I agree with much of what you wrote but not this.

By your own logic above excess savings (in excess of what the free market would normally dictate) reduce both investment and consumption. Reductions in both will reduce growth and general prosperity over time and thus I would argue that it is a big deal.

You argument that that QTM somehow negates this seems incomplete.

Quantity Theory of Money
Vt * M = P * T

Vt =  is the velocity of money for all transactions in a given time frame
M = total nominal amount of money in circulation on average in the economy
P = Price level
T = Aggregate real value of transactions in a given time frame.

At its heart QTM is a simple deterministic equation. Obviously if T widgets are sold for P dollars in a day and a total of M dollars changed hands then the amount of times each dollar changed hands is Vt.

However, to argue that excess savings changes the value of money via QTM is flawed or at least incomplete.

If I reduce M because I have saved it by hiding it under a mattress or placed it in cold storage all the QTM dictates is that one of four things will occur.
1) Prices will drop
2) The overall quantity of goods that change hands per unit time will decline
3) Each currency unit in the economy will change hands more often
4) Some combination of 1-3

The QTM does not dictate that excess savings will make things cheaper for everyone else via reduced prices. There are two other outcomes that will satisfy QTM where prices remain unchanged.

 

I have no problem with most of the advice presented regarding self control, personal responsibility, free will et. However, the comments get stranger the farther you go down the thread.

When the author states "I do not have a child and will never have one" and then goes on to give parenting advice... well lets just say my respect for the overall work took a nose dive. The argument that a baby cries because it is a soul horrified that it has been trapped in this physical realm is clever but there are other perhaps more plausible explanations like the pain of having your head forcibly smashed through a small opening. The skull in infants is not fused so the six bones are literally deformed and compressed so they can overlap when the baby passes through the birth canal. Babies are known to cry when they are scared or in pain.

I disliked all of the Christian bashing. While not religious myself I make it a point never to try to attack the faith of another. I view religion very much as a vaccination against many of the toxins in our society today both cultural and physical. Religious people by and large live in a healthier manner then most of the heathens like me. Intellect and discipline can get you there but it is a much windier path and easier to go astray.

There was nothing falsifable presented in this work. I walked away with the impression that this was some ones clever way to spread a personal belief system on a conspiracy minded forum. According to the PDF that means I am doomed to another life in the physical world. I can live with that.
  

Complex topic here and worthy of some discussion. NotLambchop you and rpietila are discussing separate although not independent variables.

rpietila is addressing the destructive impact that inflation has when it is introduced as a mechanism to suppress price information. You are countering with the negative effects a lack of inflation has on growth.

These arguments are not mutually exclusive and in fact both are correct.

Insidertrading. I would not call myself an expert but I answered your question recently in another thread. I will post that answer here.

rpietila that brings us to the second of your two posits. The first which kicked off this recent debate I believe to be a genuine insight as I argued upthread.

However, I was curious about the second. You mentioned the fact that the supply of gold has not decreased and that this was important. I was curious as to why.

In the example above you failed to account for the debasement itself which in a free market is recaptured by the economic entities in proportion to their productivity.

Thus the investor making 5% ROI in a 0% debasement enviornment may make 5.25% in a world with debasement. If he does the investor capable of 10% ROI would be expected to make 10.5% (under the simplifying assumption that the debasement itself does not otherwise change the ROI). The exact amount of debasement captured would depend on the productivity distribution and the amount of debasement.

If you rerun the example with the assumption that economic actors capture debasement at a rate proportional to their productivity you see that the relative shares of the pie do not remain the same. As you raise debasement you increase the transfer of purchasing power from the poor to the rich. Yes you also in theory increase overall aggregate growth and to a point may increase overall prosperity due to trickle down economics. However, in the world you are advocating a world where anonymity is used to chain socialism there is no way to return that lost purchasing power to the poor.

Such redistribution in the name of growth can be justified up to the point where the poor do not suffer from the redistribution. That level is a debasement rate equal to the aggregate growth rate. A debasement rate below the growth rate redistributes wealth from rich to poor and stunts growth overall. A debasement rate above the growth rate redistributes wealth from poor to rich and increases growth. It is only with a debasement rate that equals the aggregate growth rate that redistribution zeros out. At this level purchasing power taken from the poor via debasement is returned to them via growth.

One can argue that we are better off if we debase in excess of the aggregate growth and increase the transfer from poor to wealthy beyond equitable levels in the name of growth. However, to justify such a system you would need to tax the wealthy and later transfer a portion of their gains to benefit the poor. Our current economic situation and the multiple problems with unrestrained socialism are powerful arguments against this solution.

