Understanding Why the Green New Deal Won’t Really Work

The reasons why the Green New Deal won’t really work are fairly subtle. A person really has to look into the details to see what goes wrong. In this post, I try to explain at least a few of the issues involved.

[1] None of the new renewables can easily be relied upon to produce enough energy in winter. 

The world’s energy needs vary, depending on location. In locations near the poles, there will be a significant need for light and heat during the winter months. Energy needs will be relatively more equal throughout the year near the equator.

Solar energy is particularly a problem in winter. In northern latitudes, if utilities want to use solar energy to provide electricity in winter, they will likely need to build several times the amount of solar generation capacity required for summer to have enough electricity available for winter.

Figure 1. US daily average solar production, based on data of the US Energy Information Administration.

Hydroelectric tends to be a spring-dominated resource. Its quantity tends to vary significantly from year to year, making it difficult to count on.

Figure 2. US daily average hydroelectric production, based on data of the US Energy Information Administration.

Another issue with hydroelectric is the fact that most suitable locations have already been developed. Even if additional hydroelectric might help with winter energy needs, adding more hydroelectric is often not an option.

Wind energy (Figure 3) comes closest to being suitable for matching the winter consumption needs of the economy. In at least some parts of the world, wind energy seems to continue at a reasonable level during winter.

Figure 3. US daily average wind production, based on data of the US Energy Information Administration.

Unfortunately, wind tends to be quite variable from year to year and month to month. This makes it difficult to rely on without considerable overbuilding.

Wind energy is also very dependent upon the continuation of our current economy. With many moving parts, wind turbines need frequent replacement of parts. These parts need to be precisely correct, with virtually no tolerance for change. Sometimes, helicopters are needed to install the new parts. Because of the need for continued high-technology maintenance services, wind energy cannot be expected to continue to operate for very long unless the world economy, with all of its globalization, can continue pretty much as today.

[2] Depending upon burned biomass in winter is an option, but we already know that this path is likely to lead to massive deforestation.

Historically, people burned wood and other biomass to provide heat and light in winter. If biomass is burned for heat and light, it is an easy step to using charcoal for smelting metals for goods such as nails and shovels. But with today’s population of 7.7 billion people, the huge demand for biomass would quickly deforest the whole world. There is already a problem with growing deforestation, especially in tropical areas.

It is my understanding that the Green New Deal is focusing primarily on wind, hydroelectric, and solar rather than biomass, because of these issues.

[3] Battery backup for renewables is very expensive. Because of their high cost, batteries tend to be used only for very short time periods. At a 3-day storage level, batteries do nothing to smooth out season-to-season and year-to-year variation.

The cost of batteries is not simply their purchase price. There seem to be several related costs associated with the use of batteries:

  • The initial cost of the batteries
  • The cost of replacements, because batteries are typically not very long-lived compared to, say, solar panels
  • The cost of recycling the battery components rather than simply leaving the batteries to pollute the nearby surroundings
  • The loss of electric charge that occurs as the battery sits idle for a period of time and the loss related to electricity storage and retrieval

We can get some idea of the cost of batteries from an analysis by Roger Andrews of a Tesla/Solar City system installed on the island of Ta’u. The island is in American Samoa, near the equator. This island received a grant that was used to add solar panels, plus 3-day battery backup, to provide electricity for the tiny island. Any outages longer than the battery capacity would continue to be handled by a diesel generator. The goal was to reduce the quantity of diesel used, not to eliminate its use completely.

Based on Andrews’ analysis, adding a 3-day battery backup more than doubled the cost of the PV-alone system. (It added 1.6 times as much as the cost of the installed PV.) The catch, as I pointed out above, is that the cost doesn’t stop with purchasing the initial batteries. At least one set of replacement batteries is likely to be needed during the lifetime of the system. And there are other costs that are more subtle and difficult to evaluate.

Furthermore, this analysis was for a solar system. There seems to be more variation over longer periods for wind. It is not clear that the relative amount of batteries would be enough for 3-day backup of a wind system, or for a combination of wind, hydroelectric and solar. The long-term cost of a solar panel plus battery system might easily come to four times the cost of a wind or solar system alone.

There is also the issue of necessary overbuilding to make the system work. On Ta’u, near the equator, with diesel power backup, the system is set up in such a way that 40% of the solar generation is in excess of the island’s day-to-day electricity consumption. This constitutes another cost of the system, over and above the cost of the 3-day battery backup.

