This Too Shall Pass
This publication has at times been a little gloomy in its predictions (maybe more than a little, I fear), notably over the (sadly accurate) predictions on the continuing and worsening conflict in Ukraine.
A looming energy crisis did not really make it more cheerful.
Nevertheless, this might surprise some readers, but I do think there is good news in the future.
So to go along with the spirit of celebrating the birth of Christ, the ultimate symbol of hope, I wanted this article to be one focused on exactly that.
Life Goes On
When you are directly concerned, it is hard to ignore hard times. But we need to remember this is just something that comes with being alive.
Our ancestors have dealt with much worse and our mere existence is proof that they made it through. Our descendants will equally have their own struggles to surmount.
I am from the French region of Alsace (Elsass in the local dialect), along the Rhein river valley. This means my ancestors became “French”, then “German”, then “French” again in a regular cycle, every 50 years or so.
A moment like the 30 Years War was as bad as any World War. The journal of one of my ancestors remembers how they were swimming with wine up to the knees when the French troops broke every barrel of their vineyard out of pure spite.
My own grandfather was a war prisoner for 5 years in WWII and was severely mistreated then. He also lived past his eighties while smoking for over 60 years.
Modernity and easy life have made us soft. But we have it in us to beat virtually anything.
Inflation, cold homes, and even war are nothing new. We can make it through with the right mindset.
Material comfort matters little in the end, what matters is our families, faith, and friends.
It Will Get Better
A lot of what is not working now will get solved. Let’s look at it.
Geopolitics
Empires clashing is as old as human civilization. These convulsions are most of the time short-lived, even if often destructive.
Once a new balance of power will be established, we ordinary citizens can get back to our lives.
New political systems and philosophies will emerge, some better, some worse.
Short of an all-out nuclear exchange, the world will not end, but move on.
And frankly, if it does end, what are we worrying about? It's not like we are going to be there to see it, are we?
Energy
The energy crisis is still unfolding but by the end of the decade, it will be solved. One part is simply that we will have restarted drilling for oil & gas.
The other part is that we will stop being collectively stupid and finally properly develop nuclear energy. Traditional last-generation reactors are being approved in many countries, with Eastern Europe and Asia leading the charge.
Tremendous innovations are coming online by the end of the decade:
Small Modular Reactors (SMR) from a dozen companies that make nuclear reactors a mass produced design
Surgenerators (fast neutrons reactors) which simultaneously solve the nuclear waste problem and allow us to consume fuel with a 98% efficiency, compared to the below 5%-10% of today. This is a technology already mastered in the 1970s by the way.
Thorium reactors, using a resource much more abundant than uranium. Equally mastered in the 1970s even if those old designs could be improved upon.
Floating nuclear reactors that can be mass-produced and within reach of the 80% of humankind living on the coastlines
We don’t even need sci-fi nuclear fusion for Earth-bound needs. Fission is enough.
Fusion is what we need to reach other stars, but fission is enough to supply Earth and colonize the solar system.
And we know how to do it. We just need to allocate capital to it. A few cold winters will solve this absurdity. Together, these changes will make the world a more abundant and richer place.
The 2020s might be remembered as the LAST energy crisis in our species’ history. When humans finally stopped burning stuff and went splitting atoms instead.
Something as transformative for civilization as the usage of fire or the adoption of agriculture or metalwork.
To add to this, even geothermal energy using technology like Eavor will be ready by then to provide extra renewable baseload power.
Technological revolutions
There are plenty of world-changing technologies now reaching maturity. We wasted our best minds on social media, renewables, video games, and finance for soon to be 2 decades. The current crisis will force us to remember what matters in the real world.
For this reason, I plan to start a long-term growth portfolio by 2026-2028, once the current storm has passed.
Despite the temptation to do so when documenting current failures, I do not want to be a doomer permanently.
Space Tech
SpaceX has proven reusable rockets are perfectly viable. It also divided the cost of reaching the orbit by 10x in the process.
This Pandora’s box is now open. The engineers in China, Russia, Japan, etc… now have to catch up and they will. Competition breeds innovation and cost reduction.
China + Russia will build a Moon base in just a few years. NASA will probably lag behind but do the same. SpaceX is aiming for Mars.
