The AI CABAL seems to be manufacturing money, or value, or something out of nothing: one buys a bunch of something from somebody if somebody buys a similar or equal amount of something from them so they can sell it to somebody for something and convert it all to bitcoin so they have a hedge on the future cost of data center construction for AI CloudFarming. Then they go down the hall to somebody else and do it all over again. That's generating, overnight, multi trillion-dollar enterprises.
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Bitcoin and its siblings are a thing of wonder. There can only be a certain amount of those "coins" ever. So, they are scarce. They come into existence as the result of a deeply compute intense algorithm that nobody understands, but that can melt computer chips and heat rooms and are immediately acquired by somebody paying with something - presumably not the same something generated in the AI CABAL's hall-of-money-mirrors, but who knows. A bitcoin is currently worth $76,000, although since its only value is its contrived scarcity that varies in real time.
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When AI does its wondrous deeds, it generates things called tokens. Those tokens are the AI-native "food" that allows AI's probability algorithms to do whatever it is that they do. Those tokens are assigned value by the various AI providers. Enterprises using AI and thus generating unknown but gigantic quantities of tokens are paying for them with things called stablecoins which build themselves from nothing to something using the same architecture as bitcoin; but they are somehow denominated in dollars - or dollar-like things. No one is clear what the aggregate exposure resulting in the great AI token duel - AI Tokens v Stablecoin Offsets - is now, or will be, but it's big and ballooning bigger with every mouse click in the helter-skelter corporate adoption of Agentic AI.
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Private capital markets are exploding because banks have retreated from large, risky, or long‑dated lending after 2008. They have been seeping out of various pools of money looking for leverage and return. Typical pools are:
- Private credit funds
- Private equity
- Infrastructure funds
- Sovereign wealth funds
- Pension/insurance capital
These are the modern replacements for what large commercial banks used to do before regulation pushed them out of long‑dated, high‑risk lending. This entire non‑bank capital stack is structurally exposed to leverage, tranching, exuberance, stupidity, and chicanery. In fact, those features aren’t bugs of the system; they’re the system’s native operating conditions. But now those exposures are distributed across a vast, opaque, lightly regulated shadow‑system that has grown to roughly the same scale as the traditional banking system. The scale symmetry between the newly emerged shadow and old-time banking makes one nervous: maybe they are counting everything twice? Who knows? But back to the difference. The difference is that this time, the system is designed to keep the mess out of the public eye until it’s too big to ignore.
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The difference this time is that there isn't any difference. Those same system features - leverage, tranching, exuberance, stupidity, and chicanery - that put us in the ditch in 2007/2008 are alive and well and being woven into a system so unexplainably more complex than that of 2007/2008 (there were no AI Token/StableCoin Matrices, no NVDIA/OpenAI Barter Deals nor mortgage-like things issued by unregulated bank-like money pools in 2007/2008) that the imminent starter implosion, followed in swift follow-on sequence of implosions of geometrically increasing size, and geometrically increasing temporal swiftness, is/are going to be a thing of startlingly catastrophic uniqueness. Beauty, even.
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With a National Debt of 120% of GDP and a War Department budget request for next year for a trillion-five, the bailout's gonna be ugly this time.
But the republicans' wish of a return to feudalism will finally be granted.
Or, so I don't go to donnieLand Jail, I will re-phrase that:
When private losses are socialized and public capacity is constrained by debt, the burden shifts downward onto households, workers, and local communities — a dynamic that historically resembles pre‑modern economic hierarchies.
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