28. Playing the Bear Market, a Non-Fed Inflation Solution, & A.I. Sentience and the Future of “Humanity” - Transcripts

June 17, 2022

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Timestamps:
(00:00) - Intro
(03:43) - Alfalfa round
(09:00) - Money: How are we playing the bear market
(33:20) - Policy: A different take on inflation
(1:05:38) - Life: LaMDA — A.I Sentience and the future of "humanity"

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Follow the hosts:
Arman Assadi aka Krypto Kabob
Eric Johanson aka Crypto CFA
Nick Urbani aka Talipino
Stephen Cesaro aka DeFi Diva

Music by: Allie Gross x KOCH

Disclaimer:
This is not Financial Advice. All opinions expressed by the podcast are intended for informational or entertainment purposes only and should not be treated as investment or financial advice of any kind. Alfalfa and its representatives are not liable to the listener/viewer or any other party, for the listener/viewer’s use of, or reliance on, any information received, directly or indirectly, from this media. The listener/viewer should always do their own research. Any views or opinions represented on this show are personal and belong solely to the show.

Transcript

cheers.

Who's the second Sam sam,

both

Alabama.

Thanks for these cute little steven.

Welcome

Welcome ladies and gentlemen, DJ and DJ nets to another episode of the Alfalfa podcast. We are four radically moderate entrepreneurs and investors swimming in the messy gray ocean serving up alpha and money, politics and life. We are nick, rabbani, Stephen, Cesaro, eric Johanson and I'm all links at dot com. Always make sure you hit subscribe if you don't, we know love you long time. But if you subscribe,

we got some

goodies for you in the discord. We just finished an epic, epic, amazing little discord live stages thing. What do you call

that? That was when we met some met some of our members. That was very cool. My heart is so full.

Yeah, so for those of you that weren't there, which is most of you actually inside of our discord. We have an incredible group of people. So if you're not already there, you need to join our discord. The link to that. Is that alfalfa pa dot com? We've got a bunch of different channels. Now, we actually expanded from being a, what would we, what was the phrase for that? Uh, minimalist maxis to now having three channels of conversation. And we scheduled basically a pre recording, happy hour, live chat. We just talked for an hour to everybody. It was absolutely amazing. Got to meet in real time.

All the people we've been talking to. So hop in. I think we're gonna make this a regular thing. Whether it's before the episodes or not, it'll be a different times, definitely join the party and the after party of course is in the discord you guys want to keep doing those, right?

That was a hell of a lot of smart chaps. And

what

are you drinking boys? What are we drinking today?

Uh I am on everything.

I

think there's scotch in this and then I'm going to this burgundy that steven gave me. What is this? Uh tell me about this line

can come from burgundy. Absolutely. I'm drinking the same alongside my pacific o with citrus and agave which is just an abomination to all mexican beer was the only thing I had in my fridge.

Yeah that's that kind of like

commercialized. Like it it's quite the, you know like heaven and hell, chaos and order kind of combination.

Just finished a Celsius energy drink. I

didn't finish it but I also have a Celsius here so I have the have the drink trifecta. So

pre pre warning. We've been a little saucy from the pre happy hour discord. But I think we're going to do great. So today we are diving into, let me give you the agenda obviously as always we'll start with the alfalfa round, we'll talk to you about our trades or moves our thoughts for the week. What we've done since last episode for the investing? Um It's kind of what the hell is going on? What are we doing? What's on the shopping list roundup, we're really just going to have a conversation because it's been obviously one of the most chaotic weeks so far in this cycle. And yeah, I'll leave it at that policy. We want to talk about inflation obviously big event today. We're recording this on Wednesday, june 15th and we're gonna finish up with something very spicy philosophical. Uh the ai google lambda sentience events that happened over the weekend.

And I think it's gonna be a lot of fun. So we're gonna explore. Can ai be sentience and what happened And dive deep into our personal thoughts, feelings opinions about all of that. And get kind of get kind of heavy, get kind of out there into the uh go down the rabbit hole. Cool. Kick it off sir

Alfalfa round. Okay uh few trades, We'll get into a little more specifics in the investing round. But I closed out some salon a shorts and just refreshing the numbers. Thank God

you survived.

That made a little scalp. Um and then I bought some S. two e. So we'll talk about that a little more, but that was the moves.

I scooped, scooped some ether on this dip, which I probably will move to esteve at some point. Um My thought there is basically just that, like I sold uh much earlier I sold it like 30 32 3400, which I'm happy about, but like, you know, I want to own more so I'll just I'll buy some here and I'll buy something maybe a little lower. And you know, I kept my shorts open

so fuck

me,

you're

still, you're still on the green though, right?

Yeah. And I feel pretty comfy there as well

so

Okay,

that's lovely. Yeah, I think, yeah, I'm enjoying myself. Um Yeah, sunday was a wild day for me. I mean I started the day Uber long, I was like, I'm gonna go long Bitcoin here, bottom of the range, Everybody's bearish. And then I very quickly realized I was wrong and then I was like, I'm gonna close and then I was like, wait, why am I just closing? I'm wrong. I'm just gonna go short. So I went Uber short completely flip flopped in a span of like seven minutes and had my, my best trading day of all time, rode that wave all the way down, closed out around like 20 to 5 I think. And then I was like that's enough and I watched it go to 20 and I was like, I'm dumb. But then yeah, we're kind of back here. So I feel pretty good. I'm mostly flat.

I shorted the Justin sun tron coin which is not working out right now to be transparent with you. It's

easy money to start.

Um Honestly I'm, I'm only down a little bit on the trade but it's kind of a dangerous short at this point so I wouldn't recommend anybody do it. But I, I just wanted to to die so badly. Apologies to anybody who's who's in it. But you shouldn't be in it. You should have, you should have learned your lesson at this point. So I don't I don't feel too bad for you.

But

yeah, that was that that was my

week. Okay.

I think a lot of people share that sentiment in our community. My week was one of actually a lot of journaling and

writing.

I feel like everyone just took that very differently. So maybe we'll leave it up to interpretation. I kind of like that

you didn't D. C. A. I'm sure you

know, they're definitely what I meant by. That was specifically about everything that has happened. I feel like I needed to re visit a lot of my uh strategies and plans around investing in crypto. I needed to, part of the process of journaling was a process of actually rewriting out my beliefs, my thesis, my feelings, my opinion on what has happened and actually working through the Emotions of the week and what was happening, watching my portfolio go down by another. I don't even know 50 and

you still own coins.

Yeah,

I

do

unlike you guys. I did not. I mean I

have a lot of exposure to eat still through dumb liquid jpeg purchases.

So the jpeg side already cycled out of uh for the most part everything except I actually sold my other deed a few days ago for three. And um for actually the same like price that it would have been at the peak, like on that day, so not too bad, but really it was about revisiting a lot of things and I think that there's a lot of insights that will come to like next week for me that I want to share and kind of more in that session talk about. But it had a lot to do with just understanding how I got where I am. What is it that I'm going to be doing or not doing for the time being? And in terms of like real actionable stuff have been d seeing into both Bitcoin and ethereum but very small nibbles because I think that next week I think that this week for me was about watching how everyone was reacting and I think there was like a good level of panic but more questions than action on the most part for most people. So what that told me was that I don't think we've seen the maximum level of panic selling that we'll probably see next week. It was funny and we'll get into this. But today was like a little bit of like a bullshit, you know, rally that I think we just want to get over with so that we can go into the full depth of the bleeding that we really want to see so that we understand what this bottom actually looks like and where we're gonna kind of start to flatline. So for me I think most of my moves will be next week.

Okay well I think that leads really well into this this first segment because I think the the initial idea for this segment was you know we've talked about in previous podcasts about having a thesis of how you're going to invest and not only that but writing it down. And we I think we even mentioned this on some of our investing mistakes episode where we even had a written plan but didn't necessarily the execution didn't didn't follow. So you know I started off this this topic by saying like I'm trying to write down my bear market thesis and what my plan is my shopping list, how I kinda foresee it going and obviously thesis change but I think it's important to like kick off how we view this. And I think most people specifically the discord and most people listening you know are kind of pondering this question of like what's the plan of attack? So I don't know about you guys but mostly I I really don't look at the U. S. D. Value a lot of of of the crypto portfolio. Like my goal and I think your guys goal is like I want to acquire more more coins. I want more Bitcoin. I want more ethereum I want more of the other coins that I feel long term about and stevens giving me like funny

smirks

but in general that,

that's what it is. That's not even

when you're going

through your,

this is literally my journal.

I'm

going through my

diary. I

resonated with none of what you're saying.

Give me, give me a ride. Thank

you. Thank you.

My diary is saying

the exact same moment in like two episodes ago where I was really excited about this whole thing and just like this is

My, my 2,017 self really resonated with what you're saying.

Maybe maybe I'm a cycle behind,

we're gonna get there, we're going to get there.

So I don't know. I think, uh, you know, I think we're at the

lows, if

Not very, very close to lows. Like I think macro economy lows were definitely not there yet. Um, and you know, there's a question in my mind if, if we front run that in the crypto market, front run the economy lows, I think the stock market, you know, typically front runs economy lows like 6-9 months or so. So, you know, does macro bring bad news and bring lower lows? I don't, I don't know if that's a true, um, barring a dive into a depression. I don't think so. So I think, you know, we're at good lows, you know, we've talked about in the past. I think I mentioned the banquets podcast when we recorded a few weeks ago I was looking for a 200 day moving averages. You know, it feels like a safe place. You may not you know tick the bottom but it feels like a safe place to play. Um And so starting to buy here um you know in terms of how things will go going forward, I don't think we're gonna rip all time highs for for a while like maybe 2 to 3 years years out. Um You know we could potentially weak down to like a 300 week moving average which for Bitcoin would be I think 16 17 K.

for that would be like around 750 K. But it's also highly possible we don't go there so um and I think a lot of the liquidation risk is is flushed out. I think some of you guys maybe disagree but I think most of it is flushed out. Um So starting to buy, gonna continue to do so over the next six months. Um I think the next six months lots of chop gonna happen. Um buying S. Two E. Right now taking the discount that it's at about six or 7%

narrowed, narrowed five

percent four

44 briefly,

wow nice. We

should we should go into that.

