Author: Long Yue, Wall Street Journal

• Historical Reflection: ECB President Christine Lagarde and historian Adam Tooze warn that the current "technological boom + trade protection + geopolitical fragmentation" bears a striking resemblance to the path from the 1920s to the Great Depression of the 1930s.

• Debt Crisis: Ken Griffin, founder of Citadel Securities, criticizes the "reckless spending" of governments (especially the U.S.) as the biggest threat to the current market, rather than private capital markets. "All governments are overspending, almost without exception."

• AI is not a bubble but a K-shaped divergence: Larry Fink, CEO of BlackRock and "the Godfather of Wall Street," believes AI is not a bubble but will lead to "winner takes all," with giants (like Walmart) that have scale and data crushing their competitors. Lagarde revealed that training a cutting-edge model costs $1 billion, and Griffin expects U.S. data center capital expenditures to reach $600 billion this year.

• Tariffs and fragmentation threaten AI expansion: ECB President Lagarde warns that geopolitical fragmentation and protectionism will hinder the flow of data and energy needed for AI, leading to decreased efficiency.

• The cost of tariffs: Lagarde points out that tariffs between the U.S. and Europe are rising from 2% to 15%; Griffin warns that tariffs are effectively a regressive tax on American consumers and businesses, potentially breeding crony capitalism and stifling the vitality of small and medium-sized enterprises.

• Central Bank Independence: In the face of political pressure, Lagarde reiterates the importance of central bank independence, emphasizing that fiscal consolidation cannot rely on central banks to "bail out."

Image: From left to right are Davos host Andrew, BlackRock CEO Larry Fink, Citadel Securities founder Ken Griffin, renowned economic historian Adam Tooze, and ECB President Christine Lagarde.

In the cold winds of Davos, the world's top financial power players issue a warning: uncontrolled government finances and geopolitical fragmentation may be offsetting the productivity dividends brought by AI.

In a heavyweight panel discussion the day after the 2026 World Economic Forum, the CEO of the world's largest asset management company, BlackRock's Larry Fink (managing $14 trillion in assets), one of the most successful hedge fund founders, Ken Griffin of Citadel Securities (managing $65 billion in assets), ECB President Christine Lagarde, and renowned economic historian Adam Tooze gathered together.

In this discussion, which Griffin dubbed "gloom and doom," the guests deeply analyzed how the explosion of AI technology, soaring sovereign debt, and geopolitical fragmentation are pushing the global economy toward a dangerous crossroads that "bears a striking resemblance to the eve of 1929"—the era that led to the Great Depression after a technological frenzy.

Rejecting "repeating" history, but wary of "rhyming"

"Mark Twain once said, history doesn't repeat itself, but it rhymes." Columbia University historian Adam Tooze pointed directly to the core at the outset. He noted the astonishing similarities between the current 2020s and the 1920s a century ago: then it was the technological explosion of electrification and Ford's assembly line, today it is the rapid advance of AI; then it was the rise of dollar hegemony, today it is the pressure on the dollar system.

The most disturbing parallel lies in the "failure of politics." Tooze warned that in the 1920s, people tried to cover up political rifts with technology and finance, and this model of "over-reliance on money due to a lack of political imagination" ultimately led to systemic collapse.

Lagarde agreed with this. She added that the share of global trade in GDP fell from 21% to 14% in just a few years during the 1920s, and today, although a collapse has not yet occurred, global trade is experiencing unprecedented pressure under the impact of geopolitical fragmentation and tariff barriers. She warned that without a minimum level of global cooperation, the "scale effects" required for AI will be stifled by fragmented markets.

Fiscal "recklessness": the real systemic risk

Regarding the root of current market risks, Ken Griffin, head of Citadel Securities, provided a sharp assessment.

"This is a story about recklessness, but not the recklessness of private capital markets, rather the recklessness of government spending." Griffin bluntly pointed out that unlike the excessive leverage of the private sector in 1929, the core risk in 2026 lies in the unrestrained spending of governments. "All governments are overspending, almost without exception." He warned that this fiscal indulgence is threatening the foundation of the market.

