Buy Oil With Gold-Backed Currency—Bypassing US Petrodollars

In a second ground shaking move in a week, China has moved to introduce yuan denominated oil futures contracts. Settlement may be in yuan or gold. This has huge long term ramifications for the US dollar as world’s reserve currency.

The other move this week was the US Federal Reserve signally their intention next month to start reducing it’s balance sheet assets by $10 billion per month. Again, the long term ramifications for this is enormous but will not felt immediately.

By Jay Syrmopoulos via The Free Thought Project

In a direct challenge to U.S. imperialism, China’s yuan-denominated contracts – backed by gold -will let oil exporting countries bypass using the U.S. petrodollar.

Beijing, China – In an effort to hedge against U.S. hegemony, and what could be a global game-changer, the world’s top oil importer, China, is preparing to denominate crude oil futures contracts in Chinese yuan to be convertible into gold. The move would allow oil exporting countries to bypass benchmarks denominated in U.S. petrodollars — creating what will almost certainly be the most critical Asian oil benchmark, according to a report by Nikkei Asian Review.

Typically, crude oil is priced in relation to Brent or West Texas Intermediate futures, both denominated in U.S. dollars.

The move by the Chinese will allow oil exporting countries such as Iran and Russia to bypass U.S. sanctions by trading in yuan instead of U.S. dollars. The move is a direct result of the U.S. proclivity to use the dollar as a weapon against countries that refuse to bend to the imperial will of the United States. To make the yuan denominated contracts more appealing, China intends to make the yuan fully convertible to gold on the Shanghai and Hong Kong exchanges.

“The rules of the global oil game may begin to change enormously,” said Luke Gromen, founder of U.S.-based macroeconomic research company FFTT.

According to a report by OilPrice.com:

Last month, the Shanghai Futures Exchange and its subsidiary Shanghai International Energy Exchange, INE, successfully completed four tests in production environment for the crude oil futures, and the exchange continues with preparatory works for the listing of crude oil futures, aiming for the launch by the end of this year.

Yuan-backed oil and gold futures mean that users can be paid in physical gold, said Alasdair Macleod, head of research at Goldmoney, a gold-based financial services company based in Toronto.

While some potential foreign traders have expressed reservations that the contract would be priced in yuan, according to analysts who spoke to Nikkei Asian Review, backing the yuan-priced futures with gold would be appealing to oil exporters — especially to those that would rather avoid U.S. dollars in trade.

It is a mechanism which is likely to appeal to oil producers that prefer to avoid using dollars, and are not ready to accept that being paid in yuan for oil sales to China is a good idea either,” Macleod said.

These recent moves by the Chinese are part of a larger de-dollarization strategy by other world powers intent on creating a more multipolar global framework.

As we reported in July, the formation of a BRICS gold marketplace, which could bypass the U.S. Petrodollar in bilateral trade, continues to take shape as Russia’s largest bank, state-owned Sberbank, announced that its Swiss subsidiary had begun trading in gold on the Shanghai Gold Exchange.

Russian officials have repeatedly signaled that they plan to conduct transactions with China using gold as a means of marginalizing the power of the dollar in bilateral trade between the geopolitically powerful nations. This latest movement is quite simply the manifestation of a larger geopolitical game afoot between great powers.

report by the Centre for Research on Globalization clarifies the implications of these most recent moves by the Russians and the Chinese in an ongoing drive to replace the US petrodollar as the global reserve currency:

Fast forward to March 2017; the Russian Central Bank opened its first overseas office in Beijing as an early step in phasing in a gold-backed standard of trade. This would be done by finalizing the issuance of the first federal loan bonds denominated in Chinese yuan and to allow gold imports from Russia.

The Chinese government wishes to internationalize the yuan, and conduct trade in yuan as it has been doing, and is beginning to increase trade with Russia. They’ve been taking these steps with bilateral trading, native trading systems and so on. However, when Russia and China agreed on their bilateral US$400 billion pipeline deal, China wished to, and did, pay for the pipeline with yuan treasury bonds, and then later for Russian oil in yuan.

This evasion of, and unprecedented breakaway from, the reign of the US dollar monetary system is taking many forms, but one of the most threatening is the Russians trading Chinese yuan for gold. The Russians are already taking Chinese yuan, made from the sales of their oil to China, back to the Shanghai Gold Exchange to then buy gold with yuan-denominated gold futures contracts – basically a barter system or trade.

The Chinese are hoping that by starting to assimilate the yuan futures contract for oil, facilitating the payment of oil in yuan, the hedging of which will be done in Shanghai, it will allow the yuan to be perceived as a primary currency for trading oil. The world’s top importer (China) and exporter (Russia) are taking steps to convert payments into gold. This is known. So, who would be the greatest asset to lure into trading oil for yuan? The Saudis, of course.

All the Chinese need is for the Saudis to sell China oil in exchange for yuan. If the House of Saud decides to pursue that exchange, the Gulf petro-monarchies will follow suit, and then Nigeria, and so on. This will fundamentally threaten the petrodollar.

“In 2014 Russia and China signed two mammoth 30-year contracts for Russian gas to China. The contracts specified that the exchange would be done in Renminbi [yuan] and Russian rubles, not in dollars. That was the beginning of an accelerating process of de-dollarization that is underway today,” according to strategic risk consultant F. William Engdahl.

Russia and China are now creating a new paradigm for the world economy andpaving the way for a global de-dollarization.

“A Russian-Chinese alternative to the dollar in the form of a gold-backed ruble and gold-backed Renminbi or yuan, could start a snowball exit from the US dollar, and with it, a severe decline in America’s ability to use the reserve dollar role to finance her wars with other peoples’ money,” Engdahl concludes.

About the Author

Jay Syrmopoulos is a geopolitical analyst, freethinker, and ardent opponent of authoritarianism. He is currently a graduate student at the University of Denver pursuing a masters in Global Affairs and holds a BA in International Relations. Jay’s writing has been featured on both mainstream and independent media – and has been viewed tens of millions of times. You can follow him on Twitter @SirMetropolis and on Facebook at SirMetropolis.
Source: https://truththeory.com/2017/09/13/china-moves-new-world-order-will-buy-oil-gold-backed-currency-bypassing-us-petrodollar/

The Coming Four D’s

Over the last 17 years we have witnessed an increasing loss of confidence by voters in liberal democratic governments around the world. The 17 years have truly exposed the fact that politicians have personal agendas beyond serving the needs of their electorates. As political confidence fails, economic confidence fails soon after. Despite confidence failing, the economy seems to totter on fuelled by the vast money expansion of the last 9 years, unprecedented in human history.

Nowhere is this more apparent than in Australia where voters prefer having a “hung parliament” than trusting government. Many Australians feel a sense of unease that something has gone terribly wrong with the “lucky country”. The spontaneous ordering of the Australian electoral process has delivered a series of difficult to govern parliaments reflecting the wishes of voters to minimize damage to themselves. Unfortunately, this situation is also leading to the collapse of political confidence in this country. When that happens, economic confidence fails soon after. Many indicators illustrate an underpinning weakness of the Australian economy and this is accelerating.

Emerging Events foresee a time coming (very soon now) when “The Four D’s” will come to bear in most liberal democratic countries around the world including Australia.

These Four D’s, like the Four Horsemen of the Apocalypse are:

  1. Deleveraging (reduce debt). In Australia it is not so much public debt that is the issue like the US, Japan, UK, Italy, France and others but private debt held in the form of home loans, car loans and consumer loans. Australians today are loaded with debt and at risk of a severe downturn in the economy and property prices. Remember that any debt is a claim on future labour.

2. Deregulation. Over the last 40 years we have seen a massive growth in the amount of red tape choking our ability to get up and achieve. It was Frederick Hayek, the famous Nobel Prize winning economist who said “there is no better way to enslave a people than to enmesh them in a fine set of regulations”. Disempowering career politicians is a powerful solution to ending their crony ways and getting more people into parliament with real world experience. It can be done by setting term limits for politicians. Let them “serve” the electorate for just a few terms before thanking them and sending them on their way.

Unfortunately politicians need to be seen to be doing their job and of course that job involves passing legislation. It’s actually cheaper to send all those Federal politicians on junket trips overseas than to see them pumping out more legislation. Their need to regulate your life is the Progressive agenda and Progressivism is the “strong presumption that government intervention (force) will produce a better result than voluntary society”. In other words, they know better than you how you should lead your life.

3. Deflating the economy. This really means letting prices of everything find their own level rather than being artificially propped up. Since most asset values are overpriced anyway given the quantity of paper money that has been inflated enormously over the last 40 odd years. What we are suggesting is the value of money be allowed to recalibrate at 2016 values to allow money to once again represent a store of value as property, shares, and others assets do today. In other words it should have equal status as an asset.

The best way of achieving this is by making money a store of value again, thereby stopping politicians from endless borrowing and creating endless inflation. While 1 or 2 % inflation may not seem much, it is enough to keep you like a rat on a treadmill, constantly grinding to maintain your standard of living. It doesn’t have to be this way folks. The rising perception that inequality is increasing in many liberal democratic countries stems directly from the expansion of money supply.

  1. The first three D’s will happen regardless of all the politicians and all their minions’ attempts to control the levers of the economy and society at large. The belief they have any control is delusional at best and the consequence of this belief in the long term is, inevitably, a totalitarian state. The fourth D, possibly the most important is up to us and possibly the most important in securing all the rights and privileges available to you from the liberal-democratic tradition you have inherited. The fourth D is about decentralizing or devolving power now concentrated in the hands of federal government. By that I mean we need to devolve power concentrated in the hands of federal government to state and local governments.

We need to remember the political class makes its living from centralized power and the attendant division it causes. But why should ordinary Australians accept the false choice between one brand of centralized government and another, when the obvious solution is staring us in the face? Breaking up power politically is far more practical, and far more humane.