If we also eliminate the diesel backup, then we start adding more costs because the level of overbuilding would need to be even higher. And, if we were to create a similar system in a location with substantial seasonal temperature variation, even more overbuilding would be required if enough capacity is to be made available to provide sufficient generation in winter.

[4] Even in sunny, warm California, it appears that substantial excess capacity needs to be added to avoid the problem of inadequate generation during the winter months, if the electrical system used is based on wind, hydroelectric, solar, and a 3-day backup battery.

Suppose that we want to replace California’s electricity consumption (excluding other energy, including oil products) with a new system using wind, hydro, solar, and 3-day battery backup. Current California renewable generation, compared to current consumption, is as shown on Figure 4, based on EIA data.

Figure 4. California total electricity consumption compared to the sum of California solar, wind, and hydroelectric production, on a monthly average basis. Data used from the US Energy Information Administration through June 30, 2019.

California’s electricity consumption peaks about August, presumably due to all of its air conditioning usage (Figure 5). This is two months after the June peak in the output of solar panels. Also, electricity usage doesn’t drop back nearly as much during winter as solar production does. (Compare Figures 1 and 5.)

Figure 5. California electricity consumption by month, based on US Energy Information Administration data.

We note from Figure 4 that California hydroelectric production is extremely variable. It appears that hydroelectric generation can vary by a factor of five comparing high years to low years. California hydroelectric generation uses all available rivers, so any new energy generation will need to come from wind and solar.

Even with 3-day backup batteries, we need the system to reliably produce enough electricity that it can meet the average electricity generation needs of each separate month. I did a rough estimate of how much wind and solar the system would need to add to bring total generation sufficiently high so as to prevent electricity problems during the winter. In making the analysis, I assumed that the proportion of added wind and solar would be similar to their relative proportions on June 30, 2019.

My analysis suggests that to reliably bridge the gap between production and consumption (see Figure 4), approximately six times as much wind and solar would need to be added (making 7 = 6 +1 times as much generation in total), as was in place on June 30 , 2019. With this arrangement, there would be a huge amount of wind and solar whose production would need to be curtailed during the summer months.

Figure 6. Estimated share of wind and solar production that would need to be curtailed, to provide adequate winter generation. The assumption is made that hydroelectric generation would not be curtailed.

Figure 6 shows the proportion of wind and solar output that would be in excess of the system’s expected consumption. Note that in winter, this drops to close to zero.

[5] None of the researchers studying the usefulness of wind and solar have understood the need for overbuilding, or alternatively, paying backup electricity providers adequately for their services. Instead, they have assumed that the only costs involved relate to the devices themselves, plus the inverters. This approach makes wind and intermittent solar appear far more helpful than they really are.

Wind and solar have been operating in almost a fantasy world. They have been given the subsidy of “going first.” If we change to a renewables-only system, this subsidy of going first disappears. Instead, the system needs to be hugely overbuilt to provide the 24/7/365 generation that backup electricity providers have made possible with either no compensation at all, or with far too little compensation. (This lack of adequate compensation for backup providers is causing problems for the current system, but it is beyond the scope of this article to discuss them here.)

Analysts have not understood that there are substantial costs that are not being reimbursed today, which allow wind and solar to have the subsidy of going first. For example, if natural gas is to be used as backup during winter, there will still need to be underground storage allowing natural gas to be stored for use in winter. There will also need to be pipelines that are not used much of the year. Workers will need to be paid year around if they are to continue to specialize in natural gas work. Annual costs of the natural gas system will not be greatly reduced simply because wind, hydro, and water can replace natural gas usage most months of the year.

Analysts of many types have issued reports indicating that wind and solar have “positive net energy” or other favorable characteristics. These favorable analyses would disappear if either (a) the necessary overbuilding of the system or (b) the real cost of backup services were properly recognized. This problem pervades studies of many types, including Levelized Cost of Energy studies, Energy Returned on Energy Invested studies, and Life Cycle Analyses.

This strange but necessary overbuilding situation also has implications for how much homeowners should be paid for their rooftop solar electricity. Once it is clear that only a small fraction of the electricity provided by the solar panels will actually be used (because it comes in the summer, and the system has been overbuilt in order to produce enough generation in winter), then payments to homeowners for electricity generated by rooftop systems will need to decrease dramatically.