This is nothing compared to space tourism. First in orbit, then on the Moon, and then on Mars. This will be the ultimate luxury experience. Experiencing 1/6 of Earth's gravity, or climbing a 22km tall mountain with 4km high cliffs.
It will put the thirst for status symbols among the elites to better use than with mega yachts. It will provide the space sector with the volume it needs to keep cutting the cost per unit.
This will be the ultimate flywheel business. An endless loop of more frequent and massive flights, cheaper costs, more flights, cheaper cost, more flights, …
It will also allow us to reach into space for rare minerals. This should bring down countless costs for advanced technology.
Too bad that for now, SpaceX is private. It might stay like that forever considering Elon Musk's dislike of the constraints of publicly listed companies.
Biotech
Space exploration is close to my geeky heart. But biotech is what I actually went to learn at University.
Instead of explaining each, I will just make a short list of innovations just waiting to pass the slow decision process of the regulators like the FDA and the inertia of conservative industries and professionals:
Treatments making the paralyzed walk again (stem cells and cybernetics)
Treatments making the blind see again (stem cells and cybernetics)
Gene therapy solving most genetic diseases
Edible and cheap vaccines
Customized genome analysis done for entire countries
Advanced and routine screening for hidden diseases
Biological alternatives to antibiotics with no resistance risk
Cheap food supplements, biofuels, and biodegradable plastics
Sustainable agriculture that preserves soil fertility
This will make our life healthier and happier. I am not even listing the likely but less certain possibilities. Things like life extension, advanced cybernetics, neural interface, etc…
You can learn more about the biotech sector in my article here.
Pick-and-shovel plays are the easiest for this, like Illumina that I covered in a recent Finmasters.com report.
3D Printing
Production through additive manufacturing is still in its infancy. But it is developing a growing ability to do it beyond plastic, and with concrete or metal instead. Manufacturing industries will benefit greatly from it, from new possible designs to cost-cutting to more efficient supply chains and decentralized production.
Remote Work & Learning
We have become used to the idea that for the highest level of jobs, we need to live in polluted, crowded cities and rent a flat for $2000 for a broom cabinet. And then COVID arrived and showed us that almost all white-collar work can be done remotely.
Same for education, especially university level one. Everybody will be able to access MIT's level of technical education for low prices. Even if it will take a little while for degree recognition and HR practices to catch up.
This will massively redistribute wealth. From connected urban elites to self-taught rural autodidacts. From rich to poor. From developed countries to developing ones.
More efficient use of human resources, less wealth inequality, and more fairness, it will be overall good for the world.
It will also forever change urbanism and revitalize smaller towns and the countryside after a century of constant decline. This will have political consequences, with a strong reduction in society’s polarization as it will give back some economic and political power to currently ignored areas.
If want to invest in real estate, focus on attractive and overlooked smaller towns. And avoid student towns.
Batteries & Electrification
You know I am not a big fan of EV and electrification with current technology. I also believe that in 10-20 years, everything but planes and maybe ships will run on electricity. So why the difference between now and the late 2030s?
A key part is solid-state batteries. They charge quicker, load more power, and are less likely to self-ignite. They also use fewer metals like cobalt. The first commercial version will be in EV by 2026-2028.
Another part will be utility-scale batteries. There are so many candidates, from sand batteries for heat in Finland to liquid metal batteries. These will beat on costs of lithium-ion solutions by a 5x-10x margin. This should be enough to handle most daily peak consumption, with heat batteries helping for extra demand during winter.
In that context, copper will be in the 2030s and oil is in the 2020s. I personally own Rio Tinto shares for that exact reason.
Solid state technology might be a possible speculative play as well, for example, QuantumScape and Toyota.
Robotics and AI
I really think that AI replacing us is very unlikely. But AI making its way into all jobs the way computers did, VERY likely.
This should boost productivity, and help reduce problems from a declining population in developed countries. There are so many labor-saving applications, from autonomous deliveries and trucks to exoskeletons or tomato-picking robots that it is hard to fathom the second and third-degree effects.
Replacing human labor with “stupid” tasks, it might be as transformative as the invention of the steam engine or the internal combustion engine.
Conclusion
We collectively have a massive task ahead: to go through the rise of the Eurasian Tripod without a massive war.
To add to this, we would have to also solve our social issues without a collapse of the political and social order.
Once we are done with this, a bright future is ahead.
One that could be truly prosperous and see humanity expanding into the stars.