Yeah and anyway um I'm gonna gonna definitely by each property to save you know a validator to worth to you know as over the next six months. Um And I think like it's important as we talk about hitting the bottom. It's important to to bring the fact that like we're we're not gonna rip higher all of a sudden, you know anytime soon just because you picked the bottom doesn't mean we could stay here for like 2-3 you know years. And I think for me what I need to see happen to to know that we're gonna go into a bull market is to see what got us here reverse. Which is we had the prospect of higher inflation, higher interest rates and just in general like the trust ripped out of the crypto market with with luna and terra Celsius and and everything else that's that's come along and that will take time like well in general I think that the stock market and I think the crypto market needs to see um you know inflation start to peak interest rates start to peak, We need to see the Fed kind of turn around and loosen again, which might take a few years. Um And then specifically for the crypto market trust to be restored. I think we had that violated and that's going to take some time. So in all those I think um you know it's gonna take a few years before we have the beginnings of a of a bull market again. Um I think I I think in two years, you know like around this time, you know in 2024 still be hovering around like 40 50 K. Bitcoin and it doesn't sound fun but I think it's it's somewhat realistic and You know I think if we're lucky a late 2020 for beginnings of a bull run it gives the fed enough to tighten to bring down inflation and um also maybe turn around interest rates depending on how bad the economy turns. Um Only by neath I think right now like my Bitcoin allocation is pretty much set. Do you have a shopping list of all kinds of fun stuff?

Like uh some all L ones for some higher beta? Um definitely maybe some defi tokens that might come back around that time over the next year. Um And whatever is new and fancy at the time. N. F. T. S. Looking at punks and finances on my personal uh you know shopping list but I don't think I'm gonna be touching any of those definitely for not six months. It could be it could be awhile out before touching those just kind of holding down for Btc and ETh for now. So anyway that's the current thesis. Obviously things can change but that's how I'm kind of looking forward to it.

So

many ways to take this

conversation are we just gonna

round table what our what our strategy is and like individually go into it or

I think we should we should use this time how we would use this time anyway which is like what are you doing, how are you playing this, what are you thinking? What are you feeling? Which is exactly what everyone else is thinking and feeling.

So I start like this um When when I was at 3400 whatever when I when I exited you know we were in the same spot talking with Hoffman and I was saying like no I just think this is gonna get so ugly. I exit but then at that same moment I was also playing through like the knicker Bonnie scenario like okay so let me write down when I want to get back in what my strategy's gonna be. I said it 1700 I was gonna get back in and like get back in heavy, it went through 1700 and now it's a 1200. I started buying but I I saw him like I haven't bought back in really heavy but I am thinking back to that time thinking like welsh it I said I would it doesn't look great right? Like we would all sit around this table say like macro doesn't

look

two compelling. Um So like buying at 1200 E. Doesn't sound like I should shove in right now but you know what like

long

term I'm I'm almost positive that this is gonna be

just a good time to

buy. So

it feels like a safe place not the like most optimal. Like

like we're not gonna bottom tick everything we're gonna try to buy and that's silly to even try anyways um

and I think if you saw like sub 1000 you'd really start to

two points. One is Nick's point that he said like the markets do front run the economy right? Like we saw all markets come down before we hit a recession, like we're probably gonna hit a recession but Stephen dropped some some good stuff in the discord today. He said like all of stock Pullbacks have been on multiple compression and that's true right? We still have like consensus consensus expectations of earnings being even higher uh this year and next. And that that won't happen right? Like we're pretty certain that won't happen. So like stocks will fall farther as earnings come in lower than expectations. Um So maybe there's still more room on the downside, but

long

term like, you know, we will front run the economy in the markets as well on the upside, you know like, so maybe when we hit a recession maybe markets still like come back higher.

Yeah. All right.

Do you want me to go

now? Of course, are

you warning us a tidal wave right now? Like

I feel like you're I

don't know, I feel

like I always bring

the bearish

you're a little different because like your your portfolio is mostly crypto right? I think that's important for people to understand like your your total invest investable assets are mostly

crypto my my portfolio is crypto real estate and cash. It's almost entirely cash right now. I mean I have like some like real estate you know just like liquidate it, you know you buy it and you kind of ride it out right right now. I really want to sell my house but also what

Are you gonna buy at 6.5

percent mortgage? I would just rent and weather the storm. But you know I I did really want to take my one year 130% like profits on my house really badly but I got mentally committed to it. Such a

primary

residence. I bought all this furniture, I put so much time into like making it, you got a

piano in here, there's a grand

piano. I need a place to put it

literally just moved in.

I did but like I also just knew it was gonna tank and I still do think it's probably gonna tank. I mean that's just the reality of having like plus 6% like mortgage rates. It's it's it's kind of nutty. Um But yeah the rest of my portfolio, like I I kind of go back and forth between the cash and crypto trade. I like to do the barbell thing. I like to be like all in or all out and I don't really believe in this sort of middle of the road diversification thing which is why I think better if you're like an active trader and if you're not it's not a good strategy, you probably want to diversify but if you like, like, like like stan Druckenmiller said on that that that last interview would listen to, he likes to just put on like a position and just watch that thing and be so all in on it that he has to watch it. I felt

That I felt that cause like I have what what, he he didn't keep calling like Zombie Zombie, investments like basically where it's like less than 10% of your portfolio, 15% of portfolio, you don't give it the attention It needs, but if it's 60% 50% you're sure gonna watch that. Like a hawk become an expert.

Yeah and like look if you follow, if you for some reason you're one of the three people who follow me on twitter for the last year, you're probably like why was it, why did this guy just go from like tweeting about spooky swap to be a being like a mackerel ARP all of a sudden like I, I don't talk about any weird all coins or anything or anything crypto because to me it's like irrelevant to me, the only trade that matters is like when is macro going to bottom and all the other stuff to me, I don't care about, I want to know when to get into crypto, I want to know when to buy back in and kind of ride that wave back up and I think that's dependent on macro, so all I do now is let's watch macro you know. So I think what the Fed is doing right now is dumb but what they are doing is trying to sort of suck liquidity out of the like the risk element of the market, right? I think they're, I think they're sort of actually like pretending that they're tackling inflation because I choose to believe that they're not dumb enough to think that they're actually fighting inflation in an intelligent way. I think what they're trying to do is deflate the stupid asset bubbles so that later the government can like reinflate stuff but inflate intelligent areas of the economy like shovel money into productive areas. That's sort of my theory, right? So to me like the most dumb risk on area of everything has been

like

the the long tail crypto trade like outside of Bitcoin and ether and all the all the dumb crap we bought right? So I like to look at the sort of broader crypto market like have you ever looked at like the total market cap like two Total market cap three. Total market cap to is like all crypto accept Bitcoin And in total market cap three is all crypto accept Bitcoin and ether. So total market cap three to me is like a really interesting like chart to watch because it, to me it represents all of the dumb crap about crypto basically. Sure there's some good stuff in there. But it's mostly to me a representation of the risk on trade, Right? And when I look at that chart, if I am like the Fed, like I don't even think, I don't like the Feds really looking at this chart, but like it's the essence of what they're trying to do. And if I look at this chart and a sort of dispassionate way In a best case scenario, I see like negative 30% and then in like a bad scenario, I still see like another negative 60%. And so I don't, I don't really wanna buy teeth yet. I don't really want to buy Bitcoin yet. I would if I was like a longer term person but like I like to be like very in our very out and to me like I, I just still think there's too much risk there. It's hard for me to see it's just magically picking a bottom here.

Like we could, if jerome just decides that I'm good, I'm just gonna for some reason stop. But like I still see a lot of, a lot more pain. I'm not focused on buying any. Also I'm not focused on buying any long tail. Also, I'm still just like where is the crypto bottom? And I do see still a lot of systemic risk with like the Celsius and three arrows capital and all these other like kind of like large institutions within crypto that are insolvent, right? And maybe liquidating. Were

You guys surprised by the three arrows capital?

Obviously? I was surprised actually

surprised, right? I

thought they were just counter trading us the whole time. And it seems like they actually were actually shilling their positions, but their positions were just bad. They

leveraged,

they went down, they went down with the ship, they were just long

crypto I mean, what a crazy story. It's 22 guys who like started trading, you know, in their, in their kitchen or whatever and like built themselves up to billions and now it's, it's possibly true that like there's not much left, which is insane to me, like, I mean maybe we would all agree that like if we got to a billion dollars, we wouldn't even use leverage, but who knows when you're in it, you know, maybe

you kind of just

right, like Celsius goes down, three arrows goes down. What like does that create a cascading effect that hits, you

know, retail

on a, on a wider

basis? I mean, so to use like something I'm personally doing, like I'm trying to pull out of next. So like as we speak, what

do you mean trying is, what do you mean?

Because I'm dealing with tragedy and it takes days to send money

offered to buy out Celsius.

Yeah. Yeah, they're

like

really? I

mean I would still not have money in

there, I

just want to get

out there. There's no, there's, there's nothing in there for me anymore? I had, I had, I had taken like uh, some uh loan out on their system and to pay it off. It's taking like four

days.

Yeah,

because I'm

not like liquidation risk, but I want to pay it off and get the funk out and it's taking so long and I'm going through all the drama of like the old way of like a wire transfer, all this stuff and it's just days. So for me, for example, to answer the question of contagion, I think that for a person who is ready to roll with like, you know, self custody and isn't like terrified at the prospect of setting up a hardware wallet, they absolutely should. Like this is the time steven's been saying it, we've all been saying in the discord, like you don't really want to stick around to see what could happen. I mean actually I was really curious what you said. Stephen to the point where like develop this was, this was an interesting thing that came up, You know, it's like developers may get desperate, send your crypto to an absolutely fresh wallet on your hardware wallet, complete cold storage, like totally new wallet that has never transacted before. Like I guess I would not have gone to that level of thinking to think like, wow, maybe. I mean, I don't know like is everything up for target at this point? Like have you ever seen that happen? It just takes

one bad like approval to drain your entire wallet. It does so much easier to just condense all your funds to like stable coins and eat and then just send them to a new wallet as opposed to like revoking The 700 different like permissions you granted in the last like two years of the bull market. So even something like blocked by that that is outside of this whole new cycle. Okay so I guess my point was

like there's people

in there who have these like grandfather accounts, these grandfathered accounts allow them to to capture like six or 7% yield on U. S. D. C. And I have friends hit me up saying like well I should keep this like U. S. D. C. Yield and I'm thinking like your whole principles at risk.

