Higgenbotham's Dark Age Hovel

[Higgenbotham]

Bernanke was a drunken gambler and this is the result. Not my predicted result. Much worse.

So if AI told me, no, it's not really an adjunct because AI is now the economy, well...

A.I. buildout is becoming biggest economic bet in U.S. history: research

Jocelyn Fiset
Thu, September 24, 2026 at 6:53 PM CDT 2 min read

Simply said, both the U.S. and financial markets are now reliant on A.I.'s rapid expansion, and any stumbles could lead to a recession or worse.

https://finance.yahoo.com/economy/artic ... 57580.html

What does that mean? Well, what it means is that GDP gets cut by 2/3 and the stock market falls (as much as) 98%.

The psychopaths who control the system won't dial that extent in when they start the process.

It starts to slowly dawn on the psychopaths that they're screwed and at first they dial in a really bad recession.

It's starting to look like a massive misallocation of capital.

One thing I repeatedly observe is people today, both individually and as a group, reach too far. Their expectations are too high.

I had no idea how far they would try to reach and just how high their expectations would go. I didn't have a clue.

The Pretence of Knowledge

Friedrich August von Hayek
Lecture to the memory of Alfred Nobel, December 11, 1974

In fact, in the case discussed, the very measures which the dominant "macro-economic" theory has recommended as a remedy for unemployment, namely the increase of aggregate demand, have become a cause of a very extensive misallocation of resources which is likely to make later large-scale unemployment inevitable. The continuous injection of additional amounts of money at points of the economic system where it creates a temporary demand which must cease when the increase of the quantity of money stops or slows down, together with the expectation of a continuing rise of prices, draws labour and other resources into employments which can last only so long as the increase of the quantity of money continues at the same rate - or perhaps even only so long as it continues to accelerate at a given rate. What this policy has produced is not so much a level of employment that could not have been brought about in other ways, as a distribution of employment which cannot be indefinitely maintained and which after some time can be maintained only by a rate of inflation which would rapidly lead to a disorganisation of all economic activity. The fact is that by a mistaken theoretical view we have been led into a precarious position in which we cannot prevent substantial unemployment from re-appearing; not because, as this view is sometimes misrepresented, this unemployment is deliberately brought about as a means to combat inflation, but because it is now bound to occur as a deeply regrettable but inescapable consequence of the mistaken policies of the past as soon as inflation ceases to accelerate.

http://www.nobelprize.org/nobel_prizes/ ... cture.html

I'm aware of the Austrian point of view but haven't extensively studied the writings. But in doing some research this morning and reading Hayek's speech, there is similarity to this speech and my own thoughts at this time as recorded here in recent days. What Hayek is saying here is obvious. If I can understand this, do the likes of Krugman, Bernanke, and Yellen really not understand it?

No, they did not and they do not...as the new dark age tightens its grip.