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James Rickards

James Rickards Biography

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“To the extent that AI mimics human intelligence without being sentient we have to weigh the output against the shortcomings. AI can help to cure certain diseases, but it will also replicate highly dysfunctional behaviors. Developers say they can control for these adverse behaviors. Yet behavioral psychologists themselves don't fully understand them.”

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Book:MoneyGPT: AI and the Threat to the Global Economy
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“... Why do bank runs commence? The answer is psychology period some customers or counterparties come to believe a bank will not repay them so they pull their money out or close transactions as quickly as possible. They are not reassured by ... Press releases or positive comments by management. Word spreads, the withdrawals accelerate, and within days, sometimes hours, the bank closes its doors. From there it's an open issue whether the lost confidence spreads to other banks, in a process called contagion. No amount of capital or comment can stop a bank panic; it has a life of its own.”

PsychologyFinancePanicBanking SystemBanksFinancial RiskFinance Capital
Book:MoneyGPT: AI and the Threat to the Global Economy
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“... why do bank runs commence? The answer is psychology. Some customers or counterparties come to believe a bank will not repay them so they pull their money out or close transactions as quickly as possible. They are not reassured by ... press releases or positive comments by management. Word spreads, the withdrawals accelerate, and within days, sometimes hours, the bank closes its doors. From there it's an open issue whether the lost confidence spreads to other banks, in a process called contagion. No amount of capital or comment can stop a bank panic; it has a life of its own.”

PsychologyFinancePanicBanking SystemBanksFinancial RiskFinance Capital
Book:MoneyGPT: AI and the Threat to the Global Economy
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“If insolvency is not transparent or well understood, and if illiquidity is backstopped by the Federal Reserve, then why do bank runs commence? The answer is psychology. Some customers or counterparties come to believe a bank will not repay them so they pull their money out or close transactions as quickly as possible. They are not reassured by ... press releases or positive comments by management. Word spreads, the withdrawals accelerate, and within days, sometimes hours, the bank closes its doors. From there it's an open issue whether the lost confidence spreads to other banks, in a process called contagion. No amount of capital or comment can stop a bank panic; it has a life of its own. ... Enter AI. The next bank run may be triggered not by human panic but by AI imitating human panic. An AI bank analysis program with deeply layered neural networks and machine learning capability (perhaps complimented by a GPT capacity to speak with human analysts) Could read millions of pages of financial data on thousands of individual banks, far more than any team of human analysts could review. It's training set of materials provides familiarity with the dynamics of bank runs, basically an emerging property of a complex dynamic system, along with historical examples, worst case scenarios, and defensive moves. Events like the gold corner of 1869, the panic of 1907, the Great Depression of the 1930s, and the S&L crisis of the 1980s would all seem as fresh as today's news. This system would reach the same conclusion as a human analyst — move first, get your money out fast, don't be the last in line. The true danger is not that the machine thinks like a human — it's supposed to. The danger is that it can act faster and communicate with other machines.”

PsychologyFinanceAiPanicMachine LearningBanking SystemFinancial RiskInformation ScienceSystems Analysis
Book:MoneyGPT: AI and the Threat to the Global Economy
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“A regulator's greatest fear is the sequential collapse of hedge funds, banks, and brokerages. That process is hard to spot and even harder to stop. ... There are two sides to every trade. In a crash there can be just as many winners as losers. The problem arises when the losers go out of business. At that point the winners can't collect so they become losers too. It's as if you were a big winner at roulette and went to the cashier to collect your winnings only to find the cashier window closed and the casino had just filed for bankruptcy. All you have left is a pocketful of worthless chips. At that point, even the market winners can fall into financial distress. Because of leverage, total losses can exceed the size of the market itself. It's like a minefield. Banks running from panic start stepping on mines.”

EconomicsAiFinancial CrisisMachine LearningBanking SystemFinancial LiteracyFinancial EducationFinancial RiskEconomic CollapseFinancial Loss
Book:MoneyGPT: AI and the Threat to the Global Economy
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“While there's nothing new about financial panics, the role of AI/GPT is new and makes matters exponentially worse. That's not a criticism of AI which works as intended. It's a criticism of humans who don't understand the tool, over-rely on it, and allow it far too much autonomy in the trading process.”

EconomicsAiSociologyInformation TechnologyFinancial CrisisMachine LearningBanking SystemFinancial LiteracyFinancial EducationFinancial Risk
Book:MoneyGPT: AI and the Threat to the Global Economy
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“GPT surpasses all ... when it comes to conversation, research, and writing. ... creating an algo[rithm] that sells stocks based on a large training set of materials, correlations to past crises, and commonsense heuristics aimed at not being the last one out of a burning barn is trivial. The danger ... is not in the single system but in the resonance of millions of similar systems doing the same thing at the same time. No science fiction is needed.”

EconomicsFinanceAiInformation TechnologyFinancial CrisisMachine LearningFinancial RiskFinancial StabilitySystems Theory
Book:MoneyGPT: AI and the Threat to the Global Economy
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“This ... he largest financial bailout in history ... was not just a bailout of SVB [Silicon Valley Bank]. It was a bailout of over fifty thousand SVB depositors with over $170 billion in deposits. It was a bailout of SVB's customers, it's employees, their suppliers, and the entire high-tech startup ecosystem in Silicon Valley and around the world.”