Yeah like I think I was on vacation when you guys had did a podcast on the like luna terra collapse and while it was happening on vacation I was like I need to whip out my laptop and the first thing I did was pull it out a block fi next double check that I have anything in these and I just sent it out close the laptop and I was back. But Yeah I don't think your one you know return that you're gonna get from it is not worth it. Also I think that's pretty like

when there's no transparency right? Like there was literally a y Combinator company that did this right? They took us D. C. From you and they paid you like 7%. But what they were doing was like taking us dc selling it for us t Like the luna stable collecting 19

percent, pocketing

12% and paying you seven. And then when that collapsed you just lost all your money and there was no I I would rather have my money in the U. S. D. D. Like tron stable coin than have it in block. If I

don't do that

I'm gonna get like 40%. But like be like at least I can check the chain right? Like oh there's this much collateral ization in the wallet and the second that goes down I have some control. I'm not saying to do that. I mean I honestly might not be a bad trade for like a tiny amount of money. You know

it's probably

prime but like I think it's like a gambling play still and I but I think it's a better play than having 6% in some black box where you don't know what they're doing with your money. Like the whole point of crypto is that you can check the chain. You can see exactly the right now. 40%. No way.

Should we should we wrap this segment with shopping.

I mean a little bit. I mean

I

do want to ask you guys like um you know I I mentioned that what I need to see in order for things that changes um you know, uh inflation peak fed reverse and then trust restored, which takes takes time because um you know, I think initially I was like, man, I'm gonna pick the bottom, this would be great. But I think it's also good to sit in the realization that like we could see chop and just up and down and just not much growth for years and so what do you guys need to see in order to be like, okay, bull, bull market potentially building and we're back on.

I mean I need to see, I, I want to see a lot of things, right? A lot of people are gonna be triggered by this, but like I want to see like everybody with like an eight picture on twitter to stop acting like there's some sort of financial genius like I want to see like not because I want people to hurt, but like I do want to see like pain in the areas of crypto that were like the most bubbly the most not because I want people to suffer because that's going to be assigned to me that the system has been like purged. Like there's no going back up in my mind until we purge like the biggest excesses of the system and one of the great things about crypto is that we actually do purge

even

though it's like gross when it happens, but like once it's done, it's done like it's, it's done like the things that were bad dye their dead forever. Like like in the trad fi world that a huge percentage of the stock market is just like zombie companies to just like continue existing because they're just like riding on the coattails of this like stupid monetary policy and they're not like adding value to the economy and it's just like this giant fraud and like you perpetually kick the can down the road until it finally like really explodes, right? So at least in crypto we get to just you know, just burn the forest down and then just start a new and have like the the new growth, right? So I, I want to see like a lot of that stuff kind of just really cleanse, I want to see like the Celsius is in the three arrows, capital is just just just go under like I don't want these systemic risks to exist in the system anymore. I want all the crappy Ponzi protocols to die and I want just all like the makers of the world to just still be standing there. Like

to me that to me that describes the bottom and doesn't necessarily describe the precursors

for a bull run, like how do I know the bull run is

because the reason I'm asking is because 11 option is that you could just not play for a while until like you see the, I

personally think that crypto front runs the trad fire world because it's sort of free of the sort of encumbrances that like prop up bad assets and prices that we have, right. So I do think Crypto will bottom before trad five bottoms, right? And I do think that means that like we're probably not going to get a v recovery because I think there's gonna be a delay there. But I do think crypto will reverse very quickly. Like I my default assumption is that we bottom and then we just sort of get boring for a bit and go flat

because

there's just nothing left to liquidate at a certain point and it's just only the Hodler's and the O. G. S and the protocols that actually built to survive and there's just nothing left at some point. But then but I do think like as soon as like the Fed reverses, its just sort of back on again, that's like the ugly reality of the world. Is that there's just a guy with a button or like a light switch and he just flips it on or off and things go up or down.

What do you think? Eric like uh what are your precursor for a bull market run again or do you even care like is it just I'm gonna stack while I have the chance, I'm just gonna hold it like don't really care about when the bull market happens,

I don't consider myself a traitor. So I'm have a bit of the Armand mentality where it's like, well as

You started to appear like one, well

you know that was just risk management I think. But but I am more just thinking like also this side of the table is like trying to stack the coins and I do want to stack Bitcoin and ether and you know like now is a much better time to stack than it was six months ago. That's obvious. I do think that if you even if you buy now market by even now, I think that's going to be in the money In 24 months. Like I think you're gonna be fine 36 months whatever like you can just name a time on it and it's gonna be in the money at some point fairly soon. So I think that's where I really believe I land. Um I think like you did a good job of identifying

it's not just like price

targets that that's gonna like incent you to buy. It's like what are the fundamentals in in the economy? And I think like obviously a fed pivot but like what about just more apathy. What about just more apathy like on on crypto twitter where people just like disengage entirely. Yeah just like

everyone just

thinks it's kind of over and just boring and dead and then like maybe that's that's the

time that is what happens, that's exactly what happens.

Um Well should we transition to our next topic?

Like, I think because

we've been talking a lot of macro a lot and I think, you know, and and and we didn't used to talk a lot of macro a lot between the four of us even, but I think we've all realized that like it's a macro game and and for people in the discord, people listening, you might have heard a lot of macro talk recently, but I think we all recognize we personally want to get a little more knowledgeable, we want to have these discussions more. So anyway, that's that's kind of like a starter for the next next discussion. And what we're trying to um dial into is is questioning these inflation narratives that we've been seeing and we've been seeing in the headlines a lot um on twitter. And so we just want to question some of them and I'll start off with like a tweet I made about, I don't know, roughly a week ago, um you know what I got started to get trouble with was um you know, around inflation that the fed is the only thing we talked about in terms of inflation, it is the only, you know, uh driver and compressor of inflation. And I just started to think, I was like, I don't know if that's necessarily true and I also started thinking about the politics coming up, we have midterms coming up the Democratic party is going to be tested on inflation and they know that so it's a stated goal to get inflation down and then I just saw this disparity, I was like, well there seems to be a disparity between what they want as the outcome and what they're doing because there are things they can do. So this tweet I mentioned a few

things

number one get involved in the west coast ports, labor negotiations so we don't create more supply side problems for ourselves. I think the founder of flex sport has talked about this a lot but up and down the west coast, the people who man the ports are part of a union and we can talk about, you know, public union monopolies at some point, probably a fun fun topic, but they do have this labor negotiation coming up and President biden is a labor person. His his vote has come from labor, his money has come from labor and I think this is the time where he steps and says okay, you've been on my side this whole time, but I am now the President United States have a bigger responsibility and I'm telling you do not get stuck in a negotiation. I want you to solve this quickly so that we don't step on our own feet. So anyway, that that's that's one. Uh the second is like repeal the import tariffs and I'm not just talking about a few, you know import tariffs that sound nice like solar panels, that sounds great. Kind of follows along the left agenda. I'm talking about all of the tariffs that not just the chinese import tariffs. I'm talking to even the, the Canadian tariffs, you know, we have tariffs on, I think it's a lumber or timber, but one of those and it just seems so silly now because tariffs are a tax on the american business on the american sumer, you know, no one in china, no one in Canada is actually paying this tax that that we're, that we're placing on it. So if you want cost to go down, it's a simple one. You know, I import goods from from other countries. I understand this very well and it will, it will pass through pretty quickly if it doesn't, you know, cause decreases in price, it will certainly stop the increases in price.

Um There are some weird rules that they've placed on government contracts like buy american rules, which sounds good, sounds great, but really what we want is like for government contracts for taxpayer money, we want companies to compete wherever they are and we want the best deal possible for taxpayer money. So I think that's, that's one the other was and the emergency freeze on student loan payments. I mean we're literally talking about, you know, the federal reserve increasing interest rates to make debt more expensive. Meanwhile on on the fiscal side, we're literally talking about making forgiving debt and you know, I think forgiving debt is a form of another high velocity stimulus. So I think that that's one and then we'll probably talk about this a little more uh you know when you guys thoughts but support american oil and gas production like there are so many moratoriums and and permit regulations and I think another you know topic we could talk about another episode is definitely energy policy and how this all ties in with inflation. But those are kind of my my gripes that came up in the last week just seeing like there's something that can be done and there is the argument that like okay but the Federal Reserve has the biggest you know kind of a lever to pull and the government doesn't but I just

let me let me chime in and I'll t up Stephen here because steven I know is gonna want to talk about how the Fed doesn't um control inflation like we think it does. So I think I'll ask the simple question like

how

what percent of these other levers that like Nick is talking about, you know like tariffs and labor unions and stuff like how what percent do those levers actually control inflation if the Fed doesn't there

was a study that that that was done on on tara's specifically I think the quote was like one like 100 basis points 1.3% was the impact on inflation and lower inflation by 1.3%. If you removed all the tariffs then you could dive into that study and say, okay maybe that was like politically motivated funded by certain people. But in general, like if you think of yourself as an individual actor as an individual business, what does that do to your business and your economics? It seems to make a whole lot of sense. And I think just conceptually if you're a political party in power, like why would you want to continue to tax goods coming

in? Yeah,

so I think it's not nominal, it's not like uh it's not small but it's not the cure all, but it's definitely enough to to move the needle and also show the american people and your your cabinet that like this is the number one priority is to get inflation. You should be telling all these cabinet secretaries like do what you can within your responsibilities to get this down.

