AI Impact; Russia War; Iran–Will He?; US Chips; Prediction Markets; Welfare Fraud | Yaron Brook Show

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Go radical.

Fundamental parentheses of freedom.

Lational self-interest.

And individual laws.

This is the wrong book show.

Oh, right.

Everybody, welcome to your own book show on this Tuesday, February 24th.

I hope everybody is having a fantastic week.

Tomorrow, I leave for London.

So I'm going to fly tomorrow afternoon.

I think I'm going to be able to squeeze in the show before I head to the airport.

We will see.

Hopefully, TSA Pre still exists.

Supposedly, it's still up there, up and running.

Department of Homeland Security threatened to do away with TSA Pre.

I think over the weekend, but I think they backed out of that,

realizing the chaos that I would create for me, anyway.

So if TSA Pre's around, then I have enough time to do a show tomorrow.

So they will be a show tomorrow.

And then I'm off to London, which reminds me.

If you're in London, you haven't signed up to my seminar I'm doing on capitalism.

You should.

It's going to be a lot of fun.

It's a small group.

A lot of back and forth, a lot of questions answered.

Yeah.

It'll be an intimate group.

You can ask me about anything.

But we can talk about capitalism, finance, anything you guys want.

And I'll obviously have material prepared, but very much I'll let you guys guide it.

I'm looking for a handful more people to join us.

So it's definitely happening.

Three or four more people would be fantastic.

So if you know where else it got to dinner afterwards as well.

So it's time to socialize and just hang out.

So hopefully, hopefully you guys are interested and we'll sign up.

You can check it out on uronbookshow.com, uronbookshow.com, and uronbookshow.com.

And then just scroll down to events and then February 28th, which is Saturday, February 28th in London.

And there's a link there to buying it to getting the ticket.

And that'll take you to Eventbrite and there you'll have all the detailed information.

It's basically going to be at a hotel in Leicester Square, the W Hotel.

So right in the middle of town, easy to get to, all the subway stops are there.

And underground, underground subway.

And yeah, join us.

It's going to be, I think it's going to be a lot of fun.

All right, tonight, tonight, big deal.

Tonight is the most boring speech of the year.

Every year we get a boring speech by the sitting president.

It's usually long, boring, and pretty stupid.

But this year, this year promises to be the most boring,

stupidest, the longest state of the union address in American history.

Donald Trump is going to be up on stage, giving the state of the union address to join,

to a joint meeting of Congress, although some Democrats have said they won't be attending.

And the Supreme Court will be there right in the front row.

The Supreme Court will, right there, as Donald Trump gets read and angry and mad at the Supreme Court.

He'll probably point at them and yell at them and wag his finger at them.

That should be fun.

Just for that, it might be worth watching.

But it is, he has said, Donald Trump today said that the speech will be long.

Last year was 90 minutes.

I think it was the longest ever.

It was 90 minutes.

So if he's saying it's long, does that mean it's longer than the 90 minutes that he already stated?

God, it's going to be long.

It's going to be a litany of how amazing he is.

We all know that already.

How amazing the economy is.

We all know that already.

And all the things that the government is going to do for you.

All the ways it's going to do price controls and regulate and tariff and tax.

Well, tax is not for you.

But anyway, all the ways in which it's going to make things better for you.

In particular, the issue of affordability is going to come up.

So any kind of price caps on interest you pay on credit cards, caps on mortgages, caps on everything.

You will get the full array of socialist policies to try to get prices down.

Rent control on steroids.

That'll be that'll be the message tonight.

We are here from the government and we're here to help.

And because it's me, Donald Trump, it'll work this time.

And you guys might buy it.

I don't know.

Am I going to watch it?

Am I going to watch it?

No way in hell.

Am I watching this live?

I'll probably watch it after the fact.

I'll probably watch it tomorrow morning at one and a half times speed or two times speed or something like that.

There's no way I'm going to waste an hour and a half of my life or two hours of my life.

Who knows how long this will be on watching this.

I'll either read it tomorrow or if I want to get some of the fun nuance of Donald Trump yelling at people, I'll watch it.

But I'll watch it at two times speed.

You know, watching Donald Trump at one time speed is annoying enough.

Watching Donald Trump is annoying enough.

So yeah, you want to get it over as fast as you can.

So I will watch it or read it.

And so I will have comments tomorrow on the state of the union.