A question arises regarding what to do with all of the electricity production that is in excess of the needs of customers. Many people would suggest using this excess electricity to make liquid fuels. The catch with this approach is that the liquid fuel needs to be very inexpensive to be affordable by consumers. We cannot expect consumers to be able to afford higher prices than they are currently paying for fossil fuel products. Also, the new liquid fuels ideally should power current devices. If consumers need to purchase new devices in order to utilize the new fuels, this further reduces the affordability of a planned changeover to a new fuel.

Alternatively, owners of solar panels might be encouraged to use the summer overproduction themselves. They might set the temperatures of their air conditioners to a lower setting or heat a swimming pool. It is unlikely that the excess could be profitably sold to nearby utilities because they are likely encounter the same problem in summer, if they are using a similar generation mix.

[6] As appealing as an all-electric economy would seem to be, the transition to such an economy can be expected to take 150 years, based on the speed of the transition since 1985.

Clearly, the economy uses a lot of energy products that are not electricity. We are familiar with oil products burned in many vehicles, for example. Oil is also used in many ways that do not require burning (for example, lubricating oils and asphalt). Natural gas and propane are used to heat homes and cook food, among other uses. Coal is sometimes burned in making pig iron and cement in China.

Figure 7. Electricity as a share of total energy use for selected areas, based on BP’s 2019 Statistical Review of World Energy.

Electricity’s share of total energy consumption has gradually been rising (Figure 7).* We can make a rough estimate of how quickly the changeover has been taking place since 1985. For the world as a whole, electricity consumption amounted to 43.4% of energy consumption in 2018, rising from 31.2% in 1985. On average, the increase has been 0.37%, over the 33-year period shown. If we assume this same linear growth pattern holds going forward, it will take 153 years (until 2171) until the world economy can operate using only electricity. This is not a quick change!

[7] While moving away from fossil fuels sounds appealing, pretty much everything in today’s economy is made and transported to its final destination using fossil fuels. If a misstep takes place and leaves the world with too little total energy consumption, the world could be left without an operating financial system and with way too little food. 

Over 80% of today’s energy consumption is from fossil fuels. In fact, the other types of energy shown on Figure 8 would not be possible without the use of fossil fuels.

Figure 8. World Energy Consumption by Fuel, based on data of 2019 BP Statistical Review of World Energy.

With over 80% of energy consumption coming from fossil fuels, pretty much everything we have in our economy today is available thanks to fossil fuels. We wouldn’t have today’s homes, schools or grocery stores without fossil fuels. Even solar panels, wind turbines, batteries, and modern hydroelectric dams would not be possible without fossil fuels. In fact, for the foreseeable future, we cannot make any of these devices with electricity alone.

In Figure 8, the little notch in world energy consumption corresponds to the Great Recession of 2008-2009. The connection between low energy consumption and poor economic outcomes goes back to many earlier periods. Energy consumption growth was unusually low about the time of the Great Depression of the 1930s and about the time of the US Civil War. The vulnerability of the financial system and the possibility of major wars are two reasons why a person should be concerned about the possibility of an energy changeover that doesn’t provide the economic system with adequate energy to operate. The laws of physics require energy dissipation for essentially every activity that is part of GDP. Without adequate energy, an economy tends to collapse. Economists are generally not aware of this important point.

Agriculture is dependent upon fossil fuels, particularly oil. Petrochemicals are used directly to make herbicides, pesticides, medications for animals and nitrogen fertilizer. Huge quantities of energy are necessary to make metals of all kinds, such as the steel in agricultural equipment and in irrigation pumps. Refrigerated vehicles transport produce to market, using mostly oil-based fuel. If the transition does not go as favorably as hoped, food supplies could prove to be hopelessly inadequate.

[8] The scale of the transition to hydroelectric, wind, and solar would be unimaginably large.

Today, wind, hydroelectric, and solar amount to about 10% of world energy production. Hydroelectric amounts to about 7% of energy consumption, wind about 2%, and solar about 1%. This can be seen on Figure 8 above. A different way of seeing this same relationship is shown in Figure 9, below.

Figure 9. World hydroelectric, wind and solar production as share of world energy supply, based on BP’s 2019 Statistical Review of World Energy.

Figure 9 shows that hydroelectric power is pretty well maxed out, as a percentage of energy supply. This is especially the case in advanced economies. This means that any increases that are made in the future will likely have to come from wind and solar. If hydroelectric, wind and solar are together to produce 100% of the world’s energy supply, then wind and solar, which today comprise 3% of today’s energy supply, will need to ramp up to 93% of energy supply. This amounts to a 30-fold increase in wind and solar between 2018 and 2030, based on one version of the Green New Deal’s planned timing. We would need to be building wind and solar absolutely everywhere, very quickly, to accomplish this.