There are two pressing questions you need to ask yourself. Is centralized governance desirable in a vast country like Australia with a population of 24 million people? More importantly is it even really possible? Are overarching political solutions workable, or does politics simply enrich Canberra politicians while feeding the rapidly deteriorating social and economic wellbeing most Australians are experiencing?

In politics, the principle that a central authority such as a federal government should have a lesser function, performing only those tasks which cannot be performed at a more local level is called “subsidiarity“. Subsidiarity as a peaceful approach for devolving centralized power is the first step toward making government smaller and less powerful in our lives. National and even supra-national governments are the biggest threats to human liberty and flourishing because they have a monopoly on violence and coercion: armies, police, missiles, central banks, economic sanctions, centralised taxation, healthcare and welfare. These are the elements of systemic contagion that should terrify us.

Decentralization of power requires more than just devolution of a few powers here or there, but a society-wide commitment to transferring power, authority, and responsibility back to the grass roots. From federal to state, from state to local government. A diverse society can sustain itself peacefully when its members are committed to solving problems as locally as possible, involving higher levels of government only when absolutely necessary.

Your local council may be incompetent, but at the very least it is far more accessible to you. Its damage is likely to be contained, and your ability to change local council may only require moving a few suburbs away.

Subsidiarity is the most realistic and pragmatic approach to creating more freedom in our lifetimes. Winning majority support for supposedly universalist political principles is a daunting challenge. We would do well instead to consider the Swiss federal model, which champions the subsidiarity principle where:

Powers are allocated to the Confederation, the cantons and the communes in accordance with the principle of subsidiarity. Note this was how the Australian constitution was originally set up.

The Confederation only undertakes tasks that cantons (equivalent of shires) are unable to perform or which require uniform regulation by the Confederation.

Under the principle of subsidiarity, nothing that can be done at a lower political level should be done at a higher level.

One of the problems the EU faces at present is that they have lost sight of the subsidiarity principle. More and more control has been handed to Brussels. This is one of the factors why many Britons decided to vote to leave the EU.

Imagine Bill Shorten or Malcolm Turnbull campaigning on the idea in 2019: “I can’t claim to know what’s best for Maroubra, Sydney or Frankston, Victoria or Bunbury, Western Australia in every situation. I’m not omnipotent, and neither are the 150 members of the Commonwealth House of Representatives. We should leave most things up to the people who actually live in those towns. Vote for me if you agree.”

Subsidiarity is not perfect, just better. Freedom, in the political sense of the word, means the ability to live without government coercion. It does not mean the ability to live under broadly agreed-upon social norms, simply because truly universalist political norms are so elusive.

Free societies don’t attempt to impose themselves politically on electoral minorities any more than they attempt to impose themselves militarily on neighboring countries. Politically unyoking different constituencies in Australia makes far more sense than attempting to contain the hatred and division created by mass majority outcomes.

The world is moving toward decentralization, flattening itself and replacing hierarchies with networks. Subsidiary is real diversity in practice and a key solution to restoring the inequities that have arisen in our societies.

Whether we embrace these Four D’s or not, some or all of them will soon be imposed on us anyway.

The Coming Four D’s

Emerging Events examines The Coming Four D’s where Deleveraging, Deregulation, Deflation and Decentralization become the driving forces of change in liberal-democratic nations around the world.

The article focuses on Australia which exemplifies many of the problems liberal-democratic nations face today. We show how “subsidiarity” can bring a peaceful, more content and free society by devolving centralized power.

BitCoin Prediction

Bitcoin is completing its final consolidation phase prior to a final blow off move. The market for Bitcoin has risen in a parabolic pattern (think 1929 US stock market, Tulip Bulb Craze, Gold in 1980). In chart terms this leads to a final frenzy of speculative activity before a massive plunge. The game is getting ready to change.

In a parabolic move it is impossible to predict the final highs. They are the function of time and the shape of the parabola. Once the time function has been completed, the market is floating in pure air, the bid having been exhausted and like the coyote in the Road-Runner Show, a vertical plunge begins. The dreams of speculators are smashed.

 

We can draw some longer term predictions from this of course – the first being that we will not see the new highs being regained for at least 10 years, if ever. Usually it takes a new generation of people with the right economic circumstances to relearn the mistakes of the past. The new downturn should draw US$ bitcoin prices back to the US$1100 – US$1500 level over the next 5-10 years. There will be massive counter-rallies from time to time but ultimately, the trend will be down.

We can also observe this final phase is occurring in conjunction with a long term top in US stock markets and possibly an interim high in Gold and Oil. Refer to other recent posts to get an update. The amazing Bitcoin Bubble is just another part of our long term scenario as we mop up the last few stages. Also of interest is how the cryptocurrency mania has absorbed the speculative imagination of investors away from traditional investment mediums such as stocks or property. That is not to say those markets are not overbought or “hot”.

Political Risk 2 – Reflections

We reported (04/06/2017) prior to the UK General Election 2017:

There is a minor risk of a hung parliament where, like 2010, the new government may have to collaborate to hold office. This would make managing the Brexit process untenable. The loss of political and economic confidence that would ensue would bring chaos to the UK. Should there be an outright victory to Labor, we would see a reversion to the 1950/70’s style politics that would also be a disaster.

Little did we realize how close to the mark we would be. PM May’s electoral disaster has profound repercussions for the UK. Firstly Brexit becomes a challenge at the negotiation table because of the weakened hand PM May presents to the EU. Secondly, Jeremy Corbyn’s success at the polls will force the Conservatives to move to the centre-left of UK politics to capture Corbyn’s new found friends – the 18-34 year demographic that has recently discovered politics and utopian self-interest.

This is a disaster for the UK and will not end well. May’s leadership will be under constant challenge for the next 5 years. One of her few chances of success depends on being able to negotiate a quick exit from the EU. This is unlikely.

As has happened in Australia in 2016, the UK and with a 9% confidence level in US Congress reflecting the rising distrust voters have for politicians. This is a trend that will continue around the world for the foreseeable future. The unintended consequence of voter distrust however is that political confidence begins to fail and economic confidence collapses soon after.

In the United States the Democratic – Republican flash point continues to escalate. President Trump is beginning to claw back a few points against the “Deep State” influence working inside government. Investigations are building cases on leaks and corruption. Trump is slowly gaining momentum with his agenda despite the continual challenge of the left agenda.

Unfortunately the first directly attributable acts of violence have occurred with a Republican Congressman and two police officers wounded at an annual practice baseball session for Congress politicians. The use of violence in political discourse is inherently evil itself and not in keeping with the liberal-democratic tradition that has benefited humanity. Since 2015 we have witnessed an increasing breakdown of civil discourse – a cornerstone of a free society. This marks the first violence of the civil strife we predict emerging in the US. We anticipate this will continue to escalate over the next few years. It will not end well and directly reflects the internal divisions that continue to rent US civil society.

At the same time we move slowly towards The End of the Long Game, the last gasp of the “Industrial Revolution Cycle” that commenced in 1783. We still view the September 2017 – March 2018 time window as the time for that final top, to be followed by the downward phase of the cycle. As always rebirth follows endings and the advance of humanity continues.

This worsening political discord in the US and other liberal democratic countries merely reflect the changing cycle mentioned previously. Given the magnitude of the cycle involved – one that builds and destroys empires, we can glimpse directly at the political and economic forces shaping events and the changes to come.

This is how Big Oil will die

From WHMP / clipart.com

It’s 2025, and 800,000 tons of used high strength steel is coming up for auction.

The steel made up the Keystone XL pipeline, finally completed in 2019, two years after the project launched with great fanfare after approval by the Trump administration. The pipeline was built at a cost of about $7 billion, bringing oil from the Canadian tar sands to the US, with a pit stop in the town of Baker, Montana, to pick up US crude from the Bakken formation. At its peak, it carried over 500,000 barrels a day for processing at refineries in Texas and Louisiana.

But in 2025, no one wants the oil.

The Keystone XL will go down as the world’s last great fossil fuels infrastructure project. TransCanada, the pipeline’s operator, charged about $10 per barrel for the transportation services, which means the pipeline extension earned about $5 million per day, or $1.8 billion per year. But after shutting down less than four years into its expected 40 year operational life, it never paid back its costs.

The Keystone XL closed thanks to a confluence of technologies that came together faster than anyone in the oil and gas industry had ever seen. It’s hard to blame them — the transformation of the transportation sector over the last several years has been the biggest, fastest change in the history of human civilization, causing the bankruptcy of blue chip companies like Exxon Mobil and General Motors, and directly impacting over $10 trillion in economic output.

And blame for it can be traced to a beguilingly simple, yet fatal problem: the internal combustion engine has too many moving parts.  

The Cummins Diesel Engine, US Patent #2,408,298, filed April 1943, awarded Sept 24, 1946

Let’s bring this back to today: Big Oil is perhaps the most feared and respected industry in history. Oil is warming the planet — cars and trucks contribute about 15% of global fossil fuels emissions — yet this fact barely dents its use. Oil fuels the most politically volatile regions in the world, yet we’ve decided to send military aid to unstable and untrustworthy dictators, because their oil is critical to our own security. For the last century, oil has dominated our economics and our politics. Oil is power.

Yet I argue here that technology is about to undo a century of political and economic dominance by oil. Big Oil will be cut down in the next decade by a combination of smartphone apps, long-life batteries, and simpler gearing. And as is always the case with new technology, the undoing will occur far faster than anyone thought possible.

To understand why Big Oil is in far weaker a position than anyone realizes, let’s take a closer look at the lynchpin of oil’s grip on our lives: the internal combustion engine, and the modern vehicle drivetrain.

BMW 8 speed automatic transmission, showing lots of fine German engineered gearing. From Euro Car News.

Cars are complicated.

Behind the hum of a running engine lies a carefully balanced dance between sheathed steel pistons, intermeshed gears, and spinning rods — a choreography that lasts for millions of revolutions. But millions is not enough, and as we all have experienced, these parts eventually wear, and fail. Oil caps leak. Belts fray. Transmissions seize.

