If you thought the global financial crisis was bad…
Within a few, artificial intelligence will displace a significant portion of the world’s highly paid knowledge workers.
Flows into retirement investment accounts will turn net-negative: workers won’t just stop paying in, they will need to withdraw funds.
These outflows will come largely from passive investment funds, particularly S&P 500 index trackers.
“Jevons paradox”—the historical experience that new technology that increases efficiency also increases demand, thereby creating new jobs that offset losses. Even if demand for services and products increases because of falling costs and prices, many displaced workers will still be obsolete
The job displacement will fall disproportionately on highly educated, well-paid workers whose retirement savings drive America’s stock markets.
The resulting crash in equity prices, particularly combined with falling aggregate demand, will itself be enough to cause a financial crisis on the scale of the global one of 2007-09, if not larger.
We will witness not just an almighty market correction, but the end of the existing social contract.
In terms of politics and policy, as the old saying goes, “You ain’t seen nothing yet.”
Short-seller Carson Block The Economist 28 June 2026
Carson Block is the founder and chief executive of Muddy Waters Research.
https://muddywatersresearch.com/
GFC The Global Financial Crisis
https://www.rba.gov.au/education/resources/explainers/the-global-financial-crisis.html
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