Is AI going to take your job? Another way to put it is, where is everybody? Like, where did all the workers in restaurants go? Where did all the workers in the airplanes go? I just was reading today, Jet Blue has to cut down on flights because there aren't enough air traffic controllers. Where did everybody go? Well, I have on the man who has the answer and it's Matt Barry from freelancer.com.
Things have changed so much since the last time he came on, he came on in 2017 and the world has gone from 3% of people doing freelancing work to upwards of 40% of people doing freelancing work. And now AI is not going to just change everything for the better for worse. We talk about all these things, talk about the economy, worst-case scenarios, best-case scenarios but most of all it's just fascinating, is AI going to take your job or anybody else you know, here's Matt and I talking about it.
自 2017 年上次他来以来,情况已经大不同了。当时只有 3% 的人在自由职业领域工作,现在已经上升到超过 40% 的人在自由职业领域工作。现在 AI 将不仅仅是改变一切的好坏。我们谈论所有这些事情,谈论经济,最坏情况和最好情况,但最重要的是,人工智能会取代你的工作或你认识的任何其他人吗? 凯撒与我谈论它,真的很有趣。
This isn't your average business podcast and he's not your average host this is the James Altiger show. Matt, we last spoke six years ago and I feel like the freelancing world has a billion percent changed. What an incredible time to be alive, I mean and be a freelancer or be an entrepreneur it's incredible now.
I mean, in 2020 I was reading that only 3% of the work for us for freelancers and now it's up to 40% of the workforce does some sort of freelancing work. What are they all doing? What's happened to the world, I mean other than the pandemic?
Well, I mean every job on the world now can be done with the computer pretty much from anywhere in the world software is you know eaten everything is all moved into the clouds and human-computer interaction is got so good that you know people on the other side of the world can work in a team on pretty much any profession in real-time. At the same time, you've got whole huge numbers of people have gone online around the world and emerging markets is the internet has kind of grown everywhere and getting skilled up, getting trained up and now with artificial intelligence.
Everyone in the world can now perform at the elite level in a whole variety of skills, you can now illustrate that the level of an elite illustrator even though you might not have any design skills whatsoever you can. Right copy you can program using chat GPT it's an incredible time and the whole space is moving so quickly with all tooling is now available for freelancers that is all powered by I.
Yeah, like a lot of people go back and forth on the AI component of this and I'm still interested in like in the economics of like why people are leaving the kind of regular workforce for freelancing but a lot of people worry will AI take their jobs let's say I was going to hire someone to make a logo well now I can just go to mid journey or dolly or any of these AI graphic tools and say get me a logo give me five give me five thousand logos are going to pick from and this is what I want and I do it in the style solve the world.
The style solve or dolly and boom, it does it like is there going to be a human need for many typical freelancing jobs. I absolutely because you still need someone to drive all the tools my mother would be completely unable to go to mid journey and figure out how to use it and also people are very time poor so you always need people to do things for you even if you know how to do the particular work you've got to get people to assist you with that you know these tools basically a super skill everyone it lifts the ability of everyone.
Around the world in a variety of different categories and that's going to increase and the world is desperately short in skilled labor or around the world. You know every female on the planet needs to have 2.1 children to maintain the population and across the western world, the birth rate is way below the replacement rate even in Bangladesh today the birth rate is well below the replacement rate, so we're critically short, you know engineers critically short computer scientists and programmers you know some countries like Japan it's so pronounced in 2011 Unicharm which is the largest model in the world.
In the charm which is the largest manufacturer of diapers in Japan says we now produce more adult diapers than baby diapers right so, so there's a huge that is unbelievable that's the statistic of the day. So there's a huge needs for skilled talents and you know like all technologies in the past you know technology can be disruptive temporarily but it does create more jobs in the end that it takes, although you know I will say the events are happening in AI you know what one week in AI seems to be one year in any other filter field of research.
We'll see what we're seeing right now is that that basically it's giving superpowers to people around the world no matter what your skill set is you can now.
Working all these different areas at the elite level it's incredible it reminds me of like in the 90s where people would spend a lot of money hiring others like freelancers to make their websites but then making websites became ridiculously cheap at least at the basic level because you could just use WordPress or something like that but still probably now more people than ever.
Are higher to build websites because you still need no matter what a human component to really manage the process like there's always a human component no matter what the technology is.
