Habits and Hustle - Episode 219: Nouriel Roubini - Top Economist On The Financial Crisis "We Are Doomed"

Episode Date: February 28, 2023

Want to find out how Nouriel Roubini, Professor Emeritus at New York University, got the nickname “Dr. Doom”? Don’t miss this episode! Jen digs into Nouriel’s past predictions and how they came true, as well as his beliefs about today’s issues. Why does nobody want to work anymore? Is it possible you’ll see humans become obsolete in your lifetime in favor of AI? Hear Dr. Doom’s thoughts on Crypto, Meta, and more in this crucial episode. Jen's Bigger, Better, Bolder Mastermind starts in March! Apply now to be considered. Join Jen’s new Facebook group! Find out Jen’s secret to getting anything you want out of life Follow Jennifer: Instagram Facebook Twitter Jennifer’s Website Did you learn something from tuning in today? Please pay it forward and write us a 5-star review on Apple Podcasts. If you have feedback for the show, please email [e-mail]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Vitamin Water Zero Sugar just dropped in all new taste with zero holding back on flavor. You can be your all-feeling. I'll play and all self-care you. Grab the all-new taste today. Vitamin Water Zero Sugar, nourish every you. Vitamin Water is a registered trademark of glass O. I got his Tony Robbins you're listening to Habits and Hustle, Creshion. Today on the podcast we have Noreal Rubini who is one of the most well-known economists in the world.

He's best known for being one of the few people who correctly predicted the 2007-2009 global financial crisis. He's the author of the new book called Megathrex, which is ten dangerous trends that imperil our future and how to survive them. This was probably one of the most informative podcasts I think I've ever done. We talked all about artificial intelligence. We talked about cryptocurrency. His nickname is Dr. Doom,

because like I said, his predictions may seem a little bit doomful, but he's actually been right more than he's been wrong. This is one podcast I highly suggest you listen to. It is fascinating. Enjoy. We have of course, Noreal, of course, Noreal Rubini's on the podcast. Did I say your name correctly? Yeah, Noreal Rubini.

Remember, okay, good. And his newest book is called Megathrex, 10 Dangerous Trends that In parallel future and how to survive them. And this has been a podcast I've been very looking for to doing for a plethora of reasons. Number one, I just love how you kind of have no holds barred. Your attitude is like you say it how it is. There's no mincing words.

You get right down to it. And I love that style. So thank you for being on the podcast. Great to be in review today Jennifer. Yes, even with the technical issues we had. So I also, I guess I want to start because your nickname is Dr. Doom. Where did you even get that nickname and then we can kind of move from there. Well, nickname came because August of 2008 there was a long profile of me in the New York Times magazine titled Dr. Doom and the whole article was about me

and how I started predicting the global financial crisis in the middle of 2006. I was like, Sandra, people did not listen to me initially until I was proven right. So you know, that Nick nem stocks in that New York Times magazine profile. And if it today, sometimes people strangers, bump into me in the streets. And instead of saying, are you Nuri Rubini? They say, are you Dr. Doomini? They say are you doctor doom? So you know it sounds like it sounds like a like a villain in a Marvel movie, but

there is actually a villain called dr. Doom there is right was it based off of you then was it based off of you? No, I was before me. Okay, once I had another win was it based off of you? No, no, no, no, it was before me. Okay. And then once I had another one when I was dressed as Doctor Doom, and my date was dressed as a black swan of Nassim Talib, black swan, but nobody got the joke. I think after I'm Doctor Doom and she's black swan. No, I got it. I would have got it. I think it's great. You have a sense of humor about it. Obviously. A black swan of Nassim Talib, but even after you explained it, I guess an Halloween

people was too eyebrow as a joke, so nobody understood that. So. I think that's interesting, because when people, you know, because people think of you as this, but yet your predictions are pretty accurate most of the time. Like you predicted the housing crisis like you said, even though people thought you were a nace air, you were accurate. You were accurate in 2020 over a whole other area of things.

So, you know, it's funny that like I just find you to be a realist more than anything else. I don't find you to be someone who's a nace air. I think it's like you, like I said, you call it as it is and you're usually correct. Yeah, yeah, usually say I'm Dr. Realiz, not Dr. Doom. I guess Dr. Realiz is not as catchy as Dr. Doom. And then the nickname stuck.

