In the context of the 2023 debt ceiling standoff, President Joe Biden will invoke the 14th Amendment and unilaterally pass a budget via executive order to avoid default.
“So what Biden could do is he could say the 14th amendment gives me the right I'm going to pass a budget via executive order.”
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Explanation
Biden did not invoke the 14th Amendment or pass a budget via executive order; the 2023 debt ceiling standoff was resolved through the negotiated Fiscal Responsibility Act.
The 2023 U.S. debt ceiling negotiations—reported at the time as being roughly $72 billion apart—will be resolved with a bipartisan agreement before an actual default occurs.
“Reuters had a report this morning that there are only 72 billion apart now in their positions, which is a relatively small amount. So my guess is they're going to they're going to work this out.”
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Explanation
The 2023 debt ceiling standoff was resolved via a bipartisan deal (the Fiscal Responsibility Act) signed in June 2023, avoiding default.
By around 2028, the U.S. federal fiscal situation will remain structurally similar to 2023, with continued large deficits and a higher debt-to-GDP ratio, and no major reform having been implemented to change the debt trajectory.
“nothing will change and you guys will still be crying wolf in five years. It'll still be the same. It'll just be a different debt to GDP number that gives you anxiety.”
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Explanation
This prediction concerns the fiscal picture as of around 2028, which has not yet arrived.
In the AI cycle starting circa 2023, the majority of long-term economic value will accrue 5–7 years later (around 2028–2030) to software and services companies built on top of AI, rather than to the AI chip hardware makers.
“where the real value gets accrued is five, six, seven years later when the software and services companies show up and create a huge moat. And those are the Googles and the Facebook's and the apples of the world.”
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Explanation
This prediction concerns value accrual around 2028-2030, a timeframe that has not fully played out yet.
The current market hype and outsized investor focus on Nvidia and AI chips will persist for at least several quarters and likely a few years, after which institutional 'smart money' investors will rotate their capital into the next segment of the AI value chain (away from Nvidia/chipmakers).
“So we're gonna we're gonna have a few years. We're gonna have a few quarters for sure of this hype. And then the smart money will probably figure out where the next lily pad is, and then they'll go to the next.”
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Explanation
Nvidia and AI-chip investor focus has persisted for several years without a clear full rotation away from it yet, so this has not fully resolved either way.
When looking back from mid-2024, professional economists will date the start of the then-current U.S. recession to sometime in the past (i.e., that a recession was already underway as of mid-2023).
“I think the economists a year from now may say that the recession had already begun.”
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Explanation
No official recession was ever declared for the 2022-2023 period; the NBER did not date a recession beginning in that window.
Following the 2022–2023 monetary tightening and liquidity withdrawal, there will be a large wave ('tsunami') of company failures and bankruptcies in the subsequent period (roughly the next 1–3 years).
“The money is being sucked out of the system like the tide before tsunami and tsunami is going to be all the failures and bankruptcies.”
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Explanation
There was a wave of notable bankruptcies and failures (SVB, First Republic, WeWork) following 2022-2023 tightening, but not a broad economy-wide 'tsunami' of failures.
The Tesla Model Y will become the best-selling car in the United States (measured by unit sales) in an upcoming full year following this May 2023 conversation.
“that model Y is going to be the best selling car. It's going to be the best selling car in America.”
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Explanation
The Tesla Model Y was the world's best-selling vehicle in 2023 and 2024, but in the US specifically it ranked behind pickup trucks and the Toyota RAV4, not becoming America's best-selling car.