IT'S IMPOSSIBLE TO OVERSTATE DEFLATIONARY PRESSURES:

It's common to hear of 5% central bank rates as a "return to normal." This new normal is presented as a good thing, a return to sensible capitalism, moderation, common sense, where all excess leverage is purged.

A comforting idea, but that's not the future we face. Enter a wild new technology accelerant, generative AI. Only five months ago, most of us, even those who follow technology closely, had never heard of OpenAI, a private research organization founded by Elon Musk and others to make AI easier to use. Then on Nov. 30, OpenAI released to the public its AI app called ChatGPT. Within one week, a million people had signed up, and the AI era suddenly had shifted to warp speed.

ChatGPT's version four took an American law school admissions test in March and scored in the top 10% of test takers, versus the bottom 10% scored by an earlier version. Among the believers in AI's transformative power is Microsoft CEO Satya Nadella, who says AI is the new platform for the world's enterprise software.

Question: What do you think ChatGPT-like technology (and similar AI apps from Google, Amazon and others) will do to the world's educated, white-collar labor force? Answer: carnage. AI will be the great deflation bomb hitting professional services. The work of 20 corporate communications professionals or paralegals or mid-level programmers will now take only three or four people assisted by ChatGPT versions 5, 6, 20, 50, etc.

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