To get a sense of what problems may occur, here is a list of the most common vehicle repairs from 2015:

  1. Replacing an oxygen sensor — $249
  2. Replacing a catalytic converter — $1,153
  3. Replacing ignition coil(s) and spark plug(s) — $390
  4. Tightening or replacing a fuel cap — $15
  5. Thermostat replacement — $210
  6. Replacing ignition coil(s) — $236
  7. Mass air flow sensor replacement — $382
  8. Replacing spark plug wire(s) and spark plug(s) — $331
  9. Replacing evaporative emissions (EVAP) purge control valve — $168
  10. Replacing evaporative emissions (EVAP) purging solenoid — $184

And this list raises an interesting observation: None of these failures exist in an electric vehicle.

The point has been most often driven home by Tony Seba, a Stanford professor and guru of “disruption”, who revels in pointing out that an internal combustion engine drivetrain contains about 2,000 parts, while an electric vehicle drivetrain contains about 20. All other things being equal, a system with fewer moving parts will be more reliable than a system with more moving parts.

And that rule of thumb appears to hold for cars. In 2006, the National Highway Transportation Safety Administration estimated that the average vehicle, built solely on internal combustion engines, lasted 150,000 miles.

Current estimates for the lifetime today’s electric vehicles are over 500,000 miles.

The ramifications of this are huge, and bear repeating. Ten years ago, when I bought my Prius, it was common for friends to ask how long the battery would last — a battery replacement at 100,000 miles would easily negate the value of improved fuel efficiency. But today there are anecdotal stories of Prius’s logging over 600,000 miles on a single battery.

The story for Teslas is unfolding similarly. Tesloop, a Tesla-centric ride-hailing company has already driven its first Model S for more 200,000 miles, and seen only an 6% loss in battery life. A battery lifetime of 1,000,000 miles may even be in reach.

This increased lifetime translates directly to a lower cost of ownership: extending an EVs life by 3–4 X means an EVs capital cost, per mile, is 1/3 or 1/4 that of a gasoline-powered vehicle. Better still, the cost of switching from gasoline to electricity delivers another savings of about 1/3 to 1/4 per mile. And electric vehicles do not need oil changes, air filters, or timing belt replacements; the 200,000 mile Tesloop never even had its brakes replaced. The most significant repair cost on an electric vehicle is from worn tires.

For emphasis: The total cost of owning an electric vehicle is, over its entire life, roughly 1/4 to 1/3 the cost of a gasoline-powered vehicle.

Of course, with a 500,000 mile life a car will last 40–50 years. And it seems absurd to expect a single person to own just one car in her life.

But of course a person won’t own just one car. The most likely scenario is that, thanks to software, a person won’t own any.


Here is the problem with electric vehicle economics: A dollar today, invested into the stock market at a 7% average annual rate of return, will be worth $15 in 40 years. Another way of saying this is the value, today, of that 40th year of vehicle use is approximately 1/15th that of the first.

The consumer simply has little incentive to care whether or not a vehicle lasts 40 years. By that point the car will have outmoded technology, inefficient operation, and probably a layer of rust. No one wants their car to outlive their marriage.

But that investment logic looks very different if you are driving a vehicle for a living.

A New York City cab driver puts in, on average, 180 miles per shift (well within the range of a modern EV battery), or perhaps 50,000 miles per work year. At that usage rate, the same vehicle will last roughly 10 years. The economics, and the social acceptance, get better.

And if the vehicle was owned by a cab company, and shared by drivers, the miles per year can perhaps double again. Now the capital is depreciated in 5 years, not 10. This is, from a company’s perspective, a perfectly normal investment horizon.

A fleet can profit from an electric vehicle in a way that an individual owner cannot.

Here is a quick, top-down analysis on what it’s worth to switch to EVs: The IRS allows charges of 53.5¢ per mile in 2017, a number clearly derived for gasoline vehicles. At 1/4 the price, a fleet electric vehicle should cost only 13¢ per mile, a savings of 40¢ per mile.

40¢ per mile is not chump change — if you are a NYC cab driver putting 50,000 miles a year onto a vehicle, that’s $20,000 in savings each year. But a taxi ride in NYC today costs $2/mile; that same ride, priced at $1.60 per mile, will still cost significantly more than the 53.5¢ for driving the vehicle you already own. The most significant cost of driving is still the driver.

But that, too, is about to change. Self-driving taxis are being tested this year in Pittsburgh, Phoenix, and Boston, as well as Singapore, Dubai, and Wuzhen, China.

And here is what is disruptive for Big Oil: Self-driving vehicles get to combine the capital savings from the improved lifetime of EVs, with the savings from eliminating the driver.

The costs of electric self-driving cars will be so low, it will be cheaper to hail a ride than to drive the car you already own.


Today we view automobiles not merely as transportation, but as potent symbols of money, sex, and power. Yet cars are also fundamentally a technology. And history has told us that technologies can be disrupted in the blink of an eye.

Take as an example my own 1999 job interview with the Eastman Kodak company. It did not go well.

At the end of 1998, my father had gotten me a digital camera as a present to celebrate completion of my PhD. The camera took VGA resolution pictures — about 0.3 megapixels — and saved them to floppy disks. By comparison, a conventional film camera had a nominal resolution of about 6 megapixels. When printed, my photos looked more like impressionist art than reality.

However, that awful, awful camera was really easy to use. I never had to go to the store to buy film. I never had to get pictures printed. I never had to sort through a shoebox full of crappy photos. Looking at pictures became fun. 

Wife, with mildly uncooperative cat, January 1999. Photo is at the camera’s original resolution.

I asked my interviewer what Kodak thought of the rise of digital; she replied it was not a concern, that film would be around for decades. I looked at her like she was nuts. But she wasn’t nuts, she was just deep in the Kodak culture, a world where film had always been dominant, and always would be.

This graph plots the total units sold of film cameras (grey) versus digital (blue, bars cut off). In 1998, when I got my camera, the market share of digital wasn’t even measured. It was a rounding error.

By 2005, the market share of film cameras were a rounding error.

A plot of the rise of digital cameras (blue) and the fall of analog (grey). Original from Mayflower via mirrorlessrumors, slightly modified for use here.

In seven years, the camera industry had flipped. The film cameras went from residing on our desks, to a sale on Craigslist, to a landfill. Kodak, a company who reached a peak market value of $30 billion in 1997, declared bankruptcy in 2012. An insurmountable giant was gone.

That was fast. But industries can turn even faster: In 2007, Nokia had 50% of the mobile phone market, and its market cap reached $150 billion. But that was also the year Apple introduced the first smartphone. By the summer of 2012, Nokia’s market share had dipped below 5%, and its market cap fell to just $6 billion.

In less than five years, another company went from dominance to afterthought.A quarter-by-quarter summary of Nokia’s market share in cell phones. From Statista.

Big Oil believes it is different. I am less optimistic for them.

An autonomous vehicle will cost about $0.13 per mile to operate, and even less as battery life improves. By comparison, your 20 miles per gallon automobile costs $0.10 per mile to refuel if gasoline is $2/gallon, and that is before paying for insurance, repairs, or parking. Add those, and the price of operating a vehicle you have already paid off shoots to $0.20 per mile, or more.

And this is what will kill oil: It will cost less to hail an autonomous electric vehicle than to drive the car that you already own.

If you think this reasoning is too coarse, consider the recent analysis from the consulting company RethinkX (run by the aforementioned Tony Seba), which built a much more detailed, sophisticated model to explicitly analyze the future costs of autonomous vehicles. Here is a sampling of what they predict:

  • Self-driving cars will launch around 2021
  • A private ride will be priced at 16¢ per mile, falling to 10¢ over time.
  • A shared ride will be priced at 5¢ per mile, falling to 3¢ over time.
  • By 2022, oil use will have peaked
  • By 2023, used car prices will crash as people give up their vehicles. New car sales for individuals will drop to nearly zero.
  • By 2030, gasoline use for cars will have dropped to near zero, and total crude oil use will have dropped by 30% compared to today.

The driver behind all this is simple: Given a choice, people will select the cheaper option.

Your initial reaction may be to believe that cars are somehow different — they are built into the fabric of our culture. But consider how people have proven more than happy to sell seemingly unyielding parts of their culture for far less money. Think about how long a beloved mom and pop store lasts after Walmart moves into town, or how hard we try to “Buy American” when a cheaper option from China emerges.

And autonomous vehicles will not only be cheaper, but more convenient as well — there is no need to focus on driving, there will be fewer accidents, and no need to circle the lot for parking. And your garage suddenly becomes a sunroom.

For the moment, let’s make the assumption that the RethinkX team has their analysis right (and I broadly agree[1]): Self-driving EVs will be approved worldwide starting around 2021, and adoption will occur in less than a decade.

How screwed is Big Oil?


Perhaps the metaphors with film camera or cell phones are stretched. Perhaps the better way to analyze oil is to consider the fate of another fossil fuel: coal.

The coal market is experiencing a shock today similar to what oil will experience in the 2020s. Below is a plot of total coal production and consumption in the US, from 2001 to today. As inexpensive natural gas has pushed coal out of the market, coal consumption has dropped roughly 25%, similar to the 30% drop that RethinkX anticipates for oil. And it happened in just a decade.

Coal consumption has dropped 25% from its peak. From the Kleinman Center for Energy Policy.

The result is not pretty. The major coal companies, who all borrowed to finance capital improvements while times were good, were caught unaware. As coal prices crashed, their loan payments became a larger and larger part of their balance sheets; while the coal companies could continue to pay for operations, they could not pay their creditors.

The four largest coal producers lost 99.9% of their market value over the last 6 years. Today, over half of coal is being mined by companies in some form of bankruptcy.