But yes, be ready to be told how wonderful things are and how wonderful he is

and how wonderful he's going to make it all through government interference and government intervention.

This is not going to be a speech about more liberty, more freedom, more markets.

That is the solution of things.

If you watch it live, what's the term God help you or something like that?

Whatever the spirit be with you.

Something like that because I don't know how you can how you can tolerate it.

But some of you love Donald Trump.

So you guys think he's fantastic.

I am not taking one for the YBS team.

I don't know who is.

Is somebody taking for the YBS team?

No, I'll take it at one and a half times speed or two times speed.

Two times speed sounds right.

The content is repetitive and meaningless anyway.

All right.

So yesterday, yesterday, the stock market took a real beating.

I mean, the NASDAQ was down.

S-O-P500 is down.

Bank stocks are down like 4%.

I mean, yeah, the market just got crushed in some stocks.

It took a real beating like IBM was down 13%.

That was the biggest drop IBM has had in one day since 2000.

And a bunch of other stocks, KKR, private equity, went down a lot and just all over the map.

And initially when I looked at the market, I said, okay, this is tariff uncertainty.

But it didn't make any sense.

Why would IBM go down?

It's not clear how tariffs affect IBM.

And KKR wouldn't be affected by tariffs.

What's going on here?

So turns out that it wasn't just tariffs.

I'm sure tariffs had an intensifying impact on the stock market.

But there was more that was going on.

And here's the story.

And it's somewhat a bizarre story.

But the reality is that yesterday, a company or blogger, a blogger that blogs under Citrini research,

published a piece called the 2028 Global Intelligence Crisis.

This is a piece kind of describing how AI is going to change the world and not in from an economic financial perspective, not for the better.

And ultimately going to bleed to a massive crash and collapse in the market.

I guess it's two bloggers wrote this.

I don't know much about Citrini research, but they're the ones who wrote this and distributed yesterday.

And they say in the thing, let me find the exact, yeah, where is this?

Yeah, this is what they say, right? Right at the moment.

What follows is a scenario, not a prediction.

So now I'm even presenting this as this is what we predict will happen.

This is a possibility.

And basically the prediction or the scenario goes like this.

Over the next few months, AI is rapidly going to start replacing white color, white color jobs.

It'll start with software, but it'll also going to financial services, banking, you know, AI agents will start replacing those jobs.

People start getting laid off.

Now, the initial consequence of this will be profits will go up dramatically according to this scenario.

Profits will go up dramatically because cost has just been cut significantly, which will allow companies to invest more in AI and getting rid of more white color jobs.

And over the next two years, employment and white color jobs is going to plummet.

That is going to lead unemployment to go from what it is right now at 4.7% to over 10%.

And the thing is that it's not just any unemployment.

These are going to be high owning jobs.

These are going to be white color, high owning people who are losing their jobs.

Tyler Reddick here from 2311 Racing.

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The consequence of all these people losing their jobs is they stop consuming.

Now, we are told the consumption is 70% of the economy.

So that will lead to a collapse in demand.

And therefore, a lot of companies are going to really, really struggle.

But this is just the self-reinforcing as in order to cut costs, they will introduce AI and lay off more people.

And you get this constant process of people losing jobs.

And no jobs really being created.

And over time, this happens in Wall Street.

And in any kind of job where you can see that is easily replaceable by AI.

It probably happens to some doctors.

It happens to bankers.

You can make all-lone decisions by algorithm.

It happens to, why do we need real estate agents?

So most everything that a real estate agent could be done could be automated.

And all of this over time goes away, destroys jobs, employment collapses, and demand collapses.

An economy really, really struggles at the same time as companies become more and more profitable because the cost structure is smaller.

The cost of producing is lower.

And all of this is leading to basically depression, like you get what they call ghost GDP.

GDP is going up.

But human beings are not benefiting from it, except for the people who own the AI companies.

And as they say in one of these passages, machines don't consume anything.

So you have record profit, record setting corporate profits that are going back into AI.

But nobody's being employed and ultimately the economy is slowly collapsing as nobody can afford to buy anything.

There's a sense in which this leads to some kind of financial crisis.

You could imagine certain financial institutions collapsing, really hit hard.

For example, they say, American Express is hit hard.

They have the headwinds from white collar workforce reductions, getting its customer base, and agents running around into change.

So basically the business model is gone.

People can transfer money directly.

The agents can do all of it.

American Express took a beating yesterday because it's named in the article.

And indeed, all the, like Mastercard is named in the article.

All these companies that were named in the article are the ones that take the biggest hit.

I mean, think about it.

If our agents out there buying and selling stuff for us, and the agents have direct access to our bank accounts,

and direct access to the bank account of the person who are buying stuff from,

then you can see why Mastercard is history or financial intermediation is gone.

Facilitating facility in exchange through credit cards is useless.

I mean, think about the idea that I have an agent, a Iran purchasing agent,

and I send that Iran purchasing agent to go buy stuff.

They don't have to go to Amazon.

They can go to the people providing the stuff to Amazon.

And they can go buy it directly.

Well, I won't do that because I don't have the time to go sift through all the different stores and look at all the different stores and all the different products.

I know it was the best price.

But if I have an AI agent, the AI agent can go and search in Amazon,

who is an intermediary, really, between people who manufacture goods and me,

I can go directly to the manufacturer.

I don't need an Amazon.

And you can see how jobs just get destroyed, left and right, jobs are disappearing.

And we might have stable coins or some kind of crypto,

and everything is settled that way, so you don't need credit cards, you don't need banks.

This is why banks went down.

I think the bank index, the regional banking index went down 4% yesterday.

No news about banking, no really news even about interest rates.

Well, I mean, the long-term rate went down, so the yield curve is less steep,

which means banks make less money.

So there was some reason for banks to go down a little bit.

And here they went down 4%, I mean, no sense.

Because these guys came up with a scenario, not even a prediction,

where banking becomes irrelevant.

Again, jobs collapse in its official circle.

And basically, in the past and in the present, there is an intelligence premium.

We pay people for their intelligence, for their brain.

But AI is replacing those brains.

It's replacing their intelligence.

So what are we paying people for?

What are we paying them for?

Now, it's true that you might find more other types of jobs that computers can't do yet,

robots can't do yet.

But those are mainly manual labor.

And they pay a lot less.

So you're taking somebody who's making $200,000 as a programmer.

And now you're paying the $50,000.

That is not good.

Not good.

Right?

And maybe there's a lot of ubers, although I don't know why they would be ubers.

They use ubers as an example.

But I think ubers is one of the first things that disappear,

because you've got Waymo and you've got Tesla's and you've got self-driving cars.

Why would we even have uber?

Of course, the more people go into uber because they don't have a job,

the lower the price.

The higher the supply, the lower the price and the ubers.

And they can't make any money.

You see, wages are suppressed, jobs don't exist,

and it's a constant chain.

Anyway, this is a long article, long article explaining all this in detail.

It's written from the perspective of I'm sitting in June 20,

28 looking backwards at what's happened over the last two and a half years,

how we got to where we got.

And this caused the stock market to go down a huge amount yesterday,

particularly the stocks that I mentioned.

So first, in terms of the stock market or first,

it's nothing new in this piece.

It's nothing new.

It feeds on fears that we're spreading around the markets for months now,

and particularly in the last few weeks,

about where the companies,

how susceptible companies are to be disrupted by AI.

So there's nothing new in the piece.

Why did AI such a profound effect?

I think this is a meme stock phenomenon.

This is people not to pose.

This is people getting really excited about this,

really, really panicking about this,

and running to implement it,

and not being professionals.

They don't know exactly how they implement it.

So they just take the examples they give in the article,

which is a complete scenario, not even a prediction, right?

So they're just making up the companies,

these are the things that came to their mind as maybe possibilities.

And those companies get hit the hardest.

It's just pretty pathetic, really.

But this is kind of a meme stock phenomenon,

not buying, but selling, selling like crazy.

Those stocks that these guys are saying

might be significantly affected by this complete collapse

of the US economy as a result of AI.

Tyler Reddick here from 2311 Racing.

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Now, the reality is, as I said,

anxiety about the future of AI is out there.

Everybody's trying to figure out what this means.

Was it last week or the CEO of Anthropic

or something said that Claude is going to replace programmers

and a lot of the software company stocks went down.

They then recovered because it,

not so fast, guys.

This isn't going to happen so fast.

And it's not so much that they're going to replace programmers,

at least not in the early stages.

It's going to be that these programmers are going to be come

so much more productive because they're going to be using AI.

And generally,

while the general trend long term of these jobs being replaced

is true, it will happen.

