Rome Did Not Fall in a Day

The following chart shows the natural log of real disposable personal income per capita. Once again, constant exponential growth shows up as a straight line when using natural logs.<br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhDx2m_BtYQzoJKLKmh_CXayHVdJ7qxd_OVV9VEeNCnTBqTZCb5Eb3n7EBN0H_z62xrBjewS9YynnGN0pBCrarYK57Ino3K6_LPuqbbbDlpbLg9JhGZn7ww0ABtTbQulGPQJdt5g6gyB0k/s1600/Rome+Did+Not+Fall+in+a+Day.jpg" imageanchor="1"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhDx2m_BtYQzoJKLKmh_CXayHVdJ7qxd_OVV9VEeNCnTBqTZCb5Eb3n7EBN0H_z62xrBjewS9YynnGN0pBCrarYK57Ino3K6_LPuqbbbDlpbLg9JhGZn7ww0ABtTbQulGPQJdt5g6gyB0k/s320/Rome+Did+Not+Fall+in+a+Day.jpg" /></a><br /><span style="font-size: x-small;">Click to enlarge.</span><br /><br />There are at least a few things worth considering.<br /><br />1. Due to rising income inequality, the typical person isn't doing nearly as well as this chart would suggest.<br /><br />2. <a href="http://nextbigfuture.com/2013/12/automation-of-restaurants-would-allow.html">As automation takes on more and more human work</a>, how will billions of people find employment? How much of this is seen in the chart?<br /><br />3. The trend is definitely not a straight line. It is curving downwards with a very high correlation of 0.993. If the current trend continues, then we'll peak in 2058 (45 years from now). That's a big if. If I'm alive to see it, I'll be 94 years old. That's another big if.<br /><br />4. It is mathematically impossible for this upside down parabolic trend to continue forever. There must be a failure at some point. If nothing else, I don't think any rational person would expect real disposable personal income per capita to ever fall below zero. That would happen in 2164. This would certainly not be the first failure we've seen in recent years. We live in <a href="http://news-these-days.blogspot.com/2013/04/409-million-missing-jobs-musical-tribute.html">the era of long-term trend failures</a>.<br /><br />5. Any failure would probably be to the downside, since that is the direction the data is being pulled (much like a camel's back when more and more weight is placed upon it).<br /><br />6. Contrary to some, I therefore definitely believe that the long-term future is not so bright that I gotta wear shades.<br /><br /><i style="color: red;">“I believe in making the world safe for our children, but not our children's children, because I don't think children should be having sex.”</i> - Jack Handey<br /><br />Japan (our partner in ZIRP crime) must love Jack Handey quotes.<br /><br /><b>December 23, 2013</b><br /><a href="http://dotearth.blogs.nytimes.com/2013/12/23/japans-diaper-shift-and-global-population-trends/?_r=0">Japan’s Diaper Shift and Global Population Trends</a><br /><br /><div style="color: #666666;"><i>As I concluded: “…<span style="color: red;">world population could peak sooner and begin declining well below the 10 billion currently projected for the close of the 21st century</span>.”</i></div><br />For what it is worth, I'm very much a believer in the theory. In some ways, we're like locusts and the lowest hanging fruit has already been eaten (USA prosperity analogy). I know it sounds grim, but that's what I believe. The good news is that I'm thankful every day that I was born where and when I was.<br /><br />As seen in the chart, I'm not at all convinced that our children's children will be quite as thankful. It isn't that I think they will be unhappy being born in America. Far from it. I simply question the timing. <a href="http://en.wikipedia.org/wiki/Corruption_Perceptions_Index">It's not like I would tell them to move to China.</a> Let's just put it that way.<br /><br /><b>Source Data:</b><br /><a href="http://research.stlouisfed.org/fred2/graph/?g=qko">St. Louis Fed: Custom Chart</a>

Rome Did Not Fall in a Day

The following chart shows the natural log of real disposable personal income per capita. Once again, constant exponential growth shows up as...

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