Hi Plato - I don't have a fixed POV on the invention thing, merely an interest in various aspects of the matter.
One of the quotes attracted my attention: "According to a 2002 paper published by the International Monetary Fund (“The Long-Run Behavior of Commodity Prices” by Paul Cashin and C. John McDermott, PDF: tinyurl.com ), “there has been a downward trend in real commodity prices of about 1 percent per year over the last 140 years.” For a century and half prices have been headed toward zero."
Well, yes. More or less, that coincides with industrialization, and expanded use of fossil fuels. The conventional view is that all those synergies created by unlimited access to cheap and abundant energy will continue.
I beg to differ. We were in a blip: a period of energy-driven abundance that will never be seen again. In my opinion, we are now slowly entering a period of negative synergies - the exact opposite of the positive synergies created by cheap and abundant energy at the beginning of industrialization. Mankind will see the growing ecological and monetary cost of energy reflected in all activities, including exploration, development, production and distribution of commodities.
See: Will Soaring Transport Costs Reverse Globalization?
faculty.washington.edu
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The mistake in conventional thinking lies in the assumption that the time in which we have lived is the norm, in terms of cost and availability of energy. It is not.
The IMF is correct about the past, but apparently misunderstands the primary driver. It's wrong - dead wrong - about the future, and that the IMF (like so many macro players, including economists and governments) should be so seriously wrong is cause for concern.
For illustration, look at the cost for gold production:
Many other commodities demonstrate the point.
At some point in the not-too-distant future, we'll see crude back at $147/ barrel, and higher. If anybody thinks we have prepared properly, or even substantially mitigated the approaching consequences, think again.
Future commodity costs approaching zero? Good grief.
Jim |
