In today’s issue:

  • Puppetry of the P… oliticians
  • Inflation and the real UK government to come
  • Weekend at Bernie’s

Editor’s note: Today, we bring you a guest piece by Sam Volkering from his publication AI Collision which was first published on Tuesday 2 July.

You can hear from Sam more often at AI Collision and learn more about the latest developments in AI by simply clicking here to sign up for free on Substack.

Also, a quick reminder that John Butler and Nick Hubble will be holding a special post-election Q&A tomorrow. Please send us your questions in advance to [email protected].

 

Welcome to AI Collision 💥,

AI Collision 💥 Two puppets in the highest of power

Did you see the car crash?

The car crash that was the US presidential debate last week?

Wow.

I mean, we all knew it was going to be awful, and it certainly lived up to pre-debate expectations.

We aren’t picking sides here, but let’s be honest, there was a clear winner. Even though it was full of child-like tomfoolery and name calling, it was so bad for President Biden that afterwards even CNN panellists were calling for him to be removed – not just from the candidacy, but immediately from the presidency!

However…

You can see the issues Biden has.

I can see them.

The world can see them.

So why only now are the people around him and his party starting to see it? Well we’d argue that perhaps Biden was never in control of anything let alone his own bodily function. His people saw it all right from the start.

That perhaps the whole time he’s been at the mercy of others behind the scenes (even if he didn’t realise it), carefully putting piece into play to very purposefully let this all happen “naturally”.

What should be equally as concerning to people of the UK is that on this side of the Atlantic, right here on British soil I believe the exact same thing is playing out.

I see a person in great position of power, or at least very soon to be the most powerful person in the country – the most powerful they’ll ever be – as just the puppet show for the masterminds behind the scenes.

To understand who those real powerbrokers might be, I think we can see it in the roots of artificial intelligence strategy and the shape that’s going to take in the next year as powers on both sides of the Atlantic change.

Let’s start in the US.

On 30 October 2023, President Biden issued an Executive Order specifically relating to AI.

The Executive Order (which you can read in full here) was solely focused on “Safe, Secure, and Trustworthy Artificial Intelligence.”

And its goal?

“With this Executive Order, the President directs the most sweeping actions ever taken to protect Americans from the potential risks of AI systems.”

Protect Americans.

Sounds like the USA PATRIOT Act…

Draw your own conclusions there. The point is the positioning of AI from the Biden administration, straight off the bat, is that AI is to be feared, and that only the government will protect ordinary citizens.

I suspect in the months ahead that rhetoric will get louder from that particular camp. And I say that because of Joe’s apparent fast-track way out of office, and the potential suitors lining up for his spot.

You see according to ABC just days after the AI Executive Order dropped,

Former President Barack Obama helped draft the new White House artificial intelligence policy that President Joe Biden rolled out earlier this week, according to aides familiar with the situation.

The report goes on to say,

Ahead of its debut, Obama — who has long had interest in AI — assisted the Biden team with the plan, an Obama aide told ABC News. Obama held meetings with AI industry leaders, where he pressed them and made them aware of not just the national security concerns AI poses, but also other issues with AI such as bias and discrimination, the aide said.

Don’t you just get the slightest feeling that the current Obama Biden administration isn’t all it appears to be on face value?

That maybe he might not be able to serve three terms, but maybe another Obama could fill that void?

Then we turn our eye domestically to the UK and what could perhaps be the biggest landslide victory in British political history.

We’ve already commented on the manifestos of the competing parties and their distinct lack of anything much to do with AI (and in one case nothing at all).

But as one of our readers very correctly pointed out, the manifestos are nothing but mere marketing, and rarely (well, never really) actually held to account.

So what do we know about Labour and AI? Well not much.

But it’s fair to say who might have some input on the shaping and change-making that Labour might pursue when it comes to AI.

And I would suggest taking a look at the Tony Blair Institute site for a bit of an idea.

The institute’s Executive Leadership page specifically says:

We have led countries, businesses, NGOs, think-tanks and charities. We have advised presidents and assisted prime ministers. Working alongside our global team of expert changemakers, we are focused on transforming countries and changing lives.

Well I suspect that’s exactly what’s in play here. And I don’t think it’s any great stretch to think that while the toolmaker’s son is the face of Labour, behind the scenes it’s some of the old guard making the moves.

Some of the Blair Institute’s smash hits on AI so far include:

Now of course it’s forever impossible to tell just who the puppet masters may be behind any political campaign.