But you know, even my last book on mega threads, you know, I'm not speaking about aliens taking over the planet Earth or asteroids are hitting our planet and speaking about stuff that is actually reasonably common knowledge. And I called it mega-trets, but one of the words of the year according to the financial times was the concept of poly crisis. This is again, economic and non-economic threats that are interconnected with each other that's the term that Adam Tools and historian Columbia

and other accounts have presented now everyone is using it. And I was on the stage in December with the head of the International Markly Fund, Miss Cristalina Georgieva. And she spoke about the confluence calamities, like we haven't seen since World War II, and I was just two weeks ago, that was for the World Economic Forum, and the yearly global risk report was all about threats, economic and non-economic and poly-crisis. So, you know, some people call it mega-treks, some people call it poly-crisis,

some people call it the conference call calamies, some people call it the conference call calamities, or the web says, we'll have the most turbulent and uncertain and dangerous decade in a long time. They're just different terms for the same types of concerns. Right. Well, I saw something, two things. Everyone in your book was considered to be one of the best books by the Financial Times of 2022.

And very well deserved. And that I saw someone say, this book is a wake up call and we are sleep walking into a disaster. I think that was the quote that I read about you and this book. What was the genesis of, is it that to make you even write this book, was it because that you foresaw these things happening and you wanted to kind of bring it to the attention of everyone, or what was the origin story for writing a book? Well, usually I write about economic monetary and financial affairs, and my last book was

on the global financial crisis, crisis economics, but I realize in this world in addition to the traditional and non-traditional economic monitoring financial risks, there are other ones that are connected to the economic and financial ones and they all relate to each other, they're interconnected. The way I speak about these mega-threats is like a matrix 10 by 10 in each one of these threats affects the other and vice versa. And understand this world, you have to understand

social, political, geopolitical, environmental, health, technological, and trade and globalization related threats. They're all connected to each other. So this system where you have to go beyond your expertise, you know, economists usually believe in the concept of comparative advantage. I mean, speak and write only about what you know very well and shut up about the rest. But in these complex world, where there is unexpected and unprecedented unusual uncertainty, we have to think about the system.

So it's an attempt to think about the system. And during COVID, I was not traveling a lot of time to sit down, take a read and write and take about the bigger picture. So it's not just a book about economics, it's about the world and what could even end our species as human, under some extreme circumstances and scenarios. You talk, there's so many, yeah, you talk about climate change, artificial intelligence, there's so many different areas.

And that's why I wanted like dive deeper into a lot of these things, but I wanted to ask you something about just overall overall just COVID, right? Post COVID. You know, I think most people have noticed that all the prices have gone, our skyrocket, yet there's no labor workers, there's no supply. What was it about the, I'm curious, like what happens and why is this, it's continuing,

like there's no, you can't find people to work. Everything is expensive from gas to eggs. Like how are people, why is this happening? And how do we, as is an everyday person, supposed to kind of acclimate when we're not, you know, because people are not making money, but yet everything is like 100% more expensive. you know, because people are not making money, but yet everything is like 100% more expensive.

Yes, you know, I'm old enough, you may six days that I remember the 1970s when we had also double digit inflation and recession and high unemployment at the same time. That's what's called stack-flation, the combination of economic stagnation and inflation. At that time, there were two negative supply shocks. They all price shocks of 73 falling a war between Israel and Arab states, and their second shock coming after the Iranian Islamic revolution. This time around, what happened is that there were a combination of what are called bad policy and bad luck that has led to this high inflation.

Bad policy is that the amount of stimulus compared to the shock of COVID was excessive. Yes, we had to do monetary fiscal and credit easing, but was ended up being too much and for too long. After the global financial crisis, the fiscal stimulus was about a trillion dollar after the COVID crisis was five trillion dollars. In the extent of unconventional monitoring, credit, easing was even more extreme than during the global financial crisis. So too much stimulus for too long, creating too much money and demand chasing too few

goods. And on the supply side, there were three negative supply aggregate supply shocks that reduced the potential productive capacity of the economy and the supply of goods and services. One was the initial impact of COVID on shutting down economic activity, production of goods and services, the supply of labor, and global supply chains. The second one was the impact of the brutal invasion by Russia of Ukraine on commodity prices, oil, natural gas, food, fertilizer, industrial metals.

