Grant Williams:
Before we get going, here’s the bit where I remind you that nothing we discuss should be considered as investment advice. This conversation is for informational and hopefully entertainment purposes only. So, while we hope you find it both informative and entertaining, please do your own research or speak to a financial advisor before putting a dime of your money into these crazy markets. And now on with the show.
Welcome everybody to a long overdue episode of The Narrative Game and joining me and bringing all his knowledge on the subject in question is my dear friend, the wonderful, the one and only Dr. Ben Hunt. Ben, how are you my friend?
Ben Hunt:
Doing great, Grant, right back at you. Good to see you. And you’re right, long overdue.
Grant Williams:
Long overdue. Well, look, there’s so, so much to talk about, as always. And I sit back and watch with just so much admiration the way you do what you do and the way you cover all the stuff that’s happening.
Ben Hunt:
Oh, thank you.
Grant Williams:
And every time I get a chance to sit down and talk with you about it, I grab it with both hands, because I always come away from these conversations so much better informed and with so much to think about. And I spend a lot of time thinking about this stuff as it is. And damn it, if you don’t send me back to the drawing board every time, I kind of throw my rudimentary guesses about what’s happening into the pot, and you slap them back at me, and I wander away with my tail between my legs. But so happy to have so much more to think about.
Ben Hunt:
Well, that’s very generous of you, Grant, and again, right back at you.
Grant Williams:
Well, listen, the place I want to start this conversation with is a narrative that has been around for some time, and I’ve followed it very closely for a decade now. But for whatever reasons, and I’m hoping you’re going to help me understand those, it has mushroomed and grown and ballooned and appeared in every single place that I can imagine in recent weeks. And that is the dedollarisation narrative. We’ve been through the deglobalization narrative. But this dedollarisation narrative I find fascinating, because I’ve watched it happen and it’s clear there is a move to dedollarise. But what I’ve found really interesting recently is the dogmatism on both sides of this narrative.
Ben Hunt:
Right?
Grant Williams:
And so I’m hoping, yeah, I’m hoping to kind of work out with you and have you help me understand really what’s happening and why now, this particular story, has not only grown legs, but teeth, is the way I kind of like to think about it. So perhaps I can just hand the floor over to you and with a very open subject of dedollarisation and the narrative around it, let you kind of lead me wherever you think I should be going.
Ben Hunt:
Well, I keep coming back to something that’s really guided my thinking about not just international economics, but international relations, power, politics, money, all of that, because that was my first field, right? It’s been a lot of years in academia on this very specific thing. And that guiding principle that I just think is so true is that politics trumps economics, no pun intended. Although, yeah-
Grant Williams:
There are times.
Ben Hunt:
The pun works too, right? Politics trumps economics always, right? So power trumps money. Money is a form of power, but it’s only a form of power. The concept of power politics is much broader and more encompassing than money. I believe that when you think about the dedollarisation story arc that continues to grow, as ole Tucker Carlson is running that on his show. And a couple of weeks ago, Fareed Zakaria at CNN did the same thing.
I mean, I went to grad school with Fareed, right? So I know the guy well. Anyway, that’s another story. So everywhere you look, and certainly you see it with, I’ll call it the Bitcoin bros, right? The Balajis of the world, who… And I know we’ll talk about this as well, it’s a two-pronged narrative. It’s, oh my God, the dollar is no longer going to be the reserve currency. It’s gone. It’s out of here. And US banks, hundreds are insolvent and your money’s not safe. There are two sides of that same coin, of a same narrative coin. Now we’re going to talk about both. I think when I say that politics trumps economics, and we’ve got to think about international power relations here. What clearly occurred last year in response to the Russian invasion of Ukraine was a decision by the United States to use the dollar as a strategic weapon.
We’re going to get the Russian banks off of SWIFT. We’re going to take other steps to freeze oligarch’s money, do all these things. But the battle directly between the US and Russia took place on that front, on that battleground. So a hundred percent the totally rational response by Russia, their, I’ll use the word axis, not as an axis of evil, but if the shoe fits, so we’ll put Iran in that axis, right? Because the battle with Iran is also taking place in the realm of money. Let’s put China in there too, as a strategic competitor for sure, and I’d argue adversary to the United States, not as clearly a strategic adversary as Russia and Iran, but let’s call it for what it is. Increasingly-
Grant Williams:
Yeah, I think that’s fair.
