China Is Selling America (Markets Are Unstable)

Debt-Based System Paradox with AI00:00

There's a theory that the system we've been living in is going through a paradox. Our economy uses debt to grow and debt assumes more workers and more incomes to pay for it. But the markets and their values today assume that AI is going to rule the world. AI assumes less workers and less income in the future. So, how will this expansionary debt-based system work in a world where AI and robots eat the jobs and the incomes? Both can't be true at the same time. That's the paradox.

New World Order and Shifting Alliances00:30

Are we at the beginning of a new world order where we move away from Europe and toward anything else? There's a real question about whether there's a massive shift happening now in terms of world alliances long term. There's definitely a new world order. The president has sought it. There's a new world order in trade. There's a new world order in globalization and the way that we invest in our economy versus foreign supply chains. The president is willing to shake up some old alliance structure.

Part 1: Keynesian Debt-Based System01:02

For the last 80 years or so, the global economy was built on the Keynesian theory of economics. An easy way to understand what that means is that someone has money, you borrow it, and in order to pay interest on it, we have to make more money, aka more debt. It's also why economists call it the debt-based system. Now, in order for that system to work properly, we need cheap money in the form of low and stable interest rates. And we also have to assume the population of the world goes up over time. More people with jobs and incomes will keep rising and that the price of stuff in the world would go up slowly at a rate of about 2% per year aka inflation.