In a world where debasement of the currency is competitively distributed and there is no redistributive taxation the arrangement that optimizes outcomes for the largest percentage of the population over time is world where debasement is set equal to the aggregate economic growth.


I agree that where the debasement goes is critical. In my argument above I am assuming that the debasement is via free market competition and equally distributed based on productivity.

I did address the fact that there isn't one debasement rate. I replied that because of the Bubble Theory of Money optimal game strategy will likley (eventually) lead society to standardize on a single asset as a store of value. However, I admit that this conclusion is somewhat speculative.

Are we reaching the limits of utility in this debate? I think we both want to wind it down. Anything further to discuss?

Edit: Debasement could also be directed elsewhere with radically different results. For example it could be distributed equally to all market participants as a sort of guaranteed minimum income. If debasement was set equal to aggregate economic growth such an arrangements would maintain optimal incentives to invest. However, debasement in this situation siphons purchasing power from the wealthy/productive so growth overall would be reduced. This cost would be offset by the benefit of a formalized social safety net via guaranteed minimum income. Challenges to any such system including accurately identifying all participants, objectively measuring growth, and finding a solution to the collectivization problem outlined in the OP. Unfortunately these technical challenges appear insurmountable at this time.   

 
Ok it is clear to me that I have not effectively communicated my argument so let's go another round and I will do so in a more formalized fashion. Lets examine the issue from the bottom up rather than top down and examine the game theory behind the decision to invest.
Observe the case of an investor who is capable of making investments over his lifetime with a average annual return of x percent annually while operating in an economy that is growing at y percent each year and a monetary unit that is debased at z percent.

Scenario #1: x > y (Return on investment exceeds average economic growth)

In Scenario #1 the investor is capable of achieving average real returns greater then the average growth in the economy. In this scenario the investors decision is easy and he should always invest. The investor is the upper elite in terms of productivity and will always be better off investing regardless of currency debasement.

Scenario #2 0 < x < y (Return on investment is below average economic growth)

As you pointed out productivity is power-law distributed. Therefore it is mathematically impossible for the majority of humanity to fall into scenario #1. Most of humanity are and always will be be in a situation where their investments on average generate a real return that is less then the average growth rate of the economy.

The ideal outcome for humanity is that investors in this situation make these net positive but lower return investments. The growth rate y is not a single value but rather the aggregated sum of the growth vectors over all the individuals in the economy. If investors in scenario #2 do not invest the value of y and prosperity overall is reduced.

The majority of humanity in scenario #2 face a free rider deliema. In the extreme situation of z = 0 (no debasement) they are decisivly better off not investing and letting the overall growth in the economy increase their purchasing power. In this situation instead of making net positive investments the majority of humanity gain most by parasitizing the gains of the upper elite and prosperity overall is reduced.

This delima can be solved by introducing a non zero debasement rate z. As we raise the debasement rate individuals lose the incentive to be free riders. At a debasement rate of z = y all inverstors in scenario #2 like those in scenario #1 have a positive incentive to make net positive investments. Money loses the ability to parasitize on the gains of the productive. Furthermore money at this debasement rate maintains its ability to act as a store of value. Meaning that with a debasement rate of z = y a saver who chooses to defer consumption will still be able to purchase a like basket of goods and services in the future.

Now lets examine the situation where z > y and debasement rate is set in excess of the underlying economic growth. All investors still have optimal incentives to invest. However, what changes is that individuals on the upper portion of the power-law distribution now gain purchasing power in excess of what they actually produce.

To understand why this is the case we need only look at the example of an investor achieving returns of y in a world where z = 2y (a world where an debasement is twice the rate of aggregate growth). Such an investor is achieving a growth rate that matches the average in the economy, however, his rewards do not reflect that.

If such an investor starts with initial capital C then his returns over n years can be calculated as follows

Return = C((1+y)^n * (1-z)^n)

You can plug in different numbers to see what the exact result will be for varying levels of growth and debasement. However, in all cases where the debasement exceeds the average economic growth z > y our investor who contributed an average share to the growth of the overall economy finds that his capital significantly depreciated over time. Where does that purchasing power go?  It is redistributed to the upper elite who while they are the most productive gain purchasing power in excess of what they produce.

