We just returned from a visit to friends in the United Arab Emirates, passing through the busy gold souk of Dubai on the way back. There, at the junction of three continents, the world passes by, looking through the shop windows.
The price of gold just tipped over a historic milestone at $5,000 per troy ounce. It is pretty stuff – and it is also transportable in troubled times. The rise in price seems driven by consumers rather than investors changing tack.
People are looking for safe places for their assets. That is partly because of the uncertainty caused by the Trump “administration” – it is also because even the dogs on the street know that the AI bubble is going to burst.
The US’s big tech companies – they like to call themselves the Magnificent Seven – have started borrowing billions on the US bond markets to push a tidal wave of money into this ridiculous, overhyped toy.
But Wired magazine just highlighted a paper that argues – using maths I can’t follow – that what we call Artificial Intelligence – ie Large Language Models – can never be reliable.
It has been decreed by some clever PR person that we should call the mistakes it makes “hallucinations” as if the machine was coming down from a weekend spent with Hunter S Thompson.
However, apart from the constant errors, it is tediously derivative in content, irritatingly predictable in style, and prone to meaningless bullshit. It never shows anything like Thompson’s originality or wit. Its witterings actually remind me more of the sub editor who complained to a trainee scribe: “I had to sub this before I could spike it”.
I have read that the AI bros are accelerating towards the wall. As with other situations like this – tulips, canals, railroads, the dot coms, they know what is coming and accept that only what is left after the crash will be what was useful and profitable.
So the end is in sight – and it is kind of consistent with the beginning. When the tech bros appeared on the scene in their sneakers and hoodies, they promised to be different and better than the previous generation of capitalists. Their mottoes were “Don’t be evil” (hmm) and “Move fast and break things” ( and people).
When they hit that wall, their personal wealth is doubtless secured in such a way that they will pass through it like the young wizards in Harry Potter. It will be us Muggles who find ourselves still on this side, arse over tit, in a crumpled heap, calculating the damage.
I am not qualified to give financial advice. I have no idea if gold is going to keep going up or the dollar is going to slide. I don’t know what you should do about your pension. But I will give you one tip – don’t buy any Melania Meme coins.