The Importance of Time-Price in Relation to Sustainability
In Friday’s Prophecy, I asked for you to let me know how we’re doing at Gilder’s Daily Prophecy.
So, before we get to today’s Prophecy, I’d like to ask one last time to hear from you. You can let me know your thoughts by clicking here.
Now for today’s update…
I’m writing from the MoneyShow in San Francisco, where last night I got into a disagreement with a member of the FundX Investment Group, with whom I shared a panel.
The member of the panel was Janet Brown and she wanted “sustainable” investments, “green” investments, “ethical” investments, “diverse” investments, and ESG investments whatever they are. She cited social science research showing that such investments outperform ordinary investments optimized for profits rather than political correctness.
In the strange world of upper-class institutional investment, political correctness seems to be the road to wealth and prosperity.
It was there I told the crowd that money is time and time-prices are the most meaningful prices.
Time-Price, Sustainability, and Where to Focus Our Energy
Time prices, as calculated by Gale Pooley and Marian Tupy, signify that world economic growth is roughly three times faster than measured by GDP and various deflators and inflation adjustments such as the CPI and Consumer Expenditure surveys.
Since 1980, while the population increased 71%, the prices of the 50 commodities essential to human life plummeted 72%. The greater the population the greater the abundance.
Human beings are not merely mouths, as environmentalists imply.
Human beings are minds, creative in the image of their creator.
As entrepreneurs invent new goods and services and learn to make them run more efficiently, economic growth rises in a tide of creativity.
That means that interest rates, adjusted for appreciating principal, are normal and debt levels are sustainable. The only threat comes from vandalistic politicians who think they can “win” a trade war by breaking up global technology supply chains and relationships.
As for Janet Brown’s appeal for profitable diversity, all such campaigns chiefly hurt their supposed beneficiaries.
The chief effect of diversity campaigns on boards, for example, is to fill them up with lawyers and accountants who know nothing about the business. It is part of what I call the “outsider trading scandal” under which the SEC cripples the crucial learning processes of capitalism by enforcing the rule, “Don’t invest in anything you know about.”
As for sustainability, the chief problem of the US industry today is the green notion that capitalism is not “sustainable” without sickling certain investments with a pale cast of green goo.
To Janet Brown, I asserted that US tech companies face fierce global competition and must be allowed to hire world champion talent of all sexes and nations.
We live in a world of erroneous numbers that tell us world growth is slowing, interest rates are turning negative, China exploits the US through the trade gap and steals our technology, and the middle class is being damaged by technology.
But time-prices tell us that world growth is surging, real interest rates are normal, and China is a vital asset for world capitalism. We should all get out and enjoy it, making investments around the globe, with a focus on Israel, China and the Cryptocosm.
Let’s give thanks for our blessings, and celebrate the prophecy of better times to come.
Editor, Gilder’s Daily Prophecy