The Meb Faber Show - Better Investing Vanguard’s Joe Davis on AI vs. The National Debt: The Tug-of-War To Decide America’s Future | #605
27 snips
Nov 7, 2025 
Joined by Joe Davis, Vanguard's Global Chief Economist and author of 'Coming Into View,' the discussion dives into the tug-of-war between AI and demographic deficits shaping the U.S. economy. Joe highlights a potential optimistic outcome where AI offsets pressures, while warning of the risks if expectations fall flat. He emphasizes the importance of diversification in investing and explores how technological trends, international bonds, and the roles of financial advisors will evolve in this changing landscape.
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Consensus Forecast Is Unlikely
- Joe Davis finds the consensus 2% growth/2% inflation view has less than 20% probability given megatrends and AI.
- He frames the future as a tug-of-war between an AI-driven upside and a demographics/debt-driven downside.
Real-Time Probabilities Favor AI
- Vanguard's framework assigns roughly 60% odds to an 'AI wins' scenario and updates probabilities in real time.
- The opposite 'deficits dominate' tail grows if fiscal measures worsen, so probabilities shift with new data.
Gold And Tech Rising Together Signals Uncertainty
- Concurrent rallies in gold and tech stocks signal markets are pricing multiple non-consensus futures simultaneously.
- Vanguard's framework explains why both safe-haven and optimism plays can rise together.