That's right and people are very time poor there's so many things you can do in the world now that you're hyper connected right there's so many distractions whether it's whether it's work or whether it's Instagram or whether it's you know you can be counting with people or whatever it is.
You know the time is increasingly precious and so you do need people to help you no matter what it is and if you look at some of these professions and what's happened over the last decade or two with the internet and with software and so forth.
Look at graphic designer 20 years ago graphic designers the bread and butter at least here amongst the people I knew that were doing graphic design was I'll design a few logos and you know I'll do that for a few thousand dollars and then afterwards what I'll do is I'll do a station reset few business cards and I'll be like a little bit more and you know it's all kind of that level of sort of work.
You know over the last decade graphic designers don't really in the west don't really do that anymore they're up the stack now they're designing apps they're designing websites the designing businesses right they can now high freelancers who can program to help them to turn the dreams into reality.
And with a it's going to be another leap again where you know the I will probably design the app and the website for you and you'll be more of a conductor or the editor or the producer or the cinematographer saying I want it to be a little bit different maybe a bit more color there at a feature so we can.
You know do the following and and you know the nature of work is going to be more and more higher level and more more the production level in the directing level then then maybe on the tools pushing pixels around the screen.
And you know let me ask this I wonder if this is true for Australia like and around the world again freelancer dot com is is a global site there's about sixteen million users so it's around the world I wonder if you're seeing the same thing we're seeing very particularly here in the US which is after the pandemic.
It seemed like nobody went back to work like every restaurant was complaining to me oh we don't have anybody none of our old employees came back where did everybody go did they all go to freelancer dot com I mean that a lot of did actually yes so there's been three major.
Points in the world in the last decade where you've had this discontinuity of disruption that's occurred in the marketplace for work we saw it in originally in the global financial crisis where you know even though that was mainly in the US for the most part you had three things happening you had businesses going online looking to do things cheaper because it obviously you know all the layoffs and everyone's trying to cut costs you had a lot of people looking for work online and then you had the third phenomenon which was a lot of people creating businesses.
Because they're like you know I lost my job at Lane brothers yeah I've got six months before I kind of will take it seriously and get back into the workforce why don't I kind of build that start up that I was always wanting to build or go help my wife with her her shop she was want to get a website put together I kind of help with that.
We saw that again in the pandemic three things were happening you know people looking for online business looking to cut costs but a lot of start up businesses were happening and you know people were kind of you know there's build a little drop shipping website or on Facebook I can sell a particular product they found out Valley bar.
Or you know I can build a game that was very popular of games being developed and so forth and we're seeing again today with the with all the layoffs that's happening in tech where you know the I think last year there's like 170,000 layoffs in technology companies in the US and you know people doing the same thing they're like you know I'm not going to go back working at a big tech company or or I have you know I'm going to do my own start up here's a chance for me to kind of go out there and and do it myself and you know we're seeing a big boom in you know software development apps we're seeing a big boom in games and so on.
Like what kind of games like I when I think of a game I think of these really high tech 3d you know super games that take a thousand man years to build like can someone just go on freelancers.com and say oh I could build a game like how do you how do you build a game.
Absolutely you come in and you just kind of write out right out of brief and you say this is kind of how I want it to work and there's all sorts of freelancers all way from individuals right up to professional agencies that will do it for you for any budget really I mean there's a lot of that's really I mean there's one that happened like as we speak there building a game around war and strategy that you know there's missions special events and a high entire campaign storyline. Then implementing a play to play a feature and a play versus machine model etc and you can do the stuff very very very inexpensively for that one tenth of what you expect to cost if you went to local agencies and you know the talent is incredible today you know any skill set you can possibly imagine you can hire kind of the snappy fingers by disposing a project that's there.
Basically the global economy benefits so you have people in third world countries who are doing this labor cheaply and you have people like who are laid off from Amazon last week they have maybe a little extra cash to hire somebody from some other country through a site like freelance.com or upwork or whatever they can lay out the cash to build a game build the website build a store or whatever. That's right.
So who's who actually will restaurants all go about a business because that can be any waiters any more. Well I mean the there's there is the issue with restaurants. I would be a waiter.
But yeah I mean it's a pretty amazing phenomenon because what's happening is you know France is a pretty magical place because you know the 66 million people are on the marketplace. They're creating the future and they're creating opportunity and it's really changing lives so on one hand yeah you've got the guy who left Amazon in the US is like you know what I'm going to start a game or I'm going to start a website or an app or what have you. And so they're kind of creating the future and innovating and doing fun fun things.
