Whales are always the most dangerous customer for a company to have. Because once a customer becomes a whale, they can dictate terms under threat of leaving. Or they can create massive secondary damage by their own failing.
Which is why I strongly suspect that many companies will become bankrupt once this AI bubble bursts - and not small ones, either. No, I fully expect nVidia to go into full Chapter 11 and lose 90+% of its value, requiring trillions in bailout in order to “save”.
Anyone who knows anything about boom-bust cycles will be escaping this bubble like rats from a ship.
Normal people can somewhat cushion themselves from any severe crash.
Debt itself is not the problem. Lots of debt is actually fine - inflationary effects can and will whittle that debt away, assuming you are still servicing it.
No, the real issue comes down to single-family homes on arable land. If your home is debt-free and completely paid off, there is no legal way to take that away from you, and the land it sits on can allow you to grow food for yourself and even sell a little on the side. While a severe economic crash will be painful for most anyone not of the Parasite Class, those who have debt-free arable land have a chance to ride out that crash better than most.
Granted, the devil is in the details, but in broad strokes this is a truism. The difference is between virtual or physical assets that depend on appreciation, and those who can work for you.
Hate to burst your bubble here, but there are two major ways to take people’s paid-off homes that I can think of just off the top of my head.
Unpaid property taxes can force a foreclosure
In all US states except Florida your home can be forced to be sold in order to satisfy a debt (like medical debt for example)
There are other ways you can lose your paid-off home as well:
It is destroyed in a natural disaster in a place where it is difficult or impossible to get insurnace (Florida/California etc) and you can’t afford to rebuild
You need expensive end-of-life care and you have to sell your home to pay for that
Nvidia will likely lose a huge chunk of their share price, but I don’t see them going bankrupt because selling GPUs is still so profitable. If they can’t sell to AI companies there are plenty of other people lining up to buy them.
Whales are always the most dangerous customer for a company to have. Because once a customer becomes a whale, they can dictate terms under threat of leaving. Or they can create massive secondary damage by their own failing.
Which is why I strongly suspect that many companies will become bankrupt once this AI bubble bursts - and not small ones, either. No, I fully expect nVidia to go into full Chapter 11 and lose 90+% of its value, requiring trillions in bailout in order to “save”.
Anyone who knows anything about boom-bust cycles will be escaping this bubble like rats from a ship.
There’s really no way to escape the bubble pop. Not for us normal people anyway.
Normal people can somewhat cushion themselves from any severe crash.
Debt itself is not the problem. Lots of debt is actually fine - inflationary effects can and will whittle that debt away, assuming you are still servicing it.
No, the real issue comes down to single-family homes on arable land. If your home is debt-free and completely paid off, there is no legal way to take that away from you, and the land it sits on can allow you to grow food for yourself and even sell a little on the side. While a severe economic crash will be painful for most anyone not of the Parasite Class, those who have debt-free arable land have a chance to ride out that crash better than most.
Granted, the devil is in the details, but in broad strokes this is a truism. The difference is between virtual or physical assets that depend on appreciation, and those who can work for you.
Hate to burst your bubble here, but there are two major ways to take people’s paid-off homes that I can think of just off the top of my head.
Unpaid property taxes can force a foreclosure
In all US states except Florida your home can be forced to be sold in order to satisfy a debt (like medical debt for example)
There are other ways you can lose your paid-off home as well:
It is destroyed in a natural disaster in a place where it is difficult or impossible to get insurnace (Florida/California etc) and you can’t afford to rebuild
You need expensive end-of-life care and you have to sell your home to pay for that
I’m sure there are a few others
Nvidia will likely lose a huge chunk of their share price, but I don’t see them going bankrupt because selling GPUs is still so profitable. If they can’t sell to AI companies there are plenty of other people lining up to buy them.