And three, until recently, the zero COVID policy of China led to additional global supply bottlenecks that created also restriction to supply. So how much was it that bad policies opposed to bad luck depends, I would say, solomatically half and half in Europe more bad luck because of exposure to Russian energy in the US more excessive stimulus, but was a combination of both too much demand because of loose policies and Not enough supply because of a negative aggregate supply shocks call it bad luck So these excessive stimulus for example, right

It's a massive stimulus, for example, right? But yeah, and now what's happened is, you know, nobody wants to work now. No one can find people to work at a restaurant. No one can find anyone to work anywhere. And it's not, it doesn't seem to be getting any better. What it is, what will create? How can we shift it? How can we even attempt to make it better at this point?

Or, you know, I've heard you say in other places that like, it's like, we're kind of like, we're kind of doomed, you know, I've heard you say in other places that like, it's like we're kind of like, we're kind of doomed, you know, excuse the pun, but we're kind of doomed. Like there's, we're kind of, we're kind of so deep in the hole. When can we start crawling ourselves out of the hole? What can we do?

Well, the fall in the supply of labor, it's a series of very complicated factors. First of all, you have aging of the United States, like other advanced economies. The number of young people can become worker, is limited. Two, we are now restricting severely immigration. And the migration policy of the Biden administration are substantially not different than those of the Trump administration. Three, there is a skill mismatch. So the job's technology of the future requires skills.

The average of blue collar doesn't have, or you have to move from point A to point B, and there are impediments for people moving, including the housing problem right now. Then, this whole generation of people that are called the Decks of Despair, young people, hopeless, killed, helpless, incomeless, who play video games, get a welfare check, they are on opioids, and they are effectively out of the labor force, the labor source participation rate for prime males, these those that are in working age as fall in sharply

in US as not recovered. Then you had people retiring early because there were no jobs because of COVID. Then there is the raise resignation of people saying, I'm tired of the rat race. Let me do something else. Being entrepreneurial or being off the grid. And then you have the quiet quitting. Of people say I'm tired of just being productive and boring jobs. And they're there. They go to work,

but God knows whether they're working or they work from home and they're not that productive. There's a whole bunch of factors that are more structural that imply that supply of labor is tight compared to demand that now wage growth is excessive. Keep coming back, you got plenty of space! Oof, not how you would have done that. You like working with people you can rely on, like USAA, who has helped guide the military community for the past 100 years. USAAA, get a quote today. This episode is brought to you by GlobalX ETFs. Start your investing journey by exploring exchange-traded funds. Exchange-traded funds, more commonly known as ETFs, create baskets of

stocks, bonds, and other assets that you can buy in a single trade. At GlobalX, they specialize in ETFs that track emerging technologies, like the rise of electric vehicles, as well as strategies aimed to potentially generate income, and much more. To discover how you can add ETFs to your portfolio, visit GlobalXETFs.com. So, do you, what do you, I want to ask you about it. So, let me ask you this, because I know when I was telling people that you were coming on the podcast the big question I got from people like what can you ask him what I should do with my money then should I be investing in anything? Should I be holding my money should I put my money and keep my money in cash?

What would you say to those people including me? But I'm asking for friends and for myself. What should we be doing now? Well, you know last year was a bad year for both stocks and bonds. You know, the typical investment advice is put 60% of your money in equities. They're more risky, but we've higher return and 40% in government bonds that are lower yield but more stable in terms of price. 64, T 73rd, the risk parity depending on your age and risk profile. But that assumes that the price of equities and the price of bonds are negatively correlated. Risk on, risk off, growth and ascension.

Most of the time that's the case. So there is growth and risk on you make money on your equities, but the bond is go higher, the price falls, you lose money on your bonds or risk off recession, equities do poorly, but then bond yields fall and the price goes up and you make money on your bonds. What I argued in 2021, even before this shock, I wrote a piece saying inflation is going to be bad but for stocks and bonds. And that's what happened last year. Bonds were higher, the price was lower, and the price of equity was lower.

So the correlation we did did to became positive rather negative. So you lost money on equity and bonds. Why? When inflation is rising, the discount factor for your profit dividend is a long-term bond yield is higher and therefore equities fall like it did last year because you have higher return bonds. And long duration assets like road stocks, tech, we see all these things lose even more money because there are long duration assets where the dividends come later in the future so they are even more sensitive to

rising interest rates than traditional stocks. That's why Nasdaq felt 30% SMP 15% only. But when bond yields are higher, the price of the bonds is lower. So last year you lost more money on 10 year treasuries that are supposed to be safe than you did on equities because the SMP fell only 15% because the correlation became positive because of rising inflation. So people forgot that that happens when inflation is rising because we had decades now all low-install inflation. And last year there was no right because public equities did poorly.