Ben Hunt:
Strategic adversary and not just a competitor. Does it make sense that they will try to do global trade transactions in things other than the US dollar? Of course. And for Russian energy exports, until you get this kind of weird-ass scheme they’ve got going on with a price cap that’s below… Anyway, all of that makes so much sense in terms of great power competition and the new battlefield, which is around money. I see the narrative that has sprung up as an offshoot of that, and I’m not talking about Tucker must be a Russian stooge, although… But we used to call them, I’ll call it fellow travelers, and it was in reference to people, typically on the left, not on the right, but the notion of fellow travelers that for their own domestic political reasons, would further aid, abet the narrative. So the same thing happened in the fifties and sixties and seventies, but there it was not, like I say, the narrative, oh my God, US imperialism, it’s dead. The dollar’s going away.
It’s the correlation of forces. That was the phrase that the Soviet Union used at the peak of their support for proxy wars in Africa and Latin America and Asia, wherever they could go. That was the phrase. It was exactly like today. The difference today is that the ability to, as they say in political consulting, astroturf, these narratives is nuclear level technology as opposed to Bronze Age technology in the fifties. So astroturf means fake grassroots. And it’s a phrase that’s been for around forever in political campaigns because it’s so effective. You pay for the man on the street or the woman on the street to support your candidate and to write about it on Facebook. And it doesn’t have to be paid as in terms of here’s some money, it can be paid as let’s… We’re going to give you some attention, but the effort is the same, fake grassroots support.
I think that’s exactly what’s happening today. I think it’s a combination of strategic interest by Russia and China. Again, I’m not saying they’re paying people off or people are stooges, but I’m saying there is absolutely a strategic imperative, a very rational effort to try to publicize whatever dedollarising moves are made, right? The Malaysian Prime Minister says, oh, yeah, I guess we could do some things with the renminbi directly with China, and it gets trumpeted everywhere. Oh my God, the dollar’s collapsing. The facts are, and this is through 2022, so including when we’ve got the response of knocking essentially Russia out of the SWIFT system and the dollar trade system. But in terms of trade, the dollar is as dominant today as it was 30 years ago. Is the renminbi used for more transactions today, global trade transactions, that does not include the dollar?
Yes. Yes, it is. But you know where that share is coming from on international trade? It’s not coming from the dollar. The dollar is still one side of 90% of global foreign currency transactions, 90%. 90% of all the transactions that happen in the world have the dollar on one side on it. And that’s been a consistent 90% for 30 years. The renminbi share has grown. I think it’s like 3% or 4%, but that’s come at the expense of the yen, the pound, the Euro.
Grant Williams:
The Euro.
Ben Hunt:
Not the dollar, not the dollar. There’s a separate argument, and we can address that too, in terms of central bank reserves, which has seen a decline in the dollar from 20, 30 years ago to today, still is mostly dollar, but there’s been a decline. That’s overblown too, right? Because there’s so many more currencies that are part of central bank reserves that are denominated in dollars. That’s one.
Two is the entire, I’ll call it state-owned enterprises, state-linked enterprises, the purchase of US dollar assets as… I mean, when I’m calling kind of the shadow central banking, the shadow banking world.
It keeps the dollar right where it was before, as the reserve currency of the world. So the facts don’t support this. And yes, you can point to, oh gosh, Brazil and China may be doing currency directly and bypassing the dollar. All right, well, that’s going to be a grand total of 30 basis points of global trade. I mean, the US share goes down from 90.1 to 89.8, and that’s just the reality. But you’re exactly right, Grant, the fever pitch of the drum-beating from the left, from the right, from the Bitcoin bros, from, it’s a group I like to call the Peter Thiel industrial complex. So these billionaire… It’s called accelerationism. We want to collapse the system so we can be the Duke of Auckland and the Count Palatine of a new neo-feudal, lower California. I’m joking, but I’m really not. Right.
Those are three incredibly powerful forces. The China apparatus, the Russia apparatus, great powers both. The billionaire accelerationist Thiel-adjacent group, another incredibly powerful group. All of them have a… And I’ll say political entrepreneurs and their parties, domestically, they all have an interest in destabilizing the United States. And I think that’s exactly the effort that’s being made. It’s not a coordinated effort, but it’s not a not coordinated effort, to destabilize the United States in narrative space, in narrative world. I think that’s exactly what’s happening, and I think we’re going to see so much more of this in not just the years to come, but the days to come. This is increasingly where the battle takes place. It takes place in narrative world, and the toolkit, both to create the storyline that resonates and to astroturf it, is just unprecedented today. I think that’s going on, Grant.
Grant Williams:
Well, let me ask you, because I… Sorry. I’ve watched this very closely and I find it fascinating, and I want to come on in a second to the one country that you didn’t mention in that axis that is very central to all of it in some way, shape or form. And that’s Saudi Arabia. I want to come onto them in a second, but as I watched this narrative spring up and I saw the Fareed Zakaria piece, and I posted that, because I find it fascinating that if it’s being talked about by Fareed Zakaria on CNN in primetime, the level of conversation around this that’s gone on before we’ve reached that point is extraordinary.