Currently, U.S. national debt has reached $38 trillion. Griffin questioned whether Washington's hope that AI would bring significant productivity gains to "save" the deficit is realistic. If AI does not deliver the expected productivity leap, such unrestrained spending will be unsustainable.

AI: Not a bubble, but a brutal "K-shaped" cleansing

Larry Fink, managing $14 trillion in assets, has a more micro and brutal view of AI. He clearly stated, "I don't think we are experiencing an AI bubble, but I do think there will be huge failures."

Fink introduced the concept of a "K-shaped economy." He observed that in various industries, companies with scale advantages are rapidly widening the gap with small and medium-sized enterprises through AI. He cited Walmart as an example, pointing out that its ability to use AI for inventory control and consumer preference analysis is far ahead.

The root of this divergence lies in the staggering capital threshold. Lagarde revealed on-site that the cost of developing a cutting-edge AI model has reached $1 billion and is highly dependent on cross-border data flows. Ken Griffin provided a more macro figure: this year alone, U.S. capital expenditures for data centers will reach $600 billion—Larry Fink even interjected that "the actual number will be higher."

Such a high "entry ticket" means that only "scale operators" with deep capital moats can afford to play this game. As Fink stated, AI will not naturally "democratize," but may instead exacerbate the winner-takes-all situation.

Tariff Boomerang: Who is paying the price?

With recent geopolitical tensions escalating, tariffs have become an inescapable shadow over the Davos Forum. Lagarde provided a shocking set of data: the average tariff level between the U.S. and Europe has surged from 2% a year ago to over 12% currently, with the risk of rising further to 15%.

"If 96% of the cost of these tariffs is borne by consumers, this is not good for inflation," Lagarde warned.

Griffin, from a micro-enterprise perspective, lamented the drawbacks of tariffs. He pointed out that tariffs are not only a regressive tax on consumers but also breed "crony capitalism." Under tariff barriers, companies with the closest ties to Washington will gain privileges, which is poison for the innovation vitality of small and medium-sized enterprises. He reminded that whether it is BlackRock, Citadel, or today's AI giants, they all started as small and medium-sized enterprises, and protecting this market vitality is crucial.

Central Bank Independence and the "Last Line of Defense"

In the face of massive debt and fiscal deficits, markets often look to central banks to "print money to save the economy" again. Lagarde took a firm stance on this, citing Paul Volcker's example, emphasizing that central banks must maintain independence and cannot become an appendage of fiscal policy.

"I don't think central banks will always be the 'only savior,'" Lagarde stated, emphasizing that relying solely on monetary policy cannot solve structural fiscal imbalances.

Tooze also added that the concept of central bank independence was born in the 1920s to respond to populist pressures, and in today's extremely politicized environment, maintaining the "knave-proof" nature of central banks is more critical than ever.

Full transcript of the panel discussion at the World Economic Forum:

Davos Host (Andrew): It is a great honor to invite these extraordinary guests to join the dialogue. Larry Fink from BlackRock, of course, he is currently managing $14 trillion in assets. I should also mention that he is the co-chair of this year's World Economic Forum. You have done an outstanding job during this period.

Ken Griffin is also here. He is the founder and CEO of Citadel. He manages $65 billion in investment capital and has been at the forefront of the financial industry for decades. He has always been one of the most prescient voices regarding economic trends, and we will talk to him later.

Then we have invited European historian Adam Tooze. He is also the director of the European Institute at Columbia University and the author of five books, including "Flood: The Great War, America, and the Reshaping of Global Order (1916-1931)."

This covers some of the periods we want to discuss. Lagarde will join us later, and we look forward to discussing this issue with her. But I would like to start with Adam, if possible, to help us lay the groundwork and provide some historical context for this moment, as there are some astonishing similarities. We are experiencing an incredible boom, part of which is related to technology. There were also technology-related issues back then, followed by various monetary issues, and then tariffs emerged later; you can start to see what that looked like.

Adam Tooze: Thank you very much. It’s really great to be here. I don’t think we should do that kind of automatic repetitive historical story. I don’t think history works that way. Mark Twain’s saying that "history doesn’t repeat itself but it rhymes" is very useful. I do think there are several points from the 1920s that are very relevant to our current moment. One is the technological aspect. That was indeed a moment of a new era, especially in terms of electrical technology and mass production. That was the time of Ford.