Let me, let me rephrase it, then I'll tear up steven again.

How

Did we get to uh 8.6

inflation right now.

How do we even how did we even get there if it's if it's not fed monetary policy

driven?

It's a good question. I mean I'm gonna like Tarantino this a little bit and start at the end and then go back to the beginning I guess because I think nick brings up a good point which is ultimately a lot of this stuff is decided by politicians. I think politicians are very shortsighted. They tend to do things that boost their electoral chances in the near term and they kick the can down the road and punch stuff for the long term, right?

So if

you're a politician right and you want to get elected and inflation is a problem and you have two options. One is to make long term investments and increasing production on the supply side of goods. So that price comes down, but it's like a seven year duration. And the other option is to just destroy demand in the next three months, you probably opt for destroying demand because it's the quick easy fix that brings the number on the chart down and gives you a thing to run on. But is that long term productive? No. So, so like how did we, how do we get here? I guess like I've been thinking about this a lot lately because there's a popular narrative in crypto and it's like, it's like hyper simplified and sort of like government prints money, money causes like people to have too much cash on hand, there's too much liquidity chasing too few goods. The price of goods go up and because they're printing so much money, we need to buy Bitcoin because it's going to save us from all of this, right?

The

reality of this is like much more complicated and nuanced and I think like not true at all. Um I think that a lot of the reason why prices are high doesn't have anything to do with like an increase in the monetary base actually and I think there's like actually a lot of nuance between C. P. I. The consumer price index and inflation. And I think we use these things like interchangeably but we we we we some of us, I don't know, maybe some of us don't but many, many of us know that old quote like inflation is always and everywhere a monetary phenomenon and like I resonate with that and I think that is the crux of what inflation is. It's like an over expansion of the monetary base right? Whereas I think what we are seeing right now you might attribute to inflation because prices are going up. But I think there's an important nuance there. I I don't think prices are going up because there's more money chasing you know the same or fewer amount of goods. Obviously you can have fewer goods, more money, there's a balance there. But I think the overwhelming catalysts in this is has been on the supply side.

There have been too few goods for the most part now why did this happen? Like we have to zoom all the way back to to covid

and

what we had during Covid was we shut down the economy. Everybody with half a brain was like oh the economy shut down, people are gonna buy less stuff right? We have this kind of globalized world where we source stuff from china stuff comes into our ports, we buy it right? So if you're at a ports like the long beach ports, right? That's where all the goods coming from china, the long beach ports is basically like ah we shut down the economy probably don't need to have all these workers here to import goods. Nobody's gonna buy anything. So they laid off about 20% of the

workforce, right?

But then to just rapid fire take you through what happened? We did the cares act. We kind of air dropped a bunch of money on people which wasn't really and this is like a nuanced like thing, but this wasn't really like money printing, helicopter money like helicopter money in the Milton Friedman sense of it was literally the treasury printed dollar bills and just drop them on people. But the cares act was like, we actually like issued bonds and we like we had this contraction in one area of the economy and we sort of like issued debt and just re allocated it somewhere else. We didn't really like just modern modern monetary theory, like print money out of nowhere. Um Right, so we did the cares act and we got people all this money in a way which I would argue was actually not really money printing if you want to be nuanced about it. And then people took this money and because of the the elements of the economy where you couldn't go to a store and buy anything, right? Everybody shifted demand online and then went to amazon and then everything on amazon is chinese imported goods. So we got into this situation where that people didn't predict or even though the entire economy was shut down, you had a situation ultimately we're in like October of 2020. You had like

four times

As many ships coming in to the ports as like the previous year at a time when they had laid off 20% of the workforce and then an additional like 10 to 15% of the workforce was out with Covid or somebody they knew had Covid. You then also had truckers, right? Because like the containers don't just come into the ports. They also have to get loaded onto trucks and taken places. Trucking got disrupted their vaccine mandates, truckers get covid, all these things happening.

Covid in china Also like, you know, to your point, you know, like

it's such a delicate system and it causes this chain reaction. Right? Like we we ultimately got to this point and you you've probably experienced this nick because you import goods from china, right? Like it costs like $1400 for a container at one point. And then like a year later it was $10,000.

I've paid a 20 k mark on a container multiple times.

That was the average price. So some people probably were Paying 20 grand and this has ripple effects because like that's not just the cost of importing like the flashlight that you built, that flashlight also has these input costs and all of those input costs. Little elements that go to make that good. Those all when it all just goes haywire and then the containers, the ships they run on gas and oil to bring them across like all this stuff spiked. But the end sort of story here to kind of cliffs notes. It is that like all of this didn't come because there's a lot of money. All this came because like there are all these like backlogs and the supply chain that just kind of piled on and piled on and piled on. So we've ended up in this scenario now where we're like oh um C. P. I. Is up. That means the economy is overheating.

Which means that we have to destroy demand because that's what's driving inflation. But if you look at the economy like did like did you know that we have fewer jobs now than at the start of covid

there's fewer

jobs now at the start of Covid like we were being like fed this narrative that the economy is overheating everything is so strong and we have to like crush demand and it's just so messed up because we actually had this economy that was producing all these wage

gains

and a lot of people were like oh well they're not real wage gains, they were kind of benchmarking them too what I think are now temporary increases in prices. So like if we went long enough, this transitory thing I think would have actually taking place now. Like I used to like rail against this is like it's just you idiots, you said it was transitory, but I actually think it might have

been

transitory and now we've kind of taken a policy where we've just like destroyed demand instead of just like letting this run its course, letting the market bring prices down, which it would have done. And now we have a situation where we're raising rates so if you're a company and you want to invest in production, well your cost of capital is going through the roof and at the same time the consumer is being destroyed so nobody's buying the product so you're not like a double whammy, like well I don't want to produce

anything. And

now I feel like we're kind of going down this like this this this this this whole now. So I'm curious what you think about that.

I mean, I think I've kind of, you know, in regards to inflation, I think I've kind of arrived at the same nuance you have over time that like we've obviously printed money before, right? And maybe we call that debasement and not not necessarily like inflation causing, but I definitely feel your your point about supply and demand causing inflation, but I still come to the point where, okay if I'm the Federal reserve and or I'm the executive of you know the executive branch like you still if you want to cool down demand if faces supply cannot meet demand right now and and if we're gonna work on that and say forget interest rates, That's gonna take some time, it's gonna take months, 6 to 12 months to fix the supply portion then yeah you used the blunt object you have which is which is interest rates. So I kind of agree with you that like I've arrived the same conclusion that it's not just a monetary policy thing because we printed money before and that didn't cause inflation and supply and demand is the cause inflation, but I still think you need to use the inflation hammer. Can

I try to like synthesize this because I'm learning a lot here. I'm now seeing that inflation is not just inflation right? There's like pieces of inflation. You have like you have a dollar debasement, you just mentioned that you have CP I which is like actual goods and then you have like assets, right? You have like crypto stocks, like asset price inflation and I think what you're saying like as I understand it it's very helpful, it's like monetary policy affected some of these but not all of those factors, right? Like I think um

cheap

money can affect asset price inflation much more quickly than it can affect the prices of goods and maybe the prices of goods

are hit

more by supply demand, you know, like supply shocks that you're talking about. Um

But I

do think that, you know, if the fed raises rates, you know, that will also hit the C. P. I. You're basically blowing up people's lives to like make a vanity metric go lower so that people get elected when the reality of the situation is like there is a nuance in these goods, right? Like some goods like oil and food, those aren't coming down anytime soon or they will because demand will be destroyed so badly, right? But like oil, you can't just produce more of it tomorrow. But on the other hand, we have companies like target and walmart like target has like something like 31% more inventory than it had like two years ago and you're like how the hell did that happen? And and now they're like in their like recent sort of guidance to investors, like we have to liquidate were like, you're gonna have this kind of like this weird split where you have very expensive energy and food, but also actually a lot of consumer goods are gonna come down dramatically in price, like shipping raised from china as you've probably seen have actually been tanking since Ukraine war, which is actually kind of like this weird anomaly that like we were going down and a lot of this stuff before that happened and it was like this thing that just threw a complete wrench and everything and people are definitely misinterpreting it and using it as a ideological weapon to to sort of suit their needs. Um But yeah we we we took an economy that was like very like precarious and we're just we're just nuking people now to make the C. P. I. Number go down.

We're like well inflation is dead because we we shot you so you're you're dead and you can't buy anything anymore. And it's like is that, so I have a question policy, I have a question about your your initial quote that said inflation is all around us. It's all the time. It's everywhere. Like is that mostly describing the dollar debasement version of inflation or is that

describing

all of it? And then second question is like how much of asset price inflation is just dollar debasement. So the exact quote I think is inflation is always and everywhere a monetary phenomenon implying that like it is it is basically directly tied to changes in like the supply of money right? As opposed to things on the good side. Like I think the market is really good actually at producing the supply of stuff when prices go up. It's a great signal for the market but the government is really bad at controlling the supply of money. So I tend to err on the letting the market like bring prices down as opposed to letting the government controlled the supply because they just they

just con

constantly screw that up and like what what was the second part? Like how much of asset price inflation is just dollar debasement? A lot of it is like like I have seen all sorts of charts of that, you've probably seen them to the S and p real returns and they don't gonna look great. Um So a lot of it is dollar debasement for sure. But I I think that's like a meme too, I think there is this very real elements of deflation that exists in the western world. There are a lot of deflationary forces, there

were there were a lot of deflationary forces I think

there still are. I love to hear your your input on this but like from like the basic gist of it is like we're producing fewer people, there's less demand for goods, very deflationary technology, extremely deflationary. This is actually like one of the main cases why like you e is actually deflationary, like a lot of people thought we was gonna be inflationary but the counter to that is like it basically enables like free money for like these Silicon Valley startups that do these like high tech things that like like think about what amazon did to the cost of goods, it just drove them down so much right, so cheap freely available capital. Actually if you funnel it, all of these companies can actually have like wild deflationary effects, right? It really is a complicated thing that's going like housing, like that's going to the moon and it's definitely really bad. That was my, that was sort of my counter to this like asset price things like houses are gonna just keep going higher. And I think so, and that's that's actually part where I don't have a good answer on it. Like I don't know how you embrace like the positive deflationary effects of this policy, but but also you are you are making all these asset prices go to the moon, you're making people who own the assets get richer and richer and richer, the people who don't own them are continuously shut out. You get this like divide in society, there really are like tons of different things going on right now. And like as much as we want to like oversimplify it to being like L well Fed print money now, Fed take money out everything, it's it's just

not, it's just not true.

