Juggling Dynamite

Bill Gross, founder and co-CIO of Pimco, thinks the Fed will have to “taper” its bond purchases by the end of the year because lower deficits in Washington mean the Treasury will issue less debt, which could create a shortage of Treasury securities if the Fed continues QE at its current pace.

Gross still doesn’t think the economy is strong enough to stand on its own, without support from the Fed. But he has also derided quantitative easing as “chemotherapy” that may do more harm than good. Gross cites three side effects of QE that could be distorting the economy and holding back growth. First, super-low interest rates encourage saving, leaving less money available for investment. Second, financial firms that rely on more normalized interest rates for income are less profitable, which means they hire fewer workers. Finally, low returns on investment discourage companies from deploying capital in the real economy, contributing to lower growth and fewer jobs. See his article: Wounded Heart.

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“Five years since the financial crisis and not one individual has been prosecuted. But can we really lay all the blame on bankers or were they just the pawns of a system society created? John Authers, senior investment columnist, reports on the debate.”

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Windsor Castle is powered by a water turbine, while the roof of Blackfriars station is covered by solar panels.

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Yes renewable energy requires long-term investment and government assistance to get established. But all of the world’s new technologies and systems have been born of similar investment. And to be fair, critics rarely acknowledge the ongoing subsidies and concessions that big oil and gas still receives from taxpayers. Not to mention the huge cash flow that non-renewable fuels drain from consumer incomes each week–leaving less money to be spent on everything else in the economy. Lastly there are the $billions that traditional fuels export to the middle east each month to purchase and control foreign oil interests.

The long term math of renewable energy trumps non-renewable without even needing to quantify environmental benefits. And the savings are literally world changing as more money is freed up for true essentials like ingenious inventions, smart grids, education, health, disaster prevention and restoration, clean air, water, healthy food supply, art…the possibilities are endless.