CapitalismFinanceBankingFederal ReserveFinancial CrisisBanking SystemFinancial RiskBailout
Book:MoneyGPT: AI and the Threat to the Global Economy
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“This ... the largest financial bailout in history ... was not just a bailout of SVB [Silicon Valley Bank]. It was a bailout of over fifty thousand SVB depositors with over $170 billion in deposits. It was a bailout of SVB's customers, it's employees, their suppliers, and the entire high-tech startup ecosystem in Silicon Valley and around the world.”

CapitalismFinanceBankingFederal ReserveFinancial CrisisBanking SystemFinancial RiskBailout
Book:MoneyGPT: AI and the Threat to the Global Economy
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“আসল বিষয় হচ্ছে কেন্দ্রীয় ব্যাংকগুলো যদি জনগণকে আশ্বস্ত করতে পারে যে, স্বর্ণের সাথে অর্থের কোনোরূপ সম্পর্ক নেই, তবে তারা যত খুশি টাকা ছাপতে পারবে।”

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Book:The New Case for Gold
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“The 1962 Cuban Missile Crisis came well before the current age of AI, yet computers were in use and technology played a critical role in the form of U-2 spy plane photos that showed Soviet missile installations in Cuba. Protocols and standard operating procedures were in place, ... Still, it was human judgment as displayed in Khrushchev's letter to Kennedy and Kennedy's decision to remove U.S. missiles from Turkey and Italy that defused the crisis. ... human judgment, not computers and processes, avoided nuclear war. It's instructive that the one case, albeit fictional, in which nuclear war resulted was [the movie] "Fail Safe," where a computer malfunction had the last word and attempts at human intervention by the president and the commander's wife failed due to strict adherence to protocols. ... Delegation of attack decisions to AI, however sophisticated, greatly increases the risk of nuclear war.”

HistoryAiMachine LearningMilitary HistoryNeural NetworksMachine IntelligenceNuclear ThreatNuclear PostureMilitary Psychology
Book:MoneyGPT: AI and the Threat to the Global Economy
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“Confabulation, or hallucination, is ubiquitous in AI/GPT output already. Efforts to correct this by self-learning algos and back propagation are unlikely to solve the problem because they add to the complexity of the system as a whole, which increases the likelihood of emergent ghosts. The difficulty is that duplicity is hard to detect unless you're a subject matter expert in the topic or you conduct your own research to test its accuracy. This begs the question — if you have to be a subject matter expert to spot the flaws in AI/GPT output, what good is the system in the first place?”

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Book:MoneyGPT: AI and the Threat to the Global Economy
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“... bias in training materials is inevitable and there are better ways to deal with adverse effects than to scrub them out of existence. Efforts to eliminate bias would simply create new kinds of bias and distort the validity of the original datasets. Bias can be unjust by some standards but serves a useful purpose. ... the way to deal with it is to use other systems developed by those not involved in the original code, assisted by subject matter experts who could spot damaging bias in AI output and mitigate it in a commonsense manner. The way to deal with bias is not to eliminate it (you can't) but to identify bias and take it into account. Again, education and accountability are better than censorship and new biases.”

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Book:MoneyGPT: AI and the Threat to the Global Economy
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“The Soviets had ... built an early warning radar system with computer linkages using a primitive kind of AI code-named Oko. On September 26, 1983, ... the system malfunctioned and reported 5 incoming ICBMs from the United States. Oko alarms sounded and the computer screen flashed "LAUNCH." Under the protocols, the "LAUNCH" display was not a warning but a computer-generated order to retaliate. Lieutenant Colonel Stanislov Petrov of the Soviet Air Defense Forces saw the computer order and had to choose immediately between treating the order as a computer malfunction or alerting to senior officers, who would likely commence a counterattack. Petrov was Oko's codeveloper and knew the system made mistakes. He also estimated that if the attack were real, the U.S. would use far more than 5 missiles. Petrov was right. The computer had misread the sun's reflection off nearby clouds as incoming missiles.”

AiMachine LearningMilitary HistoryMachine IntelligenceNuclear ThreatNuclear PostureMilitary Psychology
Book:MoneyGPT: AI and the Threat to the Global Economy
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“A gold standard is the ideal monetary system for those who create wealth through ingenuity, entrepreneurship, and hard work. Gold standards are disfavored by those who do not create wealth but instead seek to extract wealth from others through inflation, inside information, and market manipulation.”

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Book:The Death of Money: The Coming Collapse of the International Monetary System
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“The problem right now is that central banks have not normalized their balance sheet since 2009. They're trying, but it's not even close. If we had another crisis tomorrow, and you had to do QE4 and QE5, how could you do that when you're already at $4 trillion? They might have to turn to the IMF or SDR or to Gold. Then, if you go back to the gold standard, you have to get the price right. People say there's not enough gold to support a gold standard. That's nonsense. There's always enough gold, it's just a question of price.”

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Author:James Rickards
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“What does reflect reality very well is complexity theory, which comes from physics. I'm the one pioneering the idea of bringing it to capital markets. When you look at capital markets through the lens of complexity theory, you ask "what's the scale of the system?" Scale is a fancy word for size. What measures are you using? If you look at total debt, the concentration of assets in the five largest banks, what percentage of the total assets of the five largest banks are interconnected? What you see is a very densely connected, fragile system that could collapse at any moment.”

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Author:James Rickards
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“When you own gold you're fighting every central bank in the world. That's because gold is a currency that competes with government currencies and has a powerful influence on interest rates and the price of government bonds. And that's why central banks long have tried to suppress the price of gold. Gold is the ticket out of the central banking system, the escape from coercive central bank and government power.”

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Author:James Rickards
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