PeterZ wrote:Vince wrote:It's not just interest rates that have to be positive. It's real interest rates* that have to be positive.
* Real interest rate = Actual interest rate - inflation rate.
Galactic Sapper wrote:Not just that. You have to assume that there will be a LOT of savings chasing investment returns, with significant downward pressure on returns as a result. It may take decades, even centuries for all of society to adapt to the new realities of prolong, but eventually 4% is going to be on the insane side of optimistic. Plan for more along the lines of 0.4% or less, unless the investment is really risky.
TFLYTSNBN wrote:A logical argument. Japan offers a real world example. Manticore's economy would be in deep shit if it could not be mitigated. This might explain why Queen Elizebeth could sell war bonds to pay for the military buildup.
There are more worlds that hold a larger population that require investment just to reach Havenite standards than there are worlds who have surpassed Haven technologically. Heck, that statement would probably be true when compared to Silesia. Once those Protectorates, Vergers and Fringers are full comparable to the core Worlds, then there will be a dearth of investment opportunities. Until then, there are returns available for both the risk averse and the risk takers in the galaxy.
I am still struggling to understand what technologically backwards worlds in Silesia and the Fringe have to offer that would make either investment or conquest profitable. The Honorverse does not have sentient, self aware computers. However; the level of automation described (even if the "molycircs" are actually miniturized, mechanical, analog and digital, computers, LOL) suggests that factories and assembly lines don't require many people much less unskilled laborers. There should be no viable niche for "Third World" star systems manufacturing products using sweatshop labor that can then be shipped back to advanced star systems at a profit. There should be no Nike Corporation manufacturing athletic shoes on OFS exploited planets for less than a dollar per pair then shipping them back to SL core worlds where they can be sold for $100 per pair because they are endorsed by some famous professional athlete.
About the only viable export products from primitive worlds should be some foods (Montana free range beef, fish) exotic woods and may be pharmecuticals from plants that may be for some reason can not be synthesized.
Given asteroids andgas giants that can be exploited, I would not even expect mining for either metals or Deuterium to be viable. Aneutronic fusion fuels like Lithium, Boron and Berryllium would be only a remote possibility.