Welcome to the World in 2030

The World in 2030 is about presenting news and analysis on what’s happening now and how it may affect us in the years to come. Of course we hope that worldin2030.com will last longer than 19 years, and if it does we’ll certainly change our name to something really catchy, say worldin2060.com. It may be somewhat arrogant or ignorant to think we can say how the world will look in 2030. But it will be fun to try. So what are the questions we’re hoping to delve into?

What will the workplace look like in 2030? Our coffee-shop office. For the last 200 years, industrialization depended on workers assembling in a common location to build things together. In the future, this will change. There is no reason that knowledge workers with laptops, WiFi access and videoconferencing should commute to offices in the future. Perhaps manufacturing and retail will require a physical presence to do a job, but most “office” jobs will be spun out to homes and coffee shops. Unfortunately for baristas, they may still have to commute to their place of work.

Will rampant inflation destroy the American economy? Since the Fed started printing money in the aftermath of the financial crisis a lot of hands have been wrung. Gold prices have surged on worries about the debasement of the US dollar. What will actually happen? With unemployment high, a wage-price spiral is unlikely. But gas and other commodity prices seem to rise even with wages stagnant. A debased currency will chase returns. Like a volcano erupting, all that lava has to go someplace.

Because of unemployment, globalization and technological advances, this money will not chase wages. But since a lot of dollars put into the system are bought by exporting countries like China, expect their reserves to jump while pushing up liquidity. The US is exporting inflation to China, where wages are surging.

But when China stops accumulating US dollars, inflation will take off in the United States, including in wages while unemployment drops. The Fed will allow this for a time to help inflate away our debts –devaluation by stealth. But when the party really gets going, far higher interest rates will be followed by a sharp recession.

Does rising inequality matter? Will it reverse? Rising inequality probably doesn’t affect economic growth as much as democrats claim. Equality doesn’t necessarily mean more consumption – just ask Western European countries. But the character of a vastly more unequal American society will be very different. People are generally less happy when there’s more inequality. So expect rising crime, social unrest and even socialist movements to take form if current trends in inequality continue.

When will we see our next financial crisis? Soon. One result of rising inequality is vast amounts of dollars accumulated by the rich to invest. Those dollars, instead of chasing wages in productive industries, chase assets causing bubbles. With low returns across the board on most investments, expect large sums of cash to chase the next hot thing. This could be social media or commodities. More hot money will follow, credit will increase, but eventually the story will end badly, over and over again.

What does a Paul-Ryan-budget America look like? America has some serious problems that require public investment. Infrastructure is on the fritz, health care costs are soaring, and public education is not preparing children for the new knowledge economy. Without these investments, America will look more like a Latin-American country in terms of transport, boom-bust economic growth, wages, immense inequality and social services. Heaps of elderly will languish in poverty and die early without the protection of government health insurance. They will certainly need help from their children. Expect the return of the extended family, proper slums of homeless in an economy that, while more dynamic, doesn’t provide high-wage jobs.

Does Brazil have what it takes to become a second American superpower? Around 200 million people who speak Portuguese and earn the same amount as your average South African at $10,700. But with growth at 7.5%, Brazil is already taking its place on the world stage.

Where should you invest in the future? Check out the map below from a CIA publication on changing demography. See the beige areas marked “youth bulge”? A youth bulge will eventually become a productive-worker bulge, resulting in huge economic gains over time (think Asian tigers). So invest in Brazil, Chile, Australia, North Africa, Central Asia and Southeast Asia.

Where will wars happen in the future? One simple answer – where water is at risk. Watch out for conflict between Brazil, Argentina, Uruguay, Paraguay and Bolivia, or between South Africa and its neighbors. Also, India and Bangladesh will experience severe tension over the Ganges River.

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