
The next twenty years are going to be completely unlike the last twenty years. - sinzone
http://captaink.blogspot.com/2009/05/next-twenty-years-are-going-to-be.html
======
_delirium
This feels a little too gold-buggish for me in parts. Fiat money and
fractional-reserve banking are quite separate things: fractional-reserve
banking was common even with gold currency. Unless an intrusive government
regulation outlaws people from accepting deposits and lending them back out,
and even further, from issuing promissory notes, it will continue to happen
even in a gold-standard economy, because full-reserve banks are less
attractive, both to owners and depositors, _except_ in crises, of which our
memories are short.

Gold supply also has over the past 100 years or so inflated at a low
exponential curve that looks much like a compounding curve, because the annual
production has been increasing roughly in line with the total amount in
existence (from 400 tons/yr in 1900 to 2500 tons/yr today). It's compounding
with a low rate, around 1%-2% over most of that period, but nonethless the
money supply inflates, and continues to inflate faster in absolute terms year
to year (with some dips now and then).

~~~
nazgulnarsil
actually they are connected. with a gold standard banks that run FRB risk
actual bank runs. with a fiat system the government (fed) can provide
unlimited backing so instead of a bank run the fed would print money, causing
inflation (see the Savings and Loan crisis of the 80's). your buying power
decreases in exchange for socializing the risk of bank runs.

one of the reasons austrians bug me is their insistence on 100% reserve
banking even though a cursory examination of history reveals that there is
market demand for FRB. sure, demand would certainly be lower than it is now if
there was no "lender of last resort" fed subsidizing risk, but it would still
exist. most people care about 100% safe investments.

however the austrian criticism that banks who mismanage their funds should be
allowed to fail is spot on.

~~~
_delirium
Yeah, there's more scope to maneuver in a fiat-money system; I was mainly
objecting to what seemed to be the suggestion that under a gold standard FRB
and the money multiplier somehow wouldn't exist. It seems that some people in
this group want to somehow mandate that everyone conduct their transactions by
literally exchanging gold coins in bags. But the people with that viewpoint
tend to also be libertarians... how, consistent with libertarianism, can the
government prohibit private individuals from exchanging pieces of paper saying
"I owe you 5 ounces of gold", and force them to physically exchange the 5
ounces of gold instead? But if the government _doesn't_ force them to
physically exchange the gold, you have a money multiplier, and, in effect,
privately minted fiat currency. And the related bubbles and crashes would also
exist, as they have for centuries.

~~~
nazgulnarsil
well....

[http://unqualified-
reservations.blogspot.com/2008/09/maturit...](http://unqualified-
reservations.blogspot.com/2008/09/maturity-transformation-considered.html)

------
mixmax
This is mostly bunk. I'm not going to go through the whole thing, but I'll
take the third video as an example:

First, the graph the author has drawn obviously isn't exponential. The graph
is too flat and rises too quickly, but it certainly is scary. Second, global
population growth is declining, and going towards zero. In some East European
countries it's already negative. Third, this has already been discussed by
Thomas Malthus back in the 70's and dismissed.

This looks like someone who doesn't quite grasp the complicated machinery of
economy, people and energy and tries to explain it using pocket philosophy.

~~~
Estragon

      ...has already been discussed by Thomas Malthus back in the 70's and dismissed.
    

Not sure which Malthus you mean. In 1770, he was only 4 years old, and by
1870, he was dead...

~~~
mixmax
Ah yes, sorry for that. I was mixing Malthus up with the Club of Rome that
revived his ideas and published _the limits to growth_.
(<http://en.wikipedia.org/wiki/Club_of_Rome>)

Thanks for catching this :-)

------
sown
So I'm just curious for someone who was around, but how similar were the last
twenty years to the twenty years previous to that?

~~~
arethuza
Single biggest thing: no Cold War.

Go watch Threads:

<http://www.imdb.com/title/tt0090163/>

and if you aren't old enough, consider that people lived with this kind of
threat for decades.

~~~
hga
Indeed: for around 6 decades we had a determined adversity who was dedicated
to destroying us by any means possible in every realm ... and we weren't used
to dealing with that sort of threat.

And by some time in the '50s "the bomb" made that threat immediately
existential (bomber or missile flight time) ... it's hard to describe what
living under that was like.

~~~
arethuza
"we had a determined adversity who was dedicated to destroying us by any means
possible in every realm"

Of course, that was the view the Soviets also had. Although they were an "evil
empire" I don't think they actually had anyone in power actively campaigning
to start a war, which did happen in the US. The Soviets were largely dangerous
because they were so very afraid and (by the 80s) had senile leaders - look at
the near disaster of Able Archer 83.

~~~
hga
In the 30s??? I think not.

They started effective war on the West in general and the US in particular no
later than that. (A war doesn't have to be "hot" to be a war.)

Maybe they "were largely dangerous because they were so very afraid and (by
the 80s) had senile leaders" ... but perhaps they should have thought of that
before starting and sustaining a generations long war?

Moving out of the Lenin-Stalin eras, was Khrushchev, who actually ordered
Soviet subs to use nuclear tipped torpedoes on the US Navy "so very afraid"?

~~~
hga
(I should point out that the last comment was WRT the Cuban Missile Crisis,
and Khrushchev's "adventurism" (or whatever) in it and the lead up was the
grounds for purging him from office.)