Such an approach does in theory maximize growth I do not dispute that. Historically this idea has been referred to as trickle down economics. However, you need to be honest about what debasement in excess of the aggregate economic growth really is. It is certainly not needed to maximize individual incentives to invest. Instead it is simply a redistributive mechanism. It is a form of reverse socialism redistributing from the poor to the wealthy because they in theory can better put capital to productive use.

I agree that in the end the market will decide between competing alternatives. However, in any realistic economy, real or virtual, there is a demand for at least one good which is used as a store of value that and is not intended to be used but simply to transfer purchasing power across time. The Bubble Theory of Money dictates that the optimal strategy is for everyone to standardize on the same asset as a store of value, and for this asset to be one of intrinsically limited quantity.    
 
My thesis is that a market of rational investors will choose the monetary unit that maximizes individual incentives to make productive investments while minimizing redistributive transfer from the poor to the wealthy. That level is a debasement rate that matches the rate of aggregate economic growth. You can make the case that society will be better off with reverse socialism if the wealthy later pay back their ill gotten gains by returning a portion of them back to the poor perhaps via the establishment of a guaranteed minimum income or other welfare type programs. However, any such an arrangement would be very difficult to stabilize in light of the problems outlined in the OP. Furthermore it is emphatically not compatible with anonymity.

Our differences appear to boil down to two issues:

1) You do not feel the frictional cost of time calculable and I believe it can be estimated and is equal to aggregate economic growth.

2) You do not feel that debasement above the frictional cost of time is a theft paradigm and I do.

I do not have further arguments to add to the ones above so I will leave you with the last word.

 

You are not addressing my fundamental argument.

I am not debating anything you wrote above. In fact I agree complete with your comments that today's low ROI investments are essentially theft paradigms.

There is a frictional cost of time, however, if you set debasement above this frictional cost you are simply replacing one theft paradigm with another. In the knowlddge age discussed upthread the elite knowledge workers would take the banksters place as undeserved recipients of the wealth of society. Likewise a debasement rate below the frictional cost of time is also a theft paradigm as was demonstrated upthread.

The only non theft paradigm is a debasement rate equal to the frictional cost of time.

My argument is that interval aggregate growth is the frictional cost of time.

I wanted to take a moment and give a recommendation regarding my favorite scifi/fantasy author John C. Wright. He is very much a libertarian author who writes about the distant future.

The Golden Age is set 10,000 years into the future. The future world presented is interestingly very much in line with the knowledge age discussed upthread.

Awake in the Night Land is probably the most intelligent harmonization of hard science fiction with religion that I have ever read. A profoundly moving story about an unstoppable evil relentlessly driving humanity extinction.

Chronicles of Chaos is just a great series in the fantasy genre.  A very fun and entertaining read though not related to the topic at hand.

Ok let’s say for the moment that you are correct and that there are no low risk/low reward investment opportunities in a future knowledge age. To the degree that this is true it only strengthens my overall argument that a debasement rate greater than the rate of aggregate economic growth is detrimental.

In a world without low risk investment options both low productivity individuals and the elderly are excluded from the investment market. Add in a large debasement and these individuals lose the realistic option to ever defer an immediate claim on real capital. Excess consumption results.

A debasement rate that matches the overall aggregate economic growth is the maximum debasement rate at which purchasing power is maintained relative to the time it was earned. At this rate a saver deferring a purchase will still be able to purchase a like basket of goods and services of comparable quality later. If you debase the currency faster than this you are stealing purchasing power from the elderly and the low productivity workers and transferring it to the high productivity workers in the name of growth. You create a system that does not provide optimal incentives for the majority of humanity in the hopes that the economic gains created by the new elite will offset the damage done. That sounds an awful lot like a more robust version of the system we already have.


Ok in my zeal to copy your prior logic word for word I inadvertently strengthened your statement. You stated that 5%+ debasement was probably correct and admitted uncertainty.

Nevertheless you have presented no logic to support that number that you believe to be probably correct. Whereas, I am presenting logic for why a debasement rate greater then the aggregate economic growth is not optimum.

Thus I maintain that the equilibrium point between the competing inefficiencies is a debasement rate that equals the rate of economic growth.

I am not certain we are moving towards consensus on this issue. Should we agree to disagree?

I00% agreement here this represents the revolutionary potential of cryptocurrency .


Weak argument I see no reason why a knowledge age would lack low risk low reward activities. The only requirement of a knowledge age is that such low ROI activities not be guaranteed or collectivized. Even if that were true (doubtful) you will still have a subgroup of bad investors (individuals who would like higher returns but on average achieve 1% returns over time).


