Howard highlights interest rate outlook, Bitcoin, AI, sovereign debt

• Howard Marks says interest rates won’t go back to zero anytime soon.
• The billionaire investor warns that America’s US federal debt could create problems in the future.
• Marks says AI won’t replace the best investors, and the banking fiasco shed light on bitcoin.

Interest rates aren’t going back to zero anytime soon, and the best investors won’t be usurped by artificial intelligence, says Howard Marks.

The billionaire investor and Oaktree Capital Management co-founder also sounded the alarm about the rising national debt, suggested that bitcoin has its uses, and called on the Federal Reserve to intervene in the economy as little as possible. He spoke during a recent episode of the “We Study Billionaires” podcast.

Here are Marks’ 8 best quotes from the interview, lightly edited for length and clarity:

1. “Falling interest rates were responsible for the majority of all the money that has been made in the last 45 years.” (Marks hailed the Federal Reserve’s embrace of lower interest rates as a “sea change” for financial markets, as it made borrowing cheaper and debt financing easier.)

2. “Rates are high today to fight inflation. I don’t think they’re going to stay that high. But they’re through to fall in some major way, and they’re through to be ultra-low.”

3. “I just think it’s too good to be true to think we can have a credit card we never have to pay the balance on.” (Marks warned that continued growth in the US federal debt is likely to have dire consequences.)

4. “AI, just like passive investing and machine learning – perhaps even more so – will drive out anyone who doesn’t add value. It should be harder and harder and harder to make money and get paid high to produce worse. But hopefully there will still be a small group of people who can do something that the machine can’t.”

5. “Can an AI-enabled computer sit down with CEOs and figure out who is Steve Jobs? Can it sit down with five business plans and figure out which one is Amazon? I just don’t think so. This is an art shape.”

6. “There are people who believe that when you have a banking crisis, as we did with Silicon Valley Bank and some of the others, that the weakness of the banks shows the strength of bitcoin. It is in many ways an anti-bank game. It seems that there are good uses for some coins, and bitcoin seems to be the one in the lead so far.”

7. “Humility is a very important thing, especially in the market, which humbles us all. Anyone who does not allow humility, in a field where there is randomness and uncertainty, and qualitative and subjective things are important, is riding for a fall.”

8. “People used to talk about the factory of the future, which would have a man and a dog, and it was the dog’s job to keep the man from touching the equipment. It was the man’s job to feed the dog. I’d like to let the Fed keep its hands off the machinery most of the time.”