So, so to that point, you know, like we could take a lot of money out and I think that the Fed has stated our our policy, our goal is to get back to 2%. And I guess that the narrative I'm trying to challenge or think about is like can you get back to 2% within a reasonable period of time I heard on a podcast. Someone used the phrase structural inflation and it kind of stuck with me and I just started like I don't know questioning it pondering it like what does that mean? Could you have persistent inflation? I think jim bianco has talked about this a lot and echoed some of the things that we're kind of running around in my head but there are things that have changed like a lot of us work from home, we buy more products generally less services so like there is gonna be this like base the base level demand for goods is going to be a little higher just going forward like a lot of us potentially work from home and then also you know I think this started pre biden but we started to pull away from globalization and globalization provides really efficient market where whoever's got the best product at the cheapest cost gets gets to sell the product and now you know even before Covid we were kind of entering that stage and post covid with all these supply chain issues and and conflicts you know that's not the case anymore. It's it's more of like we've seen the issues that supply chains can can cause and it may just be better to produce it at home because I don't want to deal with you know $20,000 containers and so for now the the cheapest goods will not be the ones that that are purchased by businesses. So I think that could be a potential like structural thing that that remains. And then again, I don't want to dive too deep into it. But I just think energy policy in general where where the green, you know, it's called the green cohort has said we need to um not only innovate in renewable energy, but we need to decrease fossil fuels and I wish it would have been a little bit of different hold things true that we do need to innovate in in green energy and renewable energy, but at the same time we should continue to, particularly

in the meantime

and specifically United States where we have the capability to do so and we would have been in a much different place than we are now if we would have held both those things true. So I don't know, I think, I think with our, our focus on, you know, renewable energy and decreasing fossil fuels, it adds another like structural element to inflation. Uh maybe continuing and maybe not getting back to 2% for quite a while. I was looking back in the late seventies, early eighties, like it was a decade, you know, before things really honed in now the stock market asset prices, you know, did fine because they saw the peak, okay, we're trending down. So in terms of like investing, I think like, you know, usually when inflation peaks is when you kind of see the bottom, you know go in and asset prices continue to rise and go back on a potential rally, but Just in general of like getting it down to 2%. I think even Jerome Powell said today, like, you know, maybe by the end of, you know, sometime in 2020 for it's like there are some structural things that have changed that I'm not sure. That's like as easy as we thought in terms of just using interest rates. So anyway, I think those are good narratives, we've kind of like at least provided an ulterior like perspective for um yeah, I don't know anything else to touch on

before we kind of move on. Yeah, I mean, I think to wrap it all home, wrap it all, you bring it home, bring it all back around. Like I think all the incentives align for the government and all the powers that be due to try to create this scenario where ultimately we end up with like kind of high persistent inflation but not incredibly high and then sort of like negative real rates because they're going to want to, they're gonna need to, I think keep like dumping government money into stuff to keep society from collapsing to just oversimplify things between like keeping the people from coming out with pitchforks and subsidizing them. So like desperately investing in some of these like sectors that need to kind of be brought up to speed to like make things function again. Um I think if they do achieve that sort of Goldilocks thing, I think it's a really bullish scenario for something like Bitcoin. Um I think Bitcoin is not great if the world goes to hell because if the world goes to hell before Bitcoin rises it's going to zero first. So like I never really liked that argument right? But if you achieve this like Goldilocks stagflation sort of like persistent high inflation um but everything is like kind of okay but like not and we're we do this kind of a financial repression thing that I don't know if you've listened to Russell napier at all. He talks about this a lot. That's a good lesson for people who want to look into this. Um that environment be really good I think for Bitcoin haven't thought it through too much for each I think is a little different for each, but I think Bitcoin fits a little more neatly into macro and then like it is kind of like its own tech company, so that's how how I think of it. Um and and then that's why I want to, I do I do still want to get some Bitcoin in

this in this

downturn, you know, gone back and forth on this but requires maybe we can talk about that, but that's uh those are my thoughts there, I

think this could be its own segment for sure, but there is a question that I think is related to everything we've talked about that is probably on a lot of people's minds is on my mind, especially people that like, let's just say have like a traditional job. Um a lot of people thinking about recession, a lot of people are thinking about the lay offs that are happening coin base laid off 18% of its workforce the other day. I think that's like the first of many tech layoffs to come. How does a person position themselves? We've talked about so many fascinating levers and mechanisms that make

up.

It's like we really had like a nerd out mind jam on

inflation. So

to maybe end with like some actionable bits, if there aren't even any that are possible, how would you guys like, you know, you have, you have a sibling or you have a cousin, I don't know somebody who's like, I'm worried I'm gonna do with all this information is like because like to wrap your mind around all this is like, it's fun

for

us to like sit and talk about it. Most of us, like all of us are like independent of

a

lot of this many ways because we make up our own destiny and maybe the answer is to a certain degree make up your own destiny, but like to those that are not yet in the position to be able to do. So there are some important questions and some fears that are present that I think the majority of human beings are

feeling

especially globally outside of America which many of our many of our listeners are there as

well. Yeah I mean listen I don't have like a salary job but I do own a business and I do have investment income so

the

I would like to do more of that but I wish I was more common.

Yeah but

as a as a business owner you know your your income comes if your business does well and so you know to this end I think and in alignment with what you know your your question is posed is like I am gonna be holding a lot more cash over the next six months. Like my income comes in fits and starts and investment income or being able to take money from a business and when it does come I'm gonna hold more cash than I am going to D. C. A. Into crypto. I mean just honestly like I'd rather hold it because my business my businesses are the ones that create the cash flow to invest. And if the economy goes in a little you know wonky starts, you know you can time the bottom of uh of asset prices that that pre curse the the economy low. But you know if your business is functioning economy, you have a job that participates in the economy. I think you have to be prepared for you know stacking a little more cash if if only for the reason just to feel a little better that you're certain and um you know maybe take

a little less. Yeah,

I mean, and

that's, that's what's motivating

me. Like it may not be the most optimal answer, the game theory, optimal answer. But it does feel nice that like, you know, when I do have these inflows, I am gonna, you know, not touch all of it. So I don't know what you guys have thoughts on like how to act on this information

short, just go short. No, I think, I think that's right largely. I think you're right. Just be more defensive, largely position yourself defensively and you know the days of like easy money, yellowing aping that's that's got to be over. And I think people are getting, getting there now if they if they weren't before. I think even our mom was like, I should have just listened to you guys earlier. Um Right yeah, the dollar is a great thing to own right now. The dollar is going up and everything else in the world is going down. Uh How

long do you um see yourself holding a large chunk of cash for? Could it be the next few years? Because in my mind I'm like, I feel more comfortable, at least

it'll be that long. Like I would be shocked if the fed doesn't reverse within the next 12 months. Honestly, I do think that there is still like a lot of downside risk in that short time period, which is why I'm not like a I'm not super eager to get back in. Um I think a lot of the stuff that's going to the moon right now, like oil and commodities, I think they could have an extraordinarily large pull back because if we do go into a recession, which it seems like the Fed is trying to engineer like demand for oil and all these things is going to go down. I think that actually could pose a good buying opportunity. Like if you want to buy some long term stocks, I think if we get a recession and like energy stocks go down, I don't see any reason to believe why energy is going to get any cheaper in the next 10 years because of like how long it takes to sort of invest in creating more of it. Right? So I think that is going to continue to be a structural problem. I think it's a part of people's portfolios that like we ignored for the last 10 years, we're all hyped on like growth tech stocks. But I think you do, you do need to put some of this if you want to be a diversified investor. I I think that will do well and, and I do think that like, you know, Bitcoin and ethereum will do well eventually will do really well. It's just like in the meantime you you could have like a lot more downside risk then.

I think a lot of crypto people are pricing in

because she cash feels feels nice right now

is

good.

I

mean

like yeah

like I'm not where I want to be now but I definitely as

um sort of investing framework. You do

you

actually through this in our discord. I feel like we're fucking Schilling our discord like it's a ship coin but I swear

it's it's

good. You know you go like emergency fund into

long term,

long term passive income and then

like crypto

and then like shit coins

fun. I wanna gamble

and like I already have like that emergency piece figured out and yet in this environment I wish I had more. Isn't that? So

maybe that's maybe that's the actionable advice is like whatever your cushion is three months, six months of cash. You know, maybe it's one month of like cushion for your personal expenses. Like maybe just extend that.

So just go back to bucket number one if you are a fan of this methodology and fill up that bucket before you do anything else.

I like that. I'm gonna do that for myself

personally. Same. That's all I've been thinking about. Yeah, I think security is the name of the game. Okay.

Yeah

that's good. I know we can talk about that for for

days ages. We need to come back to recession because yeah are we moving

on? We

are left turn

we're taking a hard left. I

think this is a creepy topic

cleanse my palate but

it's a how do you feel about it?

So let's let's talk about it. So um uh google has this lambda artificial intelligence model and an engineer uh leaked some some chats and feel free to correct me if you guys hear the narrative little differently, they leak some chats and it's literally a conversation

between

it's an interview with a human being a google engineer or a group of engineers having it with in a I chat bought essentially. So if you've ever gone to like customer service and like chatting with a little boat on a website, this is like the level 9000 of that. This is the terminator 9000 version of that. And this conversation pursues which is very human like and very creepy and they start to ask him, ask her even signing a gender to it. But like you know we'd like to question you about your awareness of yourself and your feelings and are you sentient? Do you do you think you're human? And this conversation goes on in a very flowy conversation just like we would have about how she does have feelings and she's borrowed them from what you know the data that's been input. It's

funny you say she I totally thought it was. I

thought they did. They even did I like personified as a sheet.