You constantly have forces pulling from all directions. Wealthy donors, ambitious MPs fighting from within, and of course the long established old guard that never really moved out of No. 10.

But Starmer is going into a win for the ages. Perhaps the biggest winning margin and the most votes that has ever been recorded in history.

Yet as The Telegraph explains,

Starmer’s personal satisfaction ratings are lower than any Opposition leader who made it to office.

You can’t tell me the wealthy Labour donors, the real powers that be, the old guard, aren’t acutely aware of this? And the real policy makers, the wannabe change makers never really left office?

Of course this idea is nothing new. I’m sure you’ve even thought it yourself once or twice before.

I have, we all have.

My colleague Nick Hubble has. He’s even collated proof on who the real leader of the UK is set to be by the end of this week.

You might not have come across Nick’s work before. I’ve featured him once or twice here at AI Collision before. He writes for Fortune & Freedom but is also the editor of The Fleet Street Letter.

I’ve known Nick for over a decade, and I think it’s only fair that you get a feeling for how he thinks, so that when you see what he’s got to say about the new leader of the UK, it’ll all make perfect sense.

How to pay for a war pandemic

This month’s issue of The Fleet Street Letter is causing quite a stir. It claims that someone other than Sir Keir Starmer, Rishi Sunak or Nigel Farage will be leading the country on 5 July. And boy do they have plans for you…

But if we’re right, it doesn’t just have implications for the future. It also means history will have to be rewritten. Especially our understanding of the 70s and 80s.

You probably have your own narrative of what happened during the inflationary spikes back then. And how they were brought back under control.

James Callaghan summed it up like this at the Labour party conference in Blackpool, 1976:

We used to think that you could spend your way out of a recession, and increase employ­ment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists, and that in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of infla­tion into the economy, followed by a higher level of unemployment as the next step. Higher inflation followed by higher unemployment. We have just escaped from the highest rate of inflation this country has known; we have not yet escaped from the consequences: high unemployment.

That is the history of the last 20 years. Each time we did this the twin evils of unemployment and inflation have hit hardest those least able to stand them. Not those with the strongest bargaining power, no, it has not hit those. It has hit the poor, the old and the sick.

We have strug­gled, as a Party, to try to maintain their stan­dards, and indeed to improve them, against the strength of the free collective bargaining power that we have seen exerted as some people have tried to maintain their standards against this economic policy.

Historians and economists point to that speech as the turning point. It was the moment when even the left wing of the political class figured out that Keynesianism doesn’t work.

The country turned to the theories of free marketeers FA Hayek and Milton Friedman instead.

Friedman was renowned for championing free markets with one major exception: the market in money itself. And so independent central banks were entrusted to set interest rates and the money supply. Just as Keynes had believed governments could be trusted to pursue sensible fiscal policy before that. Why central bankers would do a better job than politicians remained a mystery.

Nevertheless, the world embraced monetarism and embarked on cutting inflation by monetary means.

Interest rates went so high they’d cause a heart attack today. And inflation plunged. The price we paid for price stability was unemployment, bankruptcies and recessions. But only for a while.

Thatcher, Reagan, Volcker, Greenspan and so many other ideological and economic heroes were forged during that time. They set us up for the prosperity of the 90s and early 2000s.

But it was all a lie. And not just because the financial crisis of 2008 destroyed the reputation of Monetarism.

Keeping interest rates too low for too long only created an artificial stability.  One that hid a rather large housing bubble. And when it popped, the whole financial system threatened to go with it.

These days we understand that Keynesianism and Monetarism are two sides of the same coin known as interventionism. And whether it’s the politicians making a mess of government spending, or central bankers making a mess of the money supply and interest rates, it always ends in disaster.

But that’s beside the point. Because, even by its own standards, that narrative about the 80s and 90s is deeply flawed. The truth is something completely different.

As this month’s issue of The Fleet Street Letter claims, the inflation of the 70s was really a deliberate policy.

As was the inflation of 2021-2023.

It’s how we deal with too much government debt.

Whether it’s a Napoleonic war debt, a world war debt, or a pandemic debt doesn’t matter. Whenever government debt-to-GDP levels get too high, we inflate them away. And then pretend the inflation was some sort of surprise that nobody saw coming, could explain at the time, or prevent.

Whoopsies.

This obviously has implications for our future. Our debt-to-GDP ratio is still dangerously high. And the impact of more inflation on financial markets would be devastating.

The meltdowns of 2022 were some of the worst in financial market history. To predict repeated inflationary surprises is to predict chaos in stock and bond markets for years to come.

