The Allure of Graphic Predictions

We’re not ones to trust any kind of research associated with a massive energy conglomerate (Ever read the Exxon funded Idso research? It would be hilarious…. if people didn’t cite it seriously). They’ve got good reason to skew the information in their favor (stock prices, government investment in their projects, etc.), but what can we say? We’re suckers for pretty graphs. And this 30-year prognostication has lots of ’em.

Essentially, Exxon is attempting to envision what the world is going to look like by the time we get to 2040. They leave visions of jet packs and hover boards to the sci-fi fans out there, and instead focus on how economic growth trajectories will impact a variety of markets. Because they’re dealing in energy markets, the largest implications are those associated with crude oil, natural gas and others.

We’re more of the technical sort who will react to price moves as they happen instead of where prices will go based off of these long term outlooks, but some of the stats in the piece are mind blowing… for example:

  • As you’re reading this on your electronic mobile device, consider 1.3 Billion people don’t have access to electricity
  • Just 100 years ago (about 1910) we still got about 40% of our global energy from burning wood. A lot can change in 100 years
  • 75% of the world’s population will live in Asia/Pacific and India by 2040
  • The world will save about 500 quadrillion BTUs over the next 30 years in improving energy efficiency (we just wanted to use the word quadrillion)
  • The number of cars & trucks in the world will double to 1.6 Billion in 2040 (not including commercial vehicles)
  • Natural Gas will become the #2 fuel source by 2040, with more use in nearly everything from transportation and electricity to chemical production
  • China’s industrial demand will decline about 20% by 2040 (Decline? Yes)
  • Natural Gas emits up to 60% less CO2 than coal when used for electricity generation
  • Based on current demand, the world has 200 years of Natural Gas supplies

Generally speaking, though, Exxon is bullish on global growth. However, one other chart out today might be equally worth your consideration (even if not so pretty). At the NYT Dealbreaker conference, economist Robert Gordon presented his case for why we’re headed for a period of sharply contracting GDP around the world. As a Business Insider article explains, Gordon takes a look at three separate economic boom periods, which he describes as, “IR #1 (steam, railroads) from 1750 to 1830; IR #2 (electricity,  internal combustion engine, running water, indoor toilets, communications, entertainment, chemicals, petroleum) from 1870 to 1900; and IR #3 (computers, the web, mobile phones) from 1960 to present.” His analysis concludes that the latest IR period has been tremendously weak, that the implications of the second IR period would be next to impossible to duplicate, and that, essentially, Exxon’s projections are the stuff of fairy tales.

Who will be correct? Only time will tell.

Write a Comment

Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, RCM's own estimates of performance based on account managed by advisors on its books, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.

Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, RCM's own estimates of performance based on account managed by advisors on its books, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.