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The Network Propositions / 2600-2654
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2600 - 2654
The onset of the new ice age will be a 'double-edged sword', in that it will cause huge crop losses and famines, while increasing calorie-intake needs. World population, geared to present high food production levels, will quickly level off and then fall dramatically.
All countries will be affected by worsening weather. Countries (like China, Japan, India, Pakistan, Bangladesh and Russia) with large grain-dependent populations, will suffer greatly. Food-importing countries (like UK, Germany, Italy, Iran, Netherlands, Belgium and Taiwan) will also be badly affected. The third-world subsistence countries of Africa, Asia and Central and South America, will find themselves in a dire situation.
As staple food products are characterised by inelastic demand schedules, their prices will sky-rocket. On the other hand, demand for most manufactured products will drop sharply. The terms of trade of food producing countries will move very favorably, while the terms of trade of manufacturing countries will move unfavorably. Manufacturing countries which are heavily reliant on food imports, will experience a large adverse movement in their terms of trade.
Countries, such as New Zealand, which have been fighting for access to overseas markets for their export foodstuffs, will find many buyers to be now eager for supplies. The problems of New Zealand farmers will be problems of production, rather than those of marketing. How to develop cold-resistant strains and how to avoid crop and stock losses will be the focus of attention.
The worldwide downturn in manufacturing will cause an upsurge of unemployment in manufacturing-dependent countries ... and, with sky-rocketing food prices, the cost of living will rise, while average real incomes will be falling.
Food shortages will have disastrous effects on large urban populations and will result in a deterioration of the quality of urban living. Rising levels of city crime will add to the deterioration and there will be an exodus from the cities to the country.
Events will justify the farm-subsidy and agricultural protectionism policies of the past. Manufacturing countries which have thereby retained better food self-sufficiency will be rewarded to the extent of their self-sufficiency.
The weather deterioration will put world economies and politics on a 'sauve qui peut' basis and regional cooperation will become a thing of the past. Every country will seek to become as self-sufficient as possible. Protectionism will increase and a siege mentality will prevail.
As a higher proportion of incomes will be spent on food and other necessities, discretionary spending will be sharply reduced. Manufacturing industries, generally, will suffer reduced demand for their products.
As rates of interest rise, demand for bank finance will decrease, and the bankers' working margin (between interest paid and interest charged to clients) will decrease. At the same time, bad debt costs (from loan defaults) will continue at high levels. Some banks will fail.
As GNP, profits and incomes decline, government income declines, at a time when government expenditure on social services (unemployment benefits etc.) is increasing: Government deficits increase.
As most governments, worldwide, are faced with increasing fiscal deficits, they will compete actively for international funds to be invested in their issues of government stocks and bonds ... and the rates of interest will increase.
As future benefit flows decrease, the geometry of value changes, and liquidity preference increases, and interest rates increase generally, and long-term interest rates increase faster than short-term rates.
Since the beginning of the industrial revolution, returns from capital investment in automated production have been generally profitable ... but, from now on, decreasing consumer demand, increasing long-term interest rates, increasing rates of obsolescence, and increasing competition, will cause high long-term capital investments in automated production to be generally less and less profitable.
As large capital investments become less profitable, company share investments will become less profitable. Investors will gain better returns from government stocks and bonds than from most share investments. Company shares will be less popular and joint-stock companies will become less important in developed countries.
Creative intelligence randomises energy and quality ... and does not, of itself, accumulate money-claims. It may do so, but financial wealth is incidental to the actions of creative intelligence.
Creative intelligence naturally works to release and randomise energy and quality. It is only when an ego-will wishes to express itself formally that creative intelligence tenses and enforms energy and quality ... and it is only at the behest of an ego-will that creative intelligence accumulates money-claims.
Green' eco-restrictions increase cost of production and divert demand from locally produce goods to cheaper imported goods, and cause industries to re-locate to less restrictive environments, thus reducing employment in 'Green' areas and increasing employment in 'non-Green' areas. Where overall supply conditions are rendered less than optimal, production net cost/price increases may reduce total effective consumer demand. Re-distribution of consumer demand, from 'Green' to 'non-Green' areas is, however, the main effect of .. Green restrictions on production.
INDEX to the Network Propositions
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