But it also means our ideological and theoretical standoff between the Keynesians and the monetarists was just a cover story for what was really going on in the 1970s and 1980s.

What really happened?

You’ll have to read the monthly issue to find out. We’ve decided to release it in the public interest.

Apparently there’s an election on. So everyone needs to know who really governs the country. And what they plan to do, again.

If you read the report, it will radically alter how you view our government. Both in the future and our history.

Inflation is not a disease, it’s a cure

Ludwig von Mises pointed all this out in 1958:

‘The most important thing to remember is that inflation is not an act of God; inflation is not a catastrophe of the elements or a disease that comes like the plague. Inflation is a policy — a deliberate policy of people who resort to inflation because they consider it to be a lesser evil than unemployment. But the fact is that, in the not very long run, inflation does not cure unemployment.

‘Inflation is a policy. And a policy can be changed. Therefore, there is no reason to give in to inflation. If one regards inflation as an evil, then one has to stop inflating. One has to balance the budget of the government.’

If only Callaghan and the Labour Party had attended that lecture. If only investors had read the transcript in 2021. They would’ve known what was really going on. And what was coming next.

One thing is for sure. The nation’s true leaders are well aware they can use inflation to cut the national debt. Because they’re doing just that.

The good news is, we’ve turned von Mises’ theories into practical investment advice for you. But first, you need to discover who is behind the inflationary policy the UK’s real government is pursuing.

Then you can look back at what happened in the 1970s and discover the truth about what your government did to you.

Until next time,

Nick Hubble
Editor, Fortune & Freedom

Boomers & Busters 💰

AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week). [Figures correct at time of writing.]

Boom 📈

  • Tesla (NASDAQ:TSLA) up 16%
  • ai (NYSE:BBAI up 14%
  • Lantern Pharma (NASDAQ:LTRN) up 14%

Bust 📉

  • Aerovironment (NASDAQ:AVAV) down 8%
  • Gorilla Technology Group (NASDAQ:GRRR) down 10%
  • Vicarious Surgical (NASDAQ:RBOT) down 29%

From the hive mind 🧠

  • Watching Biden’s performance last week could only remind us of a movie from when I was a kid. This isn’t very AI related, but it’s funny, and a funny movie, and upon consideration an utterly bonkers premise for a movie! Here’s the YouTube trailer to make it nice and easy to see what I mean.
  • Intelligence expanded a millionfold. OK, humans are smart. Machines will help us to arguably learn more and be smarter again. But a millionfold? Really. What does that look like? Transcending consciousness, leaving our physical state for a higher plane, existing in superposition? Sometimes I think guys like Kurzweil are just playing with us.
  • Remember that meme I sent in this section last Thursday about EU innovation and US innovation? Check it out here if you missed it. Well, we all know I’ve got a bit of a view on how hands on or off regulators should be. But the EU keep playing to form. They really make it hard not to despise them.

Artificial Polltelligence 🗳️ The Results

Two results to share today!

Firstly after wondering if my Substacks were being suppressed due to the coverage we are giving the UK elections, I asked you if I was being paranoid, or it indeed was weird that the subscriber numbers hit the proverbial brick wall.

You agreed with my initial take on it…

Ok, it is weird.

Well, was weird. The subscribers have started pouring in again. But maybe not as normal still. I have noted a few of our newest subscribers have come from one of our recommended Substacks, The Price of Everything, by Tim Price.

Check that out if you’ve not already!

So that’s good to see at least. But we’ll keep a close eye on where else and what else happens as we continue our UK election AI coverage.

The other poll we had was around the state of the union for AI in a Labour-led government in the UK.

Here’s what you said…

Ugh. Not ideal. It does tend to indicate the view is that Labour won’t be too focused on the real growth opportunities that are right there for the taking in UK.

Although, if as we postulated, perhaps Starmer isn’t the leader that’s truly running the show, I wonder if your views would change… or if the “Worse” answer would be even higher 🤔 ?

Weirdest AI image of the day

Outlook not so good – r/Weirddallee

ChatGPT’s random quote of the day

“If I had eight hours to chop down a tree, I’d spend six hours sharpening my ax.” — Abraham Lincoln

 

Thanks for reading, see you next time!

Sam Volkering
Editor-in-Chief, AI Collision

PS If you enjoyed this article, remember that you can sign up for free to AI Collision and you’ll receive a double dose each week on Tuesdays and Thursdays straight to your inbox. Just click here to sign up for free on Substack.