Private equities did poorly, private equity did poorly, tax stocks, growth stocks, VC, venture did poorly, REITs and engine-related real estate did poorly, bonds did poorly, credit did poorly because credit spreads were widening, high yield, high grade, and the price was falling. and the price was falling. All the bubbles like crypto, meme stocks, SPACs fell 80-90% because they were totally speculative bubbles. And even cash, if you all cash is your zero nominal return, in real terms, inflation at 10, you lost 10% of the real purchase in power of your cash. So you have to find alternatives. What are the alternatives when inflation is high? And the same thing can happen over and over again, because suppose inflation goes from two to say 6%

on average over the minimum term, can you treasurer it and have to be 8% 6% for inflation and to real today alone it's 3.5%. So last year, the last 20%, but if they go from 3.5 to 8% they will lose another 50%. So you want to be in inflation index bond, they are protected against inflation automatically. You want to be in very short term treasury bonds, they reprise to a high yield without the price loss of long duration bonds. You want to be in gold, green metals, and some other commodities that dwell when there is high inflation. Gold does also well against geopolitical and

political risk and financial crisis risk. And then some forms of real estate, public grids in areas that are sustainable, not damaged by climate change, might provide you some edge against inflation because they tend to better than equities because you have some pricing power and rents can be adjusted and as long as real rates don't go too high, real estate doesn't do as poorly as equities. So there are other asset classes you have to think about when you want to protect yourself against even gradually rising inflation. And you don't need a hyperinflation or even double digit inflation. As I said, if inflation were to go from 2 to 6, bond years have to go to 8%, is a blood

batting bonds, and with bond years of 8% equity, price earning ratio would be much lower. In 1982, when we still had that inflation and interest rates were high, the price of the English of R&B 500 was 8. Today is 17. So that's what happens when inflation is high. This is crazy. So basically, I took notes because you're saying basically gold, metals, public greed, these are things that we can be putting our money in right now. And inflation index bonds, and then short duration. And short duration. Short duration, not long term, yeah. No, for short duration.

So, you mentioned something that I wanted to talk to you about, which was crypto. Because you say in the book it's dangerous and you know I love that I read that not I don't love it I'm kind of being facetious because I believe I believe the same thing you did and I got I really got kind of pure pressured into putting some money into crypto because everyone said it was a second coming a price basically and I want you to talk about that I want you to talk about that. I want you to talk about why you think it was dangerous and how it's kind of played in the marketplace for a period. Well, the crypto is the model of all frauds and scams and bubbles and now gone bust. You know, by the end of last year, Bitcoin, the number one crypto lost 80% of his value

from the peak of a year before. Ethereum lost more than 80% the other top 10, 85% and hundreds of others lost 90 to 100% of their value. You know, calling them crypto currencies, a misnomer, they're not currency, they're not a unit of account, they're not a scalable miso payment, they're not stable store of value, they're not a single number. They're not currencies, they're not even an asset. Usually an asset gives you some income or some utility of some use in industry, so it doesn't even have a characteristics of an acid. It's a bubble. You know, I used to call them ship coins, but that's actually offensive to manure because

manure is actually highly productive as fertilizer in agriculture while Victor is toxic. Even it's environmental damage. If there was a right carbon tax on crypto, the value of Bitcoin would be zero, would be negative after you pay for that carbon tax. So it's really toxic. So it's a bubble and it's gone bust. You know, there were 20,000 ICOs, 80% of them, that there's a much is 16,000 of them, where it's come in the first place, we have scum, still in the money in disappearing, another 17% went to zero, so they were only left 700 out of those 20,000, and on average the lost 95% of their value, the top 10 have lost between 80 and the 5% of their value.