Essentially, that was when Fordism became a global phenomenon and a social model. It was a contract of high wages, high investment, and high consumption, which, at its best, stabilized high levels of consumption and the growth model of the 20th century.

But I think what is more ominous is that one thing we tend to forget when we talk about the 1920s is that for most contemporaries, it was the first moment of polarization. It was the moment they believed the forces of liberalism had triumphed. Why? Because the liberal powers won World War I. The 1920s followed this epic revolutionary war, the first total war. And the victorious powers, in a sense, still controlled the situation for a time.

Whose hegemony is the end that Mark Carney spoke about yesterday afternoon? In other words, the British Empire, the French Empire, and the United States, two republics, the outstanding liberal imperial powers, while Russia, their only ally, succumbed to revolution in 1917 and became a more radical force. The foundation of their power was money. It was finance. It was the dollar hegemony of the 1920s, which was supposed to anchor this otherwise very fragile world.

The lesson of the 1920s is that we first tried to stabilize the world with technology and finance, but politically failed due to the failures of the Treaty of Versailles and the League of Nations. We thought technology and finance would be a good substitute. For a time in the 1920s, this formula seemed to work because ultimately the gold standard system turned into an increasingly dollar-centered system. Yet arrogance, a failure of imagination, and political failure never provided support for that structure. But I did not anticipate that I would see such a moment in my lifetime. The difference between economic power, productive power, and dependence on money (especially the dollar), and the failure to establish deep political connections in this context, is the true meaning of the 1920s for me. That is why it resonates so much with me in the current moment, because the key power here is the United States, and the key power in the 1920s was also the United States. Those new technologies are American. The important money is American. And it is essentially the United States, for domestic political reasons, that has violated its hegemonic obligations.

Host: You mentioned in the fall of 2024 that the AI bubble of the 2020s has a parallel relationship with the 1920s, where technological progress coexists with setbacks in global trade integration. I hope you can elaborate on this.

Lagarde: What I want to compare are the technological breakthroughs that occurred in the 1920s. Whether you look at the scale and scope of the electrical grid, the development of the internal combustion engine, or the assembly lines that were being developed at that time, those were breakthroughs of that era. At the same time, you also had a very strong stock market. What we observed in the 1920s, perhaps Adam you mentioned this, was a significant change in global trade. I wouldn’t call it a collapse, but it fell from 21% of GDP to 14% in just a few years.

So what we see now is the rapid digitization of our economy, particularly focused on artificial intelligence. We see the stock market performing extremely well, not only in developed economies but also in emerging markets. We have seen geopolitical fragmentation, accompanied by an increase in tariffs and import/export restrictions across almost all product categories.

This is unprecedented. As long as the WTO is still monitoring these restrictions, we have not seen trade collapse in the way I mentioned numerically. It has slightly decreased, but it is still maintained. The question is, can this be sustained? But if you give me a little more time, I want to point out a key difference between the 1920s and now, which makes the current situation more unpredictable and possibly colder. I just came back from the cold outside.

"Cold" is an appropriate word. The difference is that the breakthroughs of the 1920s could spread within national borders—in simple terms. In that era, you didn’t necessarily need that kind of scale and network effects.

Now, if you ask the giants in the digitalization field and the big players in artificial intelligence. By the way, developing a cutting-edge model today costs about $1 billion. If you ask them what they need, they will say they need access to as much data as possible. They will say they need scale effects to truly amortize the investment costs of model development. Now, if we face restricted data access due to different privacy laws around the world and more protectionist barriers, that will be severely threatened, which will hinder the scaling of these investments.

I may currently hold an overly negative and pessimistic view of what we are seeing, but I believe this is a real threat. The development of AI, the productivity gains we hope for, are difficult to reconcile with the fragmentation in standards, licensing, and access. I think this can only be remedied through a certain degree of cooperation. It will depend on whether people are willing to accept and tolerate different paradigms, different cultural preferences, and different worldviews. This is difficult.