And then of course, it shows up on Tucker, and it’s really snowballing and gathering effect. But away from the narrative and away from the effect that that narrative has on entrenching everybody’s positions on either side of yet another great chasm in which some serious thought and discussion could take place if anybody wanted to venture down the walls of it and meet in the middle at the bottom, this is the bit I find interesting, because the dedollarisation that everybody talks about is absolutely happening. And the pace may be glacial, and these stories that we read about may well be blown out of proportion, but there is a clear move here amongst the countries we’ve mentioned to lessen their reliance on the dollar. And that, to me, picked up some genuine speed and some genuine importance the day the US froze Russia’s central bank assets, that-
Ben Hunt:
A hundred percent.
Grant Williams:
To me, was a period in time where every other central bank in the world would’ve said, right, if you don’t now start work on a plan to give yourself at least a parachute out of the US dollar system, you’re a fool. Because today, Russia’s the bad guy and their assets are frozen. Tomorrow, if you get asked to join a coalition of the willing and you turn it down, maybe it’s you that’s the bad guy.
So I’m curious as to your thoughts on how this narrative unfolds from here, because at the margin, you’re right, it doesn’t mean much, but as people look to find a way to extricate themselves just from reliance upon the dollar, every single of one of these little deals in dirhams and ringgit and yuan to ruble direct and Saudi riyals to rubles and yuan directly chips away at America’s ability to run the massive deficits they require in order to fund themselves. And that’s the bit of this that I’m curious about, because it’s a slow process, but out there somewhere, I’ve got to think there’s a tipping point where that marginal dollar that’s no longer required to be held in a reserve, or used for trade, suddenly changes the balance here of America’s ability to print and spend the way it has done for 50, 60 years.
Ben Hunt:
So what we are absolutely seeing is a move towards a multipolar world. Probably a bipolar world, frankly. It feels more and more like we’re moving in that direction.
Grant Williams:
In every way imaginable.
Ben Hunt:
Right. Look, stipulated, it makes a difference, frankly, whether it’s multipolar or bipolar, makes a huge difference in terms of global stability and all like that. Again, it’s trying to put notions of the dollar and dedollarisation within the context of multipolarity. You can absolutely have these movements kind of pushing away a bit from the United States, and your currency is one aspect of that. In so many respects, though, you have so little degrees of freedom there as a country, whether you’re Saudi or you’re Brazil or whoever. It goes back to, I know you remember the famous quote from Big John, Big John Connally, who was Nixon’s treasury secretary when Nixon took the US off the gold standard because of the Euro dollar problem that we were having.
Grant Williams:
The French, the evil French.
Ben Hunt:
The evil French, and of course John Connally’s famous saying about the dollar was, “It’s our currency and it’s your problem.” Right? And that is it. So you’re right that this notion of a tipping point is correct. Also, the notion of a very stable, stable equilibrium is correct. And if you wanted to tell me that in post some great military conflict with the other axis, right? With the other pole, that we move towards the renminbi as being more… Maybe it’s as much of a reserve currency as the Euro, right? That would be a huge, huge thing. For the system as it is, I really believe TINA, there is no alternative to a dollar back system. Does that mean you could have a different system? You could, where the dollar is not that dominant reserve currency. God help us, though, on the path to get from here to there, because that is not a smooth path. That’s not just a tipping point. That’s not just, oh, it’s a thousand little cuts of little deals here and little deals there that tips it over into something else.
There’s the old Polish economist, I forget his name, you can’t jump a chasm in a series of small steps. It is a state change. It’s like moving from water to ice for you to say that, oh, the dollar loses its reserve currency status. It absolutely doesn’t mean, though, that we can’t move to a multipolar world. Both those things happen separately. Multipolar or polarity is the big power question of which money is a part. My point though is that the money part of this is actually phenomenally stable. Phenomenally stable, because of the embeddedness of the dollar in trade. You want to get rid of trade, you want to have a global recession or depression where we go back to basically bartering and using local currencies? Okay. If that’s what happens, that could absolutely change the state. I don’t want that to happen.
But I tell you who does want that to happen? China, Russia, and the Thiel industrial complex.
Grant Williams:
Right. Yeah. And this is the thing that I find so fascinating about this whole discussion around this particular thing, is that there doesn’t seem to be an ability on really anybody’s part to understand this shade of gray that you’ve just described. Because there’s the issue of the reserve currency, but that’s not necessarily what we’re talking about here. People say, oh, the renminbi, there’s no way it can be the reserve currency. I totally agree. But that doesn’t mean that what you’ve just described doesn’t happen. And what you said there, I think, is probably the key to all of this that a lot of people are missing, is that if this does continue to play out, it creates enormous problems of a kind which we don’t really understand what they’re going to be and how they’re going to happen and how they unfurl-
Ben Hunt:
And we haven’t experienced since World War ii.
