We use cookies (including third-party cookies such as Google) to remember your site preferences and to help us understand how visitors use our sites so we can improve them. To learn more, please see our privacy policy and our cookie policy.

To agree to our use of cookies, click 'Accept' or choose 'Options' to set your preferences by cookie type.

Options Accept
BullionVault

CHARTS

  • English
  • Deutsch
  • Español
  • Français
  • Italiano
  • Polski
  • 日本語
  • 简体中文
  • 繁體中文
  • Daily audit
  • Help
  • Contact
  • Deposit
  • Login
  • Open account
  • ABOUT US
    • About BullionVault
    • In the press
    • Reviews
    BUY/SELL BULLION
    • Vaulted gold & silver
    • -Live order board
    • -Daily Price
    • Coins for delivery (UK)
    INVESTMENT GUIDE
    • Guide to gold
    • -How to buy gold
    • -Gold investment
    • -Gold investment plan
    • -Investment insurance
    • -Compare asset performance
    • Guide to silver
    • -How to buy silver
    • Guide to platinum
    • -How to buy platinum
    GOLD NEWS
    • Gold news front page
    • -Gold price news
    • -Opinion & analysis
    • -Market fundamentals
    • -Gold/Silver Investor Index
    • -Infographics
    CHARTS
    • Gold price
    • Silver price
    • Platinum price
    • Price alerts
  • Login
  • Open account
  • BUY/SELL BULLION
  • Vaulted gold & silver
    • ⤷
    • Live order board
    • Daily Price
  • Coins for delivery (UK)
  • INVESTMENT GUIDE
  • Guide to gold
    • ⤷
    • How to buy gold
    • Gold investment
    • Gold investment plan
    • Investment insurance
    • Compare asset performance
  • Guide to silver
    • ⤷
    • How to buy silver
  • Guide to platinum
    • ⤷
    • How to buy platinum
  • GOLD NEWS
  • Gold news front page
    • ⤷
    • Gold price news
    • Opinion & analysis
    • Market fundamentals
    • Gold/Silver Investor Index
    • Infographics
  • CHARTS
  • Gold price
  • Silver price
  • Platinum price
  • Price alerts
  • ABOUT US
  • About BullionVault
  • In the press
  • Reviews
  • Help
  • Contact
  • Daily audit
    • English
    • Deutsch
    • Español
    • Français
    • Italiano
    • Polski
    • 日本語
    • 简体中文
    • 繁體中文

Gold News

Live support

NEED HELP? ASK US NOW

Search form

Gold News front page

Gold Price News

Gold Prices 'Caught' Between Covid and Massive Stimulus Ahead of Chinese New Year

More...

Gold Investing In Depth

Learn about gold bullion bars

Learn about gold bullion coins (and costs)

Gold investment: Why & how?

Gold Investment Analysis

  • Latest Gold Investor Index
  • Diversification: Gold as investment insurance
  • 40-year Asset Performance Comparison Table

Gold Articles

Opinion & Analysis

Gold Price News

Investment News

Gold in History

Gold Books

Gold Investor Index

Gold Infographics

Archive

  • January 2021 (18)
  • December 2020 (24)
  • November 2020 (23)
  • October 2020 (25)
  • September 2020 (25)
More...

List of authors

Pit and the Pendulum

Tuesday, 6/30/2020 09:01
After this trough, expect an upswing of innovations...
 
WHAT are we afraid of? asks George Gilder in Addison Wiggin's Daily Reckoning.
 
In recent weeks, I have been traveling around the globe and observing the rapid emptying of airports. Does this mean that most people are in a panic over a new form of highly infectious flu?
 
It called to mind my studies long ago with the great economist and game theorist Thomas Schelling, who won the Nobel Prize in economics in 2005 mostly for his theories of "micromotives and macrobehavior".
 
His book by that title showed that such phenomena as empty airports or traffic-jammed freeways or even segregated communities could reflect only the slightest changes in attitude. Small changes in people's minds, oriented in the same direction, can effect massive changes in people's collective behavior.
 
"Though a society can resist epidemics of physical disease," as I paraphrase philosopher-psychologist Karl Jung in Wealth&Poverty, "it is defenseless against diseases of the mind. Against 'psychic epidemics' our laws and medicines and great factories and fortunes are virtually helpless."
 
Many of us certainly feel helpless these days, locked down by the ridiculous and unnecessary order of politicians. With the world wilting before our eyes, we will have to wait 'till doomsday for the politicians and media pundits to admit the egregious mistake of quarantining the healthy in order to protect the frail from at most a marginal 0.5% global rise in current historically low rates of mortality.
 
Oh well, life limps on...
 
But in response to these depressing times, my friend and tireless blogger John Mauldin quotes Thomas Babington Macaulay, writing in 1830 in reply to pessimists of his day:
 
"We cannot absolutely prove that those are in error who tell us that society has reached a turning point – that we have seen our best days. But so said all who came before us, and with just as much apparent reason...On what principle is it that, when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?''
 
Good question, John. Mauldin also cites the theory of time-prices, which demonstrates that the world is getting richer all the time because it takes less and less hours of work to obtain more and more goods.
 