------
timthorn
It frustrates me when energy consumption is used as a proxy for growth. That
was probably true during industrial periods when manufacturing was the key
economic producer, but isn't education and time more important now? Of course
energy is still important to that, but to take a simple example - I can build
a web store much more quickly now than I could 15 years ago thanks to the
advent of frameworks, and indeed I don't need to build one myself as I can use
an already developed one. My time can now be spent developing novel things.

~~~
euroclydon
Whew, I don't really know. If you visit the Peak Oil website and get beat over
the head with the list of things that are made from or depend on oil, like
paint and plastics, most transportation, even feeding the world depends
heavily on natural gas fertilizers, not to mention diesel in the tractors,
you'll see that are so many things we consider necessities which can't be
replaced by photons racing down a fiber-optic cable.

~~~
timthorn
I'm not trying to argue that energy/oil isn't important for growth. I think
its that I see the argument so often that growth is the same as consumption,
when it's not - it's the creation of value, not objects.

~~~
euroclydon
Oh sure. A good analogy for me would be swimming up stream. Even if the
outbound tide of Peak Oil is draining our wealth, technological advances can
stem that tide.

------
Roridge
I didn't watch all the videos, but I didn't see anything about War.

It seems to me that if you read between the lines that the next 20 years wont
be like the last 20 years because there will be no War.

Sadly I think we need to overcome the small human need to destroy each other
before we need to worry about almost everything in this blog post.

~~~
heresy
The video on inflation covers how war has significant inflationary effects,
but obviously focuses on the economics and not the morality of it.

~~~
Roridge
I was thinking on how Wars fund many technological break thoughts and more
often improves the economy. Where would the internet be without War? DARPA
anyone?

If there were no war in the world tomorrow, millions would go out of work.

~~~
megaduck
I'm sorry, this is a dangerous and wrong line of thinking. War's primary
purpose is to _destroy_ economic output. You win by eliminating your
opponent's ability to produce the goods and services that enable them to
engage you.

You are correct that world peace would result in massive layoffs. However,
those millions of newly unemployed people would now be free to do other, more
productive work.

World peace would be the most beautiful and perfect example of creative
destruction in the history of economics.

~~~
Roridge
I am not claiming it's the right way to think. I am pointing out realistic
facts.

Your assumption that these people would be free to do other more productive
works is counter-intuitive, as you are assuming that people who fight Wars
want to do something else.

My original observation still stands, that the blog context appears to
disregard the positive influence that war has on economy as well as the
negative.

~~~
megaduck
I think you misunderstand me. If war was eliminated, people who fight wars
would have to do something else, regardless of their feelings on the issue.
That thing would necessarily be more economically productive, because war is a
net drag on the global economy.

If you wish to debate this, then you'll need to prove that _in aggregate_ ,
war is economically productive. That's a difficult argument to make, and
likely to be empirically false.

For a more robust explanation, check out the "parable of the broken window":
<http://en.wikipedia.org/wiki/Parable_of_the_broken_window>

~~~
crpatino
If I recall well the argument, the whole point about war is that it serves as
a counterbalance against the problems that perpetual growth brings.

It is never truth that the war is economically productive. But the destruction
of capital that comes as a side effect of war keeps inflation on check
(monetary inflation defined as money growing faster than the tangible economic
output; not price inflation, which is one result of the former).

Besides that, while it might be a net negative economic event, War puts lots
of public money in some chosen private pockets. So there are always people
lobbying to get into conflict in a perfectly rational way.

------
kiba
The world, for the next twenty years, is going to be dominated by black swans,
and a whole lot of them.

Hopefully it's mostly good black swans, not bad one.

~~~
david927
If we don't get the good ones, we'll get the bad ones.

------
itjitj
Yes, and also why the Singularity is such a silly idea.

We are not racing to utopia, we are racing to disaster.

~~~
david927
Think of it. We are blessed with technology that would be indescribable to our
forefathers. We have the wherewithal, the know-it-all to feed everybody,
clothe everybody, and give every human on Earth a chance. We know now what we
could never have known before -- that we now have the option for all humanity
to make it successfully on this planet in this lifetime. Whether it is to be
Utopia or Oblivion will be a touch-and-go relay race right up to the final
moment.

Buckminster Fuller

~~~
FluidDjango
Unfortunately we have no technology to manage (or enlighten) 6 billion
irrational human beings.

EDIT: And so... variations on the Tragedy of the Commons march on.

------
nickpp
F-ing hate doom-ers. I have ONE word for you:

Y 2 K

Remember? The world was gonna end. Fsssssssssssssssssss...

In 2005 we were told that PeakOil was supposed to happen before 2010. Guess
what?!

Global Warming! Global Warming!

Yes, the system goes through crises, but then things change, wrong get righted
and life goes on. No, the world is probably not gonna end. And if does, the
fact that I won't hear you whining anymore will almost make up for it.

~~~
tdoggette
What do you think Y2k would have looked like if there hadn't been a serious
date-format conversion effort?

~~~
nickpp
But THERE WAS an effort and it WAS successful. That is my point: everything
that comes our way, humanity WILL deal with it.

We did in the past and we will do again in the future. The probability for
doom, while not zero, is extremely low, due to our flexibility.