Grant Williams:
No, exactly right. That’s the bit that I worry about on the part of everyone who just says, don’t be ridiculous. The dollar is not going to give up its reserve status because both things can be true. The dollar cannot give up its reserve status just yet. And we can have complete chaos as these multipolar forces try their best to not even unseat the dollar, but just have a part of this system carved out for them, where we can go over here and we can do our little thing, quietly and peacefully amongst ourselves, without the dollar. Because if they do that, it doesn’t lose the reserve status of the dollar, but it cuts demand for the dollar and it creates, who knows what. I really don’t know what it creates.
Ben Hunt:
But it creates something different because… And that’s the goal of, this goes back Thucydides, right, 2,500 years ago, the strong do what they will, the weak suffer what they must. And so the weak nations are trying to suffer less, but ultimately, they can’t break out of whatever orbit they’re in. The strong nations, the Russias, certainly the Chinas, Iran maybe, Saudi maybe, right? They’re trying to achieve what they can, and they want more independence, period, because the status quo is not very acceptable to them. So what I mean by destabilizing is you know what diminishes significantly, in a material sense, the dollar as a reserve currency, a civil war, right? That’s what does it.
Grant Williams:
Yep.
Ben Hunt:
That’s what does it. Right? So of course everyone who thinks that they would profit, and I don’t mean profit in the money sense, I mean profit in the power sense, from domestic conflict in the United States, and who profits from that? China does. Russia does. Iran does. Actually, I think Saudi does in a way, because I don’t think they really… Anyway, with all those reasons. The billionaire accelerationists love it. The poles of our political spectrum love it, right? On both the right and the left.
Grant Williams:
Absolutely.
Ben Hunt:
They love it. They profit from that domestic destabilization of the United States. And so that’s what we’re going to get.
Grant Williams:
Let’s stick with that, right? Because I was going to take this in a different direction and come back to this, but this is the perfect time to actually bring this into the conversation. And that’s the recent arraignment of the former president, Mr. Trump.
Ben Hunt:
Perfect example.
Grant Williams:
Perfect example, right?
Ben Hunt:
Perfect example.
Grant Williams:
And there’s been a significant amount of digital ink spilled on this, obviously. And as could be predicted, everyone already has… When the arraignment was made, the articles had already been written and the positions had already been taken. And again, there’s very little discourse in the middle.
Ben Hunt:
It’s either the end of the rule of law, I think that was Cruz’s comment, or no one is above the law.
Grant Williams:
Yeah.
Ben Hunt:
Yeah, right. For misdemeanor falsification charges that are blown up to be Class E felonies because they were committed to destabilize an election.
Grant Williams:
Correct. And so there’s two overarching kind of analyses of this that I’ve seen constantly bombarding every feed I have. And that is, one, the biggest shooting in one’s own foot in political history by the Democrats, because they’re just going to galvanize Trump’s base, make him a martyr. And the other is the fact that this was done deliberately because, by galvanizing Trump’s base, we know that we’re going to run against Trump again, and we’re pretty sure we can beat him. Right? Those are the two.
Ben Hunt:
It’s the latter, Grant. It’s a hundred percent the latter. It’s a hundred percent the latter. So what came out of the midterm elections, which were a repudiation of Trump backed candidates and a much better performance by Democrats than feared or expected. There was no red wave. And to what degree red candidates won, it was they were clearly the DeSantis core, not the Trump core. Not at all.
The lesson from that, and I you can see the polling, you can see all of this, is that if, God help us, we’re going to get Biden running in a year and a half, not even that now, they want to run against Trump. They think they can beat Trump, and they are pretty darn sure they can’t beat DeSantis. So this is what I mean about both poles of our political spectrum. They want the chaos, they want the destabilization. Bring it, right?
And you’ve talked about it. We’ve written a lot about it. This is the widening gyre, where the center cannot hold because the political entrepreneurs of today, left and the right, they are as one in wanting the chaos. So that’s what we’re going to get.
Grant Williams:
So as this has played out, it was interesting to me that one of the first moves, and I don’t know if this was predicted or predictable, certainly by the Democrats, was to see DeSantis coming out and supporting Trump. Now, what they did by doing what they did with Trump was they essentially forced every Republican into his corner. I mean, that was fascinating to watch McCarthy and DeSantis and all these guys come out straight away and stand behind Trump. And that was very, very noticeable. And if that’s part of the Dems’ game, then well played them. But as I watched it all, I could very clearly see a way for these guys to then step back from that, and particularly in DeSantis’ case, to reclaim his own path to the presidency.
