人民留一半 ?
kingworldnews.com
Today
the man who has become legendary for his predictions on QE and historic
moves in currencies and metals told King World News that the global
population will be cut in half as financial and economic chaos erupts.
This will not end well!
May 24 (King World News) – Egon von Greyerz at Matterhorn Asset Management (based in Switzerland): As
technological developments and markets go parabolic, we observe many
market “experts,” even intelligent ones, forecasting that we are now in
an exponential economic era. Thus many believe that this will go on
forever. This is the typical attitude at market and economic tops and
guarantees that THIS WILL NOT END WELL!
It
is clearly absolute nonsense to believe that exponential expansion
based on deficits, debts and fake money is the beginning of a new era.
Anyone studying the economy and history of markets knows that
exponential moves indicate the end of an era and not the beginning. As I
have repeatedly said, history is our best teacher and it both rhymes
and repeats itself. And history now gives us dire warnings.
ARE WE IN A PARADIGM SHIFT?
But
for some reason, human beings always extrapolate current trends,
whether it is population growth or stock market rallies. We know from
statements at historical tops like 1929, 1987 or 2000 that anyone, from
politicians to investors at the time, believe that the trend will go on
forever and that the world has made a paradigm shift.
Many markets and investments are now going up exponentially and very few forecast an end to this euphoric state…
GLOBAL POPULATION TO HALVE?
Let’s
start with global population. For thousands of years we saw a very slow
and steady growth as the graph below shows. In the mid 1850s world
population reached 1 billion.
Since the mid 1800s, we have seen exponential growth in population and we are now almost 8 billion people on earth.
Energy
and oil in particular play a major role in this growth, leading to
increases in food production, industrialisation, better health care for
people, etc.
THE EXPONENTIAL LAW OF COMPOUNDING
Moore’s
law, first linked to transistors, is a projection of historical trends.
The fallacy with these projections is that they assume the same trend
will go on forever whether it relates to population or stock markets.
The
old fable of the inventor of the chess board tells us how little
understood exponential moves are. The king promised the inventor a
reward for inventing the game of chess. The inventor asked for one
single grain of rice on the first square of the chessboard, two on the
second, four on the third and so on. The king thought that this request
was easy and inexpensive to fulfil. Little did the king understand the
exponential law of compounding. Because once the 64th square was
reached, 18 quintillion grains were needed. This amount exceeded the
total production of the kingdom. So instead of getting his reward the
inventor was killed for fooling his king.
The
longer a trend has gone on, the more permanent it seems to be. The
explosion of population growth does not seem reversible. But the Black
Death period in the mid 1300s showed us how population can quickly
halve. This was the case in Europe and probably also in the rest of the
world.
So
exponential moves always end and so will this one. The reasons for the
coming “correction” are likely to be a combination of the causes in the
graph above.
EXPONENTIAL MOVES WORK IN REVERSE
Just
as exponential moves up are spectacular, so are the reversals. And
although few people understand it, exponential moves always reverse, at
least temporarily. The problem is that the reversal is always faster, more violent and more hair raising than the advance.
A
correction of global population from 8 to 4 billion would be totally
natural from a statistical point of view. It would obviously be
devastating for the world. But if the advance from 1 billion population
took 170 years, the “correction” might take at least half of that, say
85 years. Only future historians will tell the world what actually
happened.
As the chart below indicates, economic growth is totally linked to the availability of oil.
The
chart shows that World GDP per capita (from 1968) grows in line with
consumption and therefore also to the availability of oil. As oil
production is likely to decrease over the long term, so will economic
growth. This is totally in line with the view I have expressed in many
articles and interviews, namely that we are at the end of a major
economic cycle of at least 300 years and maybe longer.
Renewable energy is unlikely to replace fossil fuels for a very, very long time, even if this is a politically uncomfortable view for the climate control activists. What
very few realise is that most renewable energy sources are very costly
and also all dependent on fossil fuels, whether it is electric cars,
wind turbines or solar panels.
EXPONENTIAL STOCK MARKET MOVES
If we look at some more recent exponential moves in the stock market, they have been spectacular.
The
above moves have grossly exaggerated the effect of new technologies.
Once a new invention has been digested, it grows in line with the market
as a whole. Take the wheel which was revolutionary at the time. It was
invented. Still, today it certainly is not valued at a premium. So the
value of new technologies only outperforms the market for a limited
period and the above moves will see major corrections of much more than
50%.
BITCOIN – COULD ANYTHING BE MORE EXPONENTIAL
If
you invested $1,000 in Bitcoin at $0.08 in 2010, you would have had
$800 million at the $65,000 peak in April. Today it would be $400
million at $32,500, so easy come and quickly gone.
A
commodity with such volatility can obviously never replace money. And
nor would central banks permit it. Speculative frenzies can go on for
longer than anyone expects.
So
Bitcoin could go to $1 million or it could go to ZERO. Not the best of
odds. And certainly Bitcoin has nothing to do with wealth preservation.
BITCOIN vs GOLD
Bitcoin
has been a spectacular speculative investment and early investors have
made massive fortunes. Like all exponential manias it is likely to end
in tears. But for the savvy investors who have now diversified into
physical gold and some silver they have managed to get the best of both
worlds.
I
doubt Bitcoin will continue to outperform gold. But even if it does,
this is a binary investment that theoretically could go to $1 million in
a continued speculative mania but it is more likely to go to nearer
zero in my view.
With
debts and deficits now going exponential, gold will continue to reflect
the destruction of fiat money just as it has for several millennia. As
always, history is our best teacher…
