Juggling Dynamite

The European union was envisioned by its banker architects as a union of currency, enabling a financial transaction/leverage superhighway that extracted profits for a few multinational conglomerates.  The model greatly enriched and empowered the banksters over the past 20 years, while helping to billow a massive global debt bubble that now cripples most households and countries.  Debt saturated, meaningful financial recovery going forward, depends on new ideas:  not adding more debt and increasing profits for the few, but rather increasing efficiency and reducing prices to increase quality of life and disposable cash flow for consumers everywhere.

The three main constants of household spending are shelter, food and transport.  Implicit in all of these are energy costs.  In lowering energy costs (full costs that include pollution, climate degradation, water shortages and illness), we directly improve the health and stability of life on earth for humans.  A great many people are now seeing that implicit in this goal, is enabling the collection of all kinds of clean energy directly where it is consumed, as well as seamlessly sharing excess via intercontinental power grids that upload energy from millions of producers and sources so that it may be drawn down wherever needed.  No more waste and burning off excess power in some regions, while others go without.  The Trump government may be trying to pull America back to the energy dark ages, but Europe and most of the world is seeing the light.  See: Europe’s renewable energy revolution:

This is just part of a quiet revolution in renewable energy across Europe. An international power grid is gradually developing, using power interconnectors to trade surplus energy across national electricity networks, allowing big wind power producers in northern Europe, for example, to trade electricity with large solar energy generators in southern Europe.

The UK has already plugged into the network through interconnectors to Ireland, Belgium, the Netherlands and France, and there is a proposal for a highly ambitious project to connect Britain to Iceland’s abundant supply of geothermal and hydroelectric power using a subsea cable around 1,000km long.

This international power grid gives more reliable supplies, helping to smooth out the intermittent power produced from renewables such as wind and solar energy. It also gives Britain more secure power sources as old nuclear and out-of-favour coal plants are shut down.

Also see Let’s get real about alternative energy for some context on the growth potential for alternative fuels and technologies.  This is a massive, productive, smart investment area that will create excellent jobs and world-improving efficiency and growth.  And in accordance with Moore’s Law, output and efficiency are leaping every year.  All win, win.

The definition of madness…assuming the world economy can deleverage from the global debt bubble and grow at 4%.

In today’s “Morning Must Read,” Bloomberg’s Tom Keene highlights comments on economic equilibrium models. He speaks with Kingston University Economics Professor Steve Keen. Here is a direct video link.

For the past 20 years, financial experts have counseled the public down a self-destructive path leading to massive capital shortfalls and deficits in savings and pensions worldwide.  Spend more, save less was the motto; that taking more risk and paying more fees for financial products and services would magically make up for chronic under-saving.  For short periods like 1996-2000, 2003-08 and 2010-15, it appeared to wishful eyes, that the magic might be working, as three successively larger credit pumping cycles boosted asset bubbles, and helped paper over balance sheet holes.  But the mirage has always been fleeting.  As each bubble bursts, capital tanks and years are wasted trying to recover prior values, as savings deficits compound and the population moves closer and closer to planned withdrawals.

If ever there was a verdict on bubblenomics, it is this:  today, even with asset prices back near all time highs for the third time in 17 years, even before the next bear market knocks trillions off prices once more, savings deficits today are massive and mounting.  Ignoring math and believing false prophets has wrought tremendous harm.  Denial is not a strategy.  We are now past the point of small tweaks and well in the territory of massive restructuring needed.  See:  Collapsing pensions will fuel America’s next financial crisis, and this issue goes far behind America, the retirement savings blight is global today.  The truth is this:

Unfortunately, there are no easy answers. Pension reform — as with Social Security reform — is most equitably approached as a combination of benefit cuts, increased contributions and higher eligibility ages. But since those solutions tend to offend all stakeholders, it is difficult to get past the inertia.

The sooner individuals take steps to understand math and take active responsibility for managing their finances, rather than blindly riding asset bubbles to their inevitable collapse, the better off we will all be.