MoneyGPT Quotes

“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.”
― James Rickards, MoneyGPT: AI and the Threat to the Global Economy

“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.”
― James Rickards, MoneyGPT: AI and the Threat to the Global Economy

“... 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.”
― James Rickards, MoneyGPT: AI and the Threat to the Global Economy

“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?”
― James Rickards, MoneyGPT: AI and the Threat to the Global Economy

“The irony is that when you set out to remove bias you use your own possibly unconscious biases in deciding what's harmful and what should be done about it.”
― James Rickards, MoneyGPT: AI and the Threat to the Global Economy

“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.”
― James Rickards, MoneyGPT: AI and the Threat to the Global Economy

“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.”
― James Rickards, MoneyGPT: AI and the Threat to the Global Economy

“AI creates its own fog. The more sophisticated the algorithms, the less developers and engineers understand how the output emerges.”
― James Rickards, MoneyGPT: AI and the Threat to the Global Economy

“The best security is not to tell anyone you have it.”
― James Rickards, MoneyGPT: AI and the Threat to the Global Economy

“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.”
― James Rickards, MoneyGPT: AI and the Threat to the Global Economy

“... 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.”
― James Rickards, MoneyGPT: AI and the Threat to the Global Economy

“... 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.”
― James Rickards, MoneyGPT: AI and the Threat to the Global Economy

“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.”
― James Rickards, MoneyGPT: AI and the Threat to the Global Economy

“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.”
― James Rickards, MoneyGPT: AI and the Threat to the Global Economy

“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.”
― James Rickards, MoneyGPT: AI and the Threat to the Global Economy

“... A bank run never involves just one bank, however large. ... Bank runs are not about capital ratios and liquidity. They're about confidence and psychology.”
― James Rickards, MoneyGPT: AI and the Threat to the Global Economy

“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.”
― James Rickards, MoneyGPT: AI and the Threat to the Global Economy

“The war on bias assumes gatekeepers have no biases of their own and ignores the fact that bias is a valuable survival technique that will never go away.”
― James Rickards, MoneyGPT: AI and the Threat to the Global Economy

“When a robot [AI] trains on propaganda, it repeats the propaganda.”
― James Rickards, MoneyGPT: AI and the Threat to the Global Economy

“AI creates its own fog.”
― James Rickards, MoneyGPT: AI and the Threat to the Global Economy