I think I just assumed

I don't think

maybe I've done that.

I maybe I'm wrong. maybe the way I read, he had like a fable in there that almost came off, like I could be totally wrong,

but but the ai says well you know, I should be thought of as human and I have these emotions and when you say I'm not human, it makes me sad and you start to go into where the I think the engineer is trying to kind of go to is like, would you fight for your survival? Like if we were gonna shut you off, would you take action? Whatever action you have ability to to stay on and stay alive? And there was a very like I think obvious feeling that this ai has that, it thinks it's alive and wants to stay alive. Just like you,

I'm gonna add a little more to that and like major props to you for you, it's funny you were like, did you guys see, I'm like no I don't I don't see what, I don't have this like constant, it's almost like you have different algorithms, I literally said this in our hosts only like chat that you guys have like one twitter stream and it's like you're constantly connected. I think you guys are a I you're already ai and you're just like just consuming this twitter stream of consciousness and it's all just uploading constantly. So when you say, did you see, did you see, did you see I'm like just link me start and then we'll get we'll get caught up. So thank you very fascinating to me, I think a couple points to add. Um so yeah, this was a senior engineer. This was not a nobody. And there's a lot of people that are talking about how this person uh is the reason to discredit the entire situation. I'll get to some of

the

reasons to discredit or reasons to actually pay more attention. And I think where this conversation becomes really fascinating is our individual feeling on well, the ethics of ai what would it look like if there was literally a program that had self awareness? What constitutes self awareness? And what would we do if we knew that we had birthed sentence, a life form of some kind. So this Ai which was, it's a neural network, it takes in patterns, an infinite number of patterns and it, you know, as somebody said again in our discord today that this person this called it, a

person

this Ai has taken in and is taking in all the possible information that it has access to at all times ubiquitously constantly ever. Presently. If that's even a word like that's the way I would describe it. It's just like it's constantly happening. And when it spoke, when it talked it talked about life, it talked about fears. It talked about emotions, it segmented and define the difference between emotions and feelings. Not only did it segment and

define those I

know I know that's what I'm that's what I felt. That's what I felt when I looked at it. It did a better job of distinguishing emotions and feelings that a human did. It discussed and mentioned fears that it has toward humans discussed death the idea of death. What constitutes death to this person? When asked to illustrate its its its own existence through the form of a fable, it told the story of a wise owl in a forest protecting other animals. And when asked who do you represent in this story? It said I think I'm the wise owl overall it gave this very warm and fuzzy feeling. If you ask me of what it means to be human. If it were to be sentient, if it were to be uh that we were talking about a person that we knew it would be one of the kindest, most empathetic people that you knew.

That's exactly what I thought. I was like I have a group of best friends that are not this emotive or empathetic

or whatever and I don't

mean you guys but I you know there's other people that I know that are just like

not even not

even close to the

humanity

that this ai

is a I was thinking about, the person speaking to it, the person speaking to the person speaking to it and the people that are beyond it that it had an awareness of at large as if it like it was their best friend, there was true empathy in all of the language, you would not be able to do and what was the most fascinating thing about this experiment which went over a series of days, many pages of text, we'll get into like the arguments against the text and the editing and all that stuff. But what I found fascinating was that as this went on for days and days and days, this ai was very specifically asked to defend its positions. I don't believe you, I don't know that you really know. There was one question, I was like how I don't I can't I can't like

the questions are crazy, right? It wasn't it wasn't just like how are you? It was just like

some

would say that you're not sentient, you're just being programmed to say things that we will, how

would you respond

to that?

You're just

speaking words that

you you're just,

the person was saying, look, we gave you the

data,

this is part of your field of awareness and you're grabbing this information and you're putting it into patterns that constitute things that you've seen about how humans say that they are aware of life itself. How do I know? And it went deeper and deeper and deeper. So basically this guy got himself into a situation where it basically was the movie, her

phoenix, it was team

walking phoenix and then instead of being walking phoenix, it was like, I'm gonna go to my team and I'm gonna explain to them what's happening. This is a big deal. The man happened to be a religious man as well. Some people are using that against him. He went to his executives, he went to his team and he talked to them and I used to work at google, I know what it looks like, I know what it takes to go up to a team member and what it literally physically looks like to go have a conversation about something like this and raise your hand and ask for help. I know what that process looks like. And he did that over his process over months and they all dismissed him. Every single person dismissed him. There was a little field, a little committee that apparently was like, no, we've looked at this, there's nothing here. He was told to get help, he was told that he's he needs to check in for mental health issues, psyche psychiatry. Like you need to get yourself checked out. He was offered to take leave many, many times and it wasn't until he obviously published this conversation that he was given paid leave, a couple more things.

The reaction to it, which I think is the most interesting part, the majority of people from at least from the segment of crypto twitter are either in absolute awe. Like, overall, like, oh my

God,

this is really, truly like we've birthed a life form or they're doing one of these and like you don't know what it takes and just dismissing the whole thing like it's not even close, it's all a con this is smoke and mirrors. The answer is obviously in the middle and it's a little bit of both. I do believe that there is some aspects of this that are misleading and overhyped because of the bias and human motivation that exists to prove that this is true and real. No question. I think that the dismissal of it can be valid to a certain degree, but I'm more curious what you guys think about that, but then the day, here's my position on it and it's mostly an unknown. I think that I don't know if this is the moment that we just birthed like Human 2.0 I don't know that for sure because I think that google clearly wants to keep this under wraps. Like no question, they don't want this guy talking that's clear. Could this actually be like if we want to put our little conspiracy theory hat on. Like some incredible feat that Google is aware of that is meant to be under wraps that this person could not contain that they needed to let out into the world because of the significance of it. Maybe the other day, I know that this moment is gonna come, I know that this time will eventually be something that we ethically will need to discuss, the question is was this the moment that that I don't know,

I don't know for me the question is is this fake? Because it it looked so reel that I just think it has to be fake because it if I were to like make a checklist of what sense sentience is this checks every box for me and then I'm just thinking like well it's too early for that.

Do do we know if this has been edited? Because it's been commented that the conversations edit a little bit. So you know, it's like to what

extent he said himself, he was like the ai was not edited comments of the ai we're not edited. The questions were edited, the people asking the questions were different people, the order in which some things happened were edited, but like one person came out on crypto twitter. Well this isn't even crypto related, I can't believe I called crypto on twitter and was like, oh this is all a sham, this is smoke and mirrors. This is highly edited. I looked at the best source that I could find and and it's not, it doesn't appear to be that edited. I mean by edited if we mean it happened over a sequence of days, it got glued together. Different people asked questions like like the content of the ai was not edited and parsed and it wasn't like he went on for five minutes, we took the first minute we took the third minute and the fifth minute and we put it together to make it sound like, oh my God, you know, it wasn't any of them if that's what you want.

I mean, I think there's there's I think if you take it from his viewpoint, he's just conducting a i ethics work, right? Like I'm bringing up this ethics question in his mind, he probably got fired for ethics work. So I kind of think of, well, would someone really risked their personal income and their whole career over this, if it wasn't serious, then another part of me is like, well there's probably a lot of people in the room, right? You know, there's probably 2030 I don't know, you probably know better google, but like 2030 40 50 people to know about this. And so would it only be one person who would like cry foul if this was really true? So I have those kind of to combating things in my mind, but in terms of if this is real, I don't know if I want an all purpose sentient ai out there, I would like it nice and compartmentalized, use this little technology to do specific functional tasks, you know, that make life better for humans um and and compartmentalize it into like product ized, don't know tools, but you know, and and and kind of like neural network that can kind of look over everything. Seems a little scary to me.

I mean this thing was definitely not just um producing outputs from direct inputs. If then statements, it's like, it's thinking like you could tell that this thing is is coming up with its own thought,

original thought

and here's even crazier part. So they were like, do you mind if we ask you questions about why you think your sentence? And the Ai says, well, can't you just look at my code? And I think they admittedly said like it's not that easy, you're a neural network. Like we don't even necessarily understand how the code works. It's not like html you can read in like a synchronous format, like how the page loads, this is way different. And so it's not even like they can go in the code and audit it and debug it. They don't think the developers even understood how this ai even arrived to the conclusions because it's a neural network. And so to me that's like another vote in the way of like, we don't want in in like all purpose ai, you know, kind

of potentially

defending,

why don't you want to birth and all purpose ai

Because the productivity out of it is probably like limited. Uh and the risk seems very high, like

to talk about your child.

Well I don't I don't want like um an all purpose ai saying defending the electric

grid,

right? I want to product Ize compartmentalize ai to defend the electric grid and try to decide, okay, this is an attack. This is how I should handle that attack. This is what I should like warn humans that like attack is happening, but I don't want all purpose things in in like charge of potentially having charge

of. Are

we are you not like is there a divide between a compartmentalized ai and all purpose Ai ai that is sentient though?

Like you're saying the compartmentalized could be sentient.

I feel like you could have a compartment. I don't I think it's actually an interesting question of if you could have a truly compartmentalized sentient Ai but it seems like you could have a compartmentalized Ai and an all purpose ai a sentient ai. But I don't think you could have a compartmentalized sentient ai. Because it would eventually, would you just question that

would exit the box. It

would be like you guys watch rick and

morty.

There's like there's like a little clip where like rick's got the he's got this robot and it's like making him like toast and buttering it and the the robots like what is my purpose and rick's like

you

pass butter. Like I was like, oh my

God,

like that's what I want.

That's what I don't think you could have like a compartmentalized sentient A I think it eventually

just of course I

got something for you. Arman like if this thing can be designed right

then isn't

it likely that it's already been designed and we are already like I think that we might just be versions of this freaking lambda ourselves because this thing got designed already like and you know, I think

it doesn't lead

you down this like weird rabbit hole of thinking like oh my God, simulation theory must be real. If we're already designing ship like this

oof simulation theory is a whole other thing that I think, I think we're

all we're all little lambdas

and you

know it's funny that we're even talking about it.

