The flaw is assuming that lower costs “free up” money.
Money isn’t "freed". Money is created. Banks create it when they lend against future income. If automation removes wage income, banks don’t create replacement demand: they redirect credit into assets.
That’s why you can have rising productivity, stagnant wages, booming asset prices, and weak consumption at the same time. The missing variable is where credit is created, not how efficient production is. (Think Japan in the 90s)
If you think the AI threat is real buy real assets now. (not financial IOUs in computer systems)
The flaw is assuming that lower costs “free up” money.
Money isn’t "freed". Money is created. Banks create it when they lend against future income. If automation removes wage income, banks don’t create replacement demand: they redirect credit into assets.
That’s why you can have rising productivity, stagnant wages, booming asset prices, and weak consumption at the same time. The missing variable is where credit is created, not how efficient production is. (Think Japan in the 90s)
If you think the AI threat is real buy real assets now. (not financial IOUs in computer systems)
"How Do Banks Create Money?" https://www.youtube.com/watch?v=3N7oD5zrBnc