Thanks for raising this very important and interesting issue. I think it is well worthy discussion and I’m glad you wrote such a thoughtful piece. I agree with your logic, but disagree with one of your assumptions. You say that “When I leave money in my bank account, it compounds slightly (1-2%, conservatively) faster than world economic growth”. World GDP growth is typically around 3% p.a. in real terms, while the real interest rate is sometime as high as 1-2%, but sometimes as negative. Either way, it is very rate that the real interest rate is higher than world GDP growth.
Thanks for raising this very important and interesting issue. I think it is well worthy discussion and I’m glad you wrote such a thoughtful piece. I agree with your logic, but disagree with one of your assumptions. You say that “When I leave money in my bank account, it compounds slightly (1-2%, conservatively) faster than world economic growth”. World GDP growth is typically around 3% p.a. in real terms, while the real interest rate is sometime as high as 1-2%, but sometimes as negative. Either way, it is very rate that the real interest rate is higher than world GDP growth.