When was the last time China invaded another country?
Also regarding Russia, you do realize that the US intelligence community has been quite consistent in their analysis that Russia does not have the materiel to invade multiple countries, right?
Yeah, sorry, I didn’t address the power plant point. These data center aren’t building gigawatts of power plant on site (except for the nukes). They’re building megawatts of power and their using existing gas generators and turbines and feeding the power directly into the data center. They’re not building traditional power plants to enhance the grid, they’re building off grid.
I live in Canada, I can tell you that Canada absolutely does not have spare capacity on this scale. Meanwhile, Canada is suffering from a lot of the same economic problems the US is.
I have it on good authority that in parts of Canada there is a massive surplus of electricity, as there is in a few regions in Scandinavia. They’re selling electricity at less then $0.05/KwH. This is mostly due to over building of hydropower in more remote areas. I’m not saying the whole grid is flush with power. I’m saying there are pockets of overproduction and the data centers are going to find ways of getting there.
And, you keep looping back to hydrogen and geothermal, but that’s decades away
It’s not. There are active projects right now, actually deployed right now. There are hydrogen fuel cells deployed right now. There are multi-fuel generators that take hydrogen right now. There are hydrogen production capabilities live right now. It’s decades away from being produced centrally, stored, and transported at scale, but data centers are capable of being built with modular capabilities completely disconnected from larger nonexistent infrastructure.
There are active geothermal projects happening right now. The US military is investing heavily in it, and data centers are already considered matters of national security. We’re going to see at least a dozen data centers powered entirely by geothermal within 5 years.
The demand for energy is already outpacing the supply now
This is true and not true depending on your meaning. The existing data centers are powered. The data centers being built are able to be powered for the most part AFAICT. The number of unstarted projects? Yeah, there’s a lot of demand there and they aren’t started likely because they are trying to figure out supply. The amount of capital in terms of potential data centers? Absolutely not enough supply.
But this will cause supply to expand. And as you say, vertical is very slow right now, so it will create pressure to go horizontal. A.I. may not be productive, but the race to generate more power and thus make a profit is going to be productive. In fact, it might be the single most important factor in the US developing new energy capabilities and capacities.
The spare grid capacity is at mere 15% right now, and that’s needed for stuff like extreme weather events such as heat waves. Data centers are starting to eat into this spare capacity already. The Pentagon has already been gaming scenario of mass blackouts caused by the growing energy demand. That’s why the whole Stargate project is has now stalled.
And as I keep saying, data center are literally being built off-grid to account for this. There’s a 2 year waiting list to get generators right now because the data center projects have bought up future production lines. But that demand is going to push more manufacturing of generators, and the whole suite is going to consume a ton of natural gas. But again, multi-fuel generators are on the way and that means we’re going to see not only natural gas but biogas and hydrogen as fuels that can be brought in at later dates.
But really, this is happening. Texas announced that no new data centers will be allowed to stay on grid in emergencies, so what’s happening right now is that thousands of acres of data center projects are being built without ANY connection to the grid, entirely on natural gas generators.
Remember, markets aren’t great ways to run society, but they are great at getting millions of people to work on large problems independently and produce a robust suite of options in the face of scarcity that limits profits. That’s what’s literally happening on the ground right now. I wouldn’t be surprised if safety regulations that have been slowing down other energy tech gets destroyed and a whole bunch of industrial disasters start happening as profit-chasers start loading trains up with fuels without proper equipment.
We agree that it’ll likely take a couple of years for all this to come to a head
Agreed
but I see no way a crash can be avoided at this point
I don’t think it can be avoided, I think it can be deferred. Given everything remains the same as it is right now, I think it’s less than 2 years. But I think the current developments I am aware of put us at 2 - 3 years. Within that time, there will be new developments. So it’s possible it could be deferred longer.
And it’s always possible there the crash will be triggered by some other economic event that’s unrelated to the AI bubble
I think that’s entirely possible. I mean, anything that shuts down Manhattan Island would probably do it. Or another major infectious disease catastrophe. Or the food supply being incredibly tight from this harvest (although we’ve got plenty of soy for everyone).
However, usually the way you solve that problem as an empire is you expand your extraction and lebensraum, and the US is actively on that path in Latin America. I think the USA will have real trouble fighting a jungle war in Venezuela, but I think there’s a real risk of the US gaining breathing room through use of military force from Mexico all the way South.
The job numbers in the US are looking terrible
Jobs only matter for 2 reasons: production and money circulation. Most Americans aren’t productive anyway, working instead on paper pushing, marketing/advertising, sales, etc. So that’s not useful. The jobs numbers are a real problem because money is not circulating downward. That’s solvable with government intervention. It’s solvable by hiring more into military roles (ICE, local police, national guards, military, etc). It’s solvable by pushing people into the fields to replace the deported immigrants. Money flowing to the working class is one of the easiest things for a modern government to solve. They can literally just create the money in their accounts and suddenly consumer spending will be up and management jobs will come back. Jobs programs are in the USA’s history and they are part of the fascist playbook as well. I fully expect there to be a jobs program at some point in the next 5 years.
the tariff war is putting pressure on the whole economy
Honestly, I don’t even know if this is the biggest problem. The problem is that the US has lost the economics game globally and is no longer competitive enough to charge a sufficiently high price to maintain profits. We’re going to have reorganize the economy in the US to be a hermit kingdom that eats what it produces. We’re being isolated. All of the West is being isolated. The tariffs can be lifted at any time, and I don’t think it will reverse the macro trend that causing the economy to collapse.
