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What Grocery Shopping and This $15T Opportunity Have in Common

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Tom Yeung here with today’s Smart Money.

Have you ever returned from a shopping trip, new carton of milk in hand, only to open the fridge and find an unopened milk carton already there?

Well, you’re not alone.

This week, I managed to do exactly that. I was distracted at the store… misread the shopping list… and gave America’s dairy farmers a slight, unnecessary boost in demand.

We all know that distractions are bad for decision-making. Car accidents rose sharply in the 2010s after 3G networks became widely available. Pilots are now banned from bringing laptops into the cockpit during flights. (In 2009, a Northwest Airlines flight missed its destination by 150 miles for that reason.)

Even the 2017 Oscars mix-up, when the musical La La Land was accidentally announced as Best Picture, was blamed on distracted tweeting by the envelope handler (Moonlight was the actual winner).

Neurologists have termed this a limitation of working memory. People only have so much mental bandwidth and can only pay attention to so many things at once before forgetting what’s right in front of them.

Hence, the two cartons of milk that I now own.

Similarly, every day gives us a new distraction in markets, making it impossible to keep track of what’s important. Here’s some news from the past week alone…

• Tariffs. President Donald Trump said on Wednesday that a trade deal with China is now “done.” (A spokesperson for China’s Ministry of Commerce downplayed the trade deal Thursday morning.)

• Deficits. Senate Republicans plan to release major revisions to President Trump’s deficit-heavy tax bill.

• Inflation. Inflation rose just 2.4% from a year ago as falling gas prices offset increases elsewhere.

• Middle East Unrest. Thursday night, Israel struck Iranian nuclear and military facilities, spiking energy prices and sending markets downward. Iran is expected to retaliate.

Financial media have become hyperfocused on these issues, and even our own Smart Money issues have addressed many of these short-term concerns.

Meanwhile, the most crucial invention of the past century is being developed under our noses.

So today, allow me to sift through the noise and point you toward a $15 trillion opportunity hiding in plain sight… and how to capitalize on it.

Let’s dive in…

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The $15 Trillion Opportunity

I’m talking about the world of artificial intelligence, particularly in the race for artificial general intelligence (AGI).

While many have had their heads turned to the latest tariff, deficits, and inflation news, major AI developments are being made seemingly daily…

• Last week, Alphabet Inc. (GOOGL) released its latest Gemini 2.5 Pro model, which scored a record 21.6% on Humanity’s Last Exam, a benchmark that assesses the reasoning capabilities of AI systems.

• On Monday, AI drones beat the best human pilot champions for the first time at an Abu Dhabi racing event.

• And on Wednesday, OpenAI released its o3-pro model, surpassing the Gemini 2.5 Pro model launched seven days before.

Yet here we are, with Wall Street fixated on what President Trump will talk about next.

Perhaps we miss out on these advancements due to another human trait, often called the “boiling frog theory.” This cognitive bias suggests changes that happen slowly often get ignored.

OpenAs CEO Sam Altman highlighted this fact in a blog post on Tuesday, titled “The Gentle Singularity”…

Already we live with incredible digital intelligence, and after some initial shock, most of us are pretty used to it. Very quickly we go from being amazed that AI can generate a beautifully-written paragraph to wondering when it can generate a beautifully-written novel; or from being amazed that it can make live-saving medical diagnoses to wondering when it can develop the cures; or from being amazed it can create a small computer program to wondering when it can create an entire new company. This is how the singularity goes: wonders become routine, and then table stakes.

But we ignore these changes at our peril. In the same post, Altman talks about how we are already past the point where AGI is predetermined. In other words, it’s no longer if we’ll see AGI… but when.

Altman continues (emphasis ours)…

We are past the event horizon; the takeoff has started. Humanity is close to building digital superintelligence, and at least so far it’s much less weird than it seems like it should be.

Robots are not yet walking the streets, nor are most of us talking to AI all day. People still die of disease, we still can’t easily go to space, and there is a lot about the universe we don’t understand.

And yet, we have recently built systems that are smarter than people in many ways, and are able to significantly amplify the output of people using them. The least-likely part of the work is behind us; the scientific insights that got us to systems like GPT-4 and o3 were hard-won, but will take us very far.

It’s hard to overstate how earth-shattering this will be.

Imagine a world where ultra-intelligent robots build everything locally. At that point, who will care about tariffs?

Or what happens when AI software replaces millions of white-collar workers? Will the depressed wages for remaining employees drive deflation instead?

That’s why analysts are calling AI a $15.7 trillion game changer.

Consultancy PwC believes that’s the figure AI will add to the global economy by 2030, which is more than the current output of China and India combined. PwC forecasts that $6.6 trillion will come from increased productivity, and $9.1 trillion from consumption side effects.

These figures dwarf the $600 billion of tariffed trade between theUnited States and China… and even the $1.7 trillion of budget federal budget deficits expected by 2030.

In other words, the two problems of buying too much milk (constant daily distractions) and boiling frogs (gradual improvements in AI) are coming together to create the perfect storm – or, in essence, frog soup – where the most important technology of our lifetimes is going ignored.

And while markets stay distracted, Eric has been making his speculations…

The Coming AI Singularity

Let’s first take a look back to September 12, 2024. That’s when OpenAI quietly released a new technology that used a set of reasoning skills to answer questions.

This allowed AI models to tackle complex reasoning tasks, especially in fields like science, math, and coding. They work through problems step by step, similar to human reasoning.

Because of this advancement, Eric started his 1,000 Days to AGIcountdown clock. He believes that 1,000 days is the far end when we’ll achieve artificial general intelligence that will be able to outthink and outperform humans.

As he said back in January…

It’s like going from horse-and-buggy directly to time travel. They’re both categories of transportation — but one is unimaginably more advanced.

