Asymptote

I believe that productivity gains in all industries is asymptoting as the easy gains have been made and we get down to the fundamentals costs that are hard to reduce, like the cost of raw materials, labor or finance.

Cost can always be reduced but the ROI if doing so slows down over time.

Averaged across all industries we see a complex productivity curve, which, as I said, started asymptoting about 5 years ago, after the easy gains in software based intermediation were executed and done.

My belief is that the profits resulting from such productivity gains can’t be reinvested in the same industry since the ROI just isn’t there.

Globally this means that in every industry there is a surplus of stranded cash with nowhere to go since the usual place are saturated. Think bonds, stocks, investment and other debt.

Whence goes this excess cash? Real estate mostly. As cash, these reserves also acts to offset public debt with private wealth, so national economies aren’t as badly off as they look.

As this pile of cash gets bigger the fundamental economic model behind our economical management breaks down. The industrial revolution finally runs out of puff.

I see trouble ahead.