And that's a good thing, not a bad thing.

We'll get to that in a minute.

It doesn't happen quickly.

And nobody knows how it's going to happen.

The one thing we can be certain about what's happening with AI

and how AI will change business and change economy

is that we don't know how it's going to do either one of those.

A lot of different scenarios are going to play out.

A lot of different models will be tried.

And some jobs will get lost, different paces.

But generally,

job losses will happen slower than one would expect.

There's a stickiness to jobs.

I mean, for how many years have we heard,

at least 30, since really the beginning of the internet,

that real estate agents are history.

Right? Because software will match buyers and sellers.

You'll go to Zillow.

I mean, you can go to Zillow.

You don't need a realtor to check their proprietary database

to provide the databases online.

And yet, not only are the real estate agents exist,

they still are charging those ridiculous unbelievable fees

and people are paying them.

We don't need to.

The contracts are not that complicated.

You could find a house on Zillow yourself.

You don't have to go through an agent.

Now, there are all kind of institutional legal barriers

that make it very difficult to do these things without an agent

and some states have laws protecting them.

But that's all true, even with AI.

In other words, job losses for good and for bad reasons

will happen much slower than what people think.

Much slower and in very unpredictable ways.

When it comes to software, for example,

the reality is that

there's no end to the number of software jobs that are possible.

Software generally, I think somebody wrote,

and I think it's probably true.

Software generally sucks.

You're constantly tinkering with it.

You're constantly changing it.

You're constantly improving it.

I mean, there's so much work to be done to make software really good.

And it's like it's an endless process of making it really good

and improving it.

And yes, it's absolutely true that AI will make that

so much more efficient and faster.

But somebody is still going to have to guide the process.

And this is why I think AI does more to increase the productivity,

enhance the productivity of the programmers than it does

in completely replacing them.

Somebody has to figure out that the software is not good.

The software is not good by a human standard,

a standard AI.

AI doesn't know what good and what not good is.

You need a human being to use the software to be able to tell you.

Yeah, this sucks.

Think about all the legacy software that could be rewritten

really fast with AI to a place.

I don't know.

You remember, you know, how many programs,

particularly financial services and other places who written

Kobo or Fortran?

Nobody knows how to program Kobo or Fortran anymore.

So yes, if you're Fortran and Kobo programmer,

AI is going to do your job.

But somebody has to be able to guide AI

and figure out if they're doing a good job or not.

And somebody is going to have to figure out

how to replace all that software with something modern and better

and how to transition.

And there's a huge number of jobs.

I programmed in basic.

I used to know basic really, really well.

I programmed in Fortran, Basic, and Debase.

So all of this is blown out of proportion, exaggerated.

And it's also just bad macroeconomics.

Well, microeconomics.

People lose their jobs.

What are they going to do?

Just sit on their hands.

There's no more work.

But there's a lot of capital because companies are making a lot of money.

It's not clear, by the way, how companies are making a lot of money?

Because it's true that costs are going down.

But who the hell is buying the products?

If nobody has a job.

So the whole thing is a little contradictory.

But what are they going to do?

What are these white collar smart people going to do?

Once they realize, once these jobs are gone,

well, they're going to start thinking about doing things that add value.

They're going to start thinking about doing things that are fun and interesting.

They're going to be able to escape the drudgery of so many of the jobs that we have out there.

I mean, so much about life today.

The life of people out there is managing databases.

But you know, people will start being able to do what they're passionate about.

Whether that is, you know, somebody still has to make judgments.

There's still a whole lot of work to be done in relationships.

In psychology, in creativity, solving real problems.

And providing a human touch will have a lot more entertainers.

There'll be a lot more money to be made in human to human stuff.

That AI can do.

I mean, look at how many people today make a living on YouTube and a TikTok and a place like that.

There was impossible 20 years ago, 30 years ago.

Influencer was not a career that existed.

I mean, can we even imagine what careers are going to come in the future?

Now, it's not clear that I have more leisure time because it's not clear that they want it,

but it's not clear that the jobs are paying off according to the naysayers.

But people will be in a position to actually think outside the box and consider new options and different professions

and different entrepreneurship with skyrocket.

People will start businesses and new products and new services and new things will appear that I can't imagine

because that's just not me, right?

It's going to need entrepreneurs.

It's going to need the capitalists.

