(Newest Comic) The Truth about Economics: Part 10 Predicting the Economic Future
This series is no longer public. You must subscribe by email to view this series.
or
Get Dissolving Dollars the Book for a complete view of the truth about economics.
(See Comic)What most people don’t realize, including people who should, is that the current credit storm is really simply a result of the nature of modern money. Modern money is based on debt. To increase the money supply and avoid deflation requires ever more debt. Things like credit default swaps (unfunded insurance on risky investments) are the kinds of tools that become necessary to keep credit flowing when the debt game gets excessive. But they are also dangerous and start to explode when the debt game starts having a hard time keeping up. Really, deflation is perfectly fine in a world without debt. And it is what the economy has needed for many many years. But in a world that runs on debt, deflation is very undesirable since it makes past debts more costly instead of less. And despite talk right now about deflation caused by the tightening of credit, it is all most likely only going to lead to a new big wave of inflation. The federal reserve has been doing all it can to expand the money supply, and things like 700 billion dollar bailouts are ultimately inflationary. So, what can we expect to happen over the next few years and beyond? Well, there are three main storms looming over the economy: debt, energy, and terrorism. The debt storm wants to be deflationary, but it is inflationary since the central bank and government will do all they can to avoid the cleansing pain of deflation. The energy storm will be exacerbated by inflationary pressure. Economic growth requires energy. And to keep the debt game going requires growth. If energy (and the availability of resources in general) hinders growth, that is a problem. And if the money supply expands without ample growth, that is very inflationary. That money will be out there driving up prices of existing things since it won’t have new things to go into. The terrorism storm is psychologically deflationary. If terrorists wipe out a major city with a nuke, no matter where it occurs it will freak everyone out. No one will be too excited about moving to a big city since that city could be next. Nor will people be too eager to pour money into things like the stock market. But people will get over it and it could finally facilitate the cleansing of the debt system sufficiently enough to get the party started again. However, America might not lead the twenty first century party like it led the twentieth century party, especially if it sticks with the same basic monetary system and stays bogged down by its costly yet lame entitlement programs. So, based on these trends, here is how the dow jones industrial average chart could look going into 2050. The market could just stay in a sideways channel for the next twenty years. It has done that before. But another big boom will eventually come where stock price increase more than tenfold like they did from the early 80s to the year 2000. The question is though, how much purchasing power will a dollar have relative to today when the dow hits 100,000? Just focus on the trends, not the minute fluctuations dow forecast chart of the future dow jones index Global boom driven by new technology Things improve and the economy expands
Zoom in for a closer look at the comic (PC Right-Click image, MAC Control Click image).
See All the Comics
Click Here and go to the Archive
(Newest Comic) How to Become a CEO (or even President of The United States)
(See Comic)Eight Simple Steps It isn’t what you know, it is who you know. So, you want to be friendly and likable. You want to spend time doing social things like having drinks with people instead of things like reading books. I feel your pain Your high position in life already exists. You might already have connections or might have to make connections. Either way, those connections will direct you to your position. You certainly aren’t going to build your high position for yourself by starting your own successful company. You aren’t smart enough or a hard enough worker for that.Getting to your position means climbing a ladder. Go with the flow. Don’t rock the boat. You want people to see you as an ally, not a threat. Here is where the fact that you don’t have a single original thought in your head will be very helpful.As you climb higher in rank, get rid of subordinates that threaten you with their superior competence.Eventually you’ll become assistant to the existing CEO. The existing CEO made his way to the top the same way as you. And he likes you because you are likable yet dumber than him–just as he was likable yet dumber than the CEO he replaced. The time will come for the board of directors to vote in the new CEO. The board is fairly detached from the company’s success. They just want a guy in command that will pay them well. They won’t ever call you on your incompetence as long as you treat them well. They are themselves where they are because they know how to go with the flow—even when it’s down the drain. King Idiot board of idiots shareholders So finally, you are the CEO. And due to the way you got there, you are now king idiot of a hierarchy of idiots that is progressively more idiotic than the previous hierarchy of idiots. The company was originally built by competent people. But each change in leadership means a progressively more incompetent organization. Without a resurgence of competence coming from some outside influence, the organization is on its way to its demise.Oh the Insanity! So, as long as you allow yourself to be unimpeded by any dissenting competence, you can now proceed to run the company into the ground. It will be fun because while the company collapses you’ll be flying around doing things like playing expensive rounds of golf.Business, make money This guide is based in part on the observations of American billionaire financier, corporate raider, and private equity investor Carl Icahn
Zoom in for a closer look at the comic (PC Right-Click image, MAC Control Click image).