Host: Larry, if you can, please talk about this issue because I can see you are thinking.

Larry Fink: I think for Western economies, if we do not cooperate, if we do not scale, we will fall behind. I think when people ask me, "Are we in an AI bubble?" this will be one of the overwhelming issues. There will be some big failures, but I do not think we are in a bubble. That said, I would prefer to say we need to spend more money to ensure we can remain competitive.

The problem we need to solve now is that everyone believes AI will create a huge J-shaped curve demand for information. The key is to ensure that this demand only appears when the technology spreads to more applications and more uses. If the technology is just the territory of six super-large companies, we will fail. So for me, and you know, we do not have enough information yet. The key is how fast we spread it, how quickly it is adapted and adopted; for me, these will be two key characteristics. The parallel point for me from 1929 evolving into 2029 is that the limiting factor will be: can we develop the economy fast enough to overcome the deficit? Especially considering the rising U.S. deficit. Second, do capital markets have the capacity to continue funding these investments to achieve the J-shaped curve of technology adoption?

Host: I want to ask Ken this question. The 1920s had massive debt funding that decade; how do you view the systemic risks of this moment, the concentration of AI, and the debt behind it?

Ken Griffin: First of all, I am glad to participate in this "gloom and doom" panel. The footnote of the 1920s is the Great Depression. The recklessness we see here and now is the overspending of governments around the world; they are all living beyond their means. This is different from the recklessness of private capital markets in the 1920s. Regarding AI, the big question mark is: will it create the kind of productivity acceleration that governments are hoping for to overcome our reckless spending? The world needs a savior, and the hope lies in AI. But it may or may not be; we do not know yet.

There is a lot of hype around AI right now. In a sense, large AI companies need to create this hype to raise hundreds of billions or even trillions of dollars to enter the field. Larry may be clearer on this, but this year, U.S. capital expenditures for data centers are about $600 billion.

Larry Fink: I think it will be more.

Host: But does this mean it is being overhyped?

Larry Fink: Many of the data centers being built are for cloud services. The big question will be the monetization of that spending. The data centers built for AI need more advanced chips. The question is, what is the lifespan of that chip? If we have a new technological revolution and the lifespan of the chip is only one year, then that spending will really be a bad expenditure. If the lifespan is as they expect, four to five years, and then those chips can be used for cloud services, then I think these investments will prove to be good investments. Personally, I am very optimistic about how AI will impact the world.

Host: Ms. Lagarde, regarding public sovereign debt in today's system. The U.S. had a budget surplus in the 1920s, and today has $38 trillion in debt. The script we learned from after 1929 is to throw money at the problem. Ben Bernanke learned this and implemented it in 2008. We did it again during the pandemic. Can we do this again the next time there is a panic? Is there an invisible red line in the bond market where investors will say, "We are no longer picking up the tab"?

Lagarde: I do not deny that investment in artificial intelligence can be extremely net positive and will bring productivity gains, although the amount is questionable. There is a wide range of views on how much gain it will bring.

But I think going back to my point about "minimum cooperation," we also have to consider that it is capital-intensive, energy-intensive, and data-intensive. We must pay attention to these three factors. In terms of energy intensity, what kind of energy is used to manage data will be important. What consequences this has for humanity is also important. So I think while we need this cooperative approach (including dealing with data privacy and preferences in different corners of the world), we also need to pay attention to energy consumption, the types of energy, and their impact on the climate.

Second, we must pay attention to the consequences for humanity because unless you know, we enter Keynes's dream world where work is a choice—I do not see this in the medium-term horizon—we must understand what it means for humanity, unless we want to risk social chaos.

Returning to the debt issue, debt has increased significantly, but the key is what this financing is used for. Investment in necessary productive projects, necessary debt for security purposes, will always find someone to fund it. That is my assumption. Debt that is not used for productive purposes and cannot sustain growth on a sustainable basis will be much more difficult. So I will not tell you there is a red line. I will not tell you that central banks will always be there. But I think the nature of the purpose of debt subscription will be more important than the actual volume.

Host: What do you know about the idea that central banks may not always be there?

