2020 Will Be a Breakthrough Year
The world economy is on the verge of explosive and unparalleled growth. No, I’m not crazy. But I am crazy with excitement. That means you probably think I’m crazy.
Everywhere you turn it sounds like the world is coming to an end. Yes, with “the great technology stagnation,” the coming “climate change” extinction, the impeachment imbroglio, the staggering levels of debt, you may not know where I’m coming from.
Where am I coming from? Israel, that’s where.
I have decades of experience in the world of venture capital. And leading Israeli venture capitalist, Jonathan Medved, has the most impressive portfolio I have encountered in 50 years of contemplating venture capital.
“Time-Prices Spark Innovation”
In the face of onrushing doom, I’m smiling and having a ball. Around here in the Berkshires of Western Massachusetts, the weather is perfect: a season of “mists and mellow fruitfulness.”
Beyond the glorious weather, giving the lie to apocalyptic pessimism are both Medved’s breakthrough portfolio and the reality of improving living conditions for millions.
What do I mean?
Many costs are declining relative to the amount of labor required to buy them. These are called “time-prices.” Time-prices have been dropping by 3.4% a year since 1980.
Here’s an example:
Next month, we’re headed toward a lavish Thanksgiving dinner that can be purchased by a blue-collar worker for under nine minutes of work. That compares to 32 minutes in 1986, when most economists believe that blue collar workers were enjoying their heyday.
What this really means is that all the economic numbers, GDP, consumer inflation numbers, to global interest rates, to inverting yield curves — miss the world’s most important events, which always stem from innovation and new ideas.
The experts are measuring quantities, which according to the law of the conservation of matter, do not change. Our material resources, molecule by molecule, remain as they were in the stone age. What governs growth and progress is the advance of ideas.
Ideas rule. And through newer ideas, we’re organizing the raw products of the world into more useful and creative patterns that are lowering time prices. It’s steadily improving the world.
Now let’s take a look at one technology that’s about to improve the world…
I suspect you’ve heard of 5G by now. Here’s how “5G” is about to revolutionize communications.
The Electromagnetic Spectrum Lives On
As Nobel laureate physicist Richard Feynman observed, James Clerk Maxwell’s discovery of the unity of the electromagnetic spectrum was the most important event of the mid-19th century, leaving the U.S. civil war of the same year as “a parochial footnote by comparison.”
Today, in the form of 5G wireless, Maxwell’s rainbow of frequencies continues to reanimate the global economy.
With calls using low definition voice, mobile wireless today is mostly confined to a limited part of the spectrum.
But as Maxwell proved, frequencies are infinite for all practical purposes. 5G is opening up what my former colleague Bret Swanson of the American Enterprise Institute calls a “spectrum big-bang.” Wireless spectrum, he says, could grow by a factor of 10 during the next decade.
Governments still want to control the spectrum, as if it were as scarce as “beachfront property” and engineers could not figure out how to use it effectively without the guidance of Federal commissioners and politicians.
They auction it off to the most powerful companies for exclusive use, collecting tolls on the air. And then they harass and regulate the companies as potential monopolists of air.
I recently returned from Israel, where the use of the electromagnetic spectrum thrives. For almost two decades I have been following several companies pursuing the grail of software defined or “cognitive” radios that can range across the spectrum and find empty stretches to use.
Look Ma, no need for auctions or regimented airwaves!
I have predicted the steady movement of data calls and communications from licensed to unlicensed spectrum. Originally created for industrial scientific and medical uses, these bands now are crucial for everyone’s internet access. Sure enough, this year more than half of all calls are completed using Wi-Fi and other unlicensed spectrum.
Over the next several years this movement will accelerate.
5G will as much as double the amount of bandwidth currently available in the unlicensed bands of spectrum. Communications will migrate away from the toll lanes into EZ pass realms of relatively unregulated carriers.
Two of my Israeli spectrum companies — ASOCS and Celeno — appeared in The Israel Test and other of my writings.
ASOCS has a private 5G campus and corporate systems. Celeno is developing programmable radio and radar technologies for homes and businesses. Celeno is part of the Medved portfolio.
Next Year Will Bring Massive Breakthroughs
Other companies in it zap cancer tumors without damage to surrounding tissue, cure Parkinson’s disease, revolutionize chemistry, massively improve weather prediction, enable self-driving automobiles, identify you reliably by your movements, and accomplish a dozen other miracles.
Between the time-prices that signal huge continuing advances in the world economy and the upside surprise of new Israeli (and Chinese) companies and the advance of unlicensed 5G communications, I believe the global economy is ready for huge upward expansion.
Blown away will be the burdens of debt and the bloated finance sector that’s benefitted from easy money from the central banks.
During the next year, we will have breakthroughs against cancer and Parkinson’s. We will have a new architecture for internet security. We will have a proliferation of progress in blockchain and their applications. Around the world, central banks will vie with corporations and startups in launching new forms of digital money and Internet security based on blockchains.
We will come to grasp that the technological revolutions of the last three decades are real and permanent and coming together. They have moved the human endeavor to a new level of productivity and accomplishment.
Based on dubious and misleading data, the trade wars, monetary conflicts, climate delusions, and debt disasters that dominate the media and politics will shrink to relative insignificance.
That will be the huge upside surprise of 2020.
I have a track record predicting technological breakthroughs going back years. That includes predicting the smartphone!
Now, I have three big predictions for 2020 that I’m revealing tomorrow, October 16 at 7pm EST. And I’m confident they could lead to fortunes to investors who get in early.
On top of that, I’m giving away two extremely valuable things that you can only receive after you’ve signed into the live event.
To be able to claim these prizes, tune in. I will send you an email on Wednesday when I go live.
for The Daily Reckoning