The Bond Sell-off and the AI Bubble

When Paul Krugman wanted to talk with someone who understood the AI bubble, he called Paul Kedrosky, as did Derek Thompson. Though I'm much less of a fan of Thompson than of Krugman, the fact that a writer best known for pushing the techno-optimist influenced abundance agenda picked a tech critic known for appearing on Ed Zitron's podcast says a lot about Kedrosky's standing.Last week Zitron posted a discussion with Kedrosky entitled "The Hidden Recession Beneath The AI Bubble" which walked through the grim economic implications of the AI bubble. It was a bleak and densely packed fifty-four minutes, including a long and depressing discussion of balance sheet recessions. There's no way to boil this down (I actually listened to the whole thing twice to make sure I got the nuances), but this one bit jumped out. [Apologies for the quality of the transcript.] Yeah. Yeah. So, so normally the Treasury market, which is a multi-trillion-dollar market, is so large and liquid that unless you are…