Hi guys,
I'm doing a straw poll to see what people think are the biggest risks facing investors today.
Not the short-term economic cycle ones - like interest rates or boom-bust cycles, but the BIG world-changing ones that are biting now, or will begin biting in the next ten-twenty years (years almost all of us expect to live through).
Please provide your why as well as the risks so we can all understand your reasoning.
For me, I believe the biggest risks are:
Aging of the population
- We have a large group of people retiring over the next twenty-thirty years and this will dramatically change the nature of Australia - economically and socially. The electorate will be voting for old-age income and health supports rather than education and business infrastructure. This could hurt Australia's long-term economic future.
Also the increasing economic burdens of an aging population have a large likelihood of pushing Australia into a recession situation as economic resources are redirected to 'lifesupport' and away from 'gratuitous consumption'.
At the same time a huge number of skilled people will be transitioning out of the work force - we already have an across-the-board skill shortage, and this will only grow, hurting our international competitiveness. We have a shallow talent pool compared to countries like India and China already, and this is only getting shallower.
The necessary growth in immigration could also change Australia's social nature - not necessarily for the worse - but the differences will create more of a generational struggle for power - political and economic.
This entire scenario will cause lots of challenges but also lots of opportunities for the canny investor.
Information laneway
Australia is rapidly falling behind much of the rest of the work in upgrading it's IT&T infrastructure - putting pressure on our ability to compete economically on a world stage.
We're still largely languishing on sub-broadband speeds by international measures and our IT skills shortage continues to grow as well-trained Australians head overseas for better wages and conditions.
We're not replacing the professionals we lose, and this can only have a negative impact on our long-term economic success in the Networked World.
It will also create huge opportunities - and in fact I'm investigating one in this area at the moment.
Peak oil
The world runs on a fossil fuel economy, and we're in the twilight of the oil age - with supplies globally showing all the warning signs of difficulty in replacing current sources of the fuel at current prices.
The world's energy consumption is growing rapidly and we will cope with this, however there is a major bump in the road in the next twenty years as the entire world has to rapidly (in geological terms) shift from a fossil fuel to a hybrid fuel (still using fossil fuels - but with lots of diverse alternative sources also in use) economy.
The height of this bump is yet to be seen - it could only knock off a few wheels as we go over it, or it could be a ten-foot brick wall.
I'm optimistic that human ingenuity will solve it without more than a generation worth of pain - however belief is one thing, what happens is yet to unfold.
Whatever happens, the global shift in energy use is already beginning, though Australia is still in denial - look at our resistance to domestic use of uranium as a fuel and the debate over wind energy.....
If the denial continues too long we'll be eclipsed economically, particularly as we're reliant on overseas supplies for over a third of our oil needs.
Regardless, this challenge also provide massive opportunities for those pick the right horses or profit from rising fossil fuel prices.
Yes I have a personal interest in this area and are actively seeking further opportunities in the sector.
Climate change
I expect to see areas as far south as Brisbane and potentially even Perth experiencing hurricanes in the next few years, an effect of global climatic change, causing huge costs in infrastructure replacement. I also expect to see major changes in land cultivation caused by changes in weather conditions.
Most of our major cities are already suffering water shortages and these are only likely to grow over time - recycling and desalinisation are possible rectification strategies, but will mean an increase in water costs - which constrains business and household economic activity and puts further burdens on struggling farmers.
Climatic change is also likely to see Australia hosting the entire populations of some of our Pacific neighbours as their homes become untenable. While their populations for the most part are small, cultural integration and financial support for these groups will challenge us.
Overall climatic change may be good for Australia, but there's going to be substantial pain adapting to the changes over the next thirty years.
Cheers,
Aceyducey
PS: Of course rather than submitting your own ideas of the biggest risks ahead, you could simply kibitz
I'm doing a straw poll to see what people think are the biggest risks facing investors today.
Not the short-term economic cycle ones - like interest rates or boom-bust cycles, but the BIG world-changing ones that are biting now, or will begin biting in the next ten-twenty years (years almost all of us expect to live through).
Please provide your why as well as the risks so we can all understand your reasoning.
For me, I believe the biggest risks are:
Aging of the population
- We have a large group of people retiring over the next twenty-thirty years and this will dramatically change the nature of Australia - economically and socially. The electorate will be voting for old-age income and health supports rather than education and business infrastructure. This could hurt Australia's long-term economic future.
Also the increasing economic burdens of an aging population have a large likelihood of pushing Australia into a recession situation as economic resources are redirected to 'lifesupport' and away from 'gratuitous consumption'.
At the same time a huge number of skilled people will be transitioning out of the work force - we already have an across-the-board skill shortage, and this will only grow, hurting our international competitiveness. We have a shallow talent pool compared to countries like India and China already, and this is only getting shallower.
The necessary growth in immigration could also change Australia's social nature - not necessarily for the worse - but the differences will create more of a generational struggle for power - political and economic.
This entire scenario will cause lots of challenges but also lots of opportunities for the canny investor.
Information laneway
Australia is rapidly falling behind much of the rest of the work in upgrading it's IT&T infrastructure - putting pressure on our ability to compete economically on a world stage.
We're still largely languishing on sub-broadband speeds by international measures and our IT skills shortage continues to grow as well-trained Australians head overseas for better wages and conditions.
We're not replacing the professionals we lose, and this can only have a negative impact on our long-term economic success in the Networked World.
It will also create huge opportunities - and in fact I'm investigating one in this area at the moment.
Peak oil
The world runs on a fossil fuel economy, and we're in the twilight of the oil age - with supplies globally showing all the warning signs of difficulty in replacing current sources of the fuel at current prices.
The world's energy consumption is growing rapidly and we will cope with this, however there is a major bump in the road in the next twenty years as the entire world has to rapidly (in geological terms) shift from a fossil fuel to a hybrid fuel (still using fossil fuels - but with lots of diverse alternative sources also in use) economy.
The height of this bump is yet to be seen - it could only knock off a few wheels as we go over it, or it could be a ten-foot brick wall.
I'm optimistic that human ingenuity will solve it without more than a generation worth of pain - however belief is one thing, what happens is yet to unfold.
Whatever happens, the global shift in energy use is already beginning, though Australia is still in denial - look at our resistance to domestic use of uranium as a fuel and the debate over wind energy.....
If the denial continues too long we'll be eclipsed economically, particularly as we're reliant on overseas supplies for over a third of our oil needs.
Regardless, this challenge also provide massive opportunities for those pick the right horses or profit from rising fossil fuel prices.
Yes I have a personal interest in this area and are actively seeking further opportunities in the sector.
Climate change
I expect to see areas as far south as Brisbane and potentially even Perth experiencing hurricanes in the next few years, an effect of global climatic change, causing huge costs in infrastructure replacement. I also expect to see major changes in land cultivation caused by changes in weather conditions.
Most of our major cities are already suffering water shortages and these are only likely to grow over time - recycling and desalinisation are possible rectification strategies, but will mean an increase in water costs - which constrains business and household economic activity and puts further burdens on struggling farmers.
Climatic change is also likely to see Australia hosting the entire populations of some of our Pacific neighbours as their homes become untenable. While their populations for the most part are small, cultural integration and financial support for these groups will challenge us.
Overall climatic change may be good for Australia, but there's going to be substantial pain adapting to the changes over the next thirty years.
Cheers,
Aceyducey
PS: Of course rather than submitting your own ideas of the biggest risks ahead, you could simply kibitz
Last edited:
