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Archive for 27. Oktober 2018

Debt Alarm Ringing

Posted by hkarner - 27. Oktober 2018

October 26, 2018

Debt is future spending pulled forward in time. It lets you buy something now for which you otherwise don’t have cash available yet. Whether it’s wise or not depends on what you buy. Debt to educate yourself so you can get a better job may be a good idea. Borrowing money to finance your vacation? Probably not.

Unfortunately, many people, businesses, and governments borrow because they can, which for many is possible only because central banks made it so cheap in the last decade. It was rational in that respect but is growing less so as the central banks tighten their policies.

Earlier this year, I wrote a series of articles (synopsis and links here) predicting a debt “train wreck” and eventual liquidation—an event I dubbed The Great Reset. I estimated we have another year or two before the crisis becomes evident.

That’s still my expectation… but I’m beginning to wonder again. Several recent events tell me the reckoning could be closer than I thought just a few months ago. Today, we’ll review those and end with a few suggestions on how to prepare.

Addicted to Debt

As noted, debt can be appropriate—even government debt, in some (rare) circumstances. I am glad FDR issued war bonds to help defeat the Nazis, for instance. Now, however, governments go into debt not because they face existential threats, but simply to keep their citizens and benefactors comfortable.

Similarly, central banks enable debt because they think it will generate economic growth. Sometimes it does, too. The problem is they create debt with little regard for how it will be used. That’s how we get artificial booms and subsequent busts.

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AI Guru Andrew Ng on the Job Market of Tomorrow

Posted by hkarner - 27. Oktober 2018

Date: 27-10-2018
Source: The Wall Street Journal By Sara Castellanos

The co-founder of Google’s deep-learning research team on the promise of a conditional basic income, the need for a skills-based education system and what CEOs don’t understand about artificial intelligence

AI Guru Andrew Ng on the Job Market of Tomorrow

Sentient artificial intelligence may take hundreds of years to develop, but AI is already beginning to transform nearly every industry, says Andrew Ng, a pioneer in the field.

Ng is the former chief scientist of Baidu, where he started a 1,300-person division that helped create the Chinese tech conglomerate’s AI-powered search engine, virtual assistant and other products. Before that, he co-founded Google Brain, the company’s deep-learning research team. His work on neural networks helped lead to the creation of an image-identification system that underpins the Android mobile operating system’s speech recognition. Ng also co-founded Coursera, an online education company.

In April 2017, the 42-year-old left Baidu to launch two AI startups in Palo Alto, Calif.: an online education platform called deeplearning.ai and Landing AI, which aims to bring AI to companies in manufacturing, agriculture and other industries. He recently spoke with The Future of Everything about how to create an equitable society in the age of automation, the way CEOs unintentionally mislead the public about AI and why—this time—the technology is here to stay.

AI Will Be Wired in Like Electricity
AI is a general purpose technology similar to the internet and electricity—applicable to a lot of industries. It’s hard to imagine running most companies or governments without the internet. In the future, we’ll have a hard time imagining how to run these things without great AI capabilities as well. Den Rest des Beitrags lesen »

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The Chinese century is well under way

Posted by hkarner - 27. Oktober 2018

Date: 25-10-2018
Source: The Economist

Many trends that appear global are in fact mostly Chinese

The world’s economic centre of gravity*

The economic centre of the globe is calculated using an average of countries’ locations weighted by their GDP

When scholars of international relations predict that the 2000s will be a “Chinese century”, they are not being premature. Although America remains the lone superpower, China has already replaced it as the driver of global change.

There is one economic metric on which China already ranks first. Measured at market exchange rates, China’s gdp is still 40% smaller than America’s. However, on a purchasing-power-parity (ppp) basis, which adjusts currencies so that a basket of goods and services is worth the same amount in different countries, the Chinese economy became the world’s largest in 2013. Although China is often grouped with other “emerging markets”, its performance is unique: its gdp per person at ppp has risen tenfold since 1990. In general, poorer economies grow faster than rich ones, because it is easier to “catch up” when starting from a low base. Yet in other countries that were as poor as China was in 1990, purchasing power has merely doubled.

China’s record has exerted a “gravitational pull” on the world’s economic output. The Economist has calculated a geographic centre of the global economy by taking an average of each country’s latitude and longitude, weighted by their gdp. At the height of America’s dominance, this point sat in the north Atlantic. But China has tugged it so far east that the global centre of economic gravity is now in Siberia.

Because China is so populous and is developing so quickly, it is responsible for a remarkable share of global change. Since the start of the financial crisis in 2008, for example, China has accounted for 45% of the gain in world gdp. In 1990 some 750m Chinese people lived in extreme poverty; today fewer than 10m do. That represents two-thirds of the world’s decline in poverty during that time. China is also responsible for half of the total increase in patent applications over the same period.

For all its talk of a “peaceful rise”, China has steadily beefed up its military investment—even as the rest of the world cut back after the end of the cold war. As a result, the People’s Liberation Army accounts for over 60% of the total increase in global defence spending since 1990. And all of this growth has come at a considerable cost to the environment: China is also the source of 55% of the increase in the world’s carbon emissions since 1990.

Sources: Economist Intelligence Unit; Global Carbon Project; Maddison Project Database; SIPRI; World Bank; World Intellectual Property Organisation; The Economist

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The Decline of the West, Again

Posted by hkarner - 27. Oktober 2018

Date: 26-10-2018
Source: Project Syndicate by Helmut K. Anheier

Helmut K. Anheier is Professor of Sociology at the Hertie School of Governance in Berlin.

In the last century, not a decade has gone by without some proclamation of the West’s demise. But one thing sets today’s warnings apart: in the economically successful countries of Asia, the world now has a clear alternative to Western-style liberal democracy.

Heinrich August Winkler, Zerbricht Der Westen?: Über die gegenwärtige Krise in Europa und Amerika, Munich, C.H. Beck, 2018
Joschka Fischer, Der Abstieg des Westens: Europa in der neuen Weltordnung des 21. Jahrhunderts, Cologne, Kiepenheuer & Witsch, 2018
Jonah Goldberg, Suicide of the West: How the Rebirth of Tribalism, Populism, Nationalism, and Identity Politics Is Destroying American Democracy, New York, Crown Forum, 2018
Kishore Mahbuhani, Has the West Lost It? A Provocation, London, Allen Lane, 2018

BERLIN – These are challenging and unsettling times for the West. The combination of resurgent nationalism and geopolitical uncertainty feels less like a temporary disruption and more like a fundamental transformation – one that may well spell the end of the era of Western global dominance.

As the sun sets in the West, many argue, it is rising in Asia. Indeed, the question no longer seems to be whether Asia will supplant the West as the world’s dominant region, but rather when that will happen – and how smoothly. Den Rest des Beitrags lesen »

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