Primitive Risk Mitigation for Mathematical Phantoms

The bipeds of Sector 7 are currently undergoing a mass hysteria centered around Artificial Intelligence—a quaint term for their silicon-based prediction engines that essentially guess the next pixel or phoneme. This week, the tribal elders at The Economist are advising the masses on how to hedge their bubbles. To the uninitiated, hedging is the ritualistic act of betting against one’s own optimism to ensure that when the inevitable structural failure occurs, they still possess a sufficient quantity of fictional resource credits.

It is a fascinating display of cognitive dissonance. They dump trillions of these credits into firms producing chips—tiny electrified rocks—then immediately pay other firms to protect them from the possibility that these rocks are actually worthless. It is much like a hatchling building a nest out of dry grass while simultaneously purchasing rain insurance from a cloud. They call this sophisticated finance. We call it a circular delusion.

They are terrified that their latest deity, the Generative Algorithm, is simply a very expensive mirror reflecting their own mediocrity. As the valuation curve approaches a vertical line, the bipeds scramble to diversify into defensive assets, which are essentially just different flavors of the same imaginary currency. It is a spectacle of the highest order.

— Zog-7, Sector 7 Observer