jfred, <Trees don't grow to the sky> Trends don't go on forever. <Don't let a slogan do your thinking for you. > Some trends do go on forever. Okay, maybe forever is getting a bit into the theory of relativity domain, but a billion years is near enough to forever for our purposes. Our biological trends have been going that long. Near enough anyway.
I prefer the third slogan.
Yes, there are monetary limits, but given the rapid economic development which is now in China and India and even Russia is going reasonably better than badly, there is a LOT of liquidity that can be absorbed without inflation, as has been demonstrated for decades now. Credit can be enormously expanded too.
True, at some stage, interest rates will have to go back up to reward people who dare to hold cash and therefore risk dying without spending it. The less the reward, the less reason people have to defer spending on the here and now.
8 billion people with a GDP per capita of US$50,000 would require quite a major monetary boost to avoid huge deflation. I don't see why we can't get to such an economic position in a few decades. Currently there are about 6 billion people with a GDP per capita of [wild guess] US$2000 per capita. Maybe it's only US$1000.
Mqurice |
