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Balaji Profile picture
@balajis
Sep 1 • 6 tweets • 3 min read • Read on X
The dollar is losing reserve currency status. It’s down to 42% of global reserves, and gold is rapidly rising. Image
Digital gold is becoming the reserve currency of the individual.

Gold is returning as the reserve currency of the state.

Original post below.
Recall the Fed admitted that a “small number” of countries were switching to gold.

But that small number actually included Russia, India, and China: the RIC of BRICS.
It is a huge deal, because in 1950 America made things while in 2025 it only prints things.

Specifically, the only two globally competitive exports of the US are (a) the dollar and (b) tech.

And tariffs, sanctions, trade war, and printing are eroding the dollar. Image
Or the dollar almost halving.

The true rate of inflation is the rate at which the smart money is exiting the US dollar for hard money.
But why are gold prices rising? Because BRICS is stacking gold bricks, and the Russian sanctions eroded the store-of-value function of the dollar.

And why did the Fed hike rates and devalue Treasuries? Because inflation was eroding the purchasing power of the dollar. Image

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More from @balajis

Balaji Profile picture
Aug 18
On many graphs of the physical world, China is in first place by a wide margin.

But if you look more closely, India is a distant but real runner up. Image
Image
The same pattern holds in nuclear.
China is #1 in reactors under construction.
But India is in second place. Image
Electricity generation is similar.

China’s recent increase is unparalleled in history. But India is increasing quickly, and will flip the EU soon. Image
Read 7 tweets
Balaji Profile picture
Aug 6
There are now two kinds of AI retards.

The first kind of retard uses AI everywhere, even where it shouldn’t be used.

The second kind of retard sees AI everywhere, even where it isn’t used.
Usually, it’s obvious what threads are and aren’t AI-written.

But some people can’t tell the difference between normal writing and AI writing. And because they can’t tell the difference, they’ll either overuse AI…or accuse others of using AI!

What we actually may need are built-in statistical AI detectors for every public text field. Paste in a URL into an archive.is-like interface and get back the probability that any div on the page is AI-generated.

In general my view is that AI text shouldn’t be used raw. It’s like a search engine result, it’s lorem ipsum. Useful for research but not final results. AI code is different, but even that requires review. AI visuals are different still, and you can sometimes use them directly.

We’re still developing these conventions, as the tech itself is of course a moving target. But it is interesting that even technologists (who see the huge time-savings that AI gives for, say, data analysis or vibe coding) are annoyed by AI slop. Imagine how much the people who don’t see the positive parts of AI may hate AI.

TLDR: slop is the new spam, and we’ll need new tools and conventions to defeat it.
I agree email spammers will keep adapting.

But I don’t know if a typical poster will keep morphing their content in such a way.
Read 5 tweets
Balaji Profile picture
Jul 25
JP Morgan is updating their p(doom), but for the dollar. Image
Just the fact that JPMC is now admitting this is a big step.

"De-dollarization has increasingly become a substantive topic of discussion among investors, corporates and market participants more broadly."

As the US deglobalizes, the globe dedollarizes.
jpmorgan.com/insights/globa…Image
Yes, but no manufacturing economy can be realistically stood up in time to replace the sheer consumption that money-printing enables.

Example: to make $1T, you can (a) print or (b) sell $1000 phones to 1B people. Obviously, the former is far easier.
Image
Read 4 tweets
Balaji Profile picture
Jun 4
AI PROMPTING → AI VERIFYING

AI prompting scales, because prompting is just typing.

But AI verifying doesn’t scale, because verifying AI output involves much more than just typing.

Sometimes you can verify by eye, which is why AI is great for frontend, images, and video. But for anything subtle, you need to read the code or text deeply — and that means knowing the topic well enough to correct the AI.

Researchers are well aware of this, which is why there’s so much work on evals and hallucination.

However, the concept of verification as the bottleneck for AI users is under-discussed. Yes, you can try formal verification, or critic models where one AI checks another, or other techniques. But to even be aware of the issue as a first class problem is half the battle.

For users: AI verifying is as important as AI prompting.
I love everything @karpathy has done to popularize vibe coding.

But then after you prototype with vibe coding, you need to get to production with right coding.

And that means AI verifying, not just AI prompting. That’s easy when output is visual, much harder when it’s textual.
@karpathy The question when using AI is: how can I inexpensively verify the output of this AI model is correct?

We take for granted the human eye, which is amazing at finding errors in images, videos, and user interfaces.

But we need other kinds of verifiers for other domains.
Read 4 tweets
Balaji Profile picture
May 15
Democracy is creating startup cities.
Moving to Starbase was voting with feet.
Building up Starbase was voting with wallet.
And incorporating Starbase was voting with ballot.
This is the future of democracy.
Not a two-party system with the illusion of choice.
Instead, a 1000-city system with the reality of choice.Image
This thread from @dpoddolphinpro has details on the new city limits & vote results. Elon's side won 212-6.

This is 97% democracy, rather than the 51% democracy of the legacy system. Because everyone who moved to Starbase was already spiritually aligned.
@dpoddolphinpro Here's a video of Starbase, Texas.
Read 5 tweets
Balaji Profile picture
Apr 4
Ironically, one symptom of deindustrialization is that many commenters have never actually managed a physical business.

So. Suppose your US company imports $1M of high quality parts, and adds in its own components to produce finished goods sold for $1.2M per batch. Your gross profit is $200k per batch.

But wait! Suddenly a new 30% tariff is imposed on that $1M of parts. You now have to fork over $300k to customs before you sell anything. That’s cash you probably don’t have. Oh, and even if you do sell everything, you’re now losing $100k per batch.

With a sinking feeling, you realize your profitable business which you somehow managed to keep in America all these years has suddenly become unprofitable.

You post online about how bad this is but get shouted down by an angry mob, convinced that capitalists like you should die. You can’t tell nowadays if they’re on left or right.

Moreover, you don’t have the time, money, skills, or tools in house to build that $1M of parts yourself. You are being asked to do the equivalent of growing a maple tree when all you needed was a little maple syrup. So now you are faced with several tough choices.

(1) First, you may need to go into debt or fire people to quickly come up with the $300k in cash to pay for these surprise tariffs at customs. Even if the tariff might go away, it might not, so you have to get the cash somehow or risk having your shipment impounded.

(2) Next, you might need to reduce quality to stop losing $100k on each batch. You could order the lower quality $750k parts, grimace and pay 30% tariff at customs, and hope you can build and sell for the same price of $1.2M per batch despite the lower quality.

(3) Alternatively, you could keep the quality parts at $1M and instead raise prices to $1.5M per batch to get back your original margins of $200k per batch, which you need to pay employees after all. But that’s a big hike that your customer will probably not welcome, given that he’s likely dealing with his own tariff shock.

So: these tariffs don’t really give an incentive to build in the US. Because it’s far more expensive to build a screw factory than to pay even high tariffs on a foreign screw.

Instead what they likely mean is debt, layoffs, lower quality, and higher prices for any US company that buys parts abroad.

Just to understand how common that is:Image
Ok, say you do.

It’s a 25% hike to go from $1.2M to $1.5M. You will lose customers. Maybe a lot. Maybe they go out of business at that price too.

Moreover, you aren’t making more money. That extra $300k is going straight to Uncle Sam. It’s a tax on the manufacturing sector.
“If the business model cannot support higher prices, it wasn’t a meaningful product to the consumer”

I disagree. Grocery stores, for example, are famously low-margin businesses.

Nevertheless, I think they are quite meaningful. They do low margins but make it up on volume.
Read 11 tweets

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