Lagarde: Having experienced many crises, people have said, "Central banks are the only lifeline," but that is not the correct way to achieve lasting equilibrium. Fiscal authorities must take action, reform, and consider the purpose of spending and its consequences for people to maintain social cohesion.

Ken Griffin: Are you implying that our legislative bodies have abandoned fiscal prudence and become overly reliant on central banks to respond to the shocks of reckless spending?

Lagarde: I am not implying that this is the case now, but it has been observed in the past.

Adam Tooze: The irony of history is that when people talked about central banks as the "only lifeline" in the 1920s, they were urging for more aggressive fiscal policies. Because the problem is that we have a low-inflation environment, stagnation, and even prominent figures from BlackRock advocating for more confident fiscal policies, because there is a profound imbalance between the two levers of macroeconomic policy, which is also a lesson from the 1920s.

And now, as Ken hinted, what you advocate, I understand to be a more abstract claim, that every government department has a responsibility. Yes, this responsibility involves not only macro totals, as I hear you say, but also specific types of spending. Your distinction between productive and non-productive is not only for economic purposes but also for the critical issue of political legitimacy and social cohesion. Because the social contract in Europe and the United States, but in reality in Europe, is under profound pressure from the idea that the modern welfare state is non-productive, and there is a lot of very vicious distributional struggle, which is awakening another ghost of the 1920s, namely the ghost of fascism, right? That certain participants are very eager for us to give more platforms to parties that are the traditional direct successors. They are now mobilizing in Europe around the legitimacy of canceling public spending, attacking these productive, non-productive, national, international, immigrant, racial, and national issues. So that is why these politics are explosive.

Larry Fink: But Adam, in the 2000s, the mantra of "too big to fail" (as Andrew wrote) led to a social perspective that said: do not bail out. So there wasn't as much fiscal stimulus as necessary. But I would say the lesson learned is that in 2020, you could argue that we used massive fiscal stimulus, perhaps too much, looking back. So I actually believe, you know, we are all evolving, and we are deciding which lever to pull. So I think, you know, Europe, especially after 2008 and 2009, may not have used enough fiscal tools. We are all evolving in deciding which lever to pull.

Adam Tooze: It also depends on what kind of structure you have. To emphasize again, because Europeans had jobs, they essentially had short-time work schemes to keep people employed. In the U.S., the unemployment rate soared in 2020 without a real national unemployment insurance system in operation, having to rely on this "false prosperity" of trillion-dollar checks mailed to households to rescue American society. It is easy to overdo it, but this is indeed one of the great macroeconomic success stories of modern times; we did not have another 1929.

Host: Ms. Lagarde, regarding the independence of central banks relative to the political class. During a crisis, central bank governors must work with the government. You recently signed a letter about the independence of the Federal Reserve; what are your thoughts?

Lagarde: No, but this… no, but this touches on an interesting parallel point. It touches on an interesting parallel point. If you look back at what actually happened in the 1920s, especially in 1929. I have read some diaries of members of the Federal Reserve during that time. They were very concerned about the politics of the time. They were very aware of the political landscape. By the way, it was not the president at that time, President Hoover, telling them exactly what to do. Rather, they were worried that the central bank itself would… it was still considered an experiment at that time. It was still new.

Larry Fink: (Would be) dissolved.

Host: You would talk about whether the central bank governors would still be here; they were uncertain about what they were doing, uncertain whether they would break the balance, whether Congress would say, "We've had enough of you." So I wonder, during these crises, there were many times when central bank governors had to work hand in hand with the Treasury and the president. So we are at this moment. You recently publicly stood up. You know, you signed a letter about what is happening in the U.S. and our Federal Reserve. What are your thoughts?

Lagarde: First, I want to distinguish… hats off to your work because you really studied in detail how they thought in those days and what their fears were. But I would distinguish today’s kind of "working hand in hand"—we did do that to some extent during COVID, let’s face it—from "fiscal dependence." So working hand in hand in special circumstances, even if it is extremely special, I think is completely legitimate. Whether too much was done, I think we should, this is a good debate.