It's dangerous, it's risky, a bunch of common criminals, crooks, tax evaders, terrorists, human traffickers. It's really, I mean, SPF and left-X is not exception, it's the rule. The rule crooks, they should all be in jail. Literally, they should all be in jail. They literally should all be in jail. 99.9% of them are criminals. So, and unfortunately, young people in minorities and others, they usually believe that you can become rich overnight. No human being ever become rich overnight. You have to study hard, work hard, save, diversify, maybe after a few decades, you'll have

enough to retire safely. The year that you can just become rich overnight by playing in meme stocks or crypto or day trading or SPACs or very volatile techno without any revenues or profits or business plan turned out to be a bubble and the old one crashing last year when all these speculative bubbles have lost that 80 to 90% of their value. Good riddance. And what do you think of like NFTs and stuff like that? That's another job, you know. Any index of NFTs has lost 90% of his value from the peak by a year earlier. You know, if artists need to be paid for their services,

there are other good technologies that do that without somebody creating another token, taking a 20% fee out of it and pretending that this is going to provide some income to artists. The artists have been ripped off. Historically, they've been ripped off even more by this NFT bubble. So the bubble has gone bust.

And even blockchain, blockchain is not a new technology. It's a bit of a joke. The idea you can create trust with technology is meaningless. It's a totally overhyped, totally useless technology. It's no better than a centralized spreadsheet. And what they call blockchain is blockchain in name only. All the corporate DLT and blockchain enterprise are private, not public, centralized, not decentralized, permission, not permissionless,

and a small group of validators will validate them, not using trust-wet validation. So they call it blockchain because then it's called blockchain is sexy, but the blockchain, you know, in them only, they're just glorified the spreadsheets that are centralized and permissioned. You know, Google Docs is a permission, centralized document, nobody calls it blockchain, but they call blockchain stuff, it is not blockchain. So it's another fact, the entire blockchain. Now people say crypto is a scam, but blockchain is a revolutionary technology. It's nonsense. Blockchain is as useless as crypto.

So there are people that are spending hundreds and millions of dollars on that, you know, that monkey thing, I don't know what it's called. I can't remember up the time. Yeah, they, I don't know. So yeah, people are spending hundreds and millions of dollars. I think they're gonna lose their shirt on that yeah, people are spending hundreds of millions of dollars. I think they're gonna lose their shirt on that or like,

people are really lost their shirt. Anybody who bought NFT, you know, it's always like this, you know, whenever there's a bubble, there's a craze, there's formal fear of missing out. And the early guys are the big whales and insiders who dumped and the junk on the retail suckers. You know 99% of people bought say Bitcoin did they buy it when it was a hundred or a thousand or even ten thousand? No. 99% of people jumped into crypto when it started with 30,000 40, 50 at the peak 69.

Najran 20. So 99% of people bought Bitcoin, bought it at a price that was two or three times or four times or five times higher than this today. And the lost their shirt. It's always like this. Whether it's crypto, whether it's mini stocks, whether it's NFTs, whether it's SPACs, whether it's some of these vaporware growth stocks and so on. The fools always arrive late, and the insiders rip them off, dumping the junk on them, and they get the shafted royally. This episode is brought to you by Nerds Candy, calling all the gaming tech-saving nerds out there. The team carriers and keyboard warriors,

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and in all dangerous and a total joke. Most of it is, real estate is a limited supply. Maya Parmin in New York is in Manata and there is only limited supply. But in the metaverse you can create infinite supply of these virtual pieces of land or property. So why any of them should be worth anything when you can replicate them one million times or one gazillion times at zero cost. Things that have a value are, take that one, have a limited supply and scarcity and two, there is a real demand for it because it provides you, you know, some services. And, you know, you already have all these kids who are hooked on Instagram and social media

that gives you dopamine highs, much worse than crack cocaine. And you're addicted to it 24-7 and they live in this lullaland, rather than in reality. And now they want to be hooked even more in the metaverse instead of living real lives. You know, they're a whole generation of people, and a consul on a Nobel Prize with his wife, that Angus Ditovil, Hanke's, Rottergok, about the deaths of despair. It's all the white underclasses that are poor and skilled without work, without jobs, without hope,

without anything to get a welfare check. They play video games all day long, that addicted to opioids, 5% of them die every year, out of the 2 million addicts, 100,000 die of opioid overdose, that incels involuntary celibates that cannot even have a girlfriend or the date and the lives of despair and the die.

That's the metaverse. It's dystopia. It's not dystopia. And they want us to get meta and others want us to get even more addicted to this stuff. I mean, it's really, it's more toxic than any drug.

You know, take crack cocaine only maybe twice a day and never tried it. But you can be on Instagram 24-7 and young women, 25% of them are depressed and a good 20% of young men because they're addicted to social media and formal about life that don't exist. It's really toxic. What, why in your opinion is there no laws

to kind of limit something here or just to stop something like what because you're right. I mean just on the mental health crisis alone at what's happened to people's the suicide rate the depression. Yeah. Why is nobody doing anything on a higher level to mitigate this? We will eventually have to crack down on social media in the power of big tech. Talk us decade until we realize the tobacco kills. And then we limited smoking to adults in other ways now, advertising same thing with alcohol.

