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The Secret at the Center of all Capitalist Growth

Some of my readers and friends have begun challenging me, which is something that I welcome. Please send your feedback and insights here.

More specifically, they challenge my pretense that I will have something new to prophesy each and every day.

“Who do you think you are?” they say, “Rush Limbaugh or Bill Bonner? Or the Weather Channel?”

With all this daily volume they imply strongly, “Quality is going to suffer. You are going to start jabbering and droning and repeating yourself!”

My response: Haven’t you guys been listening?

Repeating yourself is the secret of the learning curve at the center of all capitalist growth. With every doubling of total units sold, costs drop between 20 and 30 percent.

There, I’ve just repeated myself and you may have learned something.

So I’ll get better and better as I go jabbering along!

But some of my critics are smarter than that.

There Is No Reason to Halt High Tech Trade

Just yesterday I defended Huawei in my writing as a great champion of Chinese capitalism and leader of 5G wireless.

Someone wrote to me: “Chinese law requires all citizens and companies to cooperate with Chinese intelligence. Therefore, how can we not assume that Huawei cooperates with Chinese intelligence?”

My response: We cannot assume that Huawei – or any other Chinese, Israeli, Russian, or even US company – does not cooperate with national intelligence or military services. The NSA aggressively hacks networks around the world.

Therefore we must assume that any particular router, switch, or other device may be guilty until proven innocent.

Purchasers of all such equipment deployed in critical path functions should apply open source software requirements, crypto-signed firmware, and other techniques as necessary. But telecom gear may be a relatively small problem. As we know, turbines on the power grid are deeply vulnerable to attack by mere small arms and have not been effectively protected.

We also must understand that telecom gear supplied by any other provider may be hacked by Chinese or Jihadist parties. After all, there were a billion breaches of the net last year.

Just yesterday, a huge breach at Capital One released the data of 106 million customers to the ether. The Internet is essentially a porous pyramid where all the data, money and power rises to the top where it can be hacked. We definitely need more redundant, rad-hard, and testable systems.

Contrary to a recent National Review cover story, it is perverse and self-defeating to treat Chinese port and container ship surveillance and control infrastructure as threats rather than as important steps to combating a global danger.

As supreme beneficiaries of world trade, the Chinese and Huawei should be induced to become partners with the US in solving these problems. Personally, I advocate a blockchain-based Internet.

Huawei recently had me speaking to hundreds of their employees over a two-day period about such solutions and their leader Ren Zhengfei has endorsed this general approach. Recently, he urged China to launch a cryptocurrency to compete with Facebook’s Libra project.

These security problems are facts of life that in no way justify halting high tech trade and disrupting global supply chains.

Money is Time

I also got several queries about my discussions of money as time and the time price as the answer to the many enigmas of inflation, deflation, and sustainability in the world economy.

My friend Ashby Foote wrote: NASA trips to the moon. Wonder how the cost today would compare with 1969? Or the cost to build the Empire State Building today or the Hoover Dam? There are many big projects done 60 or 70 years ago that would never get done today because of the intractable morass of permitting and red tape of the Leviathan.”

My response: Excellent point. All such questions can be definitively answered through measuring the times prices on the dates that we want to compare.

Regards,

George Gilder
Editor, Gilder’s Daily Prophecy

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George Gilder

George Gilder is the most knowledgeable man in America when it comes to the future of technology — and its impact on our lives.

He’s an established investor, writer, and economist with an uncanny ability to foresee how new breakthroughs will play out, years in advance.

And he’s certainly no stranger to the financial newsletter...

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