#153 - Luke Gromen - The AI-Debt Collision Breaking the Financial System
The Peter McCormack Show
Peter McCormack
4.7 • 2.8K Ratings
🗓️ 4 March 2026
⏱️ 82 minutes
🧾️ Download transcript
Summary
Governments aren't going to pay this debt down in real terms. More likely, they pay it back in weaker money.
Luke Gromen argues we're already deep into a sovereign debt cycle - and that AI could speed up the moment it really starts to crack.
In this interview we discuss how the system works: leverage, entitlements, interest costs, bond markets - and what happens when deflation hits an economy that depends on inflation to stay upright.
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TIMESTAMPS: 00:00:00 – Debt Reality 00:01:57 – Math vs Politics 00:06:26 – Already In It 00:08:51 – Japan Warning 00:14:38 – Acute Phase Risk 00:15:32 – What To Do 00:21:33 – End Of The Cycle 00:34:13 – AI Disruption 00:40:20 – 2007 Parallel 00:49:07 – UBI & Politics 00:58:02 – Sovereign Insolvency 01:08:26 – Meaning & Collapse
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CONTACT PETE › Website – http://petermccormack.com › Feedback – https://www.petermccormack.com/contact › Email – me@petermccormack.com › Instagram – /mccormack555 › X/Twitter – https://x.com/petermccormack/
CONNECT WITH LUKE GROMEN › X/Twitter – https://x.com/LukeGromen › Website – http://fftt-llc.com/
SPONSORS › IREN - https://www.iren.com/ › Ledger - https://www.ledger.com/
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FILMED BY CURTIS TAYLOR › https://www.curttaylor.co.uk/ › https://x.com/curttayloruk/
EDITED BY CONOR MCCORMACK › https://x.com/ConorM04
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Transcript
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| 0:00.0 | Is there any scenario where the debt will be paid off? |
| 0:03.6 | Not in real terms, no. |
| 0:05.0 | They'll pay every penny. |
| 0:07.0 | It will just be currency, less and less valuable currency in real terms. |
| 0:12.0 | I keep reading these things like, you know, AI is going to be productivity and it's not going to take all the jobs and it's just going to drive deflation |
| 0:21.9 | way down. And I say, exactly. And in a debt-based system, that is a mathematical bookkeeping |
| 0:28.5 | guarantee to blow up the entire freaking system. I think we're going to look back in six months, |
| 0:33.7 | 12, months, 18, 24 months time. And we're going to say February 2026 was the equivalent of July 2007. |
| 0:41.4 | AI is not going to take all the white collar jobs. AI is going to take some jobs, and systemic leverage will do the rest. |
| 0:50.5 | We know exactly how this goes. This is inbound, in which case it's probably going to be a brief moment of a sort of big |
| 0:57.7 | whoosh down. |
| 0:59.2 | They ain't ever going back to work on a lot of these things. |
| 1:02.5 | No. |
| 1:03.4 | People say, well, don't worry, they'll figure out something. |
| 1:05.4 | What else did Blockbuster video do after Netflix? |
| 1:09.1 | It is problematic, and I think things, you know, this volatility we've seen in the first half of this year is something we've been looking for. |
| 1:15.6 | I think it's going to get a lot worse, unfortunately. |
| 1:17.6 | This show is brought to you by my lead sponsor, Iron, the AI Cloud, for the next big thing. |
| 1:23.6 | Iron builds and operates next generation data centers and delivers cutting edge |
| 1:28.3 | GPU infrastructure, all powered by renewable energy. Now, if you need access to scalable GPU |
| 1:34.4 | clusters or are simply curious about who is powering the future of AI, check out iron.com |
| 1:39.9 | to learn more, which is iran.com. Luke, hi, how are you? I'm doing well, Peter. How are you today? |
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