It's going to need the process as we know it.

So, yes, it's...

We're in for a people.

And the one thing that worries me is government intervening and stepping in and thinking that they're needed in order to solve problems in order to...

You know, soften the landing in order to allocate capital to the right use.

And there are a lot of economists I see writing, yes, they'll be...

You know, the AI companies will make a lot of money and then we'll tax them and use that taxes to build big infrastructure projects.

Oh my God, no, please, no.

Save us from infrastructure projects.

Save us from...

The Roosevelt of the world.

FDRs.

We could really use fewer FDRs, not more FDRs.

What we need are more entrepreneurs.

What we need is for that capital.

Yeah, to seek out profit opportunities.

Because, I mean, in some of these things, the profit opportunities in AI will be driven to zero.

That's the other thing they don't take in account.

That a lot of these companies are going to be competitive.

They won't be able to charge a lot.

So what happens to prices in a world like this?

Prices go down.

It's not clear profits go up.

Prices go down.

Everything becomes more affordable.

Tyler Reddick here from 2311 Racing.

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She can live better on making less.

So many different things are going on here.

Now it's true.

And you guys should be excited about this.

We are probably living through a...

In a sense, an industrial revolution.

A business revolution.

A revolution about how business is going to be done.

How the market is going to be structured.

How it all functions.

It's exciting because it is...

It really is a unique moment in history.

It's...

And it's going to be interesting.

I'm fascinated by how it all plays out.

I don't think we're going to see a massive collapse because of AI.

In two years, it might be a collapse.

It might be a financial crisis for other reasons.

Caused by all kinds of other stuff.

But not AI.

So...

It's...

It's exciting.

And I'm curious about how it plays out.

I don't know how it's going to play out.

I can't imagine unless the politicians intervene and they could.

I can't imagine a scenario where it plays out badly.

But politicians might intervene and it might play out badly.

And of course, when it plays out badly, who will be blamed?

Markets.

AI.

Technology.

Who will be blamed?

You said politicians might not be able to keep up.

But the things that they might do might be so destructive that they don't have to keep up.

One of the things they might do is...

Is so distorted the markets that everything slows down to their pace.

Or, for example, the other side.

We need a UBI.

We need a universal basic income because everybody's losing their jobs.

So they'll raise taxes dramatically on internet companies, on technology companies,

and try to redistribute all that wealth to the rest of the population.

And all the distorted effects that has.

You get a self-fulfilling prophecy in that case.

So I don't know.

But that's why I think this is super exciting.

And instead of being excited...

Now, again, exciting doesn't mean go out and buy tech stocks because...

You don't know who the win is going to be.

You don't know who the loser is going to be.

I don't.

I'm just excited to be alive while this happens.

Now, if I was investing actively, yeah, I would look carefully into...

Okay, where do I think AI will impact first?

And who's going to benefit?

And who might suffer? Who might go out of business?

Who might lose their jobs?

Where can I make money?

But if you've used AI a little bit, I have a little bit.

It's unbelievably exciting.

It makes me more productive and I use it just a teeny bit.

And I can only imagine how it's going to get better and how other people are using it

and more productive endeavors.

And how it's going to make their lives much, much better.

So yeah, I think the main thing...

The main view of the world right now should be excitement and curiosity.

Excitement and curiosity.

All right, so it's kind of tragic that the Doomsday stories are dominating.

That's what people are focused on.

All right, think about...

I think about liberating millions of some of the best minds we have

from work that is relatively boring to think about exciting new possibility for the human race.

That's amazing.

That's amazing.

All right, today is the fourth anniversary of the invasion of Ukraine by Russia.

If you remember four years ago in 2022,

after weeks of speculation, after weeks of Biden urging Putin and Macron flying to Moscow

and trying to urge Putin not to do anything, Putin indeed invaded.

He pushed through from the Donbass, tried to push there, but really invaded through every side of every border that Ukraine had,

including the Northern border from Belarus.

Tyler Reddick here from 2311 Racing, another checkered flag for the books.

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The hope was, the Russian hope was, that they could take care of in days,

subdue the government, replace it with the friendly Russian government and the world be over in days.

Not only did we have columns coming in from the northward, columns coming in from the northeast,

and then you had Special Forces landing in the Kiev airport.

Whoops.

I didn't mean to do that.

No, no.

The suspension and 최� biomert wouldn't solve it.