While stock markets don’t care about the lives of the working class, we should not make the same mistake. At the end of the day people have to make ends meet. As Lenin put it, every society is three hot meals away from chaos.
Don’t get me wrong. I’m not saying ANY of this is good. I’m trying to temper your predictions of imminent failure with the factors that will allow this shit show to continue far longer than you expect it to.
Generally you’re right, but specifically there are issues with what you’re saying.
First the grid. Of course the grid can’t be fixed on these time scales. That’s why the data centers are building their own power plants. Some are natural gas. Some are nuclear. They are even buying old decommissioned or moth balled nuclear plants and starting them back up for just the data center. The grid doesn’t need to be upgraded.
The value of a.i. is obviously not in commerce. The US sees it as a potential strategic game changer for both domestic police state management and for peer conflict. The business model is DoD funding.
The construction is also not constrained to the US. US companies are building nearly anywhere within the US hegemonic sphere of influence. There’s a lot of surplus power hiding out there, especially around hydroelectric plants. Canada in particular overproduces electricity significantly.
There are also a bunch of underdeveloped opportunities, like hydrogen and geothermal, that while they couldn’t meet full demand, will be given massive cash injections and any amount of progress will create some market exuberance. A single large scale geothermal project could create a large off-grid campus for dozens of data centers. Do that a few times and the geothermal industry starts getting larger.
I agree it’s a losing battle, but I think each attempt to solve will give them a few more months, and they have dozens of attempts to make.
All great points, but have you considered a National Counsel of Corporations?
The problems you raise have been solved before. The state takes over the management of the companies in order to keep the markets happy. It helps that 80% of the stock market is owned by one single bloc (https://welcometothemachine.co/)
Yes we are absolutely running up against physical limits, but again, that just means more innovation is going to be done. Sure hydrogen takes a lot to bring online, but Microsoft alone could probably fund bringing that fuel source online in a big way. To you point, they won’t because they aren’t saviors, but it’s not too far fetched to imagine the USG forcing companies to contribute to a strategic energy fund.
What’s happening right now is that people are building natural gas power plants on campus with the data centers. I can imagine coal plants coming back for the purpose.
Of course it will all run up against chip scarcity.
I think we’ve got at least 2 years before any one particular scarcity becomes a pin prick to the bubble. I think it’ll take 3 years at least given the current state of play, and in those 3 years a lot can change.
And as for profit, the USG is probably doing a lot of Keynesianisms right now paying defense companies to develop strategic artificial intelligence, so all of the startups going nowhere isn’t necessarily the bellwether of pin prick.
Also, I wasn’t saying that downward wage pressure would create the conditions for the same people to be rehired by the same companies for the same positions. I was just saying that downward wage pressure creates new economic opportunities for margins. In essence, downward wage pressure at scale creates upward pressure on the rate of profit. Certain labor jobs may become more viable if wages continue to fall. And we’ll need labor since clearly the US is way behind on factory automation.
I think China can keep labor prices low enough to make this difficult or impossible for the US. But that’s why the US keeps trying to decouple. In the meantime, I imagine the US will start doing a lot more exploitation of low wage labor in Latin America. But then, factories just can’t be built fast enough.
I think potentially what I am pointing to is that the USA might be 2 years away from a total economic collapse and there’s a large faction of the ruling class working to extend that time line via various means.
And the reason I think they are is because there is nowhere else for them to go. The only military potentially stronger than the US is China and China isn’t going to allow EuroBourgeois to setup shop fully in China (unless it’s a nice big trap).
So for better or worse, the owning class has to make it work in the US or it’s all over. And that means every single technique is going to be applied to get another 6 months and another and another.
So I think there’s a few things you’re missing.
There are MASSIVE capital reserves in the US right now. Something like $2 trillion in dry powder. This is what it means to be in recession - money stopped moving and went into a reserve. So even though a lot of the economic activity you see is just pump and dump schemes in the market, the money is still there. Microsoft has enough cash reserves to operate with zero revenue for the next 80 years, last I checked.
Keynesian interventions work, at least temporarily. The reason this is important is because Keynes would have the US govt borrow money from the owning class to get money flowing again. But if you the govt can get the capital owners to deploy their reserves, is serves much the same function as a Keynesian intervention without the sharpening effect of th debt - even if the end result is a bunch of half-finished data centers, the money will be circulating in the economy again. This may be the real reason behind Trump’s meetings with the tech firms demanding they pledge a certain amount of money to building things - literally shakedown Keynesianism.