And on the other side you've got people emerging markets who are working in highly skilled areas and it's generating opportunity in income and tech jobs and yes skills are being generated and so forth. And so it's it's it's changing lives in the other side of the equation as well because you know globally there's a huge disparity in things like wages right and the average wage in the US last time a check was about 123 dollars a day and the average wage in India was some like $2.25 a day so there's like 50 to 1 disparity and those those ratios might have changed a little bit but but the point the point is you can you can deliver high paying jobs on one side of the equation in areas that desperately need them and and lift skills up and build independence because the freelancers they're all you can choose when you want to work what fuel. You want to work what field you want to work in how much you want to be paid and so forth and at the same time it's it's really it's architect in the future of of basically work it's going to create a job rather than take a job and I think a lot of people when they were off.
Yeah, you know the stimulus happened and there's a lot of benefits and and so forth you correctly identified that a lot of people didn't go back to the traditional workforce they're like you know I can I can run my own business now I can find ways to start things are side hustles even to supplement my income and I get to kind of you know be master of my destiny rather than kind of. You know cooking cook out 9 to 5 and it seems like AI is this.
Huge thing that's only just happened like yesterday that's going to completely change the nature of freelancing even like as we were already discussing like what skills are going to be the important skill sets to be a freelancer in the coming months years and so on now that AI has been introduced seems like you're going to have to have really good communication and project management skills like you said people are going to have me conductors of many different skill sets that AI is going to be a lot of work. So that's that AI is is doing as opposed to necessarily having the skill yourself.
That's right. I mean the advances I mean if you think about it's a it's only since August of last year they can stable diffusion came out which kind of kicked off the whole arms race and now you've got things like mid journey you've got obviously chat GPT 4 which came out which is game changing.
Any sort of white color job now the AI will be able to figure out and and probably do it at the at the level and so whether opportunity comes in is a now anyone's super skilled anyone can use the tools anyone can get in there and perform at the level across a range of different areas and yes the jobs move up the stack just like they've moved it with every leap of technology so you will be less sort of programming in Python and you'll be more saying I would like to have an app that's like Uber for pets. Can you change the features here can you more of a product manager more of a director more of conductor.
You know I like the styling I don't really like the styling can you please make the style a little bit more modern or a bit more sleek or a bit more like that website or generate a mood board for me based upon the following you know preferences or and what have you so so it's going to be really lifting pro to live at levels both of of the freelancers to the work and also the speed of which companies can commercialize products because you're a little bit of say OK build me a company today and I want a website want an app. I want to work like this I want to be in this sort of styling and presto it's there then you have a real challenges of well how do I sell it how do I market and so forth what are you seeing the most in terms of like changes just in the past few months across the freelancer dot com community.
I definitely designed a copywriting so you know copyright is now less writing the copy themselves and they're more being the editor so chat GPT for example can generate content in any field you want. But then you have to tell it will actually do it again but do it in a different style or I showed off an example as a friend of mine who runs macro voices the podcast Eric Towns and I had lunch on the other day and he's like you know you get it to run an interview transcript with me with the surgaid glaziev and I wrote the transcript is if that's what we're speaking and he's like but it doesn't really understand that he might have a certain bias given these position in the Russian ministry and so I said chat GPT do it again noting that he's in the Russian ministry and he might have a bit of bias and I regret the whole transcript needs to like wow right so you will play more of an editorial role like a cinematographer or director or produce sort of role where where you'll look at and go okay change that change this where have you but the air itself in terms of what can generate will be incredible I mean like in a few weeks from now you better say make me the movie top gun 17 with Putin's fighting that with Tom Cruise and you hit a button the bang of the movie will come out of the side that's literally wakes away so it's pretty exciting times and whole industry's got change and whatever someone says we'll chat GPT can do this but it will never be able to do that you know the wrong like it's whatever you say it's never gonna be able to do eventually it will do it
And so the question is, at what point, I mean, with every change of technology in history, as you said earlier, there's always been more jobs created than loss. When horses were replaced by cars, more jobs were created than were lost in the horse industry. But will there come a tipping point where AI finally does the full human experience, the full human job in major industries? Well, yeah, and imagine, you've got to remember that most jobs actually are not online jobs. Jobs are actually physical jobs where you kind of have to go somewhere and pick something up and put it down. Until they've plugged chat GPT into Boston Dynamics Atlas, we've got a bit of time left before Terminator, so it takes over.
