E131: 2024 Fantasy President picks, debt ceiling agreement, Dollar dominance & more

In the 2024 U.S. presidential election cycle, neither the Democratic Party nor the Republican Party will nominate the sitting CEO of a major U.S. bank (such as JPMorgan Chase CEO Jamie Dimon) as their presidential candidate.

“both parties have such a strong populist wing in them right now that I think you can never get the head of the number one bank in the US to be their candidate.” View on YouTube

China’s population will decline to roughly half of its current size by the year 2300 due to low birth rates and deaths exceeding births.

“they are demographically imploding. They do not have enough people. The country will be halved by the death rate and the lack of birth rate by 2300. Okay, so in another 70 odd years that is a problem that is going away.” View on YouTube

Friedberg predicts that moves such as China and Saudi/Brazil settling oil and other trade in local currencies mark the beginning of the end of US dollar dominance in global trade and, over time, the end of the US dollar’s status as the singular global reserve currency (on a multi-decade horizon, not an immediate collapse).

“And it's the end of the dominance. Right. It's the end of you've been... beginning of the end now, maybe it's a poor choice of words. It's not the end... Define dollar dominance in global trade... of the US dollar as a global reserve currency.” View on YouTube

Chamath predicts that China’s demographic problems will significantly diminish its economic strength, with the negative economic impact becoming strongly exacerbated over the next 10–15 years (roughly 2023–2038).

“China. Unfortunately for them, have has a huge demographic problem that will diminish them economically and you're already starting to see it, but it's going to get really exacerbated in the next 10 or 15 years. That's just a mathematical reality for a country that has literally zero immigration and no solution.” View on YouTube

Chamath predicts that India could reach US-like scale and predictability as an economic/investment destination, but doing so will require on the order of 50–100 years of sustained infrastructure and related investment from its current (2023) position.

“and the only place that's really firing on all cylinders is India. But it has a long way to go to build the infrastructure that can really scale and make it as predictable as the United States. Could it do it? I think so, but it's going to take a long time. But, you know, 50, 60, 100 years of investment.” View on YouTube

Jason predicts that the US dollar will remain the global reserve currency for the remainder of his and Friedberg’s lifetimes (i.e., no replacement as primary global reserve within several decades).

“Yeah, and I disagree. I think it will be will remain the global reserve for all lifetime. That's all. It's a fundamental difference.” View on YouTube

Chamath predicts that within the next two quarters from Q2 2023 (i.e., by roughly Q4 2023), major players such as AMD, Meta (Facebook), Google, Microsoft, and Amazon will announce substantive competitive AI hardware or infrastructure efforts, leading to meaningful vendor diversity so that AI compute forecasts are no longer effectively 100% Nvidia-dependent.

“So I think what I'm waiting for, Friedberg, is like in the next two quarters, if AMD, Facebook, Google, Microsoft and Amazon don't announce something substantive, there's a very good chance that Nvidia runs away with this. And I think that that that's very problematic. But in that case, that price is cheap. My bet though, it's a different version of your bet. But we get to the same outcome is that I don't think that that's going to happen because it's just too important. And so I think that everybody other than Nvidia wants vendor diversity... So my bet is in the next two quarters, you start to see some real action so that folks start to have to balance their forecasts where it's not just 100% Nvidia, but it's Nvidia plus plus plus.” View on YouTube

Friedberg predicts that as AI model performance improves and costs decline over the coming years, demand for AI compute and applications will grow nonlinearly (i.e., accelerating rather than saturating or shrinking).

“look, I think as performance improves, as cost declines, like any economic model, there's a pretty nonlinear relationship with demand. So we'll find new ways to apply this technology. I think the demand is only going to go nonlinear.” View on YouTube

Sacks predicts that if an anti-establishment Democrat like RFK Jr. builds a significant grassroots wave in the 2024 cycle, the Democratic Party establishment will intervene using mechanisms such as superdelegates and party control over the primary process to prevent that candidate from winning the nomination.

“I think the Democrat Party will stop it. I mean, they shut down Bernie Sanders, remember that... they rigged the primary against him... the establishment has in the Democratic Party has a huge influence over the outcome because they control the superdelegates, right?” View on YouTube

Sacks assigns roughly a 10–20% probability that the 2024 US presidential general election matchup will be Gavin Newsom versus Ron DeSantis (i.e., both parties ultimately nominating those two governors).

“I said, like over a year ago, I thought that the that 2024 would be Newsom, DeSantis race. I still think there's like a 20% chance of that... Maybe 10%.” View on YouTube