Confused? Uncertain? What to expect (or believe) this year as a presidential election looms, financial markets soar and economic “ifs” abound?
It’s a handful for sure. So, to try and get a clearer picture as we drift into March and the rest of this year, I thought it might be helpful to consult AI. No, not artificial intelligence (AI) but rather (entirely fictitious) long-time friend and super investor/market guru Al Isenberg (a/k/a “Old Al”). Yup, Old Al has seen it all over the years and its his input and data that would make a “new AI” successful.
So, Old Al, being around 100-years old and still sharp as a tack, thinks the artificial intelligence phenomenon is real and here to alter the future. Both for good, and bad. And, like anything else, it’s what the algorithms are loaded up with, and by whom.
However, Old Al is very confused on why everyone is so focused on the Fed and waiting for Chair Powell to cut rates. Why should they? If the economy is holding its own and continuing to be fairly robust, why cut? Just because? Now if you asked artificial intelligence to reflect on interest rates would it be the “zero rates” of the past several years? Or historically? If you are used to “zero” then the current rates seem high. But if you have been around for a while and used to higher rates then current rates seem low. Would AI be of help?
More importantly, Mr. Isenberg is very concerned about AI creating distrust, chaos and confusion. The rest of this year it looks like the “bad” part of AI is going to be the front runner in adaption. With the election only a few months out, AI will be used to distribute disinformation, sway voters minds and, in general, create realistic “fake news.” Same in the financial markets to attempt to manipulate economic conditions. Used to be you would have a select group of trusted (and smart) friends to decide informed decisions. Thought leaders.
Old Al notes the biggest thing that artificial intelligence lacks is old-fashioned common sense, the kind that humans (presumably still) possess. This lack of common sense makes it extremely easy to “sway” thinking. If AI hallucinates that the day is cloudy but you see a clear sky, who do you believe? And, if AI continues to claim the sky is cloudy, day after day, do you start to believe you aren’t seeing blue sky? Well, perhaps by the November elections (or a market crash), we will find out if it’s cloudy or clear.
After all his years, Al Isenberg wants everyone to remember the most important thing with AI-generated news – if it doesn’t seem to make sense, it probably is “fake news” (or purposefully biased).
AI can’t think consciously (yet), but people can. Thanks, Old Al, for making things clear.
Bill Taylor is the CEO of Digital Wealth News and a 40+ year veteran of the financial markets. You can also ready his weekly musings on BTC, ETH, Gold & SP500 at “The Taylor Market Report“.