Unlike current AI systems, AGI won’t be limited by how much data we feed into it or what cues we give it.

This is advanced AI with its own version of free will.

AI development over the past month has further proven this will be the case.

Today, AI reasoning models are surpassing experts from lawyers to accountants at their own jobs. Physics-based AI models, like the recently released V-JEPA 2 from Meta Platforms Inc. (META), can understand, predict, and plan in the physical world. (Eric is diving deeper into Meta’s latest AGI development in an upcoming Smart Money. So, stay tuned…)

The wonderful thing is there’s still time to get ahead.

In his My 3 Top AGI Stocks for 1,000% Gains special report, Eric reveals three AI-driven stocks that will be the next trillion-dollar companies.

You can learn how to access this report in this free, special broadcast.

Eric further describes how his global macro strategy has helped him stay ahead of market trends, and why the latest flurry of financial news might not amount to a can of beans (or extra carton of milk) by 2030.

Instead, distracted investors will be wondering how they ever missed out on AI, despite the technology being so apparent.

So, I encourage you to tune out the noise, pay attention to what’s important… and don’t go grocery shopping while distracted.

Instead, use this opportunity to watch Eric’s free presentation – and stock up on the right AI investments.

Until next week,

Tom Yeung

Market Analyst, InvestorPlace

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Another Brick in the Wall

By Bill Bonner, Bonner Private Research

We remind ourselves that the empire is slipping… and has been for the last 25 years. Donald Trump was elected to try to turn it around.

If he were to succeed, it would change the Primary Trend, which would cause us to change our long-term investment outlook. So, as if gleaning through a dumpster for a half-eaten sandwich, we keep studying the Trump agenda, looking for something we missed.

So far, nary a crust.

Donald Trump’s pensée is win-lose xenophobia. There are problems everywhere… and every one of them is caused by someone else. In order to win, we need to make him lose.

Without so many immigrants in the labor pool, for example, wages for U.S. citizens would rise. And without so many imports, made by foreigners, consumers would Buy American.

Then, sales, profits, and jobs – furnished by U.S.-based companies – would increase.

Such a simple problem. So ready for a solution.

What to do? Just round them up – the “illegals.” Send in the ICE… all suited out in battle gear. Deport those lawbreaking SOBs. And ban immigration from the places we don’t like.

Trump plans to deport 10 million “illegals.” He’s got $70 billion in the Big, Beautiful Budget Abomination (BBBA) set aside for that purpose.

Hold on… here’s brick number one. ABC with more math:

A new report from the American Immigration Council, an immigration rights research and policy firm, estimates that to deport even one million undocumented immigrants a year would cost over $88 billion dollars annually, for a total of $967.9 billion over more than ten years.

That’s nearly $100,000 for each deportee… and a trillion dollars to be added to U.S. debt. Is that a good investment?

Fortune:

According to a Deutsche Bank analysis of data from U.S. Customs and Border Patrol, the number of encounters at the Southwest border has plunged to 12,000 people per month since Trump’s inauguration from an average of 200,000 during the year-and-a-half period between January 2022 and June 2024.

Remember, the pool of homegrown labor is stagnant. There has been no increase in the number of jobs going to native born workers in the last five years. Without the foreigners, the U.S. economy would scarcely have grown at all.

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Remember too that the “we think, they sweat” vanity took root in U.S. soil more than twenty years ago. Now, it covers the ground.

So, who among our “thinkers” will do the work that these 10 million sweaty immigrants were doing?

Maybe, someone who just got a degree in DEI counseling from a local university? Or someone who just got out of jail and decided to go straight?

American consumers will have to pay to deport someone and then pay more for someone else to do what he had been doing.

Not only that. The Democrats’ “Joint Economic Committee” tried to tally the costs. Its conclusions:

Depending on how many immigrants are deported, these mass deportations would:

• Reduce real gross domestic product (GDP) by as much as 7.4% by 2028

• Cause labor shortages in key industries, removing 225,000 workers in agriculture and 1.5 million workers in construction

• Push prices up to 9.1% higher by 2028, and

• Cost 44,000 U.S.-born workers their jobs for every half a million immigrants who are removed from the labor force.

What are those estimates worth? Probably not much. But if you stop foreigners from depressing wages in the U.S., they’ll depress wages back at home.

And then… brick number two:

As prices for American-made products go up, foreign made products become more attractive!

In other words, by getting rid of millions of low-wage workers in the U.S., lower-wage economies overseas will have a larger price advantage… and Americans actually have an incentive to NOT Buy American.

Those damned foreigners! Ripping us off again.

As of last year, about $25 trillion worth of merchandise was crossing borders every twelve months… at tariff charges averaging below 3%. But Team Trump sees trade deficits heading toward $1 trillion per year. They’re “ripping us off,” they say

The solution is obvious – impose tariffs… trade barriers… right? Importers can “eat” the extra charges, right?

Maybe for a little while. But soon, sellers will restore their margins by raising prices.

Then, the “tariff tax” will be included in the prices that U.S. consumers pay. And with less purchasing power, Americans will be poorer.

But wait, here’s another brick in the wall…

Reducing trade deficits also means reducing the number of U.S. dollars that end up in foreign hands. Those dollars are typically recycled into U.S. bonds. That’s the way the fake money model works.

The U.S. “prints” the money. Americans borrow it. They buy foreign-made products (often better or cheaper than their Made-in-America competitors). And then the overseas dollars are used to buy U.S. debt.

It was always a scam… but it helped fund U.S. deficits, keep interest rates low, and U.S. asset prices high.

And now, the Trump troupe makes it even scammier.

We’ll see where it leads. Stay tuned.

Regards,

Bill Bonner

Bonner Private Research