19 replies to this topic

[arbman]

Are there enough resources? My estimates are saying that a global and permanent stock market top will come around 2030-2040s unless the humans start the space mining by then. This is the chart of the current estimates when the global population growth should start to curve down for a sustainable human race, simply by evaluating the current land losses and farming needs projected according to the population growth...

This is actually a typical growth curve for any organic or chemical process, keep this in mind about where the following study is going in its conclusion: a study by the Millennium Institute for this century about the sustainability...

When you are looking at the charts on the website above, consider the already extracted wealth measured by the Dow Jones Industrials Index (or the cummulative DJI below). The stock market indices measure the growth rate, so where the population curve turns horizontal again is where you would expect a permanent top in the growth, or stock market indices...

I had a few earlier projections about this for the dow 100k only by extrapolating the exponential growth without the prior observation of the limiting factors. Nothing grows exponentially forever, not at this rate...

- kisa

[OEXCHAOS]

I get a "Club of Rome" feel from this stuff. All I can say is this: Beware the seduction of linear extrapolation of trends within chaotic systems. "Social Analysts" and opinion makers are already applying the same old defunct approaches and filters to a system that is entirely foreign and rapidly changing. Mark

[arbman]

We all know the depletion of the luxury items such as fish and steady weather patterns, the next step is the realization that we can not easily (economically that is) replace the carbon based production over the next 30-50 years. The current deposits will run out probably in 100-150 years, it means you have a steady consumption for about half of that or 50-75 years, if the earth lets you. So, this last finding about the arable lands is not a new one to me, but I have no doubt that at this rate of deforestation and land loss and drought because of the climate changes, the population growth will have to slow down, it is simply a resource issue. So according to the inflation model, the stock markets can see a significant hiccup for decades to come. The 11 highest world temperatures were recorded during the past 15 years, people can deny all they want. I am very worried for my children... - kisa

[OEXCHAOS]

Everything I see in your reply says to me that you are applying old linear approaches to a chaotic system. It's not linear. The Club of Rome was dead wrong, Kisa. This crew will be too. ANYONE who tries to extrapolate current utilization trends will be dead wrong. Demand is changing and will continue to change, so will supplies and needs. Here's a quick example: 20 some years ago, I had to spend a significant amount of my salary to buy a good suit. I had to then wear several of them every day. I had to spend a similarly large amount on shoes that I wore out. I drove a significant amount every day in a car that cost me $16k. I had to spend significant sums on parking. I had a limited set of options of wine to buy, and my food selection was severely limited. Entertainment options entailed fairly significant resources. Even a TV of any quality cost me the better part of $300 back then. If I wanted to meet new people, I had to "go places" spending money and gas. Merely connecting with other human beings was a fairly expensive prospect. Of course, "connecting with people" professionally was imperative to making a living for me. Today, I can find, meet, and get to know a spouse online with a total expenditure of less than what a month of bar hopping would have cost me. I don't have a commute. I don't spend money on parking. I have more entertainment at my fingertips of all quality levels than I know what to do with, for very little money. I can buy a decent suit and have it altered for about half what it cost 20 years ago (nominal $'s, not inflation adjusted). Of course, I barely need one suit and I only buy a new one because it's out of style or because it "has shrunk" here or there. I drive an older luxury car because I get a kick out of it and I feel comfortable doing so because I can find parts with a few clicks of a mouse and I can buy them for fraction of what I could 20 years ago. I also can research how to do repairs myself or at least diagnose them, which makes me more capable of exerting price discipline on mechanics. I spend a pittance on my transportation and I consume very little in the way of resources--in fact, I'm recycling $30k (or whatever) worth of car. And of course, I have access to tons of smart, talented folks right here on traders-talk. 20 years ago, I'd have to be spending a ton on telephone and travel to meet a tiny fraction of the talent we have on the board currently. I can go on an on, but the point is that my LIFE has been fundamentally changed, for the better, and it consumes far less in resources than it did for a much higher standard of living--at least in terms of what *I* prefer and value. The power of all these connections that we can make and the efficiencies and creativity that they encourage is nothing short of revolutionary. You can't compare economic growth trends nor capacity utilization rates in any sort of linear fashion from even two decades ago, let along 10--20 decades ago. If you do, you'll be applying the wrong standards of measurement to something that is no longer of any real importance. Mark