Ben Hunt:
Absolutely. And look, and if I were a betting man, I think that’s still how I’d bet, because I think it’s kind of clear, and again, the midterms were kind of a clear bit of this, is that Trump ain’t winning. He can’t get a popular majority. And we’ve had now two national elections where he can’t get a popular majority, and the path to getting an electoral majority, it ain’t there for him anymore. It’s just not. It’s not there. That path does not exist. And I think that that’s as clear to the Republicans as it is to the Democrats now. But these are all strategic actors, right? So what you would notice is that leading up to the… Both leading up to, and then subsequently, to the indictment, most of Trump’s rage or ire was directed at DeSantis, not against the… Everybody is running against DeSantis right now. The Dems are running against DeSantis. The Trump campaign is running against DeSantis. I still give him better odds to prevail in the primary than not, frankly, DeSantis.
Grant Williams:
Yeah, I’m with you.
Ben Hunt:
But that’s the domestic political dynamic. For sure, for sure.
Grant Williams:
It’s funny, it seems to me that this move by the Dems could actually be the catalyst for Trump finally flaming out, because it’s going to become all about things that don’t really matter. It’s going to become about what the Democrats did to Trump, rather than what the Democrats have done to America. And like you… I mean, you and I were together on election night in 2016. I remember this.
Ben Hunt:
We sure were.
Grant Williams:
In San Antonio. And I was very confident then in predicting Trump would win. And I was as confident now in predicting that even if he ran, I just don’t think he stands a chance of coming back and winning another term, rightly or wrongly. And that’s no judgment on him, that’s my judgment on what I see. And so I feel as though this move by the Dems to try and force this to be us against Trump again, because we know we can win. I just feel there’s far more chance of this backfiring on them than working out.
Ben Hunt:
I think the status quo, the clear path, particularly since the midterms, was, oh, it’s going to be DeSantis, right? And then Trump was in decline. So I think what you’re going to continue to see, both from the Trump campaign and from the White House, is trying to elevate, to pump up, to keep that Trump campaign alive. Right? Because what they don’t believe, and I don’t know that I believe it either, is that Trump at the convention will be this magnanimous guy who says, “No, I’m falling in line behind you, Ron.” Right? Is that really what we think’s going to happen? I don’t think so.
So the goal here, and I think this is the plan B for the Democrats, is, all right, maybe it’ll help him in the primary, but it’s probably not enough to get him over the top. DeSantis is still going to be the candidate. If the Trump voters stay home, we’ve got a shot against DeSantis too. So it’s a dominant strategy by the Democrats, right? It’s a hypocritical one, because at the same time, their message to their base is, oh my God, it might be Donald Trump as president again. Give us money. Right? So they want to run against Trump, even if Trump is not the candidate.
Grant Williams:
Yes, yes. No, I totally understand.
Ben Hunt:
I mean, that’s just a dominant strategy. I think that’s where they see as their path. But you know, you raised the point about, well, do we actually… Because they don’t want to run on the economy?
Grant Williams:
No, for sure. For sure they don’t.
Ben Hunt:
And the DeSantis campaign does. So DeSantis has got to fight this rear guard action against Trump. I think he will win the nomination, but then even if he wins the nomination, then he’s got to get those supporters the ever Trump, not the never Trump, but the ever Trump supporters to show up in states like Pennsylvania, because he’s got to have that happen. He’s got to have that happen to… And I think he probably will, but those are the dynamics.
Grant Williams:
I was going to say, I think that will be easier. Yeah. I think that’ll be easier for him. But is there any way you think that Biden doesn’t run on the Democrat ticket?
Ben Hunt:
No, I don’t think there’s any way at all.
Grant Williams:
You don’t think so?
Ben Hunt:
He doesn’t.
Grant Williams:
There’s no surprises on that side of the coming our way? I can’t think of one.
Ben Hunt:
It’d have to be a health thing, right? But I think you and I have both had this experience with people, and they’re almost always men, who achieve that preeminent level. Certainly, you see it in our world of investing. The old billionaires, they honestly think they’re going to live forever. They think they’re going to live forever. And it’s just that pure raw ego. I saw the new John Wick movie, I loved it. It was great, enjoyed it. But in every movie John Wick is described by one of the Russian mobsters or whoever, one of the villains, “He’s a man of sheer fucking will.” Right? That’s the description of John Wick. And the truth is, in our world of finance and politics, the people who achieve these positions, they are men of sheer fucking ego. That’s what they are.
But barring something like that, then I don’t know what the plan B for Democrats would be. I mean, I’ve got to think it’s got to be somebody like Gavin Newsom and not Harris, but man, I don’t know.
Grant Williams:
Yeah. Well, yeah. Okay. Yeah. I’m not sure. I’m not sure-
Ben Hunt:
That’s a whole nother-
Grant Williams:
Which frightens me more.
Ben Hunt:
We’ll get back on the podcast again when that happens.