Here you fall prey to your own logic upthread. You arbitrarily pick 5+% debasement out if a hat and declare it optimum, but you have presented no logic to support that arbitrary selection. Whereas, I am presenting logic for why a debasement rate greater then the aggregate economic growth is not optimum, for it encourages excess consumption and investment.

Yes savings is power law distributed but that does not alter the game theory. All investors must include the debasement of the currency into their calculations even those targeting high ROI investments.

This becomes more clear with an example. Lets examine an economy that is growing at 5%.
In this environment compare two investors 1) a manual laborer capable of obtaining a 1% ROI on his investment, and 2) an IT worker who is capable of a 20% ROI.

If the currency is debased at 5% per year both the laborer and the IT worker have a positive incentive to invest as they will achieve a return that is better than immediate consumption. However, if the debasement is raised to 10% the laborer no longer has an incentive to invest nor does he have any incentive to defer immediate consumption/spending as each day his purchasing power declines.

You can make the case that the wealthy in a knowledge age are capable of higher ROI investments and we should push debasement up in this way because it will cause wealth to further accumulate in the hands of those who can achieve a higher ROI with it. However, this is a very dangerous argument because you are essentially arguing that we should create an economic system that does not provide optimal incentives for the majority of humanity in the hopes that the gains created by the upper crust will offset whatever damage is done to the lower classes. To do so implies a great social debt to those on the tail end of the pareto distribution as they are essentially being thrown under the bus in the name of growth. That is the path to socialism and redistribution.
 
Edit: By growth of 5% above I mean the aggregate growth in the value of the goods, services, and knowledge produced by the economy.

Actually rather then being utopian I believe that something like this is the only way to optimize long term adaptability and growth. A basic social safety net smooths the fitness curve and thus facilitates long term long term optimization and adaptation. Such a safety net helps ensure trailblazers survive long enough to eliminate economic frictions.

https://bitcointalk.org/index.php?topic=365141.msg4916516#msg4916516

The challenges is how to fund it and most critically how to ensure the curve is only smoothed never inverted.

Agreed it varies for each individual. That does not mean an overall aggregate does not exist. I do not see why it would be impossible to estimate said aggregate.


So we must ask what level of debasement best serves society as a whole. Lets look at this from the prospective of the individual who wants to own apples. Assume an economy is growing at 5% and by random chance the efficiency of apple production also happens to exactly match that 5% growth.  

Examine the game theory behind an individual's decision to buy an apple now or later if debasement is equal to growth:

If he chooses to buy an apple now he gets 1 apple.

If he waits and chooses to buy an apple next year he still gets 1 apple.
(The individual does not lose his apple for failing to consume immediately. This limits the incentive for sub-optimal and indiscriminate consumption. Money maintains its purchasing power relative to the time it was saved and thus functions as an acceptable store of value.)

If he invests the money for a year and manages to match the rate of economic growth he gets 1.05 apples.
(The individual gets to partake in the efficiency gain in the overall economy which is fair because he participated in said growth).

In a real economy things are obviously more complex and an investor who chooses to defer claims on real capital now will likely lose purchasing power in some areas and gain it in others. However, if the debasement of the currency matches the overall aggregate economic growth then purchasing power will be protected relative to the time it was earned. By this I mean that a saver will be able to purchase a basket of goods and services that is comparable in quality and quantity to what he could have purchased when he deferred his initial claim. Money serves both as an acceptable store of value and the incentive remains to invest and not horde.

I am presenting logic for why currency debasement greater than the average aggregate growth rate is not optimal for it encourages excess spending/investment. Above I presented logic for why currency debasement less then the average aggregate growth rate is not optimal for it encourages excess savings/divestiture.

I maintain my claim that the equilibrium point between the competing inefficiencies is a debasement rate that equals the rate of aggregate economic growth. This is the level that provides the optimal incentives for society.

rpietila I agree with your thoughts above.

When examining non intuitive ideas like the pitfalls of excessive monetary debasement or the problems with assigning a 0% cost to time it is oh so easy to get lost in the complexity. I like to simplify such concepts as much as possible so the heart of the matter can be isolated. To evaluate the utility of these competing ideas it is useful to look at some extreme economic hypotheticals.  

Let’s start with a hypothetical world where there is an assumed 0% cost to time? Let’s say that this world is growing briskly at 5% each year and has adopted a fully mined cryptocurrency. What is a wealthy young cryptobarron to do in such a world? Should he invest his coin in productive but potentially risky business or should he simply HODL. If he locks his funds away for 40 years and growth continues unchanged he will increase his purchasing power by a factor of 7. After 60 years when his children inherit the money that original purchasing power will have increased almost 19 fold.

