 GLOBAL FUTURE ANALYSIS

FACTS | EXPONENTIAL GROWTH

In 2007/2008 the world suddenly realized (due to market prices, not by analysis) that they celebrating two cumulative developments: 1) the arrival of enormous numbers of new hard working young adults on planet earth (by population growth) and 2) the arrival of 3 billion new people to the wealthy lifestyle (by purchase power growth), and all of them (3 billion) arrive at the same time together. These two developments were connected and happens thereby simultaneously. By these two developments it's getting real crowdedly in the global market place, demand outstrips supply more an more, prices going up and up. Both factors (young adults population growth and purchase power growth) results in an exponential growth of global consumption levels. Exponential growth that was not foreseen and therefore not programmed in any economic data model of any economic or geopolitical data model. More people and changing habitats are joint forces (1+1=4), creating a 'perfect economic market storm'. Ratio's are the fundamentals under exponential growth: producing cars demands some iron and energy, but driving a cars each day demands each single day of it's existence new energy, drives exponential growth. Knowledge of the car to fuel ratio is needed, if the 'car population' increases at accelerating speed. Producing meat takes wheat, production of wheat takes soil, fertilizer and water. Changing daily food behaviour changes of billions drives exponential growth. Than is useful to know the meat to wheat ratio of each production method and the several ratio's connected to wheat. Economists had till recent no historical experience with exponential growth at all: they need the knowledge of biologists to understand it. In biology exponential growth is common part of science. Exponential growth described simple: If doubling time of something is 1 year, and Y1=1.000, numbers will look like: Y1=1,000, Y2=2,000, Y3=4,000, Y4=8,000, Y5=16,000, Y6=32,000, Y7=64,000, Y8=128,000, Y9=256,000, Y10=512,Ł000, Y11=1,Ł024Ł,Ł000 (a thousand times more volume in only 11 years), Y12=2,048,000, Y13=4,096,000, Y14=8,192,000, Y15=16,Ł384,000, Y17=32,768,000, Y18=65,536,000, Y19=131,072,000, Y20=262,144,000, Y21=524,288,Ł000, Y22=1,048,Ł576,000 (a million times more volume in only 22 years), etc. The year doubling is just an easy to understand exponential growth illustrating example. Exponential growth of such a mass of people in the same time was never seen in economy till now. This is the reason economists all just failed in their projections concerning the demand of China. Exponential growth gives 'hockey stick" diagrams and hockey sticking in economics has been always similar to embedded calculation faults. The new challenge for economists is to find the important exponential growth driving ratio's of the future: plane to fuel, car to fuel, meat to wheat, wheat to water, reefer distance to energy, cool distance to energy, dry distance to energy, road distance to energy, rail distance to energy, ship distance to energy, air distance to energy. Till these are calculated the output of all global resources demand forecast models are worthless, or even negative contributing. The IEA (International Energy Agency) is one of the leading economic research institutes that has suffered till now from this missing exponential growth factor in their calculations, resulting in by market reality wrong proven projections/forecasts time after time. They need to find the right actual calculation ratio's and create new data models. Till than only the situation of the past can be analysed scientifically (by analysing market volumes and market prices in relation to GDP's and other economic indicators placed in time frames) and any projection of the future should be marked as 'not with exponential ratio's calculated yet'. Our finance system is based on exponential growth, otherwise it runs 'dry' as money for interest payments not is created by the process of money creation by loans, but interests must be paid by further loans, etc, etc, etc. Exponential growth in a world with finite resources is not a sustainable concepts. Everybody who understands these issues certainly will understand.

Author: Gijs Graafland

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