But yeah, certainly, I think it'd be interesting. When the software starts running itself, like in chat GPT, it gets given the source code to chat GPT and said, can you improve chat GPT? It'd be pretty crazy. I think the other big crazy thing is going to happen is when they feed in every single academic paper, every thesis that's been written by a PhD student, every bit of research known to man, and they'll say, okay, based on all that research, can you write a paper for a pill that will extend human life by five years or whatever it may be. I think you'll have a technological explosion that's going to come out the other side of that. That combined with the feedback loop of the software writing, the software, if chat GPT can kind of write itself, you might get a pretty crazy sort of times.
They've talked about the singularity for years where at some point, technology will outstrip the ability. The pace of which technology improves will outpace the ability of the human mind to be able to comprehend it. You'll end up with this big bangs of phenomena where either man and machine will meld, and that's what Elon Musk is trying to do with neural link, where he's trying to say, well, maybe the future of humanity is being inside the machine, or you might end up with a Terminator event where the chat GPT ends up driving Boston Dynamics Atlas. The AI figures out that humans are a threat and they're a waste of resources and you're trying to call for John Conner at that point.
Or it might be the Peter Dair, Manda's model who runs the X Prize Foundation, where he says it's the age of abundance and everything will be plentiful and you'll be sitting back with your feet up and everything you'll, every whim you want will be provided for. You might be in that sort of universal basic income sort of scenario where we've got that age of plenty. Everything's provided for you. You can do anything and everyone can just sit around playing World of Warcraft 15 or something rather which is generate on the fly. And you know, the most.
I mean, if you compare now to, like, let's say, even, let's say, 50 years ago, think about it. Like, you can already order food delivered to you. You can have a famous chef cook your food, have it delivered to you. Watch on your large screen TV, a $100 million movie that was made by Steven Spielberg, and then sleep in your bed, which is monitoring all your vitals while you sleep. Like, we already live, like, unbelievable digital, like, gods. And what's going to happen next is unbelievable.
I guess the main thing that so many people are uncertain about is what will. Could this have a negative effect on their lives? Like, for instance, if you're a journalist, there's no reason to hire a journalist anymore. You can just say, hey, Chachi, BT, there was this incident that happened today. Summarize it for me and put it running it in the paper. Like, unless you're an investigative journalist, well. You're a god.
I was about to say that, right? I actually think the court of journalism has gone downhill a lot because the whole business model has been transformed by Google in that it's just how many clicks and views of a page you've got and how many added impressions you've got. And as a result of that, it's really about, can you write a real clickbait headline that gets people to click on a link, right? And the actual journalism has been reduced to 500 words. And you probably know better than anyone. It's very hard to get more than one idea across 500 words. So what's actually been lost is the actual narrative of what actually is happening in the world. I'm a big dinner. I was made one of the hundred influencers at one point and so I could post really long stuff they ever would have read. I wouldn't publish every week. I would publish once a year something that would be like 85 pages long. And I'd try and actually string to get the narrative of actually what's going on. And they actually had a remarkable pick up.
Like, you know, I had an article that was read by a million people in two days when far around the world. So I actually think that there is a lost part of journalism, which is more of the long story narrative, the investigative piece and so forth. I think the quality of journalism's dropped dramatically. So I think there's still a place for journalism that chat GPD won't feel. But I think that run of the mills sort of stuff like, you know, the sports scores and comment on the baseball game or, you know, a stock market going up or down or world events or whatever. I think a lot of that can potentially at a very basic level be done by software and probably already is in a fairly big way. But I think that there will be a place for. Yeah fire level, more sophisticated work that the AI won't do.
Let's say you're 25 years old and you don't want a traditional job, you want to be a freelancer. What would you say are like the four or five professions where someone even in the US could make a living, could make a good living as a young person?
Well, the three big ones right now, as she used her interface design, game development and programming. They're the ones that the top earners for freelancing. I think product management is a huge industry that's taking off with, I mean, 15 years ago, the title of the role wasn't even around. But now every tech company in the world is sucking in product managers and product managers are basically a mini-CEO of something. So it's a multifaceted jack-of-all-trade sort of profession. And I think, you know, those sort of skills.
I mean, the AI is going to take a bit of time, I think, to be able to reach human level or the aesthetics and be able to decide how products should actually be built properly. I mean, it's very good at looking at all the world's content on the internet and then going, OK, based upon that, I can do something at the top level in any field. But I think, you know, tastes change and human behavior changes.
