The theory of the singularity predicts that as the technology sectors which are experiencing radically exponential productivity growth (doubling in output every 18 months is typical) grow as a share of the economy, growth in productivity and wealth will accelerate. It also predicts that as this happens, the economy will experience deflation. The Futurist argues that with the exponential tech sectors of IT hardware, software, and some biotech constituting 1.5% of GDP that this effect has started. He calls this the Tech Sponge. In his view the Tech Sponge explains why our wildly inflationary monetary policy is yielding no inflation. People with better macroeconomic chops (and models) will need to look at this question more closely but clearly something is going on.
If this is the case it will be difficult if not impossible to inflate away our excess debts. Which, of course has always been our Federal overlords' intention.
Oops.
No comments:
Post a Comment