Macro guru Raoul Pal: The "Economic Singularity" is approaching — don't get off the train easily in the next 4 years

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Macro investor and Real Vision co-founder Raoul Pal returned to the "When Shift Happens" podcast to provide an in-depth analysis of why the AI race is the largest capital event in human history and why cryptocurrency holders are in an advantageous position. Raoul Pal explained the economic singularity, why traders always lose to long-term holders, and why he continues to buy during pullbacks. PANews has summarized the highlights of the interview. Host: You shared and commented on an interesting video a few weeks ago. It satirized that the US stock market keeps rising, and you can make money as long as you "buy the dip." If you don't have money, you borrow to buy. It’s not a pyramid scheme; it’s a "buy the dip" plan. What is going on with the stock market? Raoul Pal: There are two main reasons. First, obviously, is liquidity; we are witnessing an expansion of liquidity. The other thing is that we are experiencing the most extraordinary period in human history, and everything else pales in comparison. All capital is flooding into the AI field; this is the biggest race in history. It is a race between nations and a race between corporations. Therefore, it will naturally suck up every bit of capital because you cannot slow it down. Host: Tell me about this race. Raoul Pal: In this world, no one will allow a single superpower to monopolize AGI, so there must be two, and only the US and China can afford this race. Game theory suggests that no country will stop now because stopping means the other side gains an advantage. Even in a scenario like OpenAI going bankrupt or running out of funds, the US government would immediately auction its assets to companies like Microsoft or Google; they would never allow one company to hold a monopoly. The scale of this game is too large; no one will stop. This is a game of "converting energy units into intelligence units." Host: Too big to fail. So, should we "buy the dip" forever? Will it ever end? Raoul Pal: I wrote in "Global Macro Investor" that it won't end until we reach the economic singularity. The economic singularity refers to the point where the system can no longer keep up with the pace of technological development. You know the magic formula: population growth + productivity growth + debt growth. When you count AI and robots as population, our current peak population is 9 billion, but we could reach 18 billion, 100 billion, or even a trillion intelligent agents. If there are 10 billion or 50 billion intelligent agents, the economic system simply cannot function as it did before; it operates too fast. In the past, almost all technological adoption followed Metcalfe's Law (PANews note: the value of a network is proportional to the square of the number of connected users), showing logarithmic growth. But AI is the first observable case in human history of "Reed's Law" (PANews note: the value of a network's scale increases not only with the growth of users, but the total value of the network grows exponentially due to the effect of group building), which is exponential of the exponential. It is estimated that by 2028, the amount of text produced by AI annually will exceed the total amount of text produced in human history from the Gutenberg printing press to the present. Host: Anthropic also said in an interview today that they originally expected 10x growth in the first quarter, but it ended up being 80x. This is incredible. Raoul Pal: Yes, the economic singularity is what happens when you have economic agents that can form capital instantly, which is the meaning of Meme coins: instant capital formation and capital destruction. They can build digital businesses instantly, capture the market quickly, and exit when the opportunity disappears. In this economy, what is the role of large traditional enterprises? Who are the workers? The system can no longer function properly. Because carbon-based life (human neurons) operates at a speed of 1 millisecond, and now we are passing electricity through sand (silicon, the second most common element on Earth) to create intelligence, which is six orders of magnitude (one million times) faster than human neurons. This is crazy. Host: Since AI is growing exponentially and explosively, many people in the crypto circle want to switch to AI. They feel the crypto industry is boring now and are even afraid of being trapped. How do you view the investment choice between AI and cryptocurrency? Raoul Pal: Although the AI industry is extremely hot, I still believe that over a longer cycle, cryptocurrency remains one of the best risk-reward investments. But it is indeed difficult to compete with chip companies like NVIDIA, as they are the core part of converting energy into intelligence. However, cryptocurrency has an "infinite TAM." Around October last year, we witnessed the birth of AI

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