In such a world there is a tremendous incentive not to invest or take risks. Simply by doing nothing one gets a free claim on the future productivity and work of all those who are developing knowledge, and driving productivity growth. The reality in such a world is that it will not continue to grow at 5%. Money will be horded, investments will decline, and growth with drop. Only when the growth is much much lower will it be economically palatable to risk some precious cryptocurrency.

Is massive debasement best then? Excessive debasement has significant problems as well. Lets look at a very different economic extreme and compare how an economy functions under a debased and non debased currency.

Lets look at a Mad Max world  . It is a post apocalyptic world with 0% growth no investment opportunities, and no social safety net. The currency is gold but the technology to mine it has been temporarily lost. A worker in this world may earn a fixed salary his entire life (makes the math easier). If he works for 40 years before becoming disabled but lives an addition 20 years before succumbing it is easy to calculate how much he will need to save to provide for himself in his "golden" years. He needs to save exactly 33% of his salary for 40 years if he wants to maintain the same level of purchasing power for a 20 year “retirement”.

Now lets add debasement to this world and make it worse by adding a despotic government and a forced transition to fiat currency. If the new government debases the money supply by 5% a year but otherwise does nothing productive the economic situation deteriorates markedly for our poor worker. Even if he is one of the lucky ones and manages to captures some of that government spending (say enough keep his income in line with inflation). He will find it quite difficult to maintain his lifestyle once he no longer works. Our worker would need to double his savings rate to 66% each year if he expects to live 20 years post retirement and maintain equal purchasing power throughout his life. Other workers, those unable to capture any government spending do much worse.

In a world with limited growth excessive debasement decimates the elderly and those on fixed incomes.  The reality of the human condition dictates that we all face a potentially prolonged period at the end of our lives when we are incapable of productive work and must consume previously stored savings to survive. It is this fundamental human condition that limits how much debasement can be tolerated and why we start to fear and oppose debasement as we age.

The equilibrium point between these competing inefficiencies is a debasement rate that equals the rate of economic growth.  


If long term debasement exceeds the rate of economic growth it will introduce inefficiencies into economic decision making. Claims on real capital that optimally should have been delayed will instead be invested/spent. Society as a whole suffers as a result. If long term debasement is less than underlying economic growth it provides an incentive to bury money and in the end reduces economic growth again society as a whole suffers. Equilibrium occurs when debasement matches economic growth.  

Personally I always find AnonyMint's post to be both informative and very interesting. I often don't completly agree.  I suspect if I went through my own post history a good 25% would consist of me debating with him about one thing or another.

However, I have always found these debates to be highly interesting and informative. Case in point look at his most recent debate with aminorex here.

https://bitcointalk.org/index.php?topic=355212.msg10052932#msg10052932

Its probably the most technical and in depth debate about inflation in cryptocurrency that I have ever seen on this forum.

I don't know the topic well enough to really contribute so I am staying out of this one but I am certainly following it and enjoying the arguments back and forth.

However, +1 for meditation, great stress reliever. I know I certanily could use a little sometimes.

Edit: Changed my mind and decided I can advance the discussion. Just needed to think about it a little first.
https://bitcointalk.org/index.php?topic=355212.msg10076798#msg10076798

In what way are these mutually exclusive? Provided one does not neglect personal decentralized self-sufficiency why shouldn't a rational actor in our current environment also participate in the local collective and attempt to restrain said collective. To do otherwise is to yield the floor to those who will make decentralized self-sufficiency more difficult to achieve.

Lots of interesting back and forth. Lets see if some consensus can be achieved.
Essentially the arguments above boil down to the following.

1) OROBTC argues that the US may be screwed but everywhere else is in worse shape. OROBTC also notes that the US maintains several advantages in the physical economy.

2) Anonymint counters that the physical economy is declining and will be irrelevant in the future negating this US advantage.

3) pungopete468 argues that the massive gun ownership in the US coupled with the large minority of pro-freedom individuals will establish the conditions for a recovery in the US, perhaps following significant violent confrontation/fracture. He also argues that those in the USA should not abandon hope or abandon the dream that they have held onto for so many generations.

4) Anonymint counters that socialism will not be reversed in the USA and essentially that the factors listed by pungopete468 are insufficient. He argues that the Gen Y will putsh for more socialism and that this push cannot be stopped due to the factors listed in Understand Everything Fundamentally.

