Posted on 10/02/2021 8:20:40 AM PDT by Hojczyk
Magical US thinking of a Green agenda financed by endless amounts of printing-press money will only end in tears
Prices for all energy commodities jumped during the past month, some by record margins, as a global energy shortage set off a scramble for gas, coal and oil. Brent crude has doubled in the past year, Newcastle coal has quadrupled, and Netherlands natural has risen seven-fold.
There are many small reasons for the global energy squeeze, and one big one: Investment in hydrocarbons has collapsed under pressure from the Green agenda adopted by international consensus.
Energy investment in the United States has dwindled as large institutional investors boycott fossil fuel investments. China’s critical electricity shortage is the result of draconian regulation of coal mining, exacerbated by Beijing’s punitive ban on Australian coal imports.
But several additional percentage points of inflation are now programmed into US inflation for the next two years.
That makes inflation a perfect storm. The stock market’s September setback, which left the S&P about 5% below its peak, reflected inflation risk and the associated risk that the Federal Reserve will raise interest rates in the future in response to inflation.
But the stock market’s reaction to date has been far more benign than the inflation data might indicate, and more benign than expectations about future interest rates might suggest.
At some point, the Fed’s game is going to come to an end. The magical thinking of a green agenda financed by endless amounts of printing-press money will be followed by a nasty hangover. Rates will rise and the asset bubble will pop.
Exactly when that will happen is beyond anyone’s capacity to forecast, but the unpleasant September in US equity markets was a foretaste of what we can expect.
(Excerpt) Read more at asiatimes.com ...
Where’s Nanzi Piglosi complaining about those evil oil companies?
Ergo the reason for the rich getting behind the greenies. How many of the “elite” have energy stocks?
The Democrat plan….
“Keep them sedated. Keep them sick. Keep them scared. And keep them off my beach.”
Obama wanted $5 per Fallon gas like Europe. Fast forward, inflation adjusted, we’re looking at $8 or so.
Plus, we need to bring back manufacturing from China.
There is a LOT of that, to bring back.
Thirty, forty years worth.
Thought I read somewhere China has some type of bubble about to burst to the tune of 8 trillion dollars?
In many ways, the financial crisis of 2008 was papered over by the Federal government with their bailouts. The financial system was not cleansed as it should in a recession/depression by having bad institutions fail. In fact, the exact opposite was done. Bad institutions were rewarded for their bad behavior.
Now some dozen years later, the oxy-financial-drip just doesn’t create the buzz it use to. Meanwhile the Fed has painted themselves into a corner with years of cheap money; all of which has now been spent to artificially boost the stock market and housing market. The withdrawal symptoms from this fiscal fix is going to be even more painful than it would have been in 2008.
Green power is 33% subsidized power. By 2035 social security and Medicare will have to be reduced if not eliminated. But supposedly we will continue with green power subsidies?
Contrary to this article, the markets are an excellent hedge against inflation for a balanced portfolio.
I was going to invest in oil last October. Missed a great opportunity to make some serious money.
economic production/GDP and energy usage rise and fall in a very tight correlation. Conservation, better technology, etc... can reduce that correlation, but only marginally, and only over the long term.
Money represents the totality of GDP, so therefore money is merely a call on energy resources.
Debt therefor is a lien on future energy production.
Thus, less future energy production guarantees a default on debt, whether outright, or through high inflation.
In 1929 there were soup lines in the cities... Everywhere else it was kinda like the Walton’s.
“I was going to invest in oil last October. Missed a great opportunity to make some serious money.”
I wanted my Dad to buy that new 1965 Cobra on the show room floor.
Has Pelosi started short selling yet? Then we’ll know for sure.
well, “green” and other over-priced stocks might collapse, but petro-energy stocks should continue to skyrocket ...
I was at Lowe’s....lumber is out of sight...
Green Power is subsidized because it is not cost effective. But maybe the subsidies are retarding the growth of green energy. There is no reason for green industries to spend money on improving green power when they are already getting lots of money from Uncle Sugar.
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