And I also think you're going to get a bit of a reflexive thing happening on the internet. The big thing I think is going to happen is this whole open world that's been created because of Google and search engine optimization where, you know, everyone that produced great content put it on the internet for free, Google will index it and then kind of monetize it by displaying ads when you search for stuff. I think that whole model is going to implode.
I think all the data sets are going to go private. I think people are going to turn off their logged out web pages because Google is going to, I think, in a very much an existential moment right now. There's a finite amount of search traffic in the world. So you and I, there's a finite number of things we actually interested in searching for every day, right? And a lot of that has now been deviated to chat GPT or similar. Or, or will be like, I think I think chat GPT is, even though it's the fastest growing app ever, it's still a lot of people don't use it every day, but they will.
All the next 12 months will be bigger in terms of change than the launch of the commercial internet, 94.95. I mean, 94 was the year the geeks had email addresses. 95 was the year you grandmother had an email address and everything changed forever over on sign online. Yeah. Next 12 months are going to be just even bigger than that.
So I can, so I can guarantee that Google is going to lose a lot of search volume. Because the tolerance for people to see 53 ads when searching for something, I mean, you've got a Google now that's ridiculous. You say flowers, Sydney and back. You've got 53 ads on this page and you're going to keep scrolling down before you see any relevant content. And the content you do see is all been tweaked to kind of generate Google more money because when Google launches their algorithm changes, they did one just actually a few weeks ago. What they're doing is they're not cutting back on web spam. They're actually A, B testing revenue. So they're rerouting the internet just to make Google more money. So it's all, yeah, that's kind of happening there.
But the point is that no one's going to be tolerating that heavily ad-soaked model for search. It's, you know, chat GBT is very clean. There's no ads, right? And so I think what's going to happen is, you know, anything you put publicly on the internet is going to be sucked down by the AI or multiple AI's. And so a lot of these companies that do produce, you know, new data that is important and interesting. Well, have you? They're going to close that off.
They're not going to shut to Google anymore. Because the traditional Google search engine is going to be less relevant and Google's never really existential crisis because it won't get a throw to somebody that adds people. So I think it's because I mean, think about it, you know, you give it two, three, four years from now. You know, if I'm a scientific researcher and I publish a paper, you know, the AI will suck that down in a nanosecond and then potentially commercialize it somehow, right? So people are going to be unwilling to share content online and they're going to keep those data sets private and monetize them in other ways rather than, you know, through.
And also the AI has learned from all the public data that's out there. So like the AI presumably has read every Wikipedia post as read every Reddit post as read, you know, most blogs. So, you know, when you ask Google a question, one third of those questions, you probably end up on Wikipedia as the answer. So you know, Google's like a way station to Wikipedia for about a third of the questions that are asked. So to some extent now, chat GPT just skips that whole thing and just answers you directly.
Yeah, well, I mean, Google does that in a very cunning way. So what they do is Wikipedia is shown there as a token bit of organic content to make it look like they're actually showing you relevant information rather than just ads. And because Wikipedia is not a commercial laugh at. So that's what I kind of ranks there all the time. But yeah, I certainly get your point. But I just think I think all the data sets are going to go private. I think the whole model is going to change. The Google model is going to change. Search is going to move to more of a chat interface and the voice driven chat interface. Yeah, the next version of Siri is going to be pretty crazy. And we'll see where it ends up.
How is freelance.com going to change as a result of AI? I think it's incredibly beneficial for us because number one, the supply of skilled labor is desperately needed worldwide. That's the whole thesis behind freelancer. And now that that supply of skilled labor is going up dramatically. People are increasingly time poor and need people to do things for them.
So take the example of my mother. Like she needs to think things down all the time. And she's not going to sit down and figure out the journey or what have you even if it gets, even if the interface gets really, really nice and easy, she's not going to be figured out how to draw an illustration, resize it, put it up on a website, maintain it, you know, whatever. It's not going to happen. So someone's going to have to do all that work, sort of work. And the other thing is, the ability for us to personalize content for you to help you get things done is extreme, right?
