The Monetary Matters Network — searchable YouTube transcripts & AI Q&A

The Deflationary Power of AI: Are Software Monopolies Doomed? | David Orr

David Orr argues that AI compute is heading toward oversupply, which will deflate software monopolies and make compute prices collapse. He points to hyperscalers like Google, Amazon, and Microsoft as relatively safe due to locked-in contracts and high returns on capital, but warns that most software companies face existential threats from commoditized AI. He also predicts that white-collar jobs will largely disappear, shifting labor toward trades and physical-world pursuits.

Structural Flows Will Support Stocks Until the U.S. Treasury Crisis | Cem Karsan & Noel Smith

The speakers argue that structural flows from options and structured products will keep supporting the stock market until a major catalyst triggers a crisis, likely leading to QE. They recommend selling volatility and using options structures like put calendars to profit from an expected decline before June next year, while noting the timing is uncertain.

Inside a Short Seller’s Private Credit Investigation | Laks Ganipathi

Private credit funds are using retail investors' money as exit liquidity, and the asset class is facing a structural crisis as redemptions are gated and defaults rise, argues short seller Laks Ganipathi. He points to the example of BlackRock's HPS fund, which gated redemptions after receiving $1.2 billion in requests, and warns that the true default rate is likely higher than reported because of extend-and-pretend practices. He also highlights that private credit risks are spreading to insurance and reinsurance companies, creating a systemic threat.

Midterm Results Cement an Inflationary Policy Regime | Russell Clark

Russell Clark argues that the midterm results reinforce a regime of higher government spending, stronger inflation, and rising wages, making fiscal consolidation unlikely and keeping bond yields elevated. He sees the AI buildout as a poor short because demand remains strong and equity markets still fund it, though he warns that rising capital costs could pressure homebuilders and franchise restaurants. He also suggests that Japan is an attractive market due to its political acceptance of asset inflation and its renewed role in semiconductor investment.

Michael Howell: Bonds Are Worth Owning Again

The global liquidity cycle has peaked and is now declining, which will likely lead to a turbulent period for markets, argues Michael Howell. He recommends shifting towards longer-duration government bonds and away from credit and equities, while noting that Bitcoin may retest $70,000 as a barometer of liquidity. A potential bottom in liquidity could occur by late 2027, but the exact timing is uncertain.