According to the new report issued by the Bank for International Settlements, the reason why the world economy did not collapse despite major geopolitical, economic and environmental (sic) disruptions is because it was driven by the AI bubble, which kept growing despite all odds. (https://www.bis.org/publ/arpdf/ar2026e1.htm)
“The global economy displayed surprising resilience despite successive shocks, from tariffs to the Middle East conflict. This was partly driven by optimism around progress in artificial intelligence (AI), which fuelled large AI-related investments and sustained accommodative financial conditions,” the BIS wrote in the report introduction.
“But the perils have grown with pressure points around risks of persistent inflation, the sustainability of AI-related investments, growing financial vulnerabilities and weakening fiscal positions.” In other words: inflation is rising, AI growth is a bubble ready to burst, the financial system is overwhelmed by unpayable debt and governments are more or less bankrupt.
Instead of pulling the emergency brakes and reform the system, the BIS calls for tightening monetary policy ("Safeguarding price stability"), slashing government budgets ("restoring fiscal space"), trying to straighten a dog’s leg ("strengthening financial stability beyond the banking perimeter") and more deregulation ("structural reforms").
