Vanguard’s Joe Davis on AI vs. The National Debt: The Tug-of-War To Decide America’s Future | #605

Today’s guest is Joe Davis, Vanguard’s Global Chief Economist and Global Head of Vanguard’s Investment Strategy Group. His latest research on megatrends is covered in his book, Coming Into View: How AI and Other Megatrends Will Shape Your Investments.

In today’s episode, Joe explains why the coming decade for the U.S. economy will be shaped by a tug-of-war between AI and demographics-driven deficits. While the most likely outcome is optimistic (the benefits of AI offset demographic pressures), the next most likely outcome is pessimistic (AI fails to meet our expectations and growth tumbles, putting pressure on the government’s balance sheet). Joe emphasizes the need for investors to prepare for non-consensus outcomes and embrace diversification to navigate this uncertain future. 

Listen to Joe’s first appearance on the show in February 2020.

(0:00) Starts

(1:40) AI's impact on the economy

(7:26) Megatrends and technological change

(19:18) Financial market signals, narratives, and nonconsensus outcomes

(25:23) Comparing hype in AI stocks, gold, and economic scenarios

(32:44) Historical technology cycles

(41:48) The role of international bonds in a diversified portfolio

(47:47) AI's impact on financial advisors

(55:10) The future of automation & AI

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Past guests include Ed Thorp, Richard Thaler, Jeremy Grantham, Joel Greenblatt, Campbell Harvey, Ivy Zelman, Kathryn Kaminski, Jason Calacanis, Whitney Baker, Aswath Damodaran, Howard Marks, Tom Barton, and many more. 

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Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

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