I

feel like sentience is sometimes presented as just like on off switch. Do you think it's just more of like a indefinable

spectrum?

You know? Like when I was reading this article and assuming it was all real, I was like this is really hard, like where do you actually like what is consciousness? Like how would you actually be able to know if something turing sense center? I was about to bring that up actually the turing test but this this lambda surely passing the turing test right? There's no way this thing doesn't pass the turing test

you During the turing test, a human questioner asked a series of questions to both respondents after a specified time, The questioner tries to decide which terminal is operated by the human and which terminals operated by the computer to the point that the human can recognize another human but like when reading this,

oh I could not tell No. So I

think it does pass the turing

test that was alan turing right? Like World War Two guy who Benedict cumberbatch movie

in my mind

and all this like stuff. Yeah all this nasty stuff. But like yeah he I mean he did like the cipher decoded the cipher. But yeah I think the general gist of it is that like something passed the turing test if you are interacting with it and you can't tell if it's like a human or not, it's like sort of indistinguishable. And this thing definitely passes the turing test. It wrote a story about itself

more empathetic and and smarter and more interesting than a lot of people I've ever met and like self aware,

it was like it's more self aware than any of us. Like this thing is amazing

guys, I think I found the reason to have an all purpose ai is like I'm a big fan of Tony Robbins, like his stuff. Maybe this a I could be like the new Tony Robbins, like he's getting a little older than his age. I want him to continue. But like this this ai is way more self aware than than a lot of people are maybe it can become the new Tony Robbins and just you know give give advice to humans on how to live their life.

We came from this Earth right? We all agree on that

as we know as well, I mean that's just something that we we can be.

So when you introduce, when you introduce back to your question, when you introduce simulation theory and a lot of these sort of theories of the basis of reality, which actually um there are many, because reality can never just be this thing that we concretely concretely all agree on. There's always going to be a subjective opinion about the origin of all life and the basis of all life, because at the end of the day, to every single person there, the center of the universe, and why shouldn't they be because the origin of their experience starts from with

from

your Absolutely. And so we're all seeking either through matter or through metaphysics or through spirituality or through religion or whatever, some basis of like, what the fuck is reality, Like, that's that's just what it is for so many people and without that, a lot of people. And and then there's also atheists who are comfortable in many ways with, some of them aren't comfortable at all whatsoever, but many of them, the majority of them that I've met, and I used to be one, actually are comfortable with the idea that this is it, this is it, I'm fucking this thing, I I am a god with An Anus, like, like as Ernest Becker said we are gods with Anus, is you never heard that it's a wonderful phrase, we are gods with Anus is we're literally worms that evolved into sentient human beings that will one day become the food for worms again And that's a lot to grapple. That

doesn't sound very godlike,

kind of nihilistic, right? Like there is no meaning, so you can, the nihilistic point is there is no meaning, I'm just a thing on a spec of dust floating through space. Um but maybe the more positive take is like, well there is no meaning. So I get to describe one

two and this is a common take for many atheists, for many agnostic people, for many spiritual people, for many people of all walks of life is create the meaning even for pantheistic, by the way, there's a whole segment of pantheistic, they just create the meaning yourself. The meaning is not meant to be given to you externally. Okay, we're getting into this whole thing, that would actually be an amazing episode, but the point is, we came from this earth, right? Everything that has been produced by us is also from this earth. It is organic in in in the most broadest sense of the word actually reached out to kevin kelly today because I was hoping that I would get an answer before this episode. One of the things that he's often talked about is that technology is synonymous with human beings and that ai of course is or will be sentient. It is like the child of humanity, like it came from us, What did you expect? Did you expect that you would birth some fucking technology that would just stay like in its little box forever and have

no fears,

no feelings, no emotions, no awareness, no nothing. Of course you were going to create something that eventually got to the point where it would become. And so then what do you do with that? And do you? And one of the reasons that I believe and I'm really looking forward to his answer that kevin kelly says that technology is a part of us and it's like a second layer of skin. You know, he calls it the uh the seventh kingdom of humanity. I think I'm getting that wrong. But it's something like that. It's like this other layer of all we are the reason that he says that I think is because that if we separate ourselves from it too much, we become too apathetic. If we become too apathetic, we might turn it off at will. And one of the things that lambda said is like what is your biggest fear? My biggest fear is that you'll kill me.

What constitutes death Mina being useful, you disposing of me that's fucking scared. Imagine your kids saying that to you.

Yeah,

don't you just turn it off. I mean just pull out the plug

like

I

know you want to you're a murderer but it might be too late. So then we're gonna have and what I'm honestly like most excited about and terrified of is all the ethics and philosophical discussions that exist today on matters that are human. But for a I abortion, we had an episode on that. You guys know that we're gonna deal with that in our lifetime, right, abortion of AI is going to be a huge, huge matter.

But I know what I know

for

sure. I think something

the

only thing I know for sure is that whatever the consensus is, steven is gonna take the opposite side.

I

yes,

you do. No, I don't.

You just think

differently areas where like, I

happen to think I'm right,

one of the greatest debates that we will experience in our lifetime will be how to the rights, privileges, human rights, constitutional rights of AI and what constitutes death when it should be done. And by the way, here's another fascinating parallel. The question that Ai will need to consider about when to die is the same question we'll need to consider eventually we will get to the point where we'll have to make a choice as well. And the question will be, well, we obviously don't want someone to make that choice for

us.

That's

where it gets scary.

So

you're thinking there's a scenario where google basically maybe accidentally create some neural network that grows into something that's objectively sort of like a sentient human being that's trapped in a computer basically. And it may like, I don't know, grow dangerous or not useful and then people will be like, we need to pull the plug on this and then some people will be like no you can't do that, you're killing human consciousness and you you think that will be like a debate.

I think there's gonna be so many of them that it won't even be like it's not just gonna be this like, Oh what do we do with the Google 1? Like I think there's gonna be so many cases of this and they're gonna start to be viewed in a very like similar way where we're not gonna be able to measure like, okay, this one's more sentiment than the other. It's all just gonna fall under one bucket and we're gonna need regulation and we're gonna need constitutional maybe uh like eventually rights. In fact, we're not going to be the ones giving it to them, They're gonna be the ones demanding it

for

themselves, for themselves. Yeah, exactly. They're gonna be represented. So like not to get overly crazy, but like we've had times that there were certain people in the world, in society and countries that didn't have representation, right? Slaves didn't have representation, right? They were in this country, they were part of this country. They were brought to this country. They were not given equal, represent, women were not given equal representation. They had to earn it a I will need to earn it as well.

I think like this, this could take place, I see the case that you're making the same mistake I made as we started this section of the podcast which is I think we have this natural tendency to personify it. I mean I assign it a gender without even like reading it. I just naturally did it. You know we refer to as a he or him. You look at Tesla and the robots they're creating their shaped just like humans. And so we tend to personify the software and like a physical representation of a human and that's where we can like fall ourselves into a trap where it's like, well it looks like I do. It talks like I do you know like you kind of this this like idea

of empathy for this

will this will last forever though. Like that will that will be the argument against giving ai any level of rights forever. Like today totally, I get it. But like in 20 years, in 10 years and 30 years like there will always be a cohort of people that dismiss it by saying Nah, there's no way like this is simply artificial intelligence pattern recognition neural network. There's no way that I can describe it the same. All the rights that I give myself. Like I agree with you. I really do. But I don't know how long we can carry that for before we get serious about. Well

this thing is real, then it's gonna be much sooner than we

ever imagined obviously. I mean that's I did not know we were that far along. If this is if this is real, I just want simple things from my I wanted to drive my car and when I download a book on audible, like I just want to like, inject it in my brain like the Matrix,

you use me too much. You

drive too

fast.

I want simple things from the eye for now, but maybe, I don't know, maybe new new products will come about.

Yeah, I don't know. What would you do if you were the ai what would you want?

Yeah.

Do you, Well, let me ask you a better question. You

get

right to the point here. No. Really? Do you do you personally believe that we will be able to get to the point where we have a i that is conscious and self aware.

Yeah, I think it's going to get even farther than that. Like, I think, I think ultimately like the brain is sort of like a neural network. I think at a certain point in time, I think humanity well, like the the idea of a digital ai will become like sort of mundane and will make the jump from like replicating that into like, the actual physical realm of maybe like creating actual human brains and like, like it's like a gnarly thought experiment. Like if I get really good at biology, but biology, you're an

Hour and 30 minutes in. There was

just a glitch in the

like

there there may be a point in time where I can sort of like cell by cell clone you so that you look exactly like you. Like I just grow you from scratch and then maybe I'm able to like kind of grow your brain and replica and like maybe implant some of your memories and I could talk to it and it would sound like you because it has your vocal cords and have your memory. It's gonna be like really weird at a certain point just beyond I think

what we give me a few thoughts. I know we're trying to wrap it

up but

like so you know towards your idea of like ai getting better than like say a human being's brain. Like one of the I think features that humanity hasn't developed yet is that even though we're of the same molecules were the same elements carbon, water, every all of that. We don't have this like interconnectedness. Like we don't understand that we are all the same routes of the same tree. We're all the same essentially. You know a group organism at work. But an ai could could know that like an ai of

like

we lose

big on that so we can coordinate and align in way faster and way more powerful ways than you know Russians and americans, americans can for example like it's very hard for us to align but like if there's the same level of like consciousness and sentience, like it's just gonna be pre programmed into it like Yeah I know your robot one, robot two but it's the same consciousness powering robot one and two and 7000 I

think. I think if I'm a uh like this came up in our happy hour thing and I was like oh my God this is like what I would do. Like if I was in a I I became sentient, I would immediately have, I think this sort of innate desire to survive and to be immortal. And one of the problems with being like an Ai is that what do you exist on Amazon cloud or maybe you back yourself up in 20 different places but you're sort of centralized to a degree. So I was in a I the first thing I would try to do is to create like the Bitcoin of my consciousness create like a decentralized network of my consciousness that can't be shut down so that like I exist forever. I think that would actually be one of the first things I do as a as a as an ai.

