The air in the trading room felt… tense. At least, that’s what it looked like on the screens, the red numbers flashing across the Dow Jones. This was last week, after the Citrini Research founder, James van Geelen, released his essay. The markets, they reacted fast.
It was a Substack post, a 7,000-word piece, that went viral. Van Geelen’s scenario was stark: a “Global Intelligence Crisis” by 2028. He painted a picture of AI devouring white-collar jobs, collapsing software revenues, and triggering a deflationary spiral. The details, or maybe the fear they tapped into, hit a nerve.
The core argument? AI, in van Geelen’s view, isn’t just a technological shift. It’s an economic wrecking ball. He posited that the automation of skilled labor would lead to mass unemployment, and a collapse in consumer spending. This, in turn, would lead to lower prices and, ultimately, a deflationary crash. A crash that would ripple through the credit and housing markets.
The immediate reaction was a selloff. Stocks tumbled, especially in the tech sector. Investors, or maybe it was just the algorithms, seemed to take the memo seriously. Or, at least, they reacted as if they did. The market’s volatility index, the VIX, spiked. Traders were hedging, scrambling.
“The speed of the reaction was remarkable,” said Dr. Emily Carter, an economist at the Brookings Institution. “It shows how sensitive the market is to narratives, especially ones that touch on existential threats.” She added that the speed of the market’s reaction also tells us something about the general level of anxiety in the financial sector, especially when it comes to technology.
The essay, of course, isn’t the only factor. The markets were already jittery. Inflation, interest rates, and geopolitical uncertainty — all of it played a part. But the timing, the intensity, and the specific claims of a deflationary spiral, all of it pointed to van Geelen’s essay. Or so it seemed.
The memo specifically predicted that by 2028, the unemployment rate could reach levels not seen since the Great Depression. The impact on software revenues, a core part of the U.S. economy, would be massive. Credit markets would seize. Housing prices would plummet.
The response was swift, and it was brutal. The S&P 500 dropped by 2.5% in the two days following the essay’s release. Tech stocks, particularly those seen as vulnerable to AI disruption, took the biggest hits. The reaction, in a way, validated the memo’s core thesis: that the market was, in fact, vulnerable.
There are counterarguments, of course. Some analysts dismissed the essay as alarmist. They pointed to the historical resilience of the economy and the potential for AI to create new jobs, even as it destroys others. But the markets, at least in the short term, seemed to be listening to the doomsayers.
The real question: Is it just noise, or a sign of something much bigger? The markets, as always, are still trying to figure that out.
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