When you release those capital reserves, suddenly switching costs become acceptable, startup costs become acceptable. That means that despite supply chain constraints, the demand will be high enough for expensive innovations to be undertaken and more expensive fuels to be used. Hydrogen is getting a boost now, as an example. Will it be enough to meet demand? No. But it will have an uplifting effect on the productive economy broadly, which will lessen the blow of a popped bubble.
The labor discount is growing. With all of this job market contraction, wages are coming down. And no just in the marginalized communities - this administration’s approach has been universal in putting downward pressure on the entire working class. That’s going to put downward pressure on costs, which will inflate profits, and also create room for competition to put downward pressure on prices eventually. It also means more people could be hired for the same dollar. The fact that all of these layoffs are pretending to be caused by a.i. means that when the a.i. narrative bubble bursts, there will be a narrative continuity with hiring more people again.
Can all of this fix the core problems? No. But my point is that there is a lot of space between the bubble bursting and the collapse of the system writ large, with plenty of mechanisms already in the works for softening the blow.
The real question is whether the contradictions will overwhelm their containers or not. There will undoubtedly be unrest - we are seeing labor movements growing and working class consciousness on the rise. We know what happens after that - violent disruption. Is this the generation where the military policing of citizens fails? Or are we in for yet another cycle of uprise, repress, recover, rebuild?
I doubt the bubble will burst because of logistical issues. There’s money to be made. More manufacturing and fabrication will be built. Scarcity pressures drive capitalist incentives and novel technologies will be built and investments will be made.
The bubble bursting will be from the total lack of value contributed to the economy by the a.i. projects. This will effect tech stocks, which dominate the stock market. However, if this process releases capital reserves into the economy it will have the effect of creating more consumer spending and there will be a counter balancing effect.
The real problem is ultimately that there aren’t enough jobs being created by all this activity to counteract all the job loss that’s happening. This can be papered over for a little while by having higher than average salaries being created as part of chasing this bubble, but that won’t last too long.
In the end, the bubble bursting will a financial event, not a social one. Many people will get financially hurt. Many institutions will get bailed out. These things are all merely the sharpening of contradictions. The bubble bursting will not cause a collapse directly. It’s when the contradictions become unsustainable that the collapse happens. It’s possible this financial event will push contradictions past that point, but it is impossible to tell.
Sadly that information is outdated as of 2024. It looks like Cuba’s incarceration rate spiked hard and the USA’'s came down a bit.
When you include the US parole system, though…
Really? What makes you say that?
I just saw a staunch anti-communist liberal say “why the hell should I vote for any of these progressives if the party is just gonna scuttle everything even after a historic victory and significant polling in their favor?!” And I thought “this is exactly what we expected would happen but I never thought I’d see it and certainly not from this person”
I really can’t imagine that there’s just no money, considering money is just lines on a spreadsheet at this point.
I worry that the goal is to force the poor to take desperate actions to justify further expansion of violence.
You need to read about Cuban democracy. People spend way more of their daily lives in democratic formations, driving the direction of their neighborhoods, villages, cities, and workplaces than an American could even dream of.
There’s still time
What are you talking about? He stores top secret documents at a private resort. He gives no shits. The nat sec apparatus has been in charge of Trump’s career since well before he had political ambitions. Trump’s connections with organized crime, international real estate, international oligarchs (like himself), and his family’s extensive connections all put him right in the core of the intelligence scope of multiple nations. His connections with Epstein and Epstein’s connections with the nat sec apparatus are the easiest connection make.
No. Trump is not driven by trying to distract everyone from the Epstein case.
https://en.wikipedia.org/wiki/Oil_reserves_in_Nigeria
Although Libya has more reserves, there were 37.2 billion barrels (5.91×109 m3) of proven oil reserves in Nigeria as of 2011, ranking the country as the largest oil producer in Africa and the 11th largest in the world
https://en.wikipedia.org/wiki/Oil_reserves_in_Venezuela
The proven oil reserves in Venezuela are recognized as the largest in the world, totaling 300 billion barrels (4.8×1010 m3) as of 1 January 2014
No. It wouldn’t. Why are you people so willing to believe that these fascists are motivated by avoiding public scrutiny? Trump was convicted of 39 felonies. He’s not so afraid of being tied to Epstein in the public eye that he would overstretch the US military.
There are other reasons for these actions.
It could be that they were doing illegal things and that an adversary hit them with some electronic warfare. Can’t go around admitting to doing illegal things, and certainly can’t accuse anyone of electronic warfare if you can’t tell who did it.
American workers are about 6x more productive than Chinese workers based on my preliminary research. These guys are just fucking ghouls
“World hegemon says that two nations in conflict need to negotiate a peace settlement to end the killing”
Libs: “Fuck no everyone should enlist and we should be killing more and more and more until there’s nothing left and even then we will never surrender!!!” :foams at the mouth:
Downvoters better stop malding and start arguing
Oh fuck it’s Rainer coming at us. Gonna give this a read and see how far off base he is. This guy went full on PatSoc and started going after PSL in a totally disingenuous way and I can’t trust anything he’s written since.