The GPU Economy and Money

The underlying assumption here is that money represents deferred consumption. Hoarding money can stifle economic activity. This can't last forever. The source of the money will be depleted like an election changes fiscal directions. Another option is that the consumers supplying the extra profits need to save more their money flowing out for too long. Many Asian economies have this trait with large savings and deflationary pressure. Savings become an extra source of investment competing with central banks.

It's also clear that the wealthy don't spend as freely as headlines might suggest. Frivolous spending is often a distraction. Wealth is built through careful accumulation and restrained spending.

Furthermore, the wealthy tend to stick with what works. They built their fortunes by maintaining a consistent, successful corporate strategy. Continued wealth growth demonstrates a reluctance to deviate from a winning stock.

The deferred consumption aspect of money also suggests that foreign dollar deposits are essentially void. The fact that they accumulated proves that there was no product or investment overseas to attract them.

When we save instead of spending, we create what's known as the risk-free rate. There's always a chance that consumers will cut back. Some products will inevitably go unsold. Businesses factor this risk into their pricing.

Consumers will increasingly be augmented by AI. Imagine AI algorithms directing spending and investment, smoothing out fluctuations through diversification.

Saving is wise if the money is invested. Unspent money means unsold inventory, subject to depreciation, spoilage, or theft. Anticipated demand drives up prices and inflation. People and AI invest wisely, if they invest in a company running a lasting money that will make that car that we save for. Investing elsewhere may incur risks that the investment is not liquid enough.

Sometimes, the best investments are in things like healthcare or elder care, services the saver will eventually need. This has led to the US economy's reliance on long-term mortgages for primary residences, providing a stable asset for retirement.

AI buyers will likely save and invest in the tools they'll need long-term: replacement servers, GPUs, and primary data center space.

Link of the day.
Englang scripts to generate an ERP with generative agentic AIs. Here.