And lots of other compulsion that people have. Robert Lastic wrote a book about the hacking of the American mind. It says in additional traditional compaltions and addictions, drag smoking, gambling, shopping, alcohol. You name it. There are two new mother ones in Western and now even Eastern society.

One is social media. Because I said, as much of a dopamine high is crack cocaine, and then our food is all very fatty, processed without fiber and makes us fat and obese and get us vascular disease. Those are two new addiction and compulsion that are part of our modern society and they're related with each other.

As we live more set and very lives and we play video games or in-a-n meta-verse virtual realities. No, I agree with you. And you think that this is gonna be just like you said, you know, it took people a while to kind of click and then they have some laws around tobacco or alcohol. Do you think it's gonna happen with social media and all these other technologies?

It's just gonna be like not in our lifetime, maybe in 20 years from now, but what is your prediction? I hope it doesn't take 20 years. I hope the next few years we do something about it because you have a whole generation of young kids who have a whole generation of young kids, we have a tensile deficit disorder, they have depression, they don't study, they don't work.

Part of the quite quitting is that there is really a social malaise, that's why productivity grotesque becoming very, very poor. So we cannot wait 20 years, you'll have an entire loss generation. You know, Gen Z stands for Generation Zombies, I guess. So they're living like zombies, not all of them, but many of them do, except, but that's a reality. No, I know. I smiled at your reference, but I say I'm smiling, but actually it's actually very depressing and sad that that is very accurate at the same time. So your prediction is what like in the next five years they're going to maybe

make some laws towards this because it is so detrimental to people's overall well-being. We have to crack down on it. We have to regulate and control a big tech that has too much power, also the oligopolistic power, and the damage of social media is severe. It's very complicated issue, but it's toxic. Also our political discourse is becoming more polarized as people hate each other and Twitter is becoming a shouting match, and everybody pretends to be an expert, and so on. There are lots of social diseases that are coming from many of the aspects of social media

and overall a big tech that we have to address. It's not easy because they're very powerful, all of them. And the limits to how much we can do and what we can do, but we have to think about it totally, how to limit it the same way we regulated tobacco, drug driving, alcohol and some extent the most dangerous drugs and so on. We regulate lots of things that has to be also regulated in an intelligent way, because not banning it, but regulated properly.

Yeah, I agree with you. The other question I really wanted to get to was artificial intelligence. You talk about this in the book a lot, which I wanted to get your take on this for people. I think it's very interesting because I feel human beings are going to become obsolete pretty soon. And I wanted you to talk about this? Yes, on one side there is the positive of technology, productivity growth could increase, even if we don't yet see it in macro aggregate data. The economic pie might become bigger, and the cost of lots of good and services could be cheaper, would find medical and scientific breakthroughs that make us live longer and

healthier. That's the positive side, but there are many negatives. One is that eventually you get permanent technological unemployment, initially routine jobs of blue color workers, then even cognitive jobs of white color workers that can be slicing a series of tasks that can be automated. And now with these new trans-sporer technologies, generative AI, charge-GBT, and that's only the beginning of it, even creative jobs, like writing piece of music, or a movie, or a piece of art, or a newspaper article, or predicting what the Fed does, you know, takes only two or three years more until some AI gets hold economic data, all the models, all the speech of the Fed officials

and makes a prediction about what the Fed does next month, back to the new human. And those are good jobs of people make a million dollar and a PhD at Goldman Sachs at JP Morgan. Those are really some of the best jobs in Wall Street, the Fed Watchers, the PCB Watchers. So that's a trend. Plus, these technologies are increasing income and wealth inequality, because the capital intensive skill bias and labor saving.

