Weekly Updates
Weekly Updates
- The decline of global trade in the fourth industrial revolution could lower inflation. Industries that have already localized production show that if waste is cut, costs and prices fall.
- In 2006, Robbie Williams’ album “Rudebox” launched. It sold over five million copies. But in 2006, music was sold in a physical form. The record label had manufactured over six million compact discs. Those compact discs involved trade (chemicals, plastics, energy, technology, paper, packaging) between multiple countries. A large part of that trade represented wasted resources that customers never consumed.
- Younger readers are no doubt reading this with incomprehension. Global trade in compact discs is a relic of yesteryear. Replacing trade in compact discs with streaming was dramatically disinflationary. Resources are not traded, or paid for. Wasted inventory is no longer an inflationary cost—because physical waste no longer exists. If production can be digitized or inventory minimized, costs and prices come down. Today, almost 8% of global consumer goods end up as wasted inventory. The closer production can come to producing on demand—by producing locally, closer to the customer—the less the waste and the more the disinflation.
- In fairness, the extra million copies of “Rudebox” were not completely wasted. They were used for road construction in China.
Stay up to date
Stay up to date