What form it takes is also an interesting question because between the shock absorbers on this side of the Atlantic and direct fiscal spending to consumers, I think, you know, there is no consensus on which is most effective. But fiscal dependence is another matter, and I strongly oppose it. You know, for me, the great champion and hero who broke this dependence of central bank governors is Volcker. He took risks.

Huge risks that really affected the economy, jeopardizing the economy to ensure lasting price stability. I think his position in front of President Nixon at that time, to demonstrate the independence of the central bank to restore price stability, is something we should, you know, keep in mind. I do not intend to comment on what is happening right now, including today, actually. Just to say that I and a few other colleagues did take the initiative, in the context of the events that happened a week ago, to advocate for the independence of the central bank.

Adam Tooze: One of the truly fascinating things is that the concept of central bank independence itself is a product of the 1920s. It is a product of the 1920s because most central banks, unlike the Federal Reserve, are ancient institutions. Like the Bank of England, the Bank of France. What they had to deal with in the early 20th century was the emergence of modern democracy, namely multi-party systems, populists, social democrats, and right-wingers. It was in this context that the Federal Reserve was born out of a crisis; one of the reasons the U.S. did not establish a central bank earlier was that it was a democratic country, and capitalist democracy is contentious, and money is contentious in capitalist democracy. Central banks are also highly contentious; the U.S. did not achieve this until Wilson reached a compromise in 1913. Meanwhile, others, the British, the French, the Germans, of course, had to really figure out what it meant to be a market-centered, finance-centered bank in a practically active social democratic system. It is from this that the concept has been hostile to populist democracy from the very beginning, and it has been so since the 1920s.

That phrase is Montagu Norman's, "knave-proof," right? You want the central bank system to be able to guard against that kind of pressure. There is a certain resonance in the current moment, right? You need to make the central bank institution able to guard against that kind of political pressure. I think since Volcker, this has been a fruitful place to think about the relationship between expertise, politics, and market pressures. People may have different views on Volcker, but I completely agree with your point that he set the paradigm for modern independent central banks, whether people like that paradigm or not, but it is clearly a defining moment from Carter to Reagan, withstanding the pressures during Reagan's presidency, and so on. But…

Ken Griffin: Just to put things in context. Modern central banks represent the reality that we are not on the gold standard, which was during the Vietnam (War) period…

Ken Griffin: Going back 150 years. I am not advocating that we should return to the gold standard; it is just a very different world. Then today, and the second significant difference from over a hundred years ago is that debt is everywhere. In a market economy, if you have…

Host: Where there is debt…

Ken Griffin: It is everywhere, deflation.

Adam Tooze: His… is very scary. Well, that is the reality. In the 1920s after World War I, debt was also everywhere. The debt to GDP ratio in post-war Europe was higher than ever before. No one was on the gold standard after World War I. So in reality, they had to manage democracy, deal with 140%, 150% debt to GDP, and figure out what to do with the central bank. It is surprising that they chose the gold standard. So at that time, neither the UK, France, nor Germany was on the gold standard. And in Italy in 1919, when the 1920s began, they all had to converge back there with the U.S. This became the great conflict between Keynes and Winston Churchill in the 1920s: what price will we pay? This is the Cross of Gold. In the U.S., it was William Jennings Bryan. In Europe in the 1920s. What price will we pay to stabilize again? This is what makes it look and feel like the bad eurozone of the 1920s.

Lagarde: Right? But there is also a huge difference between then and now.

Lagarde: The results of monetary policy are completely rigid, while we have more flexibility and more tools to use.

Ken Griffin: And there are plenty of success stories. I mean, if you look at price stability in Europe, I don’t want to jinx it, but it looks really good right now.

Larry Fink: Yes, I want to bring it back to today and what we need to pay attention to. I think this is the basis for our thinking about the 2026 World Economic Forum and Davos. That is how technology will reshape many parts of society, whether we get the data right or not. From BlackRock's perspective, we see more and more industries exhibiting a K-shaped economy. Yes, a huge super-winner and many losers. Almost every industry's winners are scale operators who have the opportunity, internal cash flow, and profitability to leverage AI faster. Take Walmart, for example; they have extremely excellent knowledge of inventory control that almost surpasses any other retailer. When consumers buy things, when items are taken off the shelves, they immediately understand consumer preferences, and they can navigate one store against another. You see this in their performance. You see them performing excellently quarter after quarter over time, achieving higher returns, while many retailers are really struggling. We have bankrupt assets, and so on. I see this in every industry. We may see this in every country; the scale operators are winning now, and this has not translated into broadening the world economy. In many ways, it may be narrowing. For me, it goes back to what Lagarde talked about; how quickly we can see the adaptation and democratization of AI and technology will be the real key point. Can AI be cheap enough? Widely enough? So that it can be distributed to small businesses and medium-sized enterprises, allowing them to grow and have the same advantages as scale operators.

