ish days. Which means if this pattern continues, we should reach the all-time low 364 days from our all-time high, which happened on October 6th of this year. That means we are on around October 5th, 2026 when Bitcoin could reach the all-time low of this cycle.

I mean, hate it or love it, it's a pretty simple explanation. You don't have to agree with it, but like a third grader could understand that explanation. He's just looking at the previous cycles from now or from lows to highs and then from highs to lows and literally just copying those numbers.

This is the conversation no one wants to have on Japan. This is the conversation no one wants to have. Japan's actually struggling on a population crisis. Now, the conventional conversation is um people in Japan aren't having that many kids. Sure, that's that's like the legit people in America aren't having that many kids. The actual problem is Japan doesn't really want immigrants.

In fact, the reason the old prime minister had to resign out of shame is because he wanted to bring in 500,000 Nigerians and Indians into Japan to be able to do a lot of the work that the working class of Japan isn't really doing. Partly because of uh cultural shifts, but also partly because they're getting older. It's not easy for someone who's 75 years old to do manual labor. And then, you know, the Japanese population rejected that wholeheartedly.

So the thing is when Japanese people stop when when the Japanese population starts growing stops growing at an exponential pace which it's already been for the past 10 years and everyone gets old and can't do manual labor who's going to do the work like if you're not going to have other people come into the country. So it's like that's the broader philosophical question on what's going on with their economy. And in the meantime they're printing money and raising rates and that's messing up the yen carry trade and that's affecting all of us.

>> Productivity to increase the goods and services faster than the increase in the money supply. So incre the US is increasing money supply quite substantially with you know deficits that are on the order of $2 trillion. >> Yeah. Uh so so you have to have um you know goods and services output increase more than that in order to not have inflation. So we're not there yet. But if you say like like how long would it take us to get there? I think it's 3 years probably 3 years before in 3 years or less my my guess is goods and services output will exceed the rate of inflation like money

>> Maybe after those three years, you have deflation and then interest rates go to zero and then the debt is a smaller problem than it is.

>> Yes. >> Right. >> That's most likely the case.

I mean, again, dude, I I don't know if that's how it's going to play out. I I'm pretty skeptical that in three years that happens, but if that does happen in three years, just imagine, first of all, what's going to happen to Tesla's stock price? Because, you know, part of the reason Elon's saying this is because he thinks that Tesla's going to be a major contributor in outputting all the goods and services. In this case, robots is probably going to be the biggest output to uh create that deflation. But like the stock market should be much higher than it is today in three years if that's how it's going to play out because a lot of that growth is going to come down to corporate earnings.

Man, how are people going to earn a living when robots and AI do everything? I don't know. Now again, I also don't want to sound super doomeristic and think like everyone's losing their jobs in five years. Like I I don't think that's happening, but we can't ignore all the data that we've been seeing about college grads and white collar jobs starting to go away. I don't think AI and robots are going to do everything, but they're going to do a lot.

And the question is, does that open up a new job market, but I'm also skeptical of that because like the internet opened up all these opportunities and everyone's like, oh, humans always figure it out. But no one's actually answering what is AI going to create in terms of job opportunities. Like no one's answering that question. Everyone's just like, "Oh, we always figure it out. We always make new jobs. Like this is how humans, you know, evolve." I'm like, "Yeah, but the internet, it was quite obvious, even a couple years after the internet, that it would democratize information, which would inevitably lead to massive, massive business models that could be created on top of that that needed those jobs.

We never had something that was replacing human intelligence to the point where it's democratizing information but it's also commoditizing the value of creativity within the information because a large language model for example just gives you the answer or the robot just automates the the physical labor.

So I I I think the question then becomes a broader philosophical argument about how does AI enhance jobs? Now again Chad's link right there. Pounder has taken a pretty explicit approach to this as you can see on the link that he has right there which is and Karp has been talking about this for a long time right the idea that hey uh if you actually believe in AI then there is a world where AI can be used to help people and can be a motivating force for human labor motivating force for human agency and also be something that doesn't necessarily replace you but enhances your autonomy

I I think the push back to that is what happens when someone loses their job in a factory. Like if you're an Amazon worker, you've been an Amazon worker for the past five years and they come up to you and they say, "We don't need you because a robot is going to be doing what you're doing." Which we've seen the leaked memos. Amazon's already been discussing how they're going to market their, you know, new age of robotics because they know the PR is going to be disgusting when they fire millions of people. Like like like what happens to those jobs? What happens to those people?