We've got a whole bunch of AI being deployed right across the website right now. So for example, you type your project description, you know, kind of what you want done. Most people don't know what they want done. Most people come and they go, I want to build a website, but they don't know the functionality that they want on that website. They don't know what platform to select. And building a website is how long as a piece of string it could be a $50 website, it could be a $500,000 website. It really depends how complex and so forth. But the ability for the AI to help you with that job spec and write the job spec out for you and iterate over that and show you a mood board and do you like that? Do you not like that? And then basically help you find the best freelancer that's specific for that and then structure the product development plan, write the technical specification, all that stuff can be done automatically.
And so that's on the entrepreneur side. I would imagine also on the freelancer side, look, a lot of people are from countries where English may not be their native language. So even just structuring a proposal, it's going to help them. It's funny you mentioned that. We've got a feature pushing the action next week where the chat interface will magically transcribe your voice and your typing to a different language. And so you can be.
That's really fascinating. You have very poor grass, but English and you can now speak fluently in English by voice and it would pop out the chat side and vice versa. So that's all going on. I'm loving a week from now. It's all moving so fast and it's going to be interesting to see all the changes that happen and I'm still trying to decide whether, well, I think if you're like, if you have a brand like freelancer.com, AI is not going to suddenly make its own brand. It's not going to become freelancer.com. Freelancer, Upwork, a few of the winners in the freelancing space will continue to be that way. It's not going to recreate Uber. Uber will still be Uber.
So in terms of companies that have already made it through and have become big brands, they've kind of survived the AI apocalypse that might be coming for industries. But I wonder what industries will just basically shut down. You know, again, like you were mentioning like basic graphic design. It's not shut down, but it's changed. You can't just like design stationary. You actually have to build the app and design the app now for people. And so industries are going to more, skill sets are going to change, but it's going to be interesting.
Well, I had a thought about that. I think the industries that have a creative element to it or a human connection to it or really a higher level critical thinking to it that I think we've just got the stack.
There are some industries though where I think it's very much rule driven, for example, accounting. If you're an accountant, basically the government sets the rules and your job as an accountant is to basically not be creative, right? You'll just follow the rules, right?
And I think there's professions like that, which I think will just be done in a nanosecond through an app and in real time. And I think those jobs are going to change quite dramatically. I think a lot of legal works are going to change.
Certainly, at one end, you can be creative and argue and court and this at the other bar, but a lot of legal work is drafting. And right now I can get chat to you. I'm not sure if you've ordered draft me any document I want. It'll write me a patent. It will write me a nondesclosure agreement. Write me a series eights, stop subscription agreement and it'll do a pretty good job.
I actually sat down with a bunch of lawyers last week in Vancouver and they said, oh, I bet it can't draft a escrow agreement for a share purchase in the province of British Columbia because there's a few little tips and tricks that you've got to follow, right? And I hit the button and you said, the guy's face just when he looked at his partner and he said, just as well I'm retiring next year, it's your problem now.
No, it's true. There's already a company set up that will AI does all the back and forth if you get like a parking ticket or a driving ticket. They will handle all the legal work for you just using AI. Yeah, I think there'll be explosion of lawsuits because it's so simple now to, for the AI to create a suit and to file it.
And I think there'll be explosion of defense, you know, apps to defend against these lawsuits. I think legal system will be busy, very, very busy because the cost to enter a suit is usually quite expensive and now that that barriers drop because the AI will do the drafting for you.
Now, do you think with all this innovation happening and you take AI and then you take the innovation that I've already incurring on in other industries like biotech and so on and robotics and every industry. Do you think that innovation will be enough to perhaps slow down what's happening because you know, my opinion is it was a shame the global economy shut down for almost two whole years.
And we still don't know the full ramifications of that. Part of the ramifications is that we went from 3% freelancers to 40% freelancers. Other ramifications, other ramifications we just don't know, like the effect on currencies and so on.
So do you think though the pace of innovation will be fast enough to kind of reverse whatever negative effect we have from shutting down the economy for a couple of years? Well, yeah, well, I think freelancing is incredibly deflationary and I think it answers to AI probably one of the most deflationary things in human history.
So I think, yeah, I think they will certainly have an effect to try and slow some of the inflationary pressures. But I think the Fed is kind of damned if they do, damned if they don't, right?
I mean, typically you have to raise the policy rate, I think about four or five percent above the real inflation rate in order to kind of, you know, stem inflation in a traditional sort of textbook sense. And I think the numbers were six or seven percent roughly in terms of inflation is being reported.