[arbman]

It is an ecosystem Mark, however you slice and dice it, yes the technology and the changes in our daily lives can produce significantly better improvements over the next 3 decades to extend the end for another 3-4 decades, but the biggest picture about the food and resources remains and the growth essentially comes from the unsustainable population growth. The above S-curve is common to all natural processes, we will eventually tap this planet out and the stock market top will come about 2/3 of the way. The stress signals are actually louder than they've ever been since the 250 years of exponential human dominance over the planet, even the ice caps at the poles are melting. BTW, I am projecting an incredible stock market growth over the next 3 decades --can you imagine the destruction rate? Yet, the growth rate will be probably still slower than the previous 150 years...

[SemiBizz]

Well, better smooth those calculations. Nature has a way of perpetuation. Have you factored in large scale wars, famines, or plagues into your equations? No, because that's non-linear too.

[maineman]

Fascinating stuff to ponder, but not sure how it helps with trading. I wonder what folks thought during the depression? During the Civil War, the Inquisition? They must have thought that there was no way the "human race" would survive. As big as our brains are, most people are only capable of seeing the world through their own eyes/experience and, as such, make conclusions that are random or wrong. The fly in the ointment, vis a vis the future of man, is man's inhumanity to man. Technologically we will always grow. And with human resolve we'll survive tsunamis, earthquakes, famine, etc. The weak links are the rogue madmen, like Hitler, the inquisition, Iran (?) etc. And those you cannot predict at all... mm

[arbman]

Well, I didn't want to say it, but everything is actually pointing in the direction of a large war to reduce the population once the world's stock markets peak the next time, perhaps over the next couple of decades, not even resources. Currently, if you examine the Europe's case, their population growth is stagnant, their debt to gdp ratio is also higher than US, their biggest real growth is through exporting to the developing countries and US. Their stock markets are underperforming for decades. What will happen once the US can not borrow anymore and import from Europe? They will go through a significant correction, if not depression. I think the Europe is the best example in a miniature scale about the developed countries that ran out of space to grow in population and sustainable resources. The Asian countries have a growing population and mostly they have younger generations, but they don't have a strong consumer base to support their local economies. This dependence on the exports will also considerably damage them too, but they will probably continue to be actually the source of the global growth until their lifestyles and consumption nears the Europe's, perhaps never. US is about to share the Europe's faith in terms of growth with its aging population, but there is still significant space and young generation in US to support its economy. So, it is not exactly the same. Anyway, the peak I am trying to think is much different though, it is about tapping the earth out collectively according to the current exponential trends. - kisa

[OEXCHAOS]

Europe is merely suffering from the inevitable dowside of creeping socialism and/or statism. Entrepreneurial spirit is dead, or whenever it peeks its head out it's promptly squashed with onerous regulation and confiscatory taxation. Which is not to say that demographics don't matter. They do. They're just not the whole story. M

[arbman]

Europe is merely suffering from the inevitable dowside of creeping socialism and/or statism.

Totally agree, which basically says "the economy is about getting free lunch!", and there are too many who want a free ride on the back of a few who are willing to take a risk or smart enough to outsmart the big businesses. This is exactly the phenomenan that happens when you have an old conservative population who are constantly looking to preserve their status quo and eat their free lunch. Europe managed to get destroyed a few times because of this during the past centuries, the hatred is fueled by the economic imbalances, not by the color of your skin. I guess the human nature never changes, the selfishness is like a disease that eventually grows with the population. If people really understood this, they would not hate each other, my son doesn't know how to hate. Nobody would be even interested in the Middle East, if they didn't have control over the oil...

- kisa