Monday 31 March 2008

Don't forget the future

One of the guys I have taken an interest in recently is Prechter and Elliot Waves, what strikes me as I have been working through how they apply Elliot to markets is their inability to apply the same Fib math to innovation and technology. While the focus on the markets and economics they miss the underlying build up of the various technologies , just like Fibs bunnies innovation in alternates comes in waves but the insist on reverting to linear math when the plot the future potentials. Allot of things seem to be following this kind of number sequence, debt and saving cycles, solar and various other alternates, if the debt cycle is exploding in one part of the world doesn't equilibrium teach us that the saving cycle is exploding in another.

As I wander around China it seems intuitively ludicrous that its all going to stop somehow based on the tapped out debt cycle of the Western economies, sure some significant retracement is likely along the way but the energy and capital of Asia, the sheer momentum is like nothing the world thats experienced in history, the Chinese bunnies are reaching critical mass, Krondietiev is famous for plotting prices and production waves, whats apparent in his stuff read more deeply read is his belief that constraint breeds innovation, its the old thing about big budget and big companies not being able to innovate while the smaller operations create the innovation that eventual creatively destroys the larger less nimble leaders. Rising commodity constraints breed innovation, Peak Oil breeds exponentially cheaper Algae fuels, Peak Coal and centralized power constraints breeds distributed Solar and Fuel Cell power generation, Peak Water breeds free desalination and wave energy

Peak Population breeds more engineers, mathematicians and scientists to solve the problems of Peak Everything.

Kurzweil seems to have a point about the worlds point in the innovation cycle and from my experience of reviewing so many of these technology companies it seems to confirm his charts, we seem to be on the verge of a revolution thats hard to imagine

This being the case I am kind of looking forward to the likely crash of the equity markets that makes all these opportunities even cheaper

This is part of the reason I struggle with gold, the more I look at them the more I want to free up my gold. I want to free up as much capital as I can to this next revolution .

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