John quotes from a famous essay by Nobel Laureate William Nordhaus of Yale. He got his Nobel in 2018 for a pandering poison ivy paper on climate change and carbon taxes. But in 1993, before his Nobel mistake, he made a true breakthrough. In a paper titled, "Do Real Income and real Wage Measures Capture Reality? The History of Lighting Suggests Not."
 
"Real world GDP, after inflation, is up over 15X since [Macaulay] wrote that. The cost of a candle in 1800 that would let you read, however dimly, for one hour, was six hours of labor. Today that same amount of light costs about 3/10 of a second of human labor."
 
Real GDP up a mere fifteen fold. Or measured by time-prices – the number of hours and minutes a person has to work to earn the money to buy goods and services – real output is up some 72,000 times.
 
John says it's a transformation: "The current crisis won't slow down the Age of Transformation. The crisis usually has the potential, if not the probable likelihood, to actually accelerate transformation."
 
John continues: "As my dad used to say, 'Necessity is the mother of invention.' Or innovation."
 
Your Dad was right. The current insanity will pass and will be followed by a stream of law suits. Then the innovations will begin to crowd in.
 
In order to anticipate the innovations, I recommend, sight unseen, the new book, Innovation, by Matt Ridley coming out any day now. Apart from his world-leading critiques of climate change angst, his two previous books, The Rational Optimist and The Evolution of Everything were both masterpieces of economic history and analysis.
 
Ridley has long been on to time-prices. But as the readers of my prophecies know the current virtuosos of time-price data are economists Marian Tupy and Gale Pooley, who demonstrate that Nordhaus's insight on the cost of lighting can be duplicated across the entire range of new technologies.
 
Time-prices show that real economic growth is several-fold faster than economists measure with their Consumer Price Indices, Purchasing Power Parities, Hedonic adjustments, and other federal deflators.
 
This means that real interest rates, adjusted for time-price gains, are normal rather than near zero as our debauched monetary indices depict. This means that after the politicians end their destructive siege of economic self-abuse in the name of increased power for politicians and humiliation of the public, we will return to the rates of economic growth usual under capitalist freedom.
 
That's why over the next decade or so we will have self-driving trucks (first driven from home as a new Swedish invention enables!) and then self-driving cars and self-driving planes. We will have giant integrated circuits on wafers that perform machine learning in seconds.
 
We will have an array of new vaccines obviating the need to get sick in order to get immune. We will have Strategic Investment Conferences in virtual reality zoom. And maybe we will have real life encounters again, as we escape Agora founder Bill Bonner's wandering regime of life lived between six feet apart and six feet under.
 
What we won't have, I will prophesy, is a world beyond carbon. In order to achieve real artificial intelligence, we will enter a new carbon economy consisting of carbon-based chips. Escaping the ugly self-inflated fiasco of Covid-19, we will not close down the economy again for a fake crisis of climate. Greta Thunberg as Time's person of the year in 2020 will signify the last great triumph of the climate cranks and weather bores.
 
We are in a pit today, but as Macaulay points out, we have been in such pits for most of human history and we will soon escape. Until then there are books to read and investments to contemplate in a world of transformation measured by time-prices still accelerating progress and, as Pooley shows, declining inequality everywhere.
 
Time is on our side.
  • Reddit logo
  • Facebook logo
  • Twitter logo
  • Google logo
  • Yahoo logo
  • LinkedIn logo
  • Digg logo
  • StumbleUpon logo
  • Technorati logo

Publisher of Agora Financial, Addison Wiggin is also editorial director of The Daily Reckoning. He is the author, with Bill Bonner, of the international bestsellers Financial Reckoning Day and Empire of Debt, and best-selling author of The Demise of the Dollar.

Addison Wiggin articles

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

Follow Us

Facebook Youtube Twitter LinkedIn

 

Mobile apps

 - live trading 24/7

 - buy & sell instantly

 - up-to-the-second charts

 

 

 

Daily news email
Go to 'communications settings' 

Get the latest daily gold price news free by email

Latest gold news by email

 

 

 

Gold Investor Index
5 January 2020

Gold Investor Index

Gold investing +58% in NY21

 

 

 

LBMA webinar
21 January 2021

LBMA

London gold trading

 

 

 

International
Investment

16 December 2020

Gold 2021

Gold in 2021

 

 

 

LBMA Alchemist
1 December 2020

Newton

True Gold/Silver Ratio

 

 

 

  •  Email us

Market Fundamentals

  • 'Cut Bullion Duty to Cut Smuggling': India's Gold Industry
  • Platinum Price Hits 4-Year High Even as Electric Beats Diesel Cars in Europe
  • Record Investing Pushes 'Industrial' Silver and Platinum into Deep Deficits
More...
  • Cost calculator
  • Cookies
  • Terms & conditions

©BullionVault Ltd 2005-

  • Twitter
  • Facebook
  • LinkedIn
  • YouTube

Save your cookie preferences

We use cookies to remember your site preferences, record your referrer and improve the performance of our site. For more information, see our cookie policy.

Please select an option below and 'Save' your preferences.

Save

You can update your cookie preferences at any time from the 'Cookies' link in the footer.

Secure auto-logout warning

You have not been active for some time.

For your security you will be logged out in   minutes unless you take action.