Major Economic Trends Part 1

Thursday, May 22nd, 2008 @ 7:32 pm | Finance

This is part 1 of a x part series in which I will investigate and try to determine major economic trends that will lead the way into the 21st century.

Commodities

we live a world in which commodities and natural resources are limited and demand is ever growing. The following is a list of commodities that I have singled out as showing impressive growth in the future.

Lithium – With the world of mobile electronics, plug-in hybrid vehicles and travel based lifestyle; batteries are an ever growing part of the occasion. As the current mass produced battery is based on lithium ion / polymer technology these resources will be faced with ever rising demand. Especially with the onset of electric cars, trucks and buses starting in 2010. The adoption rate for these technologies will likely be parabolic especially with growing energy prices. Despite other solution being on the horizon these first generation of products will produce exceptional demand for lithium.

Barium/Titanite – the next generation of battery technology. This will likely begin commercial adoption in 2012 – 2015 in increasingly higher rates. The batteries are dry, lighter and carry a much higher energy density than lithium ion.

Platinum – is a precious metal commonly used in electrodes for batteries. FUEL CELLS, catalytic converters, and electrical instrumentation. Demand will rise with the increasing attention to environmental issues and the rising middle class in India/China now capable of affording vehicles. Also used to convert CO2 to gasoline see below.

Coltan (Niobium & Tantalum) – used heavily in capacitors for electrical equipment. During the great silicon valley boom of the late 90’s the illiquid market for this metal saw producers charging amount based on word of mouth. There was no exchange and the price shot up from $30 to over $200. With the perceived shortage causing many electronics producers to hold large inventories. The economic slowdown following the dot.com bust and the large inventory caused a decline in prices back to $35 region. The inventories are beginning to run low and many analysts expect a run up in this mineral.

Uranium – Peak oil and export land model will cause a rapid deterioration of of net exports in this post peak world. Uranium despite it’s high capital costs is positioned well to supply the world it’s electrical needs. As plug-in hybrids eat away at gasoline market share, there will be a growing trend away from day-time electrical consumption to nighttime consumption for charging America’s batteries. This will cause an increased demand for nuclear power. Solar energy is not positioned well to supply nighttime loads or as a peaking power plant due to their highly non-linear production capacity. China is planning to bring 20 nuclear reactors online by 2020 quadrupling their capacity.

Electronics

WiMax / Fiber to the home – the new broad band technology aimed to be implemented alongside fiber to the home. Look for all major laptops to include WiMax in complement to Wifi. Broadband demand is growing at a exponential rate thanks to the likes of Youtube who as of now consumes more than 10% of all internet bandwidth. This is an amazing feat given all the IP technologies consuming bandwidth today. HD content will likely quadruple this figure in the following years. A bluray dvd is approximately 40Gb look for content providers to moving to an online ondemand format.

Hard Disk manufacturers – we live in a information rich society. Facebook, Youtube, Myspace, Google and Yahoo have hundreds of petabytes of storage and are always looking for more. Western digital, Maxtor and others will reap the benefits. Hybrid drives are on the way combining flash and platters. Benefits include high capacity, storage based on frequency of use, and better reliability. Flash has issues with rewrite capabilities, if flash is used to store highly volatile data it begins to fail.

Wireless Power – MIT is leading the way with efficient technologies to transfer electricity short distances wirelessly. Imagine sitting at home with a laptop that never died, a cellphone that was always charged when you left home and remotes that didn’t need batteries. REALITY. I am waiting for the company to go commercial and spinoff.

The world has massive coal reserve that can be converted into a readily usable substance with high efficiency. 1 BTU of coal can be converted to 0.8 BTU of gasoline or natural gas substitute. This is already being done in Australia, China and in high volume in South Africa. Coal to liquid and Coal to gas is a way to leverage out resources and existing infrastructure. It is much more sustainable than ethanol and solar. I am not arguing that ethanol doesn’t have it’s place but it will never be a replacement for gasoline in either corn or cellulosic varieties. If every acre of land in the United States was used to grow biomass for ethanol production it would still not be enough to produce enough energy to meet our fossil fuel needs. If the entire food supply of the world was used for ethanol it would also not meet our energy needs. We need time to transition and change our consumption habits move closer together, grow food locally, and build things locally as energy prices rise.

Hybrids are a show piece for the media. They are part of the problem and not a solution. Jevon principle, whenever someone or something causes an increase in the efficiency of the use of a resource, the consumption of that resource will increase. People don’t get it and the media is fooling people into thinking their are doing something good. Granted it is pretty counter intuitive. Capitalism. When something gets more efficient, you get more work per dollar (resource). People will conserve now, but today’s conservation will temporarily lower prices but stimulate people to do what they are currently doing. Living 30 minutes from work, having a huge house…etc. Hybrids merely allow people to live status quo as growth continues to trump away gains.

Solution!

Carbon Dioxide to Gasoline – Yes, you read that correctly. The Sandia National Laboratories in New Mexico is working on a way to convert carbon dioxide into gasoline equivalent using solar radiation. The technology is still 15-20 years away, and is what we should be working toward. It kills two birds with one stone. For now lets just focus on not starving 3 billion people to death by fermenting the worlds food supply.

By Thiago Avila

Next Part:

Public Transit

Water purification and infrastructure –

Health Sector