Grant Williams:
Absolutely, we will. Well, listen, let bring another subject in, because again, when we talk about narratives and we talk about things that are omnipresent, ubiquitous, and just impossible to ignore, and if you’re paying attention, you start wondering why that is. AI, large language models, neural networks, ChatGPT, I mean, this is something, particularly in the case of ChatGPT, that has just exploded in consciousness. And I’ve been fascinated for my own kind of cycle of ChatGPT went from amazement to complete disconnection with it in such an accelerated timeframe. Someone sent me something the other day and they said, “Oh, look, I want you to read this because I’ve asked ChatGPT to write something about the banks and what was going on in Silicon Valley Bank.” And we’ll come onto that in a second, in the style of Hunter S. Thompson, which is fascinating, right?
Ben Hunt:
Yeah, yeah.
Grant Williams:
And here it is. And I picked this thing up, and I read through the first paragraph and all, its clever Hunter S. Thompsoness. And then I completely disconnected with it, because I realized there was nothing, there was no soul behind it. There was no there, there. It was just a construct of something that had been programmed to do this. And I found that my connection to this stuff is completely gone. And I find myself bombarded with ChatGPT more and more and more, and I just find that I just can’t… I’m not impressed by it anymore. I am at one level, but on a personal level, I’m like, oh, it’s another ChatGPT thing. Click. I’m moving on to find an Epsilon Theory piece where I can connect with you or Rusty in a real human way. Talk a little bit about this stuff through your lens and the rise of ChatGPT and its ilk and what that means and what that perhaps tells you.
Ben Hunt:
So I’ll tell you, Grant, I had the opposite trajectory where at first it was, okay, that’s going to be cute. But for actually then using it within our own business, I’m convinced now this is an industrial revolution level.
Grant Williams:
No, no, I absolutely agree with that. I’m saying from a creative standpoint, and, oh, look what GPT can do as a user, is one thing, but consumer’s another.
Ben Hunt:
Yeah. Yeah. And so my response… And I get to see the same sort of things, and my response is, you’re doing it wrong. You’re doing it wrong.
So what the immense power, for good, and we’ll talk about the power for not good, and I’ve got a big note on this coming. I want to publish it on Easter. Easter Sunday. Because it’s called an AI in the city of God, the Augustinian city of God and the city of man. But the chat transformers are a, I think, miraculous human assistant, because it’s been trained on our human language and writings. So it is an artificial human intelligence, and you have to treat it that way. Where it changes everything is for a creator, let’s call it a senior person, a decision maker, to use that to eliminate the tasks on which they spend a lot of their effort that a human assistant could perform.
Because this, the GPT-4 in particular, performs those roles a hundred times better, faster, than the human person you’d be tasking with that. And it’s particularly suited for… In our business, we are getting some of our core work processes, 100x operational efficiency improvements by implementing this, I mean, things that we’d have to hire a couple of people or would take Rusty and me working ourselves a couple of months, like that. And it’s transformative. And it’s revolutionary. It’s revolutionary because it’s not just search, it’s also discovery. I think of it as like your own librarian for the creative work you want to do, the ability to have… This is my librarian, go into the stacks and not just this one particular book or thing I’m interested in, but find the things that are around it that, as I described to you, kind of the gist of what I’m looking for.
Show me things that I’ve never seen before that are going to be impactful for me in my creating, whether that’s creating a legal brief, whether that’s creating a new note, whether that’s creating anything. This is… It’s overwhelming to me the power for this. There are so many… I think there are not millions of people, but I think there are thousands of people for whom this is not a 2x improvement in operational efficiency. I think that’s going to be the norm. So companies, individuals, will use it for a significant productivity boost, maybe even up to 2x on a lot of these tasks. And a lot of things go away as a result. Search engine optimization, that all goes away.
We can come up with a dozen of those kinds of examples. Just things that require humans to do things, they now just go away. But there are opportunities here for 100x changes in our systems, from business models to creativity. I think it’s going to lead to an enormous flowering of human, to your point, art. It doesn’t come from the transformer. It comes from humans.
Grant Williams:
Exactly.
Ben Hunt:
For whom this allows us to make incredibly better art. So I’m just so optimistic and excited about that. And at the same time, so utterly resigned, I think it’s the right word, for these tools to be used, not just for all the astroturfing, right, that we were talking about before, but frankly, to rewrite history. Because what these large language models do is they provide what sounds right.
Grant Williams:
Exactly. Yep.
