Analyst Gail Tverberg has done an excellent job of explaining that it’s not just the availability of energy that matters, it’s the affordability of that energy to the bottom 90% of consumers.
The following is from The Myths of Green Energy by Charles Hugh Smith:
Central Banks Can’t Print Energy
Again, “money” is nothing but a claim on future energy, because energy is the foundation of the global economy. Without energy, we’re all stranded in the desert and all our “money” is worthless because it can no longer buy what we need to live.
Central banks can print infinite amounts of currency but they can’t print energy, and so all central banks can do is add zeroes to the currency. They can’t make energy more affordable, or guarantee that a day’s labor will buy more than a fraction of the energy that labor can buy today.
The global financial system has played a game in which “money” is either printed or borrowed into existence, on the theory that energy will be more abundant and more affordable in the future. If this theory turns out to be incorrect, the “money” used in the future to pay back debts incurred today will have near-zero value.
The question is: how much energy, water and food will the “money” created out of thin air in the future buy?
If the lender can only buy a tiny sliver of the energy, water and food that the “money” could have bought at the time the “money” was borrowed, then it won’t really matter how many zeroes the “money” will have. What matters is how much purchasing power of essentials the “money” retains.
Borrowing trillions of dollars euros, yen and yuan every year expands the claims on future energy at a rate that far exceeds the actual expansion of energy in any form.
This has created an illusion that we can always create money out of thin air and it will magically hold its current purchasing power for ever greater amounts of energy, food and water.
The monumental asymmetry between the staggering rate of expansion of “money” — claims on future energy — and the stagnant supply of energy means this illusion is only temporary.
See more of this great article:
Thanks to Jasper for this link
via Ice Age Now
March 12, 2021 at 12:37PM