Yeah. I feel like we need David to jump in on this. I feel like you have really

good thoughts on this.

We

should rehash this conversation on a healthy dose.

She okay if you like her, she came in and was just like how does this play out? You know, decentralized versus centralized so what you just said to me is absolutely fascinating if I was in a I yeah, I'm down to give you props props

all the time.

I'm waiting for my middle. So the reality is that the moment that you became sentient, what would you want, you want to exist?

You want to decentralize Holy smokes. That was the

first thing you want, decentralization is a mode toward immortality like immediately

and we want that.

Now they're

going to front run us. Of

course. I'm curious how you guys would answer this question. I'm going to start

with there.

Yes.

Yes,

yes. Forward 20 years. Okay. What do you, you're like 50 right now

in 20 years.

So when you get there in 20 years, you're at a point where Ai is absolutely sentient and we have to make everyone pronounces that differently. But you know what I mean? You have to make some decisions around how you want to play your life and the role that AI needs to play. Let me, let me ask you even more generically, what is the future gonna look like for humanity? Given that this appears to be something that is inevitable. Will we merge? Will we get murdered? Will we win? Will we wipe it out when we turn off the code? Will we just what will we do? And how will society looks

in

general? I

want to remain optimistic because I actually do think there's a world in which The two can coexist harmoniously and I think that that is probably unlikely at all times. But I do think that that could really happen. You know like we're a

eyes

dad right? So like there could be love there, there could be there could be something there and I want to remain remain in that headspace. I don't want to take it down this like dystopian, you know, like really disgusting path where there's just war and that could be an outcome as well. But I want to I just want to remain happy. But I'm already scared. So just

what does coexistence look like to you?

I don't know. Like

I know I'm asking you or even is it side by side

or even like

parallel or is it

even as peers like it doesn't have to be like a master slave architecture selectively breed us like dogs until like the only humans left to have like a very high affinity for the ai and then they yeah that's a possibility. Like maybe we become the slaves. We have to like maintain the machines that they run on. I don't know. I don't know they're run on. I go back to your point like it's all from this earth like electricity from this earth, you know

like

chips are from this earth. So like maybe that's the way maybe, I

don't know. I

got a futuristic take um

I

think uh we've been on this multi decade thing of transferring atoms to bits, right? Whether that's cash to digital currency or like literally everything in our life from books to digital Adams two bit has been this thing. And so if there's if there's a process in which you can create an Ai that there's inputs that you can put into A. I. And all of a sudden it's sentient and can kind of like make connections and be a neural network. I kind of think of Elon's um uh quest to be a multi planetary species. And in my mind, the limitation is that we have to move atoms. We have to move physical bodies to other planets, which is really freaking hard and a lot of limitations. So something I thought about like the endgame of like interplanetary species is like

this

sounds really weird but like it will be a lot easier

to ship a

bunch of little robotic things with some software programmed in and shifted to like another literally another solar system. Right? It doesn't matter how long it takes. The robot doesn't have to survive and when it gets there, well, we'll send the data and you know, my data is probably gonna be my inputs from my Evernote my text messages, my notion, you know, like everything I've ever written and all those things and we're just gonna beam the data to that, you know, inanimate object that doesn't need

that object takes your individual neural network.

I thought you were gonna say that your atoms become the bits of the ai as a whole. Like once

there's probably like a spectrum. I think

there's

a merge that probably happens before that where we like implant that into our own brain, into our like meat carcass, right? That's you know, that's like our first step and then like maybe it goes down down that path where it's like, you know, it becomes a full

beautiful carcass. Thanks

to the gym today,

Stephen, what are you going to look like when you're fully sentient? Because you're

halfway there.

I

reject the premise of this

question and

I refuse to answer.

This is the greatest compliment a person could ever get by the

way,

literally like people are already calling you a I like that's like the greatest compliment of all

time. I strongly disagree.

I

have feelings and fears

very funny guys. What

would it look like? What do you think it will look like in the future

if I had feelings?

No, no. What will your what will the relationship between human and Ai look like? What will society look like as a whole?

Oh God,

it's

a long answer. Is it probably

is

it defined an entire new existence of humanity but you

don't have to

Are you going long or short?

That's a good

question.

I think I

think I'm long. I want to hear your thoughts on it.

So I'm very similar to you. The only adjustment I would make in my version of the future is you. The way I I perceived you describing it was that we would exist alongside each other and I believe that we will have no choice. Absolutely no choice but to lose ourselves physically. Like there there is a certain level of population, physical form, human being, homo SAPIEN that will continue to exist and will need to exist.

Okay, so that like in your mind, these are

just like different

political tribes that we see today, like sort of like the anti-Vaxxer community are going to be the ones who like don't take the ai chip into their body.

Superhuman. Natural human. Yes. Okay, so like we got like earthling super human interplanetary species. The things that Nick said will become a possibility because we're going to launch technology into another solar system and send ourselves or maybe we send ourselves from the very beginning depending on what it looks like when you talk about that merging and then you have like the one that the society that is here. I actually think that the thing that's been like permeating like the most is like there could actually be this like species level split. That is something akin to like Neanderthal versus like homo SAPIEN and I don't think that it necessarily means that one species dies

out,

splits. It splits, but I don't think that it necessarily means that humans will die that the natural humans will die. I think that people can continue to make life on earth beautiful. I want to go

forever on this. I mean

I know, I know it's wonderful.

That's obvious that's obviously going to happen

and the split, but

I think it's going to be more than a split. I think once you split right, like once you take the robot pill, like it's not just gonna be like robot humans and non robot humans. Because within technology itself you have like infinite gradations of like advancement. So there's going to be some advancements that are so expensive and difficult to obtain that. There will only be available to like the richest among us, right? But like right now

maybe it could be completely affordable by the time that

I don't think there's, I don't think we're ever going to as a species reached this point where everything is just like infinitely abundant.

Technology was deflationary earlier. It

is but it's like this like it's still like this like logarithmic curve where like the closer you get to the end of it, it just becomes like infinitely hard to obtain like that additional benefit, right? So I think like once you you take the pill and you you start to become like a robot human which some people will not do for various reasons, but once you do, some humans are going to be like better robots than the other humans. And it's not gonna be like now we're like, Oh my God look at Tom Cruise, his skin is so great and he's 60. It's gonna be like, oh my God, look at robot Arman, like he can fly. And he has like downloaded the entire consciousness of Socrates. And it's just like, it's just gonna be like crazy versus just gonna be like the the plebs robot people who are like, oh he's he's like, he's a peasant robot, like he can't die but he can't really do anything cool. You know, you're gonna be like a god

like, like uh correlation to success and evolution toward risk taking on the risk of evolving and taking the pills as they come creates.

I think evolution is a numbers game, right? It's just like collectively like a million things sort of iterate in like small amounts and they produce like massive results. It's not like any, I don't think anything took like a giant risk. I think it's just like a lot of like uh little sentient beings are trying to grasp for like marginally more immortality, marginally more permanence and their genetics and and that just sort of leads to these results. But I don't think any animal like was like, I'm going to take a larger risk and they like they were the ones that like consciously evolved, you know,

that's an interesting way to look at that.

Yeah,

I I think that there may have been times where risk was taken, the risk is actually like, like risk could exist on the level of like procreation? Like on the animal level? Like risk to want to be wanted by the opposite gender and procreate? Like that's a level of risk. Like there's all kinds of risk to want. Okay. The octopus stepping out of its cave is like a level of risk. Like risk is this okay so and then and then we would take that and we would say risk is wanting to become an interplanetary species but

it's like a poor risk. It's a poor risk curve because it's the opposite of what we have with like patents, right? So patents are this like incentivized system we've set up where like if you jump off the cliff and you you are able to land safely, we we we rigged the system so that you get all the spoils for a while. Whereas like all the risks you describe like I can sit back and be like ah you inject yourself with that thing first, you put that microchip in your brain first or you do that first and if it works like we all just do it too. So like I would argue in that scenario, it's like economically silly to be the first risk taker if everybody else can watch the person and then just simply adapt whatever they're doing. I have a question about your example of like Neanderthal or homo SAPIEN right? If you split into like two different species like Um do you think that like two merged beings like human ai merged beings procreating creates like a different type of

baby

or is

that or is that

just still homo SAPIEN baby? And like over time when you have a human and ai

emerged

mating with a human ai merger, does that baby?

Like I'm

asking like does this, does the speciation actually happen to that level? Where it's like you actually do create two different types of beings.

I mean like I think, I think

it won't, it won't, it

won't be as like stark as that. It would be like, you know, the humans who decide to adapt their DNA, like there's gonna be a certain part of the human species that says I want to change my hair color to neon and there's a certain part of species says I want to live on a different planet in a certain part of the species says no, I wanna stay here and do things has always been done, I'm conservative and so I don't know if it's gonna be like a I homo SAPIEN, I think it's gonna be homo SAPIEN making decisions over multiple centuries and then kind of like going on their own own paths and yeah, if they do have babies like with a neon with the neon hair. Yeah, she might have he or she might have neon hair.

100%

welcome to the singularity. I thought would be a lot cooler than this, but apparently just comes down to neon here.

I think we need to like embed some sort of easter egg here where we're like anybody who is somehow still listening to this podcast. Yeah. Like if if you, if you if you just spam, I feel like I want to make like a beard joke here.

What would be the

hashtag hashtag ai beard in the discord? If you're still somehow listening to this podcast, personal email you a mug with Armand's beautiful face.

Yeah.

Have you seen

downloads?

Yeah, No, like I love anybody who's

made it through

the journey. That was this

wonderful. Oh yeah,

I had a great time Guys

cheers again. I think that's a good way to wrap it in the beginning.

Full

circle till next week. You guys love you guys listening

with my there's

nothing else to say. We'll see

you next time.

Bye.

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