Ben Hunt:
Right? You have to channel it. You have to say, no, no, no. To do this research on, I want to write a note about molecular biology, so I want you to limit your search to all the past articles in Science journal, the journal, Science, and its ecosystem. I want you to just look there, because I don’t want you pulling things that sound right, that are “truthy,” to use Colbert’s word, right? Because that’s how humans work. If you had a human assistant and said, hey, just go out and find me something on mRNA vaccines. I want to write a paper about it. The human assistant would come back to you and a lot of stuff wouldn’t be true at all. Right? It’s the same way with this.
It’s the same way with this. It’s the same with the ChatGPT. They provide what sounds right and for a lot of work and a lot of research, that’s good. That’s all we need. For other work, you know, you want it… No, no, no. I want truth with a capital T. History and the way history sits with us is about its truthiness, not its truth with a capital T. And this is going to be part of the big note is that the real power here is of, again, destabilizing common knowledge foundations through astroturfing and social media and with messages that are designed and optimized to sound truthy.
I’ll give you an example. So this guy, Balaji, when he’s writing about, oh, hundreds of banks are insolvent, the US system is going to collapse. Buy Bitcoin. That’s the message. Well, in all of his tweets and stuff, he’ll have 15 citations that we humans, they look at it and say, oh, well, he’s got citations. That must be right. Oh my goodness. There’s data here. There’s data. Now, I mean, if you go into it, A, the data is the equivalent of… A lot of it is bullshit. And the other thing is that, well, some things are cited, but the real claims, like hundreds of banks are insolvent or it’s going to die, buy Bitcoin. Those are just statements of affect. That’s the so sophistry of all this. But it works, we’re hardwired to respond to this stuff.
We’re hardwired and putting ChatGPT in the hands of those who want to destabilize, who want to create an alternative history of what is truthy, not what is truth. That’s absolutely where we’re going, Grant. And it’s going to be just this battle between rethinking autonomous humans from the bottom up using ChatGPT to create art and shields, defenses against what is coming down from the top, which is just going to be just a wholesale rewriting of history. And as Orwell said, right, that’s the power of Big Brother. It’s the power to rewrite history.
Grant Williams:
Yeah. But what does this mean for narrative and the way narrative is used? Because as you say, there will be two sides using the same tools to try and create alternate narratives. And I just wonder if you end up in what some call a narrative singularity, where if you’re using the same tool to try and create opposing arguments, does the whole thing eat itself? I’m just curious. Or is it just a function of it’s just getting better at funneling the narratives on both sides, exactly where they need to go.
Ben Hunt:
It’s the latter. It just increases the polarization and it increases the destabilization it creates. There are many games… It’s the rare game, in the technical sense of the word, that has a single equilibrium. What we’re moving towards are just two separate worlds, each with its own stable equilibrium, that multipolarity.
And again, like in ‘84, it’s Eurasia, East Asia and Oceania, and they are three separate spheres. The difference is this isn’t happening as much, right, to lose it in, I’ll call it neat world, but it happens in narrative world. That’s where the audiences are, and they interact with each other only for rage engagements. That’s what they’re there for. And that’s why the tech platforms love it, because a rage engagement is just as good as an affinity engagement. Better, in fact.
Grant Williams:
Better. Yeah, absolutely right. Yeah, it’s terrifying. Well, listen, before we finish, I want to make sure that we get a chance to talk about your upcoming event.
Ben Hunt:
Well, it’s a good segue, Grant, because the event-
Grant Williams:
It is a good segue.
Ben Hunt:
Epsilon Connect, and your participation in this specifically, is for us to connect in person and talk about, well, this is going to be your role there, how do we talk with each other?
How do we talk across the event horizon of super wokeism, or MAGAism, or Bitcoinism or Dedollar… All this, how do we talk with each other again? I mean that really… So the conference is called Epsilon Connect, and we’re going to have it in Nashville, Tennessee, first week in June, cosponsored with Vanderbilt University there. So we’re having it there on the Vanderbilt campus because a member of… An Epsilon Theory subscriber and his family made a really generous donation to Vanderbilt to set up a research center for narrative studies. Because this is… There’s real hard science here behind this, and we’re seeing it now with the ChatGPT. But so we want to convene and talk about the hard science and the role of GPT and the like and narrative research. But we also want to connect and share with each other so that we can become, yes, better investors.
Yes, better citizens, but most importantly, better friends and neighbors and human beings. So we’re going to turn the tables a little bit, Grant, I mean, you’re not going to be there to interview people. Rusty’s going to have… We’re going to have sessions with you where we’re going to interview you, and you can talk with anyone, Grant. It’s incredible. It’s incredible. And we want to talk about that. How do you do what you do, Grant, because these are the skills and these are the philosophies of being that you embody and put into practice, that we all want to take out. So yes, that’s our conference. Yes, Grant Williams is going to be there for the whole thing. And yeah, we’re going to turn the tables on Grant, because he’s not just a great interviewer, but we want to find out how you do it, Grant, so that that’s going to be a prime part of the menu there at Epsilon Connect.
