The Only Way is UP!

Generali

cells wrote: »

in your example numbers above a 1.7% positive return is sustainable minus risk on investment minus time/cost of making and monitoring said investment minus risk on inflation outlook years ahead minus tax and political risk. None of those risks and costs are zero so the 1.7% 'real' sustainable return in your example is surely lower than the headline 1.7% return

I will still maintain that real rates of return will fall towards 0.
Its also noteworthy that the UK 10 year gilt is at 1.25% nominal so negative 0.05% real return with your 1.3% RPI figure. 10 years ago you would probably have said this was impossible


Going a further level into technology and the future there are various other factors which might take real returns negative within the next generation possibly strongly negative. AI or even near AI being one possible reason why real returns could go negative. I thought about writing that this is a low probability even but the scientist in me is saying no its not low probability its a guaranteed event we just dont know the time frame but if moores laws holds up it looks possible within my lifetime.

AI makes interest rates zero! Why?

cells

Generali wrote: »

AI makes interest rates zero! Why?

Its such a deep topic lots of books have been written on it and its fascinating. The best I can do in one post is to say that we either become extinct or gods not long after super intelligence AI. both of which take investments values to zero.

Generali

cells wrote: »

Its such a deep topic lots of books have been written on it and its fascinating. The best I can do in one post is to say that we either become extinct or gods not long after super intelligence AI. both of which take investments values to zero.

That or you're just making it up again.

Can you point me in the direction of one of these deep books by any chance?

antrobus

cells wrote: »

well when the first company makes it to forever let me know

That's going to be a bit difficult, considering you'll be dead.

mwpt wrote: »

...Of course, that could be wrong, I don't really understand the cells theory of NIRP.

You're in good company. Even cells doesn't understand it.

antrobus

Generali wrote: »

That or you're just making it up again.

Can you point me in the direction of one of these deep books by any chance?

Das Kapital.

cells

Generali wrote: »

That or you're just making it up again.

Can you point me in the direction of one of these deep books by any chance?

Books on AI don't deal with interest rates they look into what a world or humanity with AI will look like and many come to the conclusion we either go instinct or become close to gods. What would the rate of return ve in either case?

Generali

cells wrote: »

Books on AI don't deal with interest rates they look into what a world or humanity with AI will look like and many come to the conclusion we either go instinct or become close to gods. What would the rate of return ve in either case?

So the books now don't exist. I give up.

You seem like quite an intelligent man but your arrogance and pathological lying makes chatting pointless.

See you later. Have a nice life.

cells

Generali wrote: »

That or you're just making it up again.

Can you point me in the direction of one of these deep books by any chance?

http://waitbutwhy.com/2015/01/artificial-intelligence-revolution-1.html

This is a good blog on the subject. It is 3 parts and each part is quite long but worthwhile reading if you have an interest in the subject.


Or if you are more inclined
https://www.amazon.co.uk/gp/aw/review/0199678111/RDMGQLIT081BX/ref=cm_cr_dp_mb_rvw_2?ie=UTF8&cursor=2

cells

Generali wrote: »

So the books now don't exist. I give up.

You seem like quite an intelligent man but your arrogance and pathological lying makes chatting pointless.

See you later. Have a nice life.

The halo effect in reverse.

mwpt

Generali wrote: »

AI makes interest rates zero! Why?

It depends what you mean by AI. In this case, in one sense, I actually agree with cells. If super-human AI materialises (and it will, one day) then the resulting explosion in tech from that point makes everything before seem trivial. It's a super trendy subject at the moment so I'm sure you've heard of the singularity.

However, what do interest rates even mean in the presence of super-human intelligence where we move into a post scarcity world. I have no idea how quickly things can move but I assume, very. The AI could invent virtually free energy, invent nanotechnology, building anything will become trivial, growing food will become trivial, reaching space to build habitats will become trivial. Remember, we presume these are tractable problems which a super-human intelligence will solve right sharp. We will have reached post-scarcity. Why would anyone even borrow at this point when resources will be virtually unlimited. Interest rates will not be zero, they will just be meaningless since people do not need to borrow.

Or will they? Will the AI devise a way to very cheaply mine commodoties or will humans interfere to create more scarcity by rationing commodoties somehow? I myself doubt they could do this but that is one angle which would mean a commodity price boom as never before. So many unknown unknowns.