Physical economy

The physical economy supply chain is: Mining -> processing -> manufacturing-> distribution Historical revenue distribution has been: 5-15% Mining 10-25% Processing 25-45% Manufacturing 20-40% Distribution AI will massively improve distribution and manufacturing both of which are complex, and this will allow the physical economy to grow much quicker than it historically has. This will also push more and more demand upstream into processing and mining, and it will eventually push commodity futures into a scarcity regime. Because whilst AI can create more demand for feedstock, it cannot create more copper ore reserves. Over the next 20-30 years, it is the big extraction industrials that will capture much of the economic value of AI. Not by owning the AI, but by owning the things that AI craves… commodities. What AI means long term is the commodification and abundance of intelligence, and that means physical commodities become the choke point on which the rest of the economy is priced. This is a new price structure for capital, as sovereign bonds and FX are historically priced off the demographics of a sovereign’s tax base, in the future bonds might instead be priced off a countries resource base, eg energy and metals. There are major winners and losers across geopolitics and the corporate landscape, once you entertain this as a plausible future scenario. The geostrategic landscape of the global economy is very different on the other side of AGI. GDP is likely to uncouple from demographics and couple up to geographical resources. This fundamentally changes the things that make a big country a big country.