It is my opinion that all of these arguments are correct. The reasons for this are not immediately obvious. Lets start with the physical economy.

The Physical Economy

Anonymint is correct that the physical economy will decline into relative insignificance. He is also correct that the physical economy will collapse spectacularly when the debt bubble bursts. However, the physical economy will never disappear entirely. It is important to note that even in a full blown knowledge age the relatively insignificant physical economy will continually grow.

The physical economy is never going to disappear. There remain great fortunes that will be won by pioneers in the physical economy. As we transition to the knowledge age, however, these fortunes will decline along with the overall importance of the physical economy. The greatest fortunes of the future will be made in the knowledge economy.

The physical economy will collapse when the global debt bubble bursts. However, this collapse should not be mistaken for an immediate transition into insignificance. The physical economy will bottom at some (much lower) level and then gradually start to grow once more. It is only over a much longer time horizon long after the debt bubble is ancient history that Physical will fade to insignificance. OROBTC is correct that the advantages the USA has in the physical economy will continue to matter for the near term (the relevant planning horizon for those of us around today) Anonymint is correct that our descendants will see those advantages fade to relative insignificance (but never vanish entirely). As a store of value gold, in the long run, is likely to mirror the physical economy and decline into insignificance. In the short term having some on hand is probably good idea.

Resistance to Socialism in the US

In Anonymint's writings about Europe he predicts that Europe will not fracture but will instead grow more centralized. Unarmed countries like Japan with relatively docile populations will never fracture no matter how bad socialism becomes. It is very easy in unarmed countries for a central authority to maintain control through the police/military/violence. The mere fact that we are discussing the possible fracture of the USA is an indication that something is fundamentally different in the USA. Those 300 million guns spread among 80 million households do matter.

Socialism will not be stopped in the US. Those opposing socialism will not be able to stop generation Y and a population dependent on the government from taking the US down the road of totalitarian socialism. Anonymint is correct that those resisting socialism in the US will fail.

However, pungopete468 is also correct when he argues that Americans should not abandon hope and that "people can find it within themselves not to give up on a dream that they have held onto for so many generations; one that we've gone astray from". It may be impossible to stop the growth of socialism in the US, but it is entirely possible to slow it. This is not a battle that is starting now. It has been fought for the last 100 years. The socialist have been winning and will continue to win, but in the US they have been slowed. This ongoing battle is the reason the US has less socialism than Japan and Europe and the reason capital is fleeing the rest of the west to the USA. The result of this battle is that the US today has less taxes, a stronger economy, and less regulation. Socialism grew at a slower rate.  

It is entirely possible that a unified world socialism could strangle the fledgling knowledge economy in its infancy. If that happens we face a Dark Age. The outcome of the battle over socialism in the USA may be predetermined, but, one can lose every battle and still win the war. Resistance in the US will slow socialism globally. The West may expropriate its own high tech sector and destroy it, but this will occur later in the US. The population of the US will also get to watch firsthand as Japan and Europe go first into the socialist abyss and this will further strengthen opposition. This window of time bought by those who resist will allow the knowledge sector to thrive (for a time) in the USA even after the debt bubble bursts. The resistance will also distract and hinder a unified world socialism from potentially destroying the knowledge economy in its infancy. Anonymint is correct that socialism in the USA will not be stopped, that does not make resistance pointless.

Contagion and I are not really arguing. I am merely analyzing some of his ideas by subjecting them to a little stress testing. Overall as I have mentioned I am in complete agreement with his overall thesis. Indeed there are many different bright people with all sorts of theories as to how and why the economy will change. Of these, I believe that the theory presented by Anonymint and highlighted in the OP is the correct one.

What we have debated recently is exactly how quickly such a transition will happen and how it will impact individual countries and areas. Personally I agree with OROBTC that the decline of the physical economy and a transition to a true knowledge economy may take a while. I also believe that the USA has some advantages that will allow it to recover faster than the rest of the West when the global debt bubble bursts.    

Both of these debates are somewhat tangential and assume that the underlying theory of a declining industrial age and a rising knowledge age is correct. They matter if you happen to live in the USA (which I do) or if you have a significant investment in the physical economy (which OROBTC does) but even if both OROBTC and I are correct  it does not weaken the underlying thesis that we are in the midst of a transition to a very different economy.  


Anonymint scrambles his password from time to time when he finds he is spending too much time on the forum.