The four largest coal companies had a combined market value of approximately zero in 2016. This image is one element of a larger graphic on the collapse of coal from Visual Capitalist.

When self-driving cars are released, consumption of oil will similarly collapse.

Oil drilling will cease, as existing fields become sufficient to meet demand. Refiners, whose huge capital investments are dedicated to producing gasoline for automobiles, will write off their loans, and many will go under entirely. Even some pipeline operators, historically the most profitable portion of the oil business, will be challenged as high cost supply such as the Canadian tar sands stop producing.

A decade from now, many investors in oil may be wiped out. Oil will still be in widespread use, even under this scenario — applications such as road tarring are not as amenable to disruption by software. But much of today’s oil drilling, transport, and refining infrastructure will be redundant, or ill-fit to handle the heavier oils needed for powering ships, heating buildings, or making asphalt. And like today’s coal companies, oil companies like TransCanada may have no money left to clean up the mess they’ve left.


Of course, it would be better for the environment, investors, and society if oil companies curtailed their investing today, in preparation for the long winter ahead. Belief in global warming or the risks of oil spills is no longer needed to oppose oil projects — oil infrastructure like the Keystone XL will become a stranded asset before it can ever return its investment.

Unless we have the wisdom not to build it.

The battle over oil has historically been a personal battle — a skirmish between tribes over politics and morality, over how we define ourselves and our future. But the battle over self-driving cars will be fought on a different front. It will be about reliability, efficiency, and cost. And for the first time, Big Oil will be on the weaker side.

Within just a few years, Big Oil will stagger and start to fall. For anyone who feels uneasy about this, I want to emphasize that this prediction isn’t driven by environmental righteousness or some left-leaning fantasy. It’s nothing personal. It’s just business.



[1] Thinking about how fast a technology will flip is worth another post on its own. Suffice it to say that the key issues are (1) how big is the improvement?, and (2) is there a channel to market already established? The improvement in this case is a drop in cost of >2X — that’s pretty large. And the channel to market — smartphones — is already deployed. As of a year ago, 15% of Americans had hailed a ride using an app, so there is a small barrier to entry as people learn this new behavior, but certainly no larger than the barrier to smartphone adoption was in 2007. So as I said, I broadly believe that the roll-out will occur in about a decade. But any more detail would require an entirely new post.

Source: https://medium.com/@sethmiller_59231/this-is-how-big-oil-will-die-38b843bd4fe0

 

Australian Housing Affordability

Housing affordability is attracting the attention of politicians as concern rises that a housing bubble has made homes too expensive. So far, none of the discussions have really addressed the problems. Several key points can be made here from a futurist perspective.

The housing problem…..

Sitting on the left wing agenda is the view that negative gearing of investment properties is a necessary step to making housing more affordable. Government is short of cash. You can see this happening in most liberal democratic countries around the world and should merely be seen as another tax grab. For this reason alone politicians will close the negative gearing window.

Cancelling negative gearing will have the long term effect of driving up rents causing a severe shortage of rental properties. That wont affect the politicians however who vote for the negative gearing “reform” as they will have disappeared into retirement.

Pre-2016 election talk suggested a grandfather clause to existing investment property holders. The time between initiating the legislation to when it goes into effect creates a window for people to grab up properties for investment purposes. The short and sharp buying frenzy in conjunction with this kind of policy or news would be typical of a major long term top for Australian property markets. This kind of event is common in financial markets when changes of trend occur at the end of a long term market. Policy or news has caught up too late. It always results in a major reversal. We might anticipate the peak of the Australian property market would last decades.

Other proposed measures include first home owners being allowed to access superannuation to form a deposit. When first home owner grants were introduced in 2000, property prices for new homes jumped by multiples of the $7000 grant. This reflected the increased purchasing power an extra $7000 had on loan to valuation ratios. If super is allowed into the equation we’ll see property prices once again jump higher as builders respond to improved loan ratios.

Part of the affordability solution……..

One issue that never gets discussed is the supply related issues created by government themselves. In many capital cities around the world, including Australia, housing affordability is often the unintended consequence of regulatory bottlenecks where zoning, building regulations and permits choke the flow of new supply and drive up the cost of housing. Clearly this needs to be addressed and would go a long way towards addressing the affordability issue.Another issue under the microscope where investors hold a property seeking only capital gains by leaving the property untenanted. If governments must be seen to be doing something, a tax on properties untenanted for longer than say 3 months would take the heat off buyers as they realize the benefits renting over buying bring in an overheated property market.

Suffice to say the long term direction of Australian property values are coming to a head in conjunction with other Australian and global social, political and economic issues. Housing affordability is just another issue along with many others whose origins lie decades in the past and whose solution cannot be answered by politicians or central planners

 

72 common things ten years from now not existing today

72 Stunning Future Things 1

How many things do we own, that are common today, that didn’t exist 10 years ago? The list is probably longer than you think.

Prior to the iPhone coming out in 2007, we didn’t have smartphones with mobile apps, decent phone cameras for photos/videos, mobile maps, mobile weather, or even mobile shopping.

None of the mobile apps we use today existed 10 years ago: Twitter, Facebook, Youtube, Instagram, Snapchat, Uber, Facetime, LinkedIn, Lyft, Whatsapp, Netflix, Pandora, or Pokemon Go.

Several major companies didn’t exist a decade ago. Airbnb, Tinder, Fitbit, Spotify, Dropbox, Quora, Tumblr, Kickstarter, Hulu, Pinterest, Buzzfeed, Indigogo, Udacity, or Jet.com just to name a few.

Ten years ago very few people were talking about crowdfunding, the sharing economy, social media marketing, search engine optimization, app developers, cloud storage, data mining, mobile gaming, gesture controls, chatbots, data analytics, virtual reality, 3D printers, or drone delivery.

At the same time we are seeing the decline of many of the things that were in common use 10-20 years ago. Fax machines, wired phones, taxi drivers, newspapers, desktop computers, video cameras, camera film, VCRs, DVD players, record players, typewriters, yellow pages, video rental shops, and printed maps have all seen their industry peak and are facing dwindling markets.

If we leapfrog ahead ten years and take notice of the radically different lives we will be living, we will notice how a few key technologies paved the way for massive new industries.

Here is a glimpse of a stunningly different future that will come into view over the next decade.

All of these items were replaced with smartphones!
All of these items were replaced with smartphones!

3D Printing

Also known as additive manufacturing, 3D printing has already begun to enter our lives in major ways. In the future 3D printers will be even more common than paper printers are today.

1.    3D printed makeup for women. Just insert a person’s face and the machine will be programmed to apply the exact makeup pattern requested by the user.

2.    3D printed replacement teeth, printed inside the mouth.

3.    Swarmbot printing systems will be used to produce large buildings and physical structures, working 24/7 until they’re completed.

4.    Scan and print custom designed clothing at retail clothing stores.

5.    Scan and print custom designed shoes at specialty shoe stores.

6.    Expectant mothers will request 3D printed models of their unborn baby.

7.    Police departments will produce 3D printed “mug shots” and “shapies” generated from a person’s DNA.

8.    Trash that is sorted and cleaned and turned into material that can be 3D printed.

How long before you own the next generation VR headset?
How long before you own the next generation VR headset?

Virtual/Augmented Reality

The VR/AR world is set to explode around us as headsets and glasses drop in price so they’re affordable for most consumers. At the same time, game designers and “experience” producers are racing to create the first “killer apps” in this emerging industry.

9.    Theme park rides that mix physical rides with VR experiences.

10. Live broadcasts of major league sports games (football, soccer, hockey, and more) in Virtual Reality.

11. Full-length VR movies.

12. Physical and psychological therapy done through VR.

13. Physical drone racing done through VR headsets.

14. VR speed dating sites.

15. For education and training, we will see a growing number of modules done in both virtual and augmented reality.

16. VR and AR tours will be commonly used in the sale of future real estate.

Flying/Driving Drones

Drones are quickly transitioning from hobbyist toys to sophisticated business tools very quickly. They will touch our lives in thousands of different ways.

17. Fireworks dropped from drones. Our ability to “ignite and drop” fireworks from the sky will dramatically change both how they’re made and the artistry used to display them.

18. Concert swarms that produce a spatial cacophony of sound coming from 1,000 speaker drones simultaneously.

19. Banner-pulling drones. Old school advertising brought closer to earth.

20. Bird frightening drones for crops like sunflowers where birds can destroy an entire field in a matter of hours.

21. Livestock monitoring drones for tracking cows, sheep, geese, and more.

22. Three-dimensional treasure hunts done with drones.

23. Prankster Drones – Send random stuff to random people and video their reactions.

24. Entertainment drones (with projectors) that fly in and perform unusual forms of live comedy and entertainment.

Our driverless future is coming!
Our driverless future is coming!

Driverless Cars/Transportation

Driverless technology will change transportation more significantly than the invention of the automobile itself.

25. Queuing stations for driverless cars as a replacement for a dwindling number of parking lots.

26. Crash-proof cars. Volvo already says their cars will be crash-proof before 2020.

27. Driverless car hailing apps. Much like signaling Uber and Lyft, only without the drivers.

28. Large fleet ownership of driverless cars (some companies will own millions of driverless cars).

29. Electric cars will routinely win major races like the Daytona 500, Monaco Grand Prix, and the Indy 500.

30. In-car work and entertainment systems to keep people busy and entertained as a driverless car takes them to their destination.

31. In-car advertising. This will be a delicate balance between offsetting the cost of operation and being too annoying for the passengers.

32. Electric car charging in less than 5 minutes.

Internet of Things

The Internet of things is the network of physical devices, vehicles, and buildings embedded with electronics, software, sensors, and actuators designed to communicate with users as well as other devices. We are currently experiencing exponential growth in IoT devices as billions of new ones come online every year.

33. Smart chairs, smart beds, and smart pillows that will self-adjust to minimize pressure points and optimize comfort.

34. Sensor-laced clothing.

35. “Print and Pin” payment systems that uses a biometric mark (fingerprint) plus a pin number.

