Having worked in fund management, property, mining and now biotech, Jim Mellon is a man who pulls no punches. In this episode of Meet the Renegades we speak with Jim about business, politics and his view on what is driving the global unravelling.
The first ticking time bomb is the destruction of the savings industry led by the policies of the U.S. and the Bank of England. Artificially destroying interest rates leads to no returns for people trying to save.
“There’s no return in the zero return world.”
In Jim’s view we have also seen the end of cheap labour capital for manufacturing. The era over the last 20 to 30 years where emerging market countries like China moved into prosperity through manufacturing. Getting the population out of poverty by moving people from subsistence farming into factories to sell goods to the West or Japan is over. Today’s emerging markets will no longer emulate this – so where from here?
We are now in an era of ‘Onshoring’– where factories are moving back to the point of consumption because automation is allowing that to happen. This move to automation is accelerating very powerfully at the moment and is irreversible.
Robots are cheaper than even the cheapest labor in the emerging markets. This is a factor to which is also driving the tidal wave of migration out of North Africa specifically, or Africa to Europe, or attempted migration to Europe.
But could more automation be a good thing? John Maynard Keynes had predicted that by now we would be working five hours a week and the rest of it be dedicated to be leisure time. We’re not there yet, but could this be true for tomorrow? Yes in Jim’s view – but only for some industries. New skills and education are key as are new ways of working.
Central Bankers and Creative Destruction
From moronic investment decisions in negative interest rate bonds, to illusionary growth through to woefully bad monetary policy, Jim believes that Central Bankers have a lot to answer for – “they have been not just asleep at the switch but actually wilfully negligent.”
“They (Central Bankers) have been not just asleep at the switch but actually wilfully negligent.”
But despite the problems mounting, private debt building and Moore’s Law affecting tech Jim is excited about all of the new technologies that we have which are good.
“I know we living in the golden age of technology.”
Unfortunately, we’ve just got a a little problem of a legacy financial system that’s hindering us.
“So, what we need is a complete crisis in Europe, rip up the rule books and start again.”
Jim shares a few of his thoughts on how to do this.