Commodities Top and Nanotechnology
Maoxian posted Bill Miller’s comments on commodities and how “pension funds are falling all over themselves to allocate a portion of their assets to commodities … AFTER the biggest bull move in 50 years.” Ray Kurzweil, in his book The Singularity is Near, predicts that most industries will profit from the exponential growth of information technology, except for two: commodities and real estate. Commodities because anything - even gold - will easily be produced from raw materials via nanofactories (which will likely be available by 2015). And real estate because people will be spending more and more time inside virtual reality.
Here is an excerpt from an analysis prepared for investors by Credit Suisse First Boston (via crnano.org):
Nanotechnology is a classic, general-purpose technology (GPT). Other GPTs, including steam engines, electricity, and railroads, have been the basis for major economic revolutions. GPTs typically start as fairly crude technologies, with limited uses, but then rapidly spread into new applications.
All prior GPTs have led directly to major upheavals in the economy - the process of creative destruction. And nanotechnology may be larger than any of the other GPTs that preceded it. Creative destruction is the process by which a new technology or product provides an entirely new and better solution, resulting in the complete replacement of the original technology or product. Investors should expect that creative destruction will not only continue, but will also likely accelerate, and nanotechnology will be at the core.
What does this mean from a practical standpoint? Because of the advent of nanotechnology, we believe new companies will displace a high percentage of today’s leading companies. The majority of the companies in today’s Dow Jones industrials Index are unlikely to be there 20 years from now.
Josh Wolfe of Lux Capital, editor of the Forbes/Wolfe Nanotech Report, writes:
“Quite simply, the world is about to be rebuilt (and improved) from the atom up. That means tens of trillions of dollars to be spent on everything: clothing… food… cars… housing… medicine…the devices we use to communicate and recreate…the quality of the air we breathe…and the water we drink, are all about to undergo profound and fundamental change. And as a result, so will the socio and economic structure of the world. Nanotechnology will shake up just about every business on the planet.”
