Sure, but manufacturing is something like 11% of the overall economy last I looked. Most of the US economy is other ephemeral stuff like the service industry.
The main danger of an AI crash is that it is extremely likely to spread to other sections of the economy.
A lot of banks have issued massive amounts of loans to Tech Companies participating in the current economic circle jerk, it’s likely if the AI bubble pops then these banks will lose hundreds of billions of dollars worth of liquid investments and this will likely force them to lean on credit card users (aka American consumers) to recouperate the lost capital.
Also it would likely force the US government to issue a substantial bailout, which, unlike in 2008, the US dollar is declining rapidly as a global reserve currency, with it being at around 45% today, while in 2008 it was around above 55%, which means that the US government will have a harder time printing money due to the fact most people are reluctant to purchase us bonds.
Oh for sure, most of the financial system is now deeply tied to the bubble. Once it pops, the whole house of cards is going to come crashing down because all the other sectors of the economy are already crashing. The bubble is the only thing holding the market up. On top of that, thanks to the war on Iran the demand for US dollar is dropping because you have to pay for oil out of the gulf in yuan now.
I mean, the AI bubble is basically the whole ‘economy’ in the US now https://finance.yahoo.com/economy/article/the-ai-economy-business-investment-overtakes-consumer-spending-as-the-biggest-driver-of-gdp-growth-181709229.html
That’s just the growth, not the whole production
Sure, but manufacturing is something like 11% of the overall economy last I looked. Most of the US economy is other ephemeral stuff like the service industry.
The main danger of an AI crash is that it is extremely likely to spread to other sections of the economy.
A lot of banks have issued massive amounts of loans to Tech Companies participating in the current economic circle jerk, it’s likely if the AI bubble pops then these banks will lose hundreds of billions of dollars worth of liquid investments and this will likely force them to lean on credit card users (aka American consumers) to recouperate the lost capital.
Also it would likely force the US government to issue a substantial bailout, which, unlike in 2008, the US dollar is declining rapidly as a global reserve currency, with it being at around 45% today, while in 2008 it was around above 55%, which means that the US government will have a harder time printing money due to the fact most people are reluctant to purchase us bonds.
Oh for sure, most of the financial system is now deeply tied to the bubble. Once it pops, the whole house of cards is going to come crashing down because all the other sectors of the economy are already crashing. The bubble is the only thing holding the market up. On top of that, thanks to the war on Iran the demand for US dollar is dropping because you have to pay for oil out of the gulf in yuan now.