36. Smart plates, bowls and cups to keep track of what we eat and drink.

37. Smart trashcan that will signal for a trash truck when they’re full.

38. Ownership networks. As we learn to track the location of everything we own, we will also track the changing value of each item to create a complete ownership network.

39. Self-retrieving shoes where you call them by name, through your smartphone, and your shoes will come to you.

40. Smart mailboxes that let you know when mail has arrived and how important it is.

Full-body physical health scanner!
Full-body physical health scanner!

Health Tech

Even though healthcare is a bloated and bureaucratic industry, innovative entrepreneurs are on the verge of disrupting this entire industry.

41. Hyper-personalized precision-based pharmaceuticals produced by 3D pill printers.

42. Ingestible data collectors, filled with sensors, to give a daily internal health scan and report.

43. Prosthetic limbs controlled by AI.

44. Real-time blood scanners.

45. Peer-to-peer health insurance.

46. Facetime-like checkups without needing a doctor’s appointment.

47. Full-body physical health scanners offering instant AI medical diagnosis, located in most pharmacies

48. Intraoral cameras for smartphones for DYI dental checkups.

The future of computers is the mind!
The future of computers is the mind!

Artificial Intelligence (AI)

Much like hot and cold running water, we will soon be able to “pipe-in” artificial intelligence to any existing digital system.

49. Best selling biographies written by artificial intelligence.

50. Legal documents written by artificial intelligence.

51. AI-menu selection, based on diet, for both restaurants and at home.

52. Full body pet scanners with instant AI medical diagnosis.

53. AI selection of movies and television shows based on moods, ratings, and personal preferences.

54. Much like the last item, AI music selection will be based on moods, ratings, and musical tastes.

55. AI sleep-optimizers will control all of the environmental factors – heat, light, sound, oxygen levels, smells, positioning, vibration levels, and more.

56. AI hackers. Sooner or later someone will figure out how to use even our best AI technology for all the wrong purposes.

Unmanned aviation is coming!
Unmanned aviation is coming!

Transportation

Future transportation will come in many forms ranging from locomotion on an individual level to ultra high-speed tube transportation on a far grander scale.

57. Unmanned aviation – personal drone transportation.

58. 360-degree video transportation monitoring cameras at most intersections in major cities throughout the world.

59. Everywhere wireless. With highflying solar powered drones, CubeSats, and Google’s Project Loon, wireless Internet connections will soon be everywhere.

60. Black boxes for drones to record information in the event of an accident.

61. Air-breathing hypersonic propulsion for commercial aircraft. Fast is never fast enough.

62. Robotic follow-behind-you luggage, to make airline travel easier.

63. Robotic dog walkers and robotic people walkers.

64. Ultra high-speed tube transportation. As we look closely at the advances over the past couple decades, it’s easy to see that we are on the precipices of a dramatic breakthrough in ultra high-speed transportation. Businesses are demanding it. People are demanding it. And the only thing lacking is a few people capable of mustering the political will to make it happen.

Miscellaneous

As I began assembling this list, a number of items didn’t fit well in other categories.

65. Bitcoin loans for houses, cars, business equipment and more.

66. Self-filling water bottles with built-in atmospheric water harvesters.

67. Reputation networks. With the proliferation of personal information on websites and in databases throughout the Internet, reputation networks will be designed to monitor, alert, and repair individual reputations.

68. Atmospheric energy harvesters. Our atmosphere is filled with both ambient and concentrated forms of energy ranging from sunlight to lightning bolts that can be both collected and stored.

69. Pet education centers, such as boarding schools for dogs and horses, to improve an animal’s IQ.

70. Robotic bricklayers. With several early prototypes already operational, these will become common over the next decade.

71. Privacy bill of rights. Privacy has become an increasingly complicated topic, but one that is foundational to our existence on planet earth.

72. Hot new buzzword, “Megaprojects.”

72 Stunning Future Things 9
The safer we feel, the more risks we take!

Final Thoughts

There’s a phenomenon called the Peltzman Effect, named after Dr. Sam Peltzman, a renowned professor of economics from the University of Chicago Business School, who studied auto accidents.

He found that when you introduce more safety features like seat belts into cars, the number of fatalities and injuries doesn’t drop. The reason is that people compensate for it. When we have a safety net in place, people will take more risks.

That probably is true with other areas as well.

As life becomes easier, we take risks with our time. As our financial worries are met, we begin thinking about becoming an entrepreneur, inventor, or artist. When life becomes too routine, we search for ways to introduce chaos.

Even though we see reports that billions of jobs will disappear over the coming decades, we will never run out of work.

As humans, we were never meant to live cushy lives of luxury. Without risk and chaos as part of our daily struggle our lives seem unfulfilled. While we work hard to eliminate it, we always manage to find new ways to bring it back.

Yes, we’re working towards a better world ahead, but only marginally better. That’s where we do our best work.

Source: http://www.futuristspeaker.com/business-trends/72-stunning-things-in-the-future-that-will-be-common-ten-years-from-now-that-dont-exist-today/

Trends shaping the Auto Industry

Paul Gao, Hans-Werner Kaas, Detlev Mohr, and Dominik Wee look at the trends shaping the auto industry.

Today’s economies are dramatically changing, triggered by development in emerging markets, the accelerated rise of new technologies, sustainability policies, and changing consumer preferences around ownership. Digitization, increasing automation, and new business models have revolutionized other industries, and automotive will be no exception. These forces are giving rise to four disruptive technology-driven trends in the automotive sector: diverse mobility, autonomous driving, electrification, and connectivity.

1. Driven by shared mobility, connectivity services, and feature upgrades, new business models could expand automotive revenue pools by about 30 percent, adding up to $1.5 trillion.

2. Despite a shift toward shared mobility, vehicle unit sales will continue to grow, but likely at a lower rate of about 2 percent per year.

3. Consumer mobility behavior is changing, leading to up to one out of ten cars sold in 2030 potentially being a shared vehicle and the subsequent rise of a market for fit-for-purpose mobility solutions.

4. City type will replace country or region as the most relevant segmentation dimension that determines mobility behavior and, thus, the speed and scope of the automotive revolution.

5. Once technological and regulatory issues have been resolved, up to 15 percent of new cars sold in 2030 could be fully autonomous.

6. Electrified vehicles are becoming viable and competitive; however, the speed of their adoption will vary strongly at the local level.

7. Within a more complex and diversified mobility-industry landscape, incumbent players will be forced to compete simultaneously on multiple fronts and cooperate with competitors.

8. New market entrants are expected to target initially only specific, economically attractive segments and activities along the value chain before potentially exploring further fields.

Automotive incumbents cannot predict the future of the industry with certainty. They can, however, make strategic moves now to shape the industry’s evolution. To get ahead of the inevitable disruption, incumbent players need to implement a four-pronged strategic approach:

Prepare for uncertainty.

Leverage partnerships.

Drive transformational change.

Reshape the value proposition.

Source:Auto Industry

 

Oil Selling Climax

As crude oil falls below US$28.00 per barrel we see a selling climax developing. The final low on this sell off could be anywhere between $12.00 to $27.00 and would lead to a major turning point for the beleaguered oil market. This will complete our oil market predictions first made in 2011 when we predicted US$12.00 per barrel. The final oil market low may well occur in conjunction with a bottom in US stock markets.

Once the lows are in we will release our predictions for oil for the next couple of years. We will also shortly update our “End of the Long Game 2009-2018” scenario.

Yanis Reveals EU Denial of Any Right of the People to Vote

Varoufakis Yanis

Greece’s Finance Minister Yanis Varoufakis has come out to reveal the quite shocking and anti-democratic events that took place during the last Eurogroup meeting. First, they do hate Yanis’ guts, for he understands far more about the economy than anyone in Brussels. At their demand, any further discussions will be without him. What led to the EU breaking off was exactly what we reported previously — they do not want any member state to EVER allow the people to vote on the euro. Brussels has become a DICTATORSHIP and is so arrogant without any just cause, believing that they know better than the people.

We are watching the total collapse of Democracy and the birth of a new era — Economic Totalitarianism from arrogant people who are totally clueless beyond their own greed for power and money.

Source: http://www.armstrongeconomics.com/archives/34115

Editor Note: Greece is the end of the beginning for the EZ and the beginning of a long period of political, social and economic instability that co-incides with the topping phase of the upward phase of the Industrial Revolution cycle that began in 1783-85.

Canada Legalizes Physician-Assisted Dying

In February 2015, Canada legalized physician-assisted dying — a first among countries with common-law systems, in which law is often developed by judges through case decisions and precedent. The Supreme Court of Canada issued the decision in Carter v. Canada

Read the full article here: http://www.nejm.org/doi/full/10.1056/NEJMp1502442

The judgment portends changes outside Canada. Imitation is a feature of the common-law world, and if physician-assisted dying is litigated in England, India, or South Africa, for example, odds are high that judges would draw on the Canadian Court’s reasoning. Societies are also changing, and in coming decades aging populations with growing affluence and incidence of chronic illness will increasingly question the medical and legal orthodoxies regarding the end of life. Given the flow of legal ideas and shifting demographics, change and convergence around physician-assisted dying as a standard of care seem inevitable.

These developments will trouble people who instinctively find legalized physician-assisted dying repellent. But increasingly, society is acknowledging that denying people the right to die with dignity and safety is even more repellent.

Editor’s Note: This is in line with our prediction that euthanasia will become commonplace in liberal-democratic nations around the world. Our prediction remains on track and we should see euthanasia being mainstream by 2025.

Of greater concern is the risk that failing governments will cause a rise in “iatrogenic-induced deaths” as the continued breakdown of societies accelerates.

Small is beautiful. The Nano future is coming

Advances in nanotechnology will be a key enabler of technological advance in the next decade. The integration of information technology, biotechnology, materials sciences, and nanotechnology will generate a dramatic increase in innovation. Read this Alert to see how your personal and business life might be affected pretty soon.
What is changing?

