The first presentation above lays out the plans behind the data centre build out. They are comprehensive and there is certainly a financial logic to them that’s obscured by distractions and AI hype. The question becomes whether or not that financial logic can be implemented in the real world, and the second presentation discusses the many reasons why this is somewhere between unlikely and impossible.
Globally the rise of debt is rapidly outpacing the ability to service it. The debt was traditionally backed by government ability to tax workers’ incomes and a share of corporate profits, but demographics and austerity have limited the tax base and incomes. Labour participation is at a record low, hence debt per employed worker is skyrocketing. Tax cuts for corporations and the wealthy have greatly limited that aspect as well. The collateral backing the debt is already inadequate, in fact far more inadequate than generally perceived. Potential buyers are already questioning the risk associated with sovereign debt, and demanding higher interest rate risk premiums as a result. This is verging on creating an exploding debt scenario.
The system is structured as a ponzi scheme, and those must continue to grow or they will implode. For financial expansion to continue, huge amounts of money must be ‘printed’ (electronically rather than physically) and for that to happen excuses must be found and available collateral expanded. When the repo crisis threatened the financial system in late 2019, covid appeared shortly after a coronavirus pandemic was wargamed in detail in Event 201. This was not a coincidence. Covid, which was manufactured through gain of function research begun in the US and outsourced to China, provided an excuse to print trillions of dollars. Increases in the money supply relative to available good and services naturally cause prices to increase as a lagging indicator, hence the substantial rise in the cost of living since then. The system is teetering on the brink again, and now war provides an excuse, but a collateral expansion is still necessary, and the data centre build out is a key aspect of this.
Wealth held by households is considerable – $175 trillion in the US compared to $40 trillion in national debt, although the quoted debt figure does not include unfunded obligations that would make the figure very much larger. Household wealth includes land, home equity, pensions, securities, businesses, precious metals etc. However, it’s currently not available for use by the financial elites and much of it is illiquid. There are plans to address both of these issues through monetisation and confiscation. The Great Taking, as explained by former hedgefund manager David Rogers Webb on the website of the same name, details the legal changes made across the West to grant priority in bankruptcy to holders of derivatives contracts. Derivatives are simply bets on the price movements of underlying assets, unconnected to ownerships of the assets themselves, however the legal system has been altered in order to create a connection. It’s essentially a perversion of trust law, whereby financial assets can be confiscated by financial elites when the clearing houses that hold them in trust are deliberately bankrupted. You only think you own financial securities. They will be confiscated when the plug is finally pulled on the financial system. In a crisis, ownership will simply default to the financial elite
As for illiquidity, this is to be addressed through tokenisation of all assets on a single ledger held by the Bank for International Settlements (BIS), which is the central bankers’ central bank. Tokenised/monetised assets can be traded fractionally and instantaneously. You will be encouraged to ‘liberate’ equity you hold in these assets in order to generate taxable economic activity, and fines can be levied against a fraction of an asset, for instance your home. Ownership of physical assets becomes a privilege rather than a right, and is to be subject to your compliance with the demands of the system, whatever those may be.
As Miles Harris explains above, the data centre build out has the theoretical potential to create an entire ecosystem of financeable assets, including land, buildings, electrical infrastructure, grid connections, power contracts, cooling systems, and resource consents in resource-constrained areas. Your assets are earmarked for funding it. By fully digitalising finance, for which digital ID would be required, more collateral becomes available and the speed at which it can be deployed to support the debt ponzi would be greatly increased, allowing it to do more work. The availability of granular data processed by AI would allow for lower risk margins, so that a greater proportion of the asset value could be lent against. Value fluctuations could be monitored continuously, ownership would be fully verified in real time, transaction costs would be greatly reduced, and enforcement would be rapid and unavoidable. Faster transactions support the velocity of money, and stronger enforcement can allow for ownership to be stripped away quickly and efficiently. The result would be a great deal more money creation to keep the ponzi scheme inflating. This potential is the real value of data centres to the system. Miles Harris describes AI as a loss leader, but a force multiplier over the longer term. Governments are reinforcing the trend towards continuous revaluation by shifting their borrowing to the short end of the curve.
Parasitic debt has become an increasingly dominant feature, with everything being fed into it to stave off implosion. However, ponzi schemes all end the same way, and implosion is inevitable. It can be delayed, but not prevented. This approach is just another attempt to kick the can down the road. It may fail long before the plan can be fully implemented. Data centres are extremely energy and resource intensive, and the ability to deliver both energy and other essential resources is currently being heavily compromised. The wars have taken a large percentage of global energy supply off the market, and a lot of critical infrastructure has been damaged or destroyed, meaning that restoring supply will take years, and it may never be fully restored. A shortage of refined products is looming, with diesel of particular importance, although aviation fuel and bunker fuel will also be in short supply. This is a result of the loss of heavier crudes with longer chain hydrocarbons, and also the destruction of refineries around the world, either due to war or mysterious ‘accidents’.
In addition to energy issues, data centres also obviously require a lot of computer chips, and these in turn require helium and LNG, the supply of both of which have been greatly reduced due to the war in the Gulf. Data centres also require copper and silver in large quantities. Silver has been in relatively short supply for a long time, and copper extraction requires sulphur, but sulphur supply has also been heavily impacted by the war in the Gulf. The chips have a limited lifespan of 2-3 years, meaning that there would be demand for them in perpetuity, but the necessary resources may well be unavailable. Data centres also require huge amounts of cooling water, but are frequently being built in arid regions. Even if people living in these areas are deprived of water in order to service the data centre, the supply may not be sufficient. Cooling water would be contaminated with biocides and other chemicals, leading to major environmental impact.
Opposition to data centres is growing rapidly, as the continuous light, noise, and fumes make living next to them unbearable, and this in turn destroys property values within a significant radius. Infrasound is particularly harmful to health. Farming with animals anywhere near such an installation may not be a viable option. In places where the adverse impacts are well understood, opposition has been sufficient to see some proposed projects scaled back or even cancelled. The movement to stop the build out is growing. Combined with resource shortages and the likely collapse of the circular financing model of AI (which amounts to financial fraud), this could bring an end to the plans of the financial elite. The questions are how quickly those plans could unravel, and what the impact would be of the financial collapse that would inevitably follow as a debt ponzi unable to maintain expansion would rapidly implode. It’s possible we may not have to wait too long to find out.