The real number is probably close to 15. And you know, they raised rates to 4.75 in the fastest hike. I think in history and Silicon Valley bank blew up, right? And Silicon Valley bank was doing phenomenally well because it banks will attack companies, right?
It went from 60 billion to deposit, 190 billion to deposits in two years. So it was flush cash. It just had nothing to lend to because those deposits are liabilities on the bank's balance sheet. And so they're going to have assets that are going to learn it out.
And they couldn't figure out what to do with it. So they stuck 82 billion into mortgage back securities and average yield at 1.56 percent over 10 years, which meant your money back in 10 years, no problem. But it start ups burn cash all the time and then quarter by quarter in the start kept on burning and then they kind of had a bit of a liquidity crisis when the VCs broke ranks and said, pull your money out.
So I think all the banks around the US can have that problem. So the Fed, if the Fed keeps raising rates, you're going to blow up a bunch more banks. If your lower rates, you inflation is going to be out of control. And the US debt is mathematically unpayable at the current level.
So you know, in some way, I think the US government wants a lot of inflation to continue so that the debt problem becomes smaller and smaller and smaller in, you know, when you, you know, that's what I want to policy rate of 2 percent usually because after 30 years, the debt problems half as big because you've inflated it away. So I think they kind of want to run inflation hot for a few more years and then, and that's why you've got these policies like green, you deal and, you know, reparations for everyone and, you know, education, you know, wave of student debt and so forth. Because I think they want to run inflation hot to make the US debt problem go away and then they'll do some sort of reset with a central bank digital currency, maybe with some loose backing by gold or whatever, whatever, what have you.
But certainly a pretty dynamic space right now. But yeah, I mean, these are very, you know, freelancing, you know, freelancing online and the AI and software and so forth, very deflationary forces. So we'll see where it lands up.
Well, you know, it's interesting because before they dropped all this money on the economy during the pandemic, they were fighting deflation. Like that was what was keeping the Federal Reserve governors up at night was worries about deflation because of technology changes because of freelancing around the world and so on.
And they kind of got their wish of inflation, but maybe, maybe too much and hopefully some of it is transitory because supply lines were all shut down, but, you know, we're going to see. It's going to be, it's definitely going to be an interesting time.
I mean, the problem is printing money won't dig any more copper out of the ground. I mean, faster, really. Yeah. But that's why we got off all the, you know, we got off all the gold standards because we didn't have enough gold to pay to pay our debts.
Well, I mean, getting off the gold standard was phenomenal for the US in terms of driving economic growth, right? Basically meant you could just print money and, you know, you know, you're playing monopoly in the banker and you print your own money. You can buy everything on the board. It's been, it was phenomenal for the US, but now we're going to, you know, obviously a few things got deep eggs such as, you know, wages and now we're getting the ramifications of that because it's going off for so long. So I think there's going to be some sort of a, it's going to have to be some sort of reset in the next five years or so.
Do you think oil will get deep ag? Do you think like, you know, with China kind of brokering relationships with Saudi Arabia and Iran and Russia and so on? Do you think at some point the petro dollar won't exist?
Well, that's the talk of the week, right? Because I think the first transaction just went through in Rembebee last night and Saudi is now shifting its focus to it. Oh, really? I didn't know that.
Yeah, it was on Twitter or so. I think they're focused in terms of security alliance alliance to China, along with many other countries in the world. I think a lot of, I think one of the mistakes the US did was the sanctions program against Russia because, you know, confiscating, you know, oligarchs, boats around the world. I think it freaked out a lot of countries where you've got, you know, a lot of people in power have got a lot of toys around the world parked in the Mediterranean or have you and I think that people greatly concerned. But I think we'll see where it ends up, but I think we're obviously heading to a very confrontational point in human history.
I mean, we had one of the greatest peacetime periods in modern times, you know, since World War II really has been a few kind of, you know, minor wars around the world, but I think we're heading to a confrontation. I think the Thessically's trap where you've got a monopolar world and then suddenly there's a great threat from a usurper and that was China.
And I think Trump kind of looked at that and said, okay, well, his advisor has told him that I think about 13 critical technologies that the US has that China doesn't have, you know, they can punch out, you know, electronics and make chips and so forth, but they don't come back to the machines, they make the chips, you know, and, you know, certain types of, you know, superconductors and AI and this at the other end. So he was like, okay, well, let's try and start a bit of a trade war here to try and temper the, you know, temper the usurper. But I think now it's kind of been a bit mismanaged and I think there's too many people turning against the US. So it's a pretty scary time.