Innovation

  • Older technologies will continue lateral ‘sidewise development’ into new markets and applications .
  • Current high-visibility investments and technology breakthroughs will be needed to realize the full potential of nanotechnology.
  • Technologies like nanotechnology will be used to establish a maintenance free environment (i.e. self -cleansing glass, self-repairing concrete).
  • Nanotechnology will produce new goods with new properties at a smaller scale that may use far less resources.

Health

  • Future uses of genetic data, software, and nanotechnology will help detect and treat disease at the genetic or molecular level.
  • Modern healthcare technologies and prevention strategies will have the potential to extend the life expectancy of people.
  • Molecular ‘robots’ could be designed to enter the body and eat plaque.
  • Nanotechnology will enable lives to be saved by digestible cameras and machines made from particles 50,000 times as small as a human hair.
  • Smart nano-materials will facilitate the development of textiles that detect biotoxins.

Business

  • The global market for nanotechnologies will reach $1 trillion or more within 20 years.
  • Progress in nanotechnology will depend heavily on R&D investments.
  • Robotics, synthetic biology, nanotechnology, and molecular manufacturing really will lead to an explosion of wealth and resource availability.
  • Printed electronics and electrics will be a $335 billion business in twenty years i.e. 2029
  • Bioscience, information technology, and nanotechnology will be applied to meet agricultural and food challenges.
  • There will be 400,000 jobs in the nanotech sector across the European Union this year.
  • Nanotechnology, 3D printing, smart materials and a new generation of composites will be a $1.3trn (£805.8bn) global manufacturing battleground this year.
  • In the coming future nanotechnology will certainly have a colossal effect on the ceramics, metals, polymers, and biomaterials industries.
Implications

Transformations

  • As personalized medicine becomes more affordable expect to see the coming of age for genomics, nanotechnology, robotics, and other innovations.
  • The use of nanotechnology could herald an ‘exciting’ breakthrough for patients with heart disease.
  • Nanotechnology could completely transform conventional economic activity from healthcare and renewable energy technology to food production.
  • Applications that are likely to be widely diffused in 2025 will combine different technologies such as biotechnology, nanotechnology, materials technology and information technology.
  • New applications and reinventions will trigger market take-off and shape further development of collaborative technologies for governance and policy modelling.
  • Nanotechnology is expected to have a major impact on sustainability in the near future.

Electronics

  • Nano- technology will enable different types of electronics.
  • Nanotechnology will allow chip manufacturers to continue upholding Moore’s Law.
  • Nanoscale piezoelectric materials could provide the lowest possible power consumption for on/off switches in MEMS and other types of electronic computing systems.
  • Relying on nano-sized robotics will eventually become commonplace.

Development

  • Advances in nanotechnology will require long time horizons and continued investments in materials, platforms, and applications across manufacturingindustries.
  • Expect the greater use of new materials with an emphasis on not just boosting performance but also improving efficiency.
  • Materials and nanotechnology will enable the development of new devices with unforeseen capabilities.
  • Nanotechnology will replace most current wearable technology.
  • Discoveries in nanotechnology will lead to unprecedented understanding and control over the fundamental building blocks of all physical things.
  • Nanotechnology could be used to help reduce battery weight and lighten other products.
  • The U.S. Air Force believes that nanotechnology will have a direct application for both flight and space travel.
  • Nanotechnologies will pave the way for developing hybrid energy solutions.
  • Nanotechnology could provide solutions for sensing.
  • Nanotechnology will also spawn new technologies for manipulating DNA.

Risks             

  • Biotechnology and nanotechnology will provide greater potential for destruction.

Learn more
To find the sources and more resources on Shaping Tomorrow about ‘The Future of Your Workplace’ some of which were used in this Trend Alert, Small is beautiful – Nano futures surround you, or ask us for a customised, in-depth GIST report on this or any other topic of interest to you.  Also, click here to find out how Shaping Tomorrow can help your organization rapidly assess and respond to these and other key issues affecting your business.

Source: http://www.shapingtomorrow.com/summary/insights/423760

Six Game Changers in Six Years

In no set order:

  1. Solar costs are set to drop with new technologies and manufacturing techniques. This will  impact on the energy industry with relief of burden on coal, oil and gas sources of energy and their resultant impact on the environment. There will still be a need for electricity utilities but their role will be reduced.
  2. Online education is already making rapid inroads into traditional education processes .at university and school levels. For government this is extremely challenging as technology is rapidly ripping central control away and placing it firmly in the hands of the consumer. Education costs will decline and we will witness the old institutions crumble in the face of emerging competition and new delivery methods.
  3. Blockchain based technologies will make a huge impact on decentralizing and revolutionizing the way transactions in banking, finance and law happen. Not to mention computer programming, scientific research and communications. Blockchain technology came to public awareness with the emergence of Bitcoin. Its roots extend however from cryptography – the science of coding and decoding messages for the purposes of privacy.
  4. Climate change will not be a social or political issue in the minds of the public within 5 years. That’s not to say that change does not need to happen – a lot still needs to change to improve the quality of environment and human and planetary sustainability. Emerging technologies will help a lot and education of people in the way they treat their environment will result in significant environmental improvement even in the next 6 years.
  5. A digital healthcare revolution is commencing now where people will soon be able to monitor their own health and respond as needed. New technologies controlled from a smart phone will be able to monitor all major health aspects including ‘wet’ analysis of blood, heart, breath, urine and other sampling tests. If results warrant, your device will be able to recommend various responses including taking yourself to hospital if required or calling an ambulance in extreme cases. Once again competition and technology are making old modes of doing things irrelevant. Often these shifts are occurring where government has taken over an industry and underfunding and lack of adaption have made the industry inefficient and ineffective.
  6. The coming global depression lasting 8 to 13 years commencing anytime between now and 2018. The coming together of many factors including the level of indebtedness of liberal democratic countries, aging demographics, the inability of global economic growth to accelerate and the crushing level of regulation facing most societies. Cyclically we are also witnessing the peaking of a cycle that spans the massive growth of the west – the Industrial Revolution. As this cycle peaks after some 230 years of growth so we enter the down phase of the cycle in which contraction and liquidation of all the dead wood of that growth phase gets swept away. Thus the path is cleared allowing the birth of a new phase of human growth and development. These cycles occur at many different levels of human existence –  at the individual, societal, ethnic and nation state levels.

End of the Long Game 2009 – 2018: Part II: The Bear Argument

Part II: the Bear Argument
We also point out our alternative scenario which, if, going to happen, is starting now. This scenario suggests stock market prices are peaking in what was a false move to the upside over 2009-2014. This implies that the stock market correction which began in 2000 is still underway and has many years left to unfold. It also implies that stock markets are about to undergo a rapid and relentless decline to their 2009 low points and most probably lower. Falling oil, gold, metal and bond prices over the last few months support this scenario which suggests economies are still undergoing this huge consolidation.

The current divergence between stock markets and commodities indicate a major topping process is underway. In addition Austrian Business Cycle Theory suggests a massive divergence between the amounts of new money coming into the system on a year on year basis is diverging with capital goods prices such as stocks and real estate. This implies the system cannot support asset prices at their current high levels. Even if the US Fed were to begin another round of quantitative easing it would not be enough to sustain asset values – especially stocks at current levels. If this scenario emerges over the next six months we can predict this will give rise to an economic depression lasting 8 to 13 years before an economic recovery gets underway. See the chart below to get a sense of the disparity between M2 Money Supply growth – non seasonally adjusted compared to the weekly DJIA close.

DJIA - M2 NSAThe alternative view suggests it is the resumption of the bear phase of an ongoing correction since 2000. The massive money supply pumping had created the sub-prime bubble that should have been left to sort itself out in the 2008-2009 phase. Since then we have seen bubbles in commodities, education, shares and real estate. The divergence seen in the above M2 NSA Money Supply – DJIA graph illustrates how much worse the situation has grown with stock prices occupying high levels and the amount of new money coming into the system remaining static. This is untenable.

Summary of expectations – short term bull market scenario
• Expect stock markets to correct more deeply over 2015 (14720, 15340 (DJIA) and 1738, 1814 (SP500)) against a growing bullish optimism before beginning an upward exponential surge in stock, commodity and real estate prices. Anticipate any decline of stock markets or economic data to be met by central banks restarting their QE programs. 14720, 15340 (DJIA) and 1738, 1814 (SP500)
• The collapse of oil prices in the last quarter of 2014 creates a potential game changer for most economies as cheaper energy prices flow through to Main Street. It is likely Crude Oil prices will be capped for the next few years at around US$80 per barrel. This takes the pressure off consumer prices but once again translates into higher share and real estate prices.
• Anticipate consumer price inflation to remain low in the US, UK, EU and Japan. At the same time higher than normal unemployment and the potential for continuing stagnant economic activity will prevail. At this time we anticipate seeing US consumer inflation increase dramatically with the potential to see 4-6% very quickly. The only thing really holding CPI figures down at present, is falling oil prices in late 2014.
• Interest rates will start to rise in 2015 as central banks try to normalize credit markets.
• • Expect credit markets to re-price themselves if inflation does kick up creating a liquidity trap for central banks.
• Anticipate the US, Japan, UK and German stock markets to benefit at the expense of emerging markets as cash gets sucked from the periphery to the centre. Similarly the US dollar will continue to strengthen as money floods back to the centre from the periphery.
• Expect a collapse in stock and commodity prices followed by economic contraction where both inflation and high unemployment are experienced at the same time after this spike in stock and commodity markets prices. This may not happen for another 3 years as the ‘Roaring Teens” finishes up.
• Anticipate social and political dislocation in many countries including the US to continue to escalate.

