First Principle [furst] [prin-suh-puhl]
noun.
: any axiom, law, or abstraction assumed and regarded as representing the highest possible degree of generalization.
: in philosophy and science, a first principle is a basic proposition or assumption that cannot be deduced from any other proposition or assumption.
: the fundamental concepts or assumptions on which a theory, system, or method is based.
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Where to live for 5 yearsBali, IndonesiaHow do I have freedom of time and location
What to learn for the next 5 years
I have little desires to go pursue something in the cryptocurrency industry today.
And that opens up the world for me to explore.
Going back to the 1st Principles.
The principles of the world stay the same.
We wake up every morning, and have to drink water and eat.
We need homes to live in, and tools to talk to our friends and families.
We’ve evolved to improve our environments through gathering new information.
We’ve created tools to transport goods and people.
These fundamental demand from our daily lives ultimately formed the biggest industries in our world and drive the global economy forward:
Food & Drinks | Construction | Communication | Information | Transportation
The world basically runs on the Demand of these things, and the size of demand is mostly decided by the # of people alive aka population. The Supply of these goods & services is what businesses do. They produce to meet the demand. And in many cases, governments do this as well.
Supply
Over the past 200 years, global output capacity has surged, with food production up ~10–20x, construction capacity up ~50–100x, telecommunications up over 100,000x, information access up 1 million x, and transportation up ~100x, driven by technology.
The development of commercially viable light bulbs in 1879 by Thomas Edison allowed humanity to work and live outside of daylight hours.
With gasoline engines in 1885, we became both the fastest and the strongest animals on the planet.
With invention of Cell Phones in 1973, we are not tied to landlines or sending mails with our hand writings back and forth.
Then the internet in 1983 led to our phones today being able to make video calls instantly to anyone on earth.
Offices, shops and homes are now built by giant cranes instead of humans carrying stones up and down the stairs.
Underneath all of this productivity is energy, which is mostly powered by Oil & Gas industry today.
Wind, solar, and nuclear are becoming more cost effective and efficient but they are still much smaller part of the use.
2024-2025 projections:
Fossil Fuels: ~80% - Oil + Coal + Natural Gas
Renewables: ~15% - Hydroelectric + Solar + Wind + Geothermal
Nuclear: 5%
What a crazy world we are living in.
Demand
With the drastic increase of Supply of goods & services, the population of the world that determines the Demand went from roughly 1 Billion people to 8.2 Billion in the last 200 years. We only went 8x.
The fundamental demand didn’t change much. Sure some people in some countries crave more - private jets, helicopters, super cars, but they could easily survive on a wooden bed under a palm tree roof to keep them safe.
Human body hasn’t evolved that quickly - we still need protein & carb & fat diet and clean water. Our social dynamics? Same. We want to stay close to family and friends. We want to learn new things.
The Supply clearly outpaced Demand.
Who in the world has the largest supply!?
Food is mostly supplied locally with large excess coming from Central / South America, South East Asia and surprisingly US is a big player in agriculture exports.
Water is mostly supplied locally with very little import / exports.
Construction is also mostly supplied locally. You don’t see many construction companies going across the ocean to build. Japan and China have become the most advanced in building city infrastructure and sometimes help other countries. Take a look at Chongqing, a second tier city where my family is from in China.
The US arguably is the largest supplier of goods and services in communication & information & transportation.
This comes in the form of Computers (Apple / Microsoft), Cellphone (Apple, Google, Microsoft), Radio, and Telecommunications Infrastructure like satellites. Quietly, China has taken almost all of the manufacturing of US products especially in goods and services of communication in the last 50 years. They are now aggressively competing on these hardware sales globally (Huawei / Xiaomi).
On the other end, many don’t realize, but Entertainment (Hollywood / Youtube / Netflix), Music, and Culture (social media) are the strongest exports of the U.S. They fall under the bucket of “Information”.
The Chinese, due to the language barrier, they aren’t able to export information such as social media / content / culture to other parts of the world. At least that was the case.
That’s now changing with Tiktok being a serious competitor in the social media world in the west. They bypassed their language barrier by relying on localized user generated content with their superior newsfeed algorithm.
Transportation. 100 years ago, in 1925, the U.S. produced 80–90% of the world’s cars. That number has gone down to 12% today in 2025, but the aircraft & aerospace industry is still one of the largest exports of the U.S. today.
Japan & Germany have advanced in the world of transportation.
Then in the last 20 years, China took it to a new level with Electric Vehicles.
Today in global motor vehicle production:
China - 35%
US - 12%
Japan - 10%
Germany - 5%
With China taking over 60% marketshare in Electric Vehicles.
China now leads the world in high speed rail infrastructure, beating Japan / Germany / Spain.
In summary
Food & Water / Construction are produced and consumed locally.
China wins in Transportation.
US is winning in Information.
US is ahead but with China trailing closely in Communication.