So if you own the machines or the capital owns the machine, they are you do well. During the top 10% of distribution of skills education, human capital for a while AI makes you more productive, but your blue color, white color, low medium value added sector increasingly gradually is not going to overnight. Your jobs and your income are going to be threatened by AI. And yeah, eventually there also these AI theorists that predicted sapiens as species might become obsolete. Either we merge with machine,

become super intelligent, transhuman, bionegly, forever, or otherwise sapiens as we know it eventually. We don't know if it's got 50 or 100 years or more, maybe come up solid, there'll be some other form of an omninoid coming after us. That eventually will happen. You said, like you said merge with a machine. How would humans merge with a machine? Is that, I think you see that in movies, you see that in like, you know, in like sci-fi

movies. Well, you know, we can already, let's say replace some body parts with things that are made out of Bionic material. One way or another, we transplant some of those organs eventually could be not organic bionic. And you can think of a world

in which eventually your mind, your consciousness, your memory, also uploaded into this bionic world. You know, there's a merge of it in human and machine, you know, slowly, slowly, you know, we're using increasingly stuff that makes us smarter, even a smartphone is in times of the call of every information. Once you have the chip in your brain, then it can regulate other things. You're already moving in there.

That's slippery slope, right? It's the idea of transhumanity. You know, before Sampions, there was Omar Actus and Denisovian and the Undertale. They all disappeared. Where the only species that actually destroys those who came before us, you know, we come from apes, but in the animal world, the gorilla might be strongest, but the bonobos and the chimps happily live with him while sapiens destroy the rectus and the nizovian and the underthal and the homodeus or feminadeus or bionic men

or woman is going to destroy sapiens down the line. Sapiens have been around only 150,000 years. When life has been around for 3.4 billion years, the idea was the last of what human life is on this planet is totally far-fetched, of course. Vitamin water just dropped a new zero-sugar flavor, called with love. Get the taste of raspberry and dark chocolate for the all-warm, all fuzzy, all self-care, zero self-doubt you. Grab a with love today.

Vitamin water's zero sugar, nourish every you. Vitamin water is a registered trademark of glass O. This is fascinating. So you think that what you think the homo sapiens can become extinct like a dinosaur eventually. How many years, from now, do you think, like in 50 years, 100 years, 20 years? No, it's not going to be 20 years, but they're saying within the end of this century, there will be some merger between the human and the machine.

That's I think is quite likely, and it is given the speed at which this technology is advancing. And the machines are becoming super intelligent. So either we merge with them or otherwise, they're going to completely replace us. Probably that's some kind of a merger. Yeah, within the next century or so. But if we don't merge and they replace machines, replace humans, who controls the machines?

Who's going to be on Earth to control the machine? You know, they may become super intelligent and I have consciousness, they might be the next evolution. You know, the Undertale might have said if I disappear, who's going to control Omosapiens, Omosapiens controls themselves. And Omosapiens is a those sapiens, control themselves. And homosapiens is a trippin' set of his DNA, his Neanderthal.

So, you know, there'll be another form of life human, the superintelligence of consciousness, maybe they care more about the planet, about animal and plant species the way we don't. Maybe it's gonna be a better world where animal and plant life as a chance was where the worst predator and pests on this planet and we're destroying it. So maybe we have to evolve in a wiser and more

civilized form of humanity. So it'll be in the next stage of what is human. As I said, we said that sapiens should be the last one. It's totally for fetch. I guess you're right. Like that. should be the last one. It's totally far-fetched. I guess you're right. How about, just to finish this question, I'll let you go. Can we regulate that? Can there be governmental laws now so that won't happen? Why isn't that happening? What's the... We're trying to regulate AI, but if the US stops AI and will not stop it, China or Korea or somebody else is going to do it. And who's going to dominate AI, machine learning, robotic automation is not only going to dominate the indices of the future, but it's going to be also the strongest geopolitical military

and security power in the next century. That's why this past year Eric Schmidt, former CEO of Google, wrote a book together with Henry Kissinger, the greatest US strategist of our time, saying that the race between US and China and AI is not just about economics. It's also always gonna be the hegemonic power, military and security,

and we'd rather have the US, rather than China being that. So eventually, you cannot stop technology. You can manage it, but you cannot stop it. This is fascinating. I know you've got to run. For those of you, the book is called Megathoret's Ten Dangerous Trends that Impair All Our Future. And how to survive them.

We'll continue this conversation. Pick up this book, guys. It's fantastic. It's fantastic. We inspire you. This is your moment. Excuses. We're having that the habits and hustle podcasts power by happiness Hope you enjoyed this episode. I'm Heather Monahan host of Creating Confidence a part of the Yap Media Network The number one business and self-improvement podcast network Okay, so I want to tell you a little bit about my show. We are all about elevating your confidence to its highest level ever and taking your business right there with you.

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