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Cake day: June 9th, 2023

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  • It benefits China strategically and economically. Long term military wise, if Russia remains an active land mass threat to Europe, much of Europe and US will build a military for armed land conflict in Europe while leaving their strategic initiatives in the Pacific and Indian ocean underinvested leaving China to grow its power there. In the same way China is using Pakistan and the occasional skirmish in the useless high altitude Himalayas to keep India’s military focused on building a land-based military while leaving Indian ocean and its naval fleets underinvested.















  • AOC is right, if AI bubble burst, companies shouldn’t be bailed out. I want to remind people that not ALL bubble bursts have resulted in bail outs. When the dot-com burst, there were no bailouts. There was a short recession of 8 months, and the rest of the world continued on in its aftermath. When the commodities bubble burst, in the 2000s there was no bail out. When the housing bubble burst, there was bailout because banks had lent too much money into the housing bubble. If banks fail, there would be bank runs, and that contagion would have spread everywhere and the entire financial system would have collapsed. Currently, there are no bank debts nor bonds being issued to spend billions on AI data centers. The danger will be when leverage is used to fund these trillion-dollar outlays. Currently there is very little debt tied to AI bubble. Most of the AI spending is coming from the humongous tech companies with loads of cash on hand and with fat profit margins who are plowing it all into AI data centers. When it does go bust, their valuations will deflate but the business will still remain. Watch for use of leverage or debt in AI. Once it enters the equation, that’s where the systemic risk will begin to tick up.