Coming Advances

I am subscriber to weekly letters from Mauldin Economics and was quite taken with a recent letter entitled “The Age of Transformation” (you can sign up for free to receive John Mauldin’s letters. I am mainly a fan of Thoughts from the Frontline and Patrick Cox’s Tech Digest). I thought it would be good to share some of my main takeaways and highly encourage you to sign up for the publications on Mauldin’s website. Even simply scanning them, as I have a tendency to do, can be beneficial.

image source unknown; modified by Alyssa J Freitas

In “The Age of Transformation” he points out that although recently it seems as though the economy is getting better, what with the shrinking of government spending and the US deficit, this is not actually the case. In fact, the overly optimistic opinion that we will be able to grow our way out of debt fails to take into account that our debt is compounding and that ‘real’ growth is needed to accomplish this.

Mauldin does however discuss the exciting exponential nature of technological and economic advancement (which was much more fun to read. After all, who wouldn’t want to hear about an optimistic forecast for the future?). As technology and industry continue to advance at previously unheard of rates, there will be both great expansion in certain fields and even more destruction in others. Mauldin tells his readers that the solar industry is growing at 30% a year; this means that solar could soon be cost competitive with fossil fuels making no industry truly safe.

The takeaways for me (from what I summarized and other parts of the letter) are:

• be prepared for rapid changes and try to see in what industries these changes are going to occur, specifically so your investments can reflect it
• don’t be fooled into believing that the government will make good on its promises 
• even if you are not dependent on the government, when those who are realize they will not be getting what they expected it will affect all of society 

P.S. This is in no way, shape or form a sponsored post. I just love to share things that make me think and Mauldin’s letters happen to be one!