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To: Mark Adams who wrote (75620)	3/5/2001 2:35:18 PM
From: Don Lloyd	Read Replies (1) \| Respond to of 436258

Mark - ...Is the best use of future capital the development of additional gold stockpiles? Is it possible that we have stablized in one of many possible equilibria- and an appropriate nudge might bump the system into another by encouraging capital to seek other venues? That miners continue to mine gold because the capital investments and returns are more assured than, say an effort to tap near earth asteriods for thier mineral resources? Free market prices and the expectations of future prices seem to provide a simple and effective signal to control the entire matrix of economic activity. The economy is a complex, non-linear, adaptive system that tends to fill any niches of opportunity that may appear with global results from local actions. It is entirely equivalent to biological evolution wherein multiple organisms (industries and products) co-evolve without plan for mutual benefit. A simple analogy is a varied topographical region populated by simple nanobots whose one purpose is to climb gradients against gravity. This will most often result in all of the nanobots perched on the top of the nearest nearest hill. In the biological context, this is a fitness peak where further incremental progress from the co-evolution of the existing organisms is impossible. In the economic context, this is the co-evolved automobile system, with its automakers, parts suppliers, gasoline stations, and roads. In any context, an optimal maximum altitude has only been achieved in a local optimum sense. But it will seldom be a global optimum, as a higher peak will always be possible if the existing one is destroyed and a new one is allowed to evolve. Regards, Don