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HB

And to understand how "far sighted" the rest of the world is, read today how the highest human recognition in economics, the Nobel Prize, was given to two economists who have modeled the economy, the climate, and human advancement -- to a time past the singularity!-- and have warned of dire consequences. In their view, a post singularity world that is two degrees Celsius warmer will represent a calamitous future. A hardship that no singularity can undo. Of course, hordes of already marginalized and disenfranchised lackeys who resent technology and fear economic freedom, subsidy feeders, and cronies, are all rushing to applaud.

I can't wait to get to the singularity, if anything to be able to look back and ridicule all these once untouchable erudites and the, once again, gullible masses. Once upon a time, the smartest people became alchemists.

PS. Actually, I think that the masses do perceive that something is amiss, but they funnel their frustration into alternative movements, like Trumpism, which though better than the current alternatives risk creating new ideological and economic distortions. But perhaps there is a silver lining. Perhaps the masses are intuitively (though not rationally) sensing that intelligent erudites with central planning ideas are the ones who have brought humanity the most grief.

HB

...Seems like most of this inherently defeatist eco-ideology springs up amongst the one percenters. By that I don't mean the top one percent in prosperity but rather the once prosperous countries who are currently on a one percent growth trendline -- an arithmetically deterministic path to decline.

Seems like one of the hardest things to explain to the evolutionaly analog human minds is the dramatically upending result of exponents. If your country is growing at one percent, and the world as a whole is growing four times faster, then you are in rapid decline as we speak. There is no buts or ifs. In two to four decades your country will be a middle income country, no matter how high it is today in worldwide prosperity rankings. Indeed, economic reversion trendline does not happen evenly. But the overall steamroller of exponential growth cannot be stopped.

Geoman

The wisdom of crowds is a well studied and provable phenomena. It appears that we as humans are able to assemble a powerful virtual computers to resolve many thorny issues.

However, that computer only works properly when you have skin in the game, if your own money and livelihood at risk.

I would love to limit carbon dioxide emissions, if it cost me absolutely nothing I'd say, heck, why not? Once I realized the expense, and that the severe impacts from climate change would not occur for decades, I lost interest - decades ago we thought horse manure would drown the cities, and there would be nor more forest because it had all gone to firewood. Such and outcome is very speculative. Any prediction post 2040 is highly speculative.

And alas, yes. A loss of 1% growth is a long-term disaster for any country. compounding interest can make us all millionaires.

waestrel

Saw this today

https://www.zerohedge.com/news/2018-10-10/vix-spikes-above-20-highest-6-months-term-structure-inverts

Kartik, I know you look at the VIX a lot, and have mentioned it in the context of THE ATOM, is the economic downturn you predicted still a valid prediction?

Kartik Gada

Waestrel,

That is part of it. While every other economic stat has improved over 2018, the ^vix index still has not hit the 2017 lows, which indicates a rising unease.

It is still possible that the downturn started in 2017, but it appears to be a very gentle decline if not an outright plateau. Plus, remember that the downtown is contingent on insufficient money-printing, whereas China just announced another $175B injection (above and beyond their monthly printing) just this week.

https://www.nytimes.com/2018/10/07/business/china-lending-trade-war.html

Plus, the US stock market is having trouble staying above the January 2018 highs.

We may yet not know for a while whether the downturn began then or not.

Kartik Gada

HB,

Seems like one of the hardest things to explain to the evolutionaly analog human minds is the dramatically upending result of exponents. If your country is growing at one percent, and the world as a whole is growing four times faster, then you are in rapid decline as we speak.

Oh, South Korea and Taiwan had the same poverty level as India in 1950. By merely beginning their economic growth three decades sooner, the difference between the two seems astronomically large.

China was poorer than India until 1993. By merely growing 1-2% points/year higher, it is a much larger economy today (despite India's still-fast-but-slower-than-China growth).

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