[9] Moving to electric vehicles (EVs) for private passenger autos is not likely to be as helpful as many people hope.

One issue is that it is possible to mandate the use of EVs, but if the automobiles cost more than citizens can afford, many citizens will simply stop buying cars at all. At least part of the worldwide reduction in automobile sales seems to be related to changes in rules that are intended to reduce auto emissions. The slowdown in auto sales is part of what is pushing the world into recession.

Another issue is that private passenger autos represent a smaller share of oil consumption than many people would expect. BP data indicate that 26% of worldwide oil consumption is gasoline. Gasoline powers the vast majority of the world’s private passenger automobiles today. While an oil savings of 26% would be good, there would still be a very long way to go.

One study of EV sales in Norway suggests that, with large subsidies, these cars are disproportionately sold to high-income families as a second vehicle. The new second vehicles are often used for commuting to work, when prior to the EV ownership, the owner had been taking public transportation. When this pattern is followed, the savings in oil use from the adoption of EVs becomes very small because building and transporting EVs also requires oil use.

Figure 10. Source: Holtsmark and Skonhoft The Norwegian support and subsidy policy of electric cars. Should it be adopted by other countries?

If one of the goals of the Green New Deal is to level out differences between the rich and the poor, mandating EVs would seem to be a step in the wrong direction. It would make more sense to mandate walking or the use of pedal bicycles, rather than EVs.

[10] Wind, solar, and hydroelectric have pollution problems themselves.

With respect to solar panels, a major concern is that if the panels are broken (for example, by a storm or near the end of their lives), water alone can leach toxic substances into the water supply. Another issue is that recycling needs to be subsidized, to be economic. The price of solar panels needs to be surcharged at the front end, if adequate funds are to be collected to cover recycling costs. This is not being done in the US.

Wind turbines are better in terms of not being made of toxic substances, but they disturb bird, bat, and marine life in their vicinity. Humans also complain about their vibrations, if the devices are close to homes. The fiberglass blades of wind turbines are not recyclable, and many of them are too big to fit into standard crushing machines. They need to be chopped into pieces, in order to fit into landfills.

Adding huge amounts of 3-day battery backup for wind turbines and solar panels will create a new set of recycling issues. The extent of the recycling issues will depend on the battery materials used.

Of course, if we try to ramp up wind and solar by a huge factor, pollution problems will rise accordingly. The chance that raw materials will prove to be scarce will increase as well.

There will also be an increasing problem with finding suitable sites to install all of the devices and batteries. There are limits on how densely wind turbines can be spaced before the output of one wind turbine interferes with the output of other nearby turbines. This problem is not too different from the problem of declining per-well oil production caused by too closely spaced shale wells.  


I could explain further, but that would make this post too long. For example, using an overbuilt renewables system, there is not enough net energy to provide the high salaries almost everyone would like to see.

Also, the new renewable energy systems are likely to be more local than many have hoped. For example, I think it is highly unlikely that the people of North Africa would allow contractors to build a solar system in North Africa for the benefit of Europeans.


*There are two different ways of comparing electricity’s value to that of total energy. Figure 7 uses the more generous approach. In it, the value of electricity is based on the amount of fossil fuels that would need to be burned to produce the electricity amounts shown. In the case of electricity types that do not involve the burning of fossil fuels, these amounts are estimated amounts. The less generous approach compares the heat value of the electricity produced to the total heat value of primary energy sources. Using the less generous approach, electricity corresponds to only about 20% of primary energy supply. The transition to an all-electric economy would be much farther away using the heat value approach.

This entry was posted in Alternatives to Oil, Financial Implications and tagged , , by Gail Tverberg. Bookmark the permalink.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.

1,326 thoughts on “Understanding Why the Green New Deal Won’t Really Work

  1. “China’s factory deflation deepened in September due to slowing output growth and falling raw material prices, adding to signs that China’s domestic slowdown is an increasing drag on the struggling world economy.

    “The producer price index fell 1.2% from a year earlier, as forecast by economists in a Bloomberg survey. Surging pork prices [spiking 69% yoy in Sept] drove consumer inflation higher, cutting into household spending power.”


  2. HA,HA,HA…this should bring a smile to Greta….her followers will be missing a lot of school time in the years ahead!

    From the