It was always going to require exceptional circumstances for investors in developed economies to go beyond traditional short term investments in emerging markets, and those exceptional circumstances would have arrived in 2008 post subprime if developed economies hadn’t taken exceptional short term measures like quantitative easing to paper over the cracks and buy time. Using a crisis caused by reckless lending and borrowing to justify even more lending and borrowing could only work out long term if it aligned with market forces in finding productive areas, not against them. Has it or hasn’t it?
So the money printing part is over now, not because governments and central banks can’t print more, they can (at least they tell us they can, and perhaps we should hope no unforseen event calls their bluff), but because like with everything in time the law of diminishing returns sets in, and in cases involving governments, ideology and social engineering, sooner rather than later. Then there is the argument that a ship sailing the wrong way needs to change direction before it cranks up the engine speed. And then there are hidden and unpredictable costs in fundamentally flawed policy choices.
You can only say from experience that there is always a price to pay. And the first step to identifying where a bill might fall is an unstinting analysis of cause and effect. And in this as in many other cases, all is not always as it seems. Take for instance waging wars and not only not winning them, but not winning them badly, at great expense, for zero gain, with crazy campaigns that even end with what the sworn enemy detects as cowardly retreat. In that case, the enemy would exploit the weakness that led to defeat, chase the loser all the way home, and present a bill that ends up dwarfing what the war would have cost to win if the loser had stuck to their guns, and superior cultural values.
And what about the classic bete noire, oil, and its demon fossil fuel partners in crime gas and coal? First we are told by scaremongering hippies in the 1970’s it’s going to run out, then fast forward forty years when we eventually find out combined reserves are good for hundreds of years of cheap energy, and the same lunatics are paid to tell us we must leave it in the ground, for this reason with a fancy name or that. No talk of reinvesting a percentage of profits in clean fossil fuel extraction or practical steps taken to mitigate the worst effects of extreme weather cycles that have been around since Noah’s Ark, no consideration that the timely extraction of existing reserves might produce a timely replacement a few hundred years from now, no curiosity about the advantageous affects to the earth and the human race of the greenhouse effect if indeed there is such a thing, just a lemming like rush into costly and inefficient renewables on a grand scale to save the world, when encouraging a fun hobby for individuals who could afford to pay for it was better policy.
Those of a practical disposition, capable perhaps of accessing their natural allocation of common sense, and coming to the right conclusions, have every right to temporarily lose their marbles at the irrationality of it all. How else to deal with the conclusion that those driven to champion renewables over fossil fuels for environmental reasons, often with hidden agendas to reduce human population and development to save a Gaia who’s been around a lot longer then they have, end up damaging what they are trying to save by holding millions below the poverty line, when poverty means bigger families and worse environmental degradation? Where is a basic application of the law of cause and effect? It’s much better for long term health to marvel at that, and the many other natural laws and laws of nature that keep us, the human race, where we are, a long way from our creator’s palace. It’s almost as if that is what was originally intended, with simple laws that can’t be easily seen making even the great religions more likely to lead us into dog poo than a cosy immortality with the one and only in some spacious palace of ideas.
Money printing, climate change, losing wars, you don’t need religion or some errant ideology these days to hide a multitude of sins, in the short term it’s enough to get the basics wrong, criminalise effective cause and effect analysis, abandon the search for a virtuous path, and get in behind the cover up. Under the circumstances, only a game changer would stand up with some new plan drafted out of real experience with at least cause and effect in mind. And if the game changer had any sense, behind a suitably thought provoking cover, like adventure capitalist. Only an adventure capitalist with an armour plated business model could see opportunity in emerging markets in times where the cowed majority seek solace in command and control hybrids. One with a special suit and curriculum vitae, and a training that can’t be found in the usual centers of learning, especially those frequented by mainstream venture capitalists, which invariably teach courses in progressive socialism washed down with an intoxicating brew of political correctness these days.