Quotessence
Home / Quotes / Quote by James Rickards

Quote by James Rickards

“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.”

Quote by James Rickards

Book:MoneyGPT: AI and the Threat to the Global Economy
Create image

Work

MoneyGPT: AI and the Threat to the Global Economy

Browse quotes and source details for this work. more

Author

James Rickards
James Rickards

James Rickards is a renowned author specializing in finance, investment, and national security. His works delve into the complexities of the global economy, monetary policy, and geopolitical risks. more

You May Also Like

“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
Create image

“In general, markets have well-known inefficiencies. One is that transactions do not take into account the effect on others who are not party to them. These so-called externalities can be huge. That is particularly so in the case of financial institutions. Their task is to take risks, and if well managed, to ensure that potential losses to themselves will be covered. To themselves. Under capitalist rules, it is not their business to consider the cost to others. Risk is underpriced, because systemic risk is not priced into decisions. That leads to repeated crisis, naturally. This inherent deficiency of markets is well known.”

CapitalismBanking SystemBanksFree Market CapitalismFinancial RiskFree MarketsFree Market Ideology
Book:Hopes and Prospects
Create image

“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
Create image