So what do you worry about in terms of like the next five years, you know, as you have your pulse on the global economy because you see so much of what's going on in the freelancing world, what worries you over the next five years? Like you personally.
Well, it's, are we going to go war first or will the robots feel figure out where we're used to space first? Are we going to go to a Skynet situation first or are we going to go to, you know, a hot war basically? I think they're too big risks right now. Yeah.
And economically, what are you worried about? Well, I mean, inflation will cause a lot of social unrest. I mean, the thing is, you know, back in the global financial crisis when they printed money, they printed money in a way, you know, through quantitative easing and so forth, where it kind of flew, it kind of flowed into sort of hedge funds and so forth, right? And so the asset prices got inflated. So, you know, the stocks went up and, you know, everything from fine art to classic cars and watches, all that sort of stuff inflated, right?
This time around when they did the stimulus for COVID, they did it in a way where food prices inflated because they're just in a broad base sort of stimulus. So, so I think the issue now is that, you know, when food goes up too much, people don't eat and I think someone said that we're only, somebody hot meals away from revolution. I think you're starting to see in countries like Sri Lanka where the effects of inflation and you know, it's the country can't take it anymore and suddenly the president's palace, everyone, you know, goes in there and starts going crazy and ripping it down because because people can't eat and I think that is going to become a broader problem around the world. We have a little social unrest if the price of food keeps going up and, you know, the price of food is linked to the price of oil. It's come down a bit but that could spike in a variety of different scenarios, particularly with the Saudis kind of pivoting. You know, if there's a revolution in Saudi Arabia in the next couple of months, it could be a catastrophic for the world in terms of the ability to feed each other and power things.
So, as an outsteel man like take the opposite side, what encourages you to not just lie and be crying every day and what gets you to work? It's amazing the things you can create now and how easy it is to create it. You know, you determine your dream into reality now. It's just so simple, right? You can come up with a concept. You've got freelancers to help you. You've got AI to help you. It's so cheap. I mean, when I started my career in tech, you had to go out and raise a series of a venture round of $5 million and you know, it took 18 months if you're lucky at all to get any money together and it was just so hard and so slow to sell anything.
Now the world is hyper connected. You've got a great product of service. You know, things can just take off overnight. I mean, like, look at chat GPT, right? I mean, that that that that has a product that's the fastest growth of any product in history. Right? I mean, there's companies around the world that make a billion dollars of revenue in their first year. What's a company you've seen literally created on freelancer.com that has gone to like amazing heights that you want to next back? There's one that one of my co-parts told me last week, there's a lady in Estonia and she's come up with, she's got a great product of of of of bisses, like a range of, you know, aromatic drinks and she came and just got a logo done and and next minute she's got a website built whatever and and and we've got a project management service that will just do everything for you.
You just pay by the hour thirty five dollars and they're running their entire business now. It's doing sales, doing marketing, doing whatever and she just came into the logo done and she's like, wow, the whole thing's just running itself now, right? So it's just that's what's amazing is if you've, you know, 60 per cent of people last time a sort of survey said they want to be an entrepreneur, six per cent of people actually do it, but your ability and ease of doing it now is just so easy. It's incredible. Like just yeah. It's exciting, the ability to create, you know, products and services of the future and and and see all the crazy things people are doing and things you'd never think of and I think that's that's super exciting.
Well, they always say that between two countries you either exchange bullets or money and so hopefully the money will be out the the bullets with entrepreneurship and sites like your site freelancer.com which puts all these things together and hopefully that's the direction things go in as opposed to a more confrontational one. You know, look, Matt, thank you so much for coming on the show. I really wanted your perspective on the economy, on freelancing, on, you know, what's going on with AI and and and the relationship to everything you're doing and freelancer.com is a great site. I used it to build a business or I used one of the companies you bought early on. I think it was scripted lands back in 2007. I used it to build a business that did very well.
So I always I always appreciate what what you guys do and and and the site and I highly recommend people use it and check it out.
我一直非常欣赏你们所做的一切,网站也很棒。我强烈推荐大家来使用它并了解它。
And thanks once again. Thanks for having me. I look forward to it coming in again sometime in the next few years and we're talking about all the new things that people are doing on the site and what the friends are doing.
Or maybe our AI avatars will come on. It's like my avatar will schedule with your avatar and they'll just talk like they listen to us all day long. So they'll and they train on our words.