Who has the largest demand!?
Although the US is one of the top purchasers of many goods & services, but most are being used to create new goods to be sold. The actual demand of American people, roughly 340 million, is only 4% of the 8 Billion people in the world.
Some estimates say that U.S consumption is 15~25% of the global consumption - the real number is likely closer to 15 than 25 just based on the first principles.
At 25% means average Americans consume 5x in every category: food, shelter, advanced tools, information, transportation, more than every one else - imagine eating 5 times more than another person? No one owns 5 homes either. It’s impossible.
In order for the U.S economy to thrive, they need customers from the outside. Hence, Trump administration is trying really hard to balance the trade - in other words making sure other people buy more goods from the U.S.
U.S cannot increase its production without foreign buyers. If the rest of the world decided that they won’t buy from the U.S, this means the economy will stall.
Well, where is the demand?
Population determines the demand. Plain and simple.
Today, the top 5:
India - 1.45B
China - 1.42B
USA - 335M
Indonesia - 287M
Pakistan - 243M
It’s projected in 2050:
India - 1.6B
China - 1.39B
Nigeria - 400M
USA - 380M
Pakistan - 340M
Indonesia - 330M
This video shows the projection of world’s population:
Excluding US:
India, China, Indonesia, Pakistan are all in Asia.
In fact close to 60% of world’s population live in Asia.
In the next 30 years, Chinese population is declining rapidly mostly due to the single child policy that started in 1980. The rise of India & Pakistan demand are underestimated. The continued demand from Indonesia & China as well as demand from Africa are also undervalued from many US companies.
Majority of the demand of goods & services in the world are in Asia.
The newest tariff issued by Trump is a double edge sword. The intention here is for these countries to say: “I want to buy more US goods, please lower the tariffs.”
But on the back of their heads, they are asking, “How can I get this monkey off of my back so we don’t get threatened again in the future?”
With new trade routes being formed due to the tariffs and geopolitical uncertainty, the Asian countries are looking for other ways to supply for their own demand.
Here’s a video of Da Nang, Vietnam - the infrastructure is becoming advanced and comparable to western standards.
Indonesia decided that they don’t want to rely on Visa / Mastercard payment systems. They created their own called QRIS.
China is playing offense. For the first time in its history, China has made visa-free entry available to most European countries on November 2024. (U.S. excluded)
39 European and Oceania countries: (Andorra, Austria, Belgium, Bulgaria, Cyprus, Croatia, Czech, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Luxembourg, Malta, Monaco, Montenegro, Netherlands, North Macedonia, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland), plus Australia & New Zealand
4 Gulf nations: Saudi Arabia, Oman, Kuwait, Bahrain (effective June 9, 2025 – June 8, 2026)
They are clearly courting more buyers from all over the world.
Random video that show a recent foreigner visiting China visa-free:
In June, they expanded the list to countries from South America where U.S. has arguably the strictest visa policy for its visitors and immigrants.
5 Latin American countries: Brazil, Argentina, Chile, Peru, Uruguay (policy effective June 1, 2025 – May 31, 2026).
As they become the top producer of goods in many categories to compete against the U.S., they need to attract more demand than ever before.
Back to the question
“What to learn for the next 5 years”
I want to understand how the world works. We can practically pick any industry in these categories and be more wealthy than what we can ever imagine: Food, Water, Construction, Communication, Transportation, and Energy that powers all.
Personally, my interest lies in Food & Water. What we consume every day and how they make us productive. The world is run by humans, and we are run by what we eat and drink. Our long term health depends on food regardless of the medical breakthroughs or biological innovation we will have.
I want to be where the demand is - Asia. My 5 year plan in Bali, Indonesia fits in quite well with this.
I have 2 hour flight to Singapore / 4 hours to Hong Kong / 5 hours to Guangzhou / Shenzhen, China / 6 hours to Tokyo, Japan / 7 hours to Delhi, India - you get the point.
Here I can learn about how the world is moving, from the first principle, at a global scale.
A big UNKNOWN
We are seeing a big boost in productivity - in other words - capacity to produce supply. From Artificial Intelligence.
It feels as groundbreaking as when the internet or cellphones were being invented.
Where will it take us? I don’t know.
I do know that people still need to eat food and drink water. But maybe robots and software can help me produce them faster, cheaper, and at a higher quality.
Worth exploring…
See ya tomorrow!
appendix.
First Principles of Supply & Demand of our world
Supply = production of goods & services that increase the quality of life
Demand = consumption of goods & services that increase the quality of life
What are these goods & services?
Food & Water - Agriculture, Processing, Storage and Transportation
Shelter - Homes, Offices, Construction
Communication - Phones, Internet, Infrastructure
Information - News, Internet, Advertising, Education, Entertainment
Transportation - Cars, Trucks, Planes, Trains, Ship
Let’s talk AI and the future since now we are on the topic. See you tomorrow.