But in the meantime, scale operators are winning. I mean, I see this in the asset management industry; scale operators have better connections because they leverage more technology. I think this is just in the initial stages, and it will represent some huge social issues.

Host: I can slightly shift the topic and throw out another big question that actually did not happen in the 1920s but technically happened in 1930, which I think is very important in everyone's mind when talking about parallels. In 1930, President Hoover, who was very eager to win votes in 1928 to secure votes from farmers, promised them he would implement tariffs. The year 1930 arrived. We had already experienced the crash of 1929. Every economist and banker was kneeling in Washington saying, "Please don’t do this. I beg you, do not implement these tariffs." Of course, because he made this promise to secure those votes, he said he needed to push it through. Then, of course, a year later, trade fell by 60%.

I am curious how you think about this issue in the current context. I think the president may even talk about tariffs later today. And it is not just about what happened when trade fell by 60% at that moment, but also about how long it actually took, for political reasons, to effectively lift those tariffs and bring us into a more globalized order, which may be deconstructed at this particular moment. Who wants to answer this question?

Adam Tooze: I mean, I hear Larry's hint not to talk too much about history anymore. So I want to turn to the present and say the biggest difference is this issue of fiat currency. Because what really led to the collapse of global trade in the early 1930s was the combination of tariffs and monetary chaos, the collapse of the gold standard in 1931, and then the introduction of massive quotas. In the current moment, we are a long way from such a world, so while these are bad, they look more like classic trade war-type tariffs. This is not good, especially considering the volatility of the current tariff regime. This is what makes it really strange. Historically, we actually do not know what the tariffs in the U.S. will be next week. But this, I think, is a relative comfort. This is a pivot point where I do not think there is reason to panic.

Host: Ms. Lagarde, do you think these tariffs are a permanent state? If we sit together 20 years from now, will the tariffs we are experiencing today still exist to some extent, as well as the kind of division in our global landscape?

Lagarde: I certainly hope not. But let's see, in 20 years, you might be here, and I might not be. But, you know, again, I think it is important to dig beneath the surface of those tariffs and see who is bearing the brunt. We might be surprised. You know, I haven't seen a lot of research, but there is certainly a study from the Kiel Institute in Germany that identifies American consumers and American importers as the primary bearers of the tariff burden. If I look at the U.S.-EU relationship now, from a 2% tariff, but a year ago, our average tariff in the Eurozone was over 12%. With the looming threat, if targeted, we will average up to 15%. If 96% of that burden is borne by American consumers and American importers, I don't think that's a good outcome, especially in terms of inflation. So I think we need to really delve into what the consequences are, what the spillover effects are, what the inflationary outcomes are, and how growth is affected by this.

Ken Griffin: So I, you know, obviously, I have spoken on this topic over the past year. Unfortunately, I think some of the concerns I highlighted have come true. Tariffs are regressive for American consumers, and we see the government removing tariffs on goods that directly affect American consumers—not all goods, but they have removed tariffs on many. Second, who pays for the tariffs, right? For any tax, tariffs are a form of tax, and there is always the question of who pays the tax. In this case, it seems that two or three studies have been completed showing that the burden of this tax falls on American consumers and American companies, not foreign companies. Then, of course, cronyism is the ongoing fear that tariffs create; you create an environment where the companies closest to Washington are those that are pleasing the powers that be, which puts small and medium-sized enterprises at a real disadvantage.

I want to touch on a point here, going back to your comments about the rise of these very large, successful companies. Most of them started as small businesses in our lifetime, right? The person to my right runs the largest asset management company in the world. He founded the largest asset management company and created that business in less than a lifetime. This is a huge success story.

