Lyn Alden on Macro Consequences of AI and The Stolgard Incident (Monitoring The Situation Replay)

**Jack Farley** (0:00)
Today's episode is brought to you by the unlimited HFGM Global Macro ETF, ticker HFGM. Later in the show, you'll hear more about HFGM, currently the number one Morningstar rated fund since its inception in the US macro trading category. Let's get into it. Monetary Matters is now streaming daily as part of Monitoring The Situation. Join us live on X from four to five p.m. Eastern, Monday through Friday for live interviews and analysis, breaking down the market's most important situations in real time. This is a recording of a live interview from MTS with none other than Lyn Alden. We talk about the macroeconomic consequences of AI, which might be severe in either direction. This is a theme that Lyn explored in her latest book, a science fiction thriller called The Stolgard Incident. Max and I review the historic surge in semiconductors, which Monetary Matters listeners have had a front row seat to before our conversation with Lyn starts at about the five minute mark. Welcome to another edition of Monitoring The Situation. I'm Jack Farley of Monetary Matters. And I'm Max Wiethe, our good friends at Citrini Research. Our friends at VanEck have kept us in the loop on everything that's happening in semiconductors. Right. And yeah, I think I'm grateful to Citrini, VanEck, people who have taught me a lot about the semiconductor industry. You know, it's no secret that I've been quite bullish in the space. And I got to say, I'm pretty proud of the coverage that we've had on the Monetary Matters podcast. I don't know if people could see the screen now, but like I interviewed Citrini.
He had a bull thesis on pterodine in the middle of June. And the stock is up 342% since then. I participated on that. I got out too early, of course. But hopefully, some people were in the ride with us. And the VanEck team as well. There, we actively were marketing their ETF, SMH and SMHX. And it's great to see the performance of some of those two ETFs. As I say, I love the feeling of marketing an ETF, and then having the ETF go up 78%.
Simply incredible. So enough raggedoscio from us. I think, Max, the real important question to get into is why the historic run in semiconductors. And here, I think it has to do with what was priced in before. What was priced in before is that enterprises weren't going to spend on AI and that, yes, you get all these nerds who love to do vibe coding and they love to ask it, have it be their therapist. But are people going to actually pay for it at scale in order to justify the tremendous sums being spent to build out the data centers and to do deals with the hyperscalers? No. And that was why NVIDIA was priced at less than 20 times forward earnings. And you saw many cheap valuations across the semiconductor index. And I think the news we've seen over the past month has proven that wrong. So I think the AI do-mers have been proven wrong in terms of, you know, people are spending a tremendous amount on anthropic open AI and the models just keep on getting better. And the bid is there from the enterprise. Let's be clear here. Jack and I are not the experts on comparing the new models. We are going to bring on experts to try and help us and you understand it and then as well to draw a connection between the opportunities in public markets. But I think the underlying point is that these tokens have value and the demand for these tokens is very high and therefore the demand for compute is high. Therefore, the demand for things that produce compute, like semiconductors and electricity, is high. That has been my thesis, continues to be my thesis. I will say 18 days in a row obviously do for a pullback, perhaps a mega pullback. So, you know, this could mark a local top, but what I suspect will not be a top top. Not investment advice. Of course. With that said, let's bring on Lyn. Yes. So, Lyn Alden of Lyn Alden Investment Strategy, not just a renowned macro strategist, not just an author of nonfiction books on monetary, monetary matters of broken money, but also a science fiction author.
Lyn, welcome.
How are you thinking about AI and the increasing use of AI agents? I know you think it has some consequences for the economy, for stocks, for the monetary system, but just how seriously are you taking this universe where many tasks are going to be done by an autonomous AI agent as opposed to a human being?