Summary of expectations – short term bear market scenario
• Expect stock markets to begin a relentless stair step down punctuated with savage counter rallies. The nature of the decline will tell us if this is a correction in a broader ongoing bull market or the beginning of the bear market. One clue would be if the correction points mentioned here are taken out in one continuous uninterrupted decline (14720, 15340 (DJIA) and 1738, 1814 (SP500)). Anticipate any decline of stock markets or economic data to be met by central banks escalating their QE programs. 14720, 15340 (DJIA) and 1738, 1814 (SP500)
• We might also anticipate inflation to break out in an unprecedented way especially in the US, UK and Japan and central banks will be unable to contain it. At the same time higher than normal unemployment and continuing stagnant economic activity will prevail. Interest rates may rally sharply on rising inflation and start to rise as central banks try to normalize credit markets in 2015 before plunging as evidence of the growing bear market gathers.
• The coming phase will be difficult to read as markets enter their final death throws and competing bullish and bearish forces play out.
• The coming depression that unfolds will last 8 to 13 years.
• Anticipate increasing social and political dislocation in many countries including the US.

Conclusion & End Game
Whether we have a few more months or years of twilight before the beginning of a new “Dark Age”, suffice to say, that from now onwards we can expect increasingly tough times punctuated by phases of optimism. And of course the coming generation of correction will not merely be confined to asset prices and the vagaries of fiat money and bad economics, but also to societies and politics, both domestic and geo-political. Generations of people will learn about long forgotten natural laws and how it applies to human behavior. Social mood will have become dark and this will also express itself through every aspect of society, both culturally and economically. Music, the arts, fashion, crime, politics, social mood and drama will all reflect the new paradigm. The growing social political and economic tensions we have witnessed a harbinger of what is to come. This phase will reset the stage for a new beginning for people from which a new and sustained social and economic recovery will slowly begin. By the time that point has arrived however, the nature of our societies and the way we relate with people and between nations will have changed. The wrangling about why it had to happen will be well underway.

6 Trends for 2017 and Beyond.

Tom Goodwin,Director of the Tomorrow Group & Marketing Writer and Speaker:

When thinking about trends for 2015 for a new post…. ( which is now published here .. http://www.theguardian.com/media-network/2014/nov/20/digital-marketing-trends-2015 ) …. I found some longer term shifts that I can feel developing and I wanted to take this chance to raise 6 themes worth consideration.

This post isn’t so much a proud proclamation of the future as a call for debate, perhaps some interesting dinner party conversation starters. What do you think?

I think the biggest changes for the next 4 years will be the following:

1) A Thinner Internet

The internet will become more seamless, more pervasive, personal and even predictive. It will spread across more devices but in thinner, more context specific layers.

From the notification layer on our phone, to “card” like app design, to apps that run invisibly in the background to wake only when required.

From fridges that on a glance show the weather, to clocks that show when we’re late with colours, to watches that tell us if we need to head right or left with a vibration. Amazon Echo as a ambient helper.

Our phones unlock in trusted places, our cars pick the coffee shop we may want, Siri, Cortana, Google now, all become personal assistants that guide us. Anticipatory or Predictive computing will be a huge development that we all talk about for the next few years as we begin to outsource our cognitive functions ( and trade privacy). Far fetched? How many phone numbers do you now know? What about birthdays?

We used to search the web, we used to go deep in, and navigate, in the near future the web bubbles up to a surface that we glance at, in more places and in less deep ways. It becomes key contextual information.

How can your business move into this thin layer, how does it become a contextual nudge or key information at the right time.

2) The post privacy age.

A generation of people simply won’t understand the concept of privacy. A generation of people who’ve grown up sharing geotagged images of their most personal moments, who’ve had every gmail read, who’ve lived with loyalty cards and financial dashboards won’t get for one second what was once possible, privacy.

Instead a generation of people will have grown up having traded it. Their Target app gave them bigger discounts, they used Facebook for free, they got retargeted ads from newspapers we once paid for.

From better healthcare from the analysis of anonymous healthcare, from more efficient smart cities from sharing user data, from thermostats that save energy by knowing where you are, or whether it’s Cortana or Google Lollypop becoming your personal assistant.

We will soon grow up in an age of near perfect information, and when we realize that when more people, know more things, there are some clear benefits, the topic won’t be about how we keep privacy but what we trade it for, where to draw the new line and how we learn to trust those with it.

What does this mean for marketers? How can they destroy assumptions about privacy, why can’t we offer more personal ads? What about more personal offers? Let’s think about how to reward people who chose to share data, it could be the new micro currency of the web.

3) The decline of the middle class in the developed world.

From Denver to Dover, Berlin to Bucharest, whether it’s the fault of the global economic downturn, quantitative easing, the internet or labor automation, it seems like a clear trend in rising income inequality and in particular the transfer of wealth upwards and it’s hard to see anything reversing this.

Will we somehow see more working and middle class jobs appearing? With the rise of automation, the global movements of talent and the rise of technology to make industry more efficient, it’s impossible to see this happening.

Will property ownership revert back to the masses? You’d be a fool to see how this can happen unless those in power stop serving their own interests.

The future “virtual” or real high street and mall from the future will be dominated by the extremes. From Burberry and Louis Vitton at the top, to the masses of bargain retailers, dollar stores, pound shops, payday loan and pawnshops of the bottom, it’s hard to see how anyone in the middle can survive.

The share price of Tesco, Sainsbury’s, Sears, JC Penney testifies to this. Be careful where your consumer is going. The Middle is a terrible place to be.

4) Mature Money.

Advertising and marketing have always obsessed with the young, but never more so and never more pointlessly.

Not only do the young have less influence than the media would have us believe, but they also suffer from having relatively little money and no loyalty whatsoever.

Yet the everlasting debate is about how to target and segment millennials or digital natives, and never how to target the old.

The over 50’s now have over 80% of most developed nations wealth, they have more free time, look set to live far longer, are way healthier and more engaged in brands than before. Yet the world of marketing abandons them to look at the trendy money.

Youth finances have never looked worse, youth unemployment is high, the cost of living is crippling, university fees in many countries are staggering and their future looks massively uncertain.Meanwhile the baby boomers sit on assets rocketing in value, drawing healthy pensions well into the future, and look for ways to spend it.

The trend lines are clear, so what can your business do about it?

5) Non Ownership

A lot of history is cyclical, people react and rebel against our past. For a generation of people that grew up in an age of post war rations, economic hardship, expensive electrical items, we’ve seen the reaction in the ultimate in consumer boom. We can now buy massive TV’s for less than $400, that we need not replace for years. In real terms cars and clothing are incredibly cheap, we’ve chickens for 2 dollars, the only thing that is expensive and limited is time.

A generation of people who’ve grown up with this abundance may turn against it. The most expensive and best phone in the world is $1000, the most most appropriate laptop costs the same. Armed with these devices we need not buy a 100 items they now replace. From the sharing economy making renting trendy, to a group of people unable to buy houses and that don’t see the stigma in renting, to hardware that becomes new due to software updates, to the digitization and streaming of once physical items. It could be we’re on the verge of a new type of consumerism, where armed with a past of excess, a present of limited finances and a future of resource scarcity, we chose to own fewer, better, more adaptable items.

6) Euthanasia

Sadly Humans are not built to last as long, the sort of ultimate in built-in-obsolescence and as we age, we do so asymmetrically.

When expensive modern medicine is able to keep people alive for longer, with ever diminishing returns, at what point do we accept that an aging unproductive population isn’t sustainable.

What becomes of the new retiring age? When do we agree to treatments? what constitutes action that is in the interest of the person? What does this mean for countries with government provided healthcare?

It’s a bit grim to dwell on it and the marketing implications are less clear, so just a philosophical issue to chat about and think about for the holiday dinner party season.

Hope you liked them, this is a call for debate, not a proclamation of the fixed, so what do you think? What other issues do you forsee?

Source: https://www.linkedin.com/pulse/article/20141119102703-6433797-6-trends-for-2017-and-beyond

India About to Hit the Sweet Spot

A combination of factors is bringing India to the “Sweet Spot’.url

A population of workers with an average age of around 35 combined with the arrival of a new government may be pulling Incredible India to where, at last, its population and vigor may carry it aloft. Like China in the early 80’s and 90’s, India has the potential to achieve rapid growth. But due to lack of political will, religious divisions, corruption, poverty, a massive overhang of the post-colonial era when Marxist-socialist solutions were the fashion and lack of capital, India’s progress has been slow.

The analogy is of an aircraft taking off. The back wheels are still on the ground but the nose has lifted up. This has been the case for some time with the deadweight of the various factors holding her back. This is about to change. Continue reading

The End Long Game 2009-2018?

As at 31st March 2014

Updating the main theme of this website we showed in our last lead article ‘A Generation of Correction’ how the big picture view had resolved itself into two clear scenarios. We painted the broad brush strokes showing those scenarios. Now the picture has advanced sufficiently enough to reveal the direction ahead.

To recap firstly, we are witnessing in our lifetime the completion of large scale cycles of human endeavor and activity with the attendant dislocation and reallocation of social, economic and political activity. The article does not attempt to make trading or investment recommendations, however an understanding of the broad brush strokes both economically and politically may serve to enhance your perspective on what emerges next. The scale of forces at work in societies and economies is so huge that the current social, economic and political drama is taking decades to unfold. This is the topping and completion process of an economic cycle that has been going on for over 200 hundred years. By the time it is finished, it may well have spanned generations of people. On a historical note, we are witnessing the completion of the growth phase of the industrial revolution that began around 1783-5. These cycles affect all industrialized nations including China which joined the industrial revolution much later. Given the length of time involved we anticipate this having a generational impact and may not be completed for decades to come.