This is the story of American economic vitality, where small and medium-sized enterprises can rise to become global leaders in just a few decades. In fact, if we look at today's AI companies, everyone is talking about Anthropic and OpenAI. Anthropic didn't exist a few years ago. OpenAI didn't exist 15 years ago. Nvidia is a company that makes video game processors. The three biggest names in AI are actually all under about 10 years old. It is this vitality that attracts capital to the U.S. and truly gives a sense of American economic prosperity. We need to continue to protect the opportunities for our small and medium-sized enterprises because you never know which one will become the next BlackRock, the next Anthropic, Apple, and so on.

Host: Larry, I have a technical question for you. One of the reasons we had a crisis in 1929 was actually technology. You mean the New York Stock Exchange couldn't keep up with the volume of trades, in fact? I mean, you see those famous black-and-white photos of thousands of people standing outside the New York Stock Exchange; that was during the crash in October 1929. They were standing there because they were trying to figure out what happened to their money. They didn't know because the processing was too lagging. Today, we can get that information on our phones, accurate to the millisecond, almost perfectly.

Yet at the same time, talk about the idea that rumors can spread and spread quickly. You know, in the old days, it took a long time for some bad rumor to spread. And by the way, it took a long time to correct that rumor in terms of efficiency. But today, we saw this with Silicon Valley Bank in the U.S., for example. When someone says and publicly states, "I am going to move my account from this bank," at that second, everyone can rush to the exits. Because they can see everything in a completely different way, so while technology is amazing on one hand, I wonder what you think the risks are on the other.

Larry Fink: So I would argue that with transparency, the risks are actually smaller. I think Silicon Valley Bank was a poorly regulated bank. I mean, in fact, BlackRock was asked to study their asset and liability mix, and we identified it as the most mismatched bank in the U.S. at the time, two years before it collapsed. So I think that was a regulatory failure, not a failure of information transmission.

I truly believe that when you talk about other things. I mean, the transmission of information is processed. Yes, we may have quite extreme daily fluctuations at any given time. But we forgot one thing in 2025. If you pick the first day of each quarter, the 10-year Treasury moved 3 basis points. That is all they did, January 1, you know, April 1. Then the 10-year Treasury moved three basis points? Yes. But between those quarters, there were huge fluctuations, you know, and… but that is precisely the efficiency of the market. That is the beauty created by Citadel; the rapid movement of funds balances it, and we determine what fair value is in a very short time. I think that is the grandeur of capital markets.

Transparency is the engine, I would say. The engine of market movement, Ken should answer this question because he is one of the geniuses of this architecture.

But I would say, going back to technology for a second, yes, I think the move towards tokenization and decimalization is necessary. Ironically, we see two emerging countries leading the world in decimalization and the tokenization and digitization of currency, which are Brazil and India. I think we need to move very quickly in that direction. We will reduce costs, and we will democratize more by reducing more fees. If all our investments are on a tokenized platform, moving from tokenized money market funds to stocks and bonds and back and forth. We have a common blockchain. We will, you know, we can reduce corruption. So I think, yes, we may have more reliance on a particular blockchain; we can discuss that. But that said, these activities may be handled more securely than ever before. We…

Host: We are running out of time. Ken, very quickly. When you think about the technological aspect of this now, I want to know if you think the benefits of technology outweigh the risks for society, but I do want to know if you think the technological aspect represents risks we should be thinking about.

Ken Griffin: The technology of our financial markets or technology…

Host: Macroeconomic technology. I mean, I think financial markets are much safer because of (technology).

Ken Griffin: Look, there is a simple, you know, everyone is talking about how difficult this historical moment is. Well, you could live the life you have today, or you could have been born 200 years ago as the King of England. Which life would you prefer?

Host: Okay, historically, what year do you think we are really in? What is the closest analogy?

Lagarde: You know, I am reminded of Hamilton's question to King George, "What comes next?" I think that is what we all want to know, what comes next. But I think we all bear responsibility for what comes next. And my "minimum cooperation" is the plea I want to put on the table now.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。