Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

AI’s Disruptive Effect on Traditional Assets

  by    0   3

Artificial Intelligence has already had an incredibly disruptive effect on many industries. It has allowed inexperienced workers the ability to increase their productivity and outpace older workers with less tech-savvy. It has begun to help some companies make efficient decisions that they would have been blinded to if they had only considered their own industry conventions. AI is different from many other tools because it can shift the direction of industry rather than merely being a tool used towards a predetermined end. Because of its ability to make decisions objectively and create unpredictable objectives, AI will throw a great deal of uncertainty into the prices of money, stocks, and bonds. 

In many industries convention and tradition hold a powerful role in determining evaluation of past performance and also preparing future plans. If an industry as a whole has been seeing lackluster performance, the operators of various firms will not be sensitive to their own poor performance as strongly as they would in a more profitable industry. Many analysts and business owners will be numbed to their own inefficiency as they believe that their industry conventions are allowing for the fastest progress they can hope for, given their circumstances. Humans thrive on patterns and routines and both investors, consumers, and business owners are often slower to accept change than would be effective.

AI overcomes these human barriers by being able to constantly reevaluate past performance and create innovative solutions that go outside of traditional conventions. AI can recognize a fundamental shift in underlying data and effectively advise a firm to make a rapid switch into an unrelated industry. Human resistance to change can be broken down by AI’s constant monitoring of opportunity cost. Its analytical capability allows it to point people toward opportunities that would otherwise be impossible to see. The opinions of stockholders will also hold less power over a company’s actions. AI can discover and research profitable opportunities that would mortify a traditional CEO or stockholder in terms of their disruptiveness.

The disruptive and creative force of AI can greatly destabilize stock prices. If businesses act much more unpredictably to the human eye, stock prices will be a much less stable asset than they were in the past. Even their current instability will be overshadowed by a new era of constant restrategizing and analysis. Businesses will be more efficient in the long run but their present stability will be much less appealing to shareholders. Some will be self-disciplined enough to continue holding stocks but demand overall will be less constant.

AI can also greatly influence international trade by allowing poorer countries access to innovative strategies tailored to their needs and resources. Many small countries will be allowed to pivot what they export and also change their production strategies. Just as with business, past practices will be put under closer scrutiny and their inefficiencies will not be maintained. AI could bring some small countries to international financial prominence. Apparently insignificant skills can be exploited to allow new opportunities to arise. The national paradigms of the past can be rearranged more quickly as they face rapid analysis and scrutiny from a creative and analytical force.

AI’s ability to promote wise national strategy will make exchange rates unstable. As different countries make radical strategy shifts, the demand of other countries for their currency will change to an extent not seen before. While the default strategy for many countries is to maintain a constant national strategy, in particular to maintain the confidence of other countries, the powerful strategic advice of AI could outweigh the reputational effects of a more radical strategy. While a certain strategy is being tested for efficacy a currency will be valued lower, but it will bounce back to higher heights after the effects of the strategy are proven. Any currency will have great potential to be far more unstable than was possible in the past.

AI has unprecedented power to influence the prices of currency and stocks, and by connection, the prices of bonds. As demand for currency and stocks fluctuates powerfully, the demand for bonds will also adjust chaotically. The traditional safe harbors of value will face a new challenge. Short-term investing will become a much more difficult task and more reliable assets will take center stage. Gold and Silver will allow extreme safety in comparison to the constantly fluctuating other assets. While the other assets may see more long-term growth, their present volatility may make them a less appealing asset.

Download SchiffGold's Free Silver Report

Get Peter Schiff’s key gold headlines in your inbox every week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

Related Posts

Invisible Hand as Conservationist: The Power of The Market to Protect the Environment

While the efficiency of the free market is very often accepted in the realm of industry, the environment is often used as an example of the government’s necessary role in the economy. Public goods are used as an example of the problems with market allocation. Short-sighted business owners are apparently unable to see or account […]

READ MORE →

As Inflation Rises, Prepare for Crime

Inflation breeds desperation, and desperation breeds crime. As central banks in Europe and Canada cut interest rates, and expectations remain that the Fed will wait to cut until at least September if it cuts this year at all, our endlessly-wise global central bankers, the benevolent all-knowing stewards of the global economy, can’t seem to agree […]

READ MORE →

Three States Start Summer with Sound Money Policies

Earlier this year, four states took steps toward strengthening sound money by lifting or reducing taxes faced by holders of physical gold and silver. Only a few months later, three other states have actually implemented new sound money policies, and by doing so, they have improved their citizens’ economic standing.

READ MORE →

Charter Schools Showcase the Power of Educational Freedom

Public schools are losing students to charter education, and government officials are doing whatever they can to bail them out. On March 6th, Colorado House Bill 1363 was proposed. The legislation included several anti-charter school reforms, including decreasing funding and allowing public schools with declining enrollment to prohibit new charter schools within the district. However, […]

READ MORE →

China’s RE Crisis: A New Experiment in State Intervention

The real estate market is responsible for anywhere from 20% to over 30% of China’s GDP (depending on who you ask). And with the latest meltdown that began with the implosion of Evergrande, the situation just keeps getting worse, inspiring a slew of government interventions beyond the scope of what would be possible in a […]

READ MORE →

Comments are closed.

Call Now