The Unnoticed Technological Explosion...It Is Only Going To Intensify Driving Prices Down

We tend to get so wrapped up in our lives that we fail to see the changes that are taking place around us. Technology has a way of "creeping" until it suddenly jumps out like it was hiding behind a bush.

The truth is that it was there all along.

Here is a little exercise that will reveal the exponential technological growth taking place right under your nose. For those old enough to remember, go back to the 1980s and count the number of devices that fall under the Laws of IT. To qualify for this, an item needs to have a processor, memory, or software.

Then do this for the 1990s. 2000s. And today.

What you will find is that 35 years ago, you had maybe one or two devices that fit in that category. Perhaps a gaming console. Ten years later, you could add pcs, dvd players, digital clocks....

...ten years after that, cameras, IPods, laptops, blackberries,

Fast forward to today....modems, tvs, thermostats, security cameras, LED bulbs, automobiles, appliances.

When you step back and look at how many devices have chips in them, it is astounding. This point is actually understated when you consider that one item, the phone, actually has multiple devices in it. It is has a camera, GPS navigation, video player, music player, calculator, and clock.

This is not only isolated to individual's personal lives. Do you think that Amazon took over the world of retail in one day? It sure seems like it yet it was something that was building for longer than a decade. Many companies failed to see what was happening until it was too late.

We are literally at the cusp of a huge move upward in technological progress. Blockchain is starting to take hold. This is one of the most powerful technologies the world ever saw because it unleashed the power of humanity. Most of our existence operated within the realms of centralization. This slows down the pace of progress since people need to operate within particular company structures.

Blockchain does something a bit different. It allows anyone to develop something and tie it to a blockchain. Open source allows individuals to take what is there and build upon it. This creates a continual upward progression of breakthroughs.

One of the biggest problems for society to deal with is the fact that prices get driven down under the scenario I am describing. Anything that comes under the Laws of IT gets less expensive, often very quickly. The products also get better as time goes by.

A few of the items that fall under this are computers, televisions, phones, chips, storage, processors, and computer cards. Remember when you could buy a 4 MB thumb drive for like $15? Now, what is the smallest one you can buy, 8 GB? They got very cheap.

The challenge is that we are not accustomed to a monetary system where the prices of items are falling. It is one of the reasons why people fell further behind over the decades. The inflation rate of even a couple percent meant that people got poorer as time went buy. The way to offset this is to have earning increase at a pace faster than the inflation rate, something that few did in the Western nations the last 20 years.

We are going to see this accelerate as AI starts to penetrate more of society. As the capabilities of this technology expands, along with the computing power, we will see tremendous jumps in capability. This will further drive prices down since research will be a nominal charge. The ability for these processes to eliminate human interaction speeds up processes, reduces mistakes, and makes the overall system less expensive.

The ironic thing is that few acknowledge that it is happening already. We witnessed the largest expansion of money via central bank easing in the history of the world. Yet, for most of that time, inflation was almost non-existent. Why is that? Economists will have all kinds of answers, most which don't satisfy even their most basic theories.

My view is that technological expansion the last 10 years put a ton of downward pressure on the entire economy. We are seeing more of our daily lives fall under the Laws of IT. Each day, more items are being digitized putting them in the zone of, as Peter Diamandis says, demonetized. In other words, shit gets dirt cheap, if not free.

Please reference music, video, information, and communication to really grasp this point.

The reason we do not see everything collapsing around us in terms of pricing is because there are still many monopolies erected. These entities ensure that little progress is made. When they are threatened, they turn to the government hacks to step in to protect their monopoly. This only delays the inevitable. Technology dammed up only becomes more powerful. Give technology time beating on that dam and it will eventually break through. And when it does, it is not just a spigot turned on, it is a tsunami for whatever is in the path.

A nice point of reference is the record companies holding onto the old model and turning to the courts to sue their own customers. Look at their record music profits for the last 16 years.

Blockchain and 3D printing are going to be the one-two punch over the next 3-5 years. These are the two technologies that are poised to explode. My estimation is that 3D printing is roughly 18 months behind blockchain. Both of these technologies will digitize more physical objects while reducing the "friction" from design to delivery. This will further depress the prices of items.

I believe that we will see a time where the basic necessities cost 1/10th of what they do now. In fact, as we are already seeing with the newer models created using cryptocurrencies, there is going to be a lot of items that are only accepted based upon paying the user. The " get paid to ___________" system will become the norm in a few years.

In other words, "Free" is not good enough.

So join me in stepping back a little from the day-to-day grind and see what is going on. We are witnessing society being rewritten right under our noses and few realize it. Instead, they buy into the old models believing the established systems will prevail.

On this, technology begs to differ.

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