"..the interest rate has been above inflation for the whole of the 20th century..." was it?
What about the 21st century? We are now 17 years old into it and we've have negative real interest rates in a large part of the world since the GFC. What worked for investors last century may not work this century is all I'm saying ;)
That's true - but many bonds and stocks have yields higher than inflation. I see no reason why gold prices will rise above inflation - it's use doesn't increase. Yes, there has been a slowdown in technological growth in the 21st century and the rapid increase of technology in the 20th century will likely never be repeated. But hopefully interest rates will eventually rise (yield curve is pretty dim tho) and productivity growth will improve (and therefore stocks as a whole).
"...there has been a slowdown in technological growth in the 21st century..." Have you heard of blockchain technology? Or Artificial Intelligence? Even the internet has had more impact on society in the 21st even though it first arrived in the 20th century. We are just getting started here and the rate of technological advancement is only getting faster. I can already hear the screams from the Luddites who want it all to slow down!
Why do you think technological advancement is getting faster? Productivity growth is down in developed countries. The innovations you mention have less effect (or at least currently do) than things like refrigeration, antibotics, central heating, flight, phone, computing. In terms of happiness, the 21st century hasn't really had any technological advancements (bar medical ones) which improve happiness (unlike central heating or refrigeration which markedly improved living standards) - see https://en.wikipedia.org/wiki/Easterlin_paradox. Do you think that productivity growth will soon increase in the future suddenly despite the trend down?
"Happiness Economics" sounds a bit like lefty pseudo-science to me so you'll have to forgive me for not buying into that.
Productivity is down in developed nations due to globalisation and the shifting of production into the developing or 3rd world. It has been going on for decades now and it is the reason for stagnation in the living wage in the West. Look at global productivity rather than a subset of it and you should see a better trend.
Plus, we are suffering from the increased "Financialisation" of our economies which is not helping productivity OR wages in the developed world. We've actually had anaemic growth since the GFC and have never truly recovered.
Calling something "lefty pseudo-science" isn't an argument - they use logical reasoning and support it with empirical data. For sure, developing countries productivity growth is much higher. But globalisation should bring increasing productivity - more options for trade. Not sure about financialisation although I'd lean towards agreeing with you. This guy puts the technology point quite well - https://www.amazon.co.uk/Summary-Rise-Fall-American-Growth/dp/1683780485/ref=sr_1_1?s=books&ie=UTF8&qid=1515180995&sr=1-1&keywords=rise+and+fall+of+american+growth
But intuitively, early twentieth century had incredible changes compare the 21st century invention of a smartphone with the invention of phones and telecommunication. Before the phone, people lived in a world confined to their village or town.News spread very slowly. A smartphone is an improvement over a phone, but it's not a completely different uphaul of society (obviously quite hard to define what an "uphaul of society" is though!).
Negative interest rates are mad though, you would expect house price increases and massive stock price increases so that dividend yields, rents and interest rates are in line (adjusted for risk). Yet you don't... My theory is that only really the government can issue debt efficiently, and we've have a recent turn towards austerity. In addition, the private sector is highly indebted (although obviously an economy as a whole can't be in debt as for every borrower there is a lender).
"My theory is that only really the government can issue debt efficiently..." Ok, you've lost me here.
The government and central bankers are manipulating the money supply and interest rates. We need less of this, not more.
What I mean is that only the government can borrow at the risk-free rate. Out of interest why do we need less of this? I think as a whole (although it's obviously not perfect), central bank policy helped the financial crisis not turn into a 1930s prolonged depression. Remember in an economy, your spending is my income, and my income is your spending so if everyone tries to simultaneously save, everyone is worse off. This is a classic collective action problem - what is in everyone's private best interest isn't in the interest of the community. Having a government step in with fiscal policy solves this situation.