Grant Williams:
Well, look, this has gone horribly wrong for me. I didn’t plan at any point in this to start I’m talking about myself, so you’ve turned the tables on me already. I was hoping we would talk about how people can sign up for it, how people can get involved. I cannot wait to sit there and chat with you and Rusty, and I’ve thought about this session and the questions you want to talk about so much since you asked me, because it was such a unique question to have asked to me. And so I’ve given it a lot of thought, and I’m not going to preempt what I’m going to say, but I’ve already thought a great deal about what I’m going to say.
And I think, in fairness, it’s such an important subject to have. And I’m genuinely thrilled and flattered that you would actually invite me to be a part of this and have me be a part of that particular piece of this puzzle, because I think it’s so important. And I think we’ve gotten so far away from this, Ben, and I think all the work that you and Rusty do to try and connect people through the amazing community, of your Wolf Pack at Epsilon Theory is so important. So you and I aside, just let people know how they can be a part of this thing, because I think the more people that take part in this, however they can, I think the better chance we’ve got of surviving the GPTs of the world and surviving their narrative challenges.
Ben Hunt:
So epsilonconnect.org, where we’ve set up a not-for-profit to handle all of this, and all of the proceeds, after cost, will go to hard science research programs around narrative. So epsilonconnect.org and check it out. It’s not just Grant, we’ve got a lot of amazing-
Grant Williams:
Geez, you better hope it’s not just me.
Ben Hunt:
Oh, no, no.
Grant Williams:
That’s not going to put enough bums on the seats if you have anything left over, I promise you.
Ben Hunt:
You give us a really good start, Grant. It’s a wonderful group. The goal here is not to sit back and spectate. The goal here is to lean forward and really participate. So it’s a very different conference setup than I think anything, most of us are familiar with. There’s a real hard cap on attendance. So please, if you’re interested, come sign up to one of our two sessions. It’s going to be very special. And I’m confident it will live up to its name of Connect, on a very personal level, and I think that’s what the world needs.
Grant Williams:
Well, I can’t wait. I’m going to fly halfway around the world to be part of this, because I’m genuinely thrilled to be a part of it, Ben. So thanks to you and thanks to Rusty. And for anybody listening to this, epsilonconnect.com aside, how else can they follow the amazing work that you and Rusty do at Epsilon Theory?
Ben Hunt:
We are all Epsilon Theory all the time. So epsilontheory.com, I’m @epsilontheory on Twitter. I’m doing a lot less Twitter now. I’m just going to-
Grant Williams:
I’ve noticed, I’ve noticed. You and most of the advertisers, it seems.
Ben Hunt:
Yes, it seems, it seems. But yes, Epsilon Theory, that’s where you can find us, and epsilonconnect.org for our conference this June.
Grant Williams:
All right, my friend. Well, listen, I say, this has been long overdue. We won’t leave it so long next time. But in the meantime, I will see you in a few short weeks in Nashville. My first trip to Nashville. I’m excited to see it. I’ve never been before.
Ben Hunt:
It’s a great place.
Grant Williams:
I look forward to that. And my thanks to you for taking this hour to sit and chat with me on a bright Sunday… Thursday morning.
Ben Hunt:
Thursday morning. Thank you, Grant. Always a pleasure.
Grant Williams:
All right, Ben, I’ll see you soon.
Well, I have say it’s been far too long since I’ve had the chance to talk to Ben and record a Narrative Game episode. Just so fascinating, as always. And the times we live in, I think it’s so important to understand a lot of the things that Ben and Rusty talk about and understand what we’re being bombarded with and why. So I hope you found that as helpful and as thought-provoking as I did. Again, just to reiterate, epsilontheory.com is where you’ll find Ben and Rusty’s stellar work. And I really would urge you to check that out because no one does what they do, and it really is just a phenomenal resource. And Epsilon Connect. I’m going to be there, it’s two sessions over, I think, six days. I’m going to be there for the whole thing. I’m so excited to be a part of it and get the chance to sit and talk with Ben and Rusty in front of an audience of like-minded people who really want to understand how the world works and hopefully how to be a better part of it, not just individually, but as a group.
So if you’re able and willing to come along and be a part of that, I would urge you to go to Epsilon Connect, find out more about it, and come and join us in Vanderbilt in Nashville in a few weeks time. My thanks is always to Ben, but most of all, my thanks to you for listening. It’s been another wonderful conversation. I’ll be back again shortly with another episode. But in the meantime, I wish you all the very best. Thanks so much.
Nothing we discussed should be considered as investment advice. This conversation is for informational and hopefully entertainment purposes only. So, while we hope you find it both informative and entertaining, please do your own research or speak to a financial advisor before putting a dime of your money into these crazy markets.