We had seen our previous forecast, ‘The Five Act Drama’, invalidated as the so called economic recovery since 2009 continued. The phase 2000 to 2009 which included the dotcom bubble collapse, the post 9/11 recovery and Iraq War followed by the subprime mortgage debacle were all part of a major degree of correction occurring in the late stages of the Industrial Revolution Cycle that began around 1785. We had concluded that the logical outcome of the economic peak in 2007 and the following financial crisis (GFC), that a major downturn with attendant declines in asset values and income levels was underway and that this process would continue into 2016 and possibly as late as 2024. The tenacious strength of the recovery since the GFC surprised us but also revealed alternative cyclic viewpoints. The ‘animal spirits’ that drove bull markets and buoyed economic activity from the 80’s to 2000 along with  the animal spirits of the central bankers whose hubris has now reached giddying heights illustrates the scope of those bull markets and gives rise to what is happening now with a clear scenario emerging.

In the first quarter of 2014 we observed stock markets pushing to new highs. At the same time, the massive US Federal Reserve intervention known as quantitative easing (QE) had started to be wound back. Unemployment levels have continued to fall modestly and economic activity has continued to sputter along in the US and other liberal democratic nations. The effect of QE has had the effect of fuelling asset prices with only marginal improvement in economic activity. The effect of not allowing spontaneous ordering to take place with the required liquidation of malinvestments of the last 20-30 years has been to stall the potential of a recovery that is founded on real growth and productivity. 

Realignments normally occur with structural economic or political realisations and to this end there is no shortage of potential factors. These include the potential for significantly higher bond interest rates, political scandal, general economic failure, student loans, China, Europe, etc. Despite all the worries of Main Street underperformance compared to stock and commodity markets, it appears QE is having the effect of distorting all relationships between markets and their ability to fairly price. Ultimately this too will result in unintended consequences and only prolongs the inevitable. One result will be the utter demolition of the myth that is Keynesian economics.

Our previous scenario was based on the assumption that the beginning of the correction (and completion of the growth phase) of the Industrial Revolution Cycle began in 2000 with the bursting of the Dotcom bubble. Since then asset values have effectively moved sideways to higher in a broad band and currently stand at the upper levels of those bands. In real terms however, asset values are broadly lower reflecting the massive money printing that has occurred. This is also reflected in sputtering global economic activity and rising political and social frustration about the political-economic situation. From another perspective this may be seen as the result of 40 years of fiat money and the economic and social dislocation that occurs when money has no store of value.

At time of writing, US money supply growth figures indicate the potential in 2014 for a mild correction of asset values due to weakening US M2 money supply growth. In effect the US Federal Reserve has failed to transfer money printing to Main Street as banks still remain resistant to large scale lending. This is in part due to distorted interest rates making it unprofitable and risky to lend.  This mild correction is merely a pause in the asset appreciation we have witnessed over the last 5 years caused by QE programs. Any excessive fall in asset values will be met by significant QE stimulus in the short term.

The fact is, the largest investment bubble in the history of humankind is unfolding right on schedule. By schedule we don’t mean time dependent but that what is unfolding is form dependent. All economic bubbles return to the starting point from whence they came. The massive money printing undertaken by central banks, the dislocation of market pricing shows a growing divergence between stocks for example and the rest of the stock market and the relentless chase for yield. Whilst divergence is indicative of major stock market tops, the topping phase can go on for a long time. We have already seen the breaking from the uptrend of many markets including gold and silver, base metals, interest rates and currencies. Human history is littered with examples of failed nations, whose prosperity and future was cut short by depreciation of money values. What makes this era any different? The modern fiat money experiment has been going on for a mere 42 years. The economic system of industrialized nations resets or reforms roughly every 40 years and so it appears we are right on time for the next reset. Given the culmination of history, cycles, accumulation of knowledge and human hubris it appears technology changes but the nature of humankind does not.

One aspect worth considering is the level of political hubris maintained by many liberal democratic countries whose politicians firmly believe that they have the skill and tools necessary to engineer recovery. Until this hubris is totally wiped away along with the hopes and dreams of the people represented, there is not much scope for real change at a societal, political or economic level. Indeed one factor contributing to the economic malaise is the inability of most markets to clear out the malinvestment most industrialized nations suffer. Typical of this is the gridlock in the US political system where entrenched self-interest stops any real or meaningful change. The weight of US economic recovery has been placed firmly on the shoulders of the Fed. US politicians are incapable of undertaking any real economic restructuring and this has the effect of prolonging the contraction phase of the cycle. Meanwhile the hubris continues, restructuring remains on the side-lines and most industrial nations face high unemployment and debt levels, unaffordable social security programs and large ageing populations starting their transition to retirement.      

Interestingly, in this next phase, all of this will come to a head. In the last cyclic correction of the same magnitude – 1710 to 1785, great things were achieved with the advance of the sciences, arts and many new inventions and discoveries. That phase concluded however with the French Revolution and Napoleonic Wars. This next phase will end the same way as humanity forgets itself and its past. It will also be accompanied by many new inventions, discoveries and advances along with the wars and other upheavals. Like all plays (the world is certainly a stage), this year 2014/15 is where the drama reveals the direction and thrust of things to come for the next 20 – 30 years or so.

In effect the recovery from the GFC is the last gasp of the fiat money boom that has been in effect since Nixon left the gold standard. Economic growth since the late sixties has been largely sponsored by credit that has left the liberal democratic economies bloated with debt, regulation and fiat money. To see how this pans out graphically, refer to the accompanying chart. The recovery since 2009 has been boosted by massive cash injections (read printing) of money into the industrialised economies boosting asset prices (read inflationary) as Keynesian orthodoxy suggests boosting asset prices will eventually lead to a follow through in consumer spending. Industrial nation governments are doing their best to boost spending in the finest tradition of neo-Keynes. The printing however is having the harmful effect of dislocating markets and the traditional matrix of pricing set by the markets is breaking down, together with a worrying disconnect between Wall St (stock market prices) and Main St (economic activity, employment). Anticipate the main buzzword to be stagflation through 2015. Commodity markets are spiking up, interest rates are starting to rise and yet, in spite of that, stock markets continue to climb a wall of worries and this gives rise to our predictions.

Our scenario suggests that quality performing stocks, commodities and real estate will continue to climb even as incomes decline and other assets peel away. Translating that into index levels implies, for example seeing the DJIA advancing to new highs from late 2014 onwards, in excess of 20,000 whilst the S&P500 reaches towards 2000-2200. Given the QE printing stimulus to asset prices over the last few years, such a move could be characterized by a final exponential rise followed by a collapse of these two indexes any time from late 2015 onwards. Such a top would mark the completion of the entire Industrial Revolution upward phase of the cycle and indicate we are entering into a prolonged period of economic, social and political stagnation and upheaval. Whilst these highs are being made the discrepancy between Wall Street and Main Street will be acutely emphasized with further deterioration of the economic, social and political fabric of the industrialized nations. At the same time, this may well be accompanied by dramatic movements in interest rates, commodities, currencies, gold and silver. The upward spike in these markets is the result of the massive QE programs flowing through to asset prices. You can also anticipate the emerging market economies to suffer as more cash gets sucked into the leading economies – the US, UK, Germany and Japan. Japan will be forced to make another QE intervention later in 2014.     

In economic history this present phase may well be a replication of the 1921-29 phase also known as the “Roaring Twenties”. This culminated of course in the Crash of 1929 and we are suggesting that the circumstances are building for a repeat performance. The scale and scope however of the coming crash still years away will dwarf the events of 1929-33. Using the stock market as a barometer or benchmark of prosperity is a recent development by the US Federal Reserve and illustrates how far we have traveled from orthodox economics in justifying the level of intervention by government and the Fed. The severity, speed and relentlessness of the events following will shock. For this scenario to unfold there needs to be a further consolidation of stock and commodity markets during 2014 before the final advance begins. We believe however that the time scale to complete the End Game is small, measured in, at most, a few years, before the next major sell off phase.

To summarize, let us be very clear about what is happening or about to happen in the final phase of the End Game:

  • ·         Expect stock markets to correct over most of 2014 before beginning an upward surge leading to an exponential rise in stock, commodity, gold and silver prices. For example anticipate the DJIA correcting to 13784 – 15341 and not below 12876.
  • ·         Anticipate central banks to respond to this correction by escalating their QE programs.
  • ·         Anticipate inflation to break out in an unprecedented way especially in the US, UK and Japan and central banks will be unable to contain it. At the same time higher than normal unemployment and stagnant economic activity will prevail. This is called stagflation.
  • ·         Expect credit markets will seek to re-price themselves in light of emergent inflation creating a liquidity trap for central banks.
  • ·         Anticipate the US, Japan, UK and German stock markets to benefit at the expense of emerging markets as cash gets sucked from the periphery to the centre. 
  • ·         Expect a collapse in stock and commodity prices followed by economic contraction where both inflation and high unemployment are experienced at the same time after this spike in stock and commodity markets prices. 
  • ·         Anticipate ongoing social and political dislocation in many countries.

Near the peak or shortly after it will also be possible to predict more accurately how long the ensuing economic contraction will last. Suffice to say, that from now ‘til anytime out to 2030 we are in for some tough times punctuated with attempts at recovery. By then the writing will be clear for everyone to see. And of course the generation of correction will not merely be confined to asset prices and the vagaries of fiat money and bad economics, but also to societies and politics both domestic and geo-political, where a generation of people will learn about long forgotten natural law and how it applies to human behavior. Social mood will have become dark and this will also be expressed right through music, the arts, fashion, crime, political and social mood and drama. The last phase will set the stage for a new beginning for people from which a new and sustained economic recovery will slowly begin. By the time that moment has arrived however, the nature of our societies and the way we relate with people and between nations will have changed. The wrangling about why it had to happen will be well underway.

 By Peter Twigg

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 Hope for Humankind

 

The End Long Game? 2009-2018

We have updated the main theme of the Emerging Events website. Click on the title to read how larger trends and cycles are moving to complete within the next few years and the implications this brings to to people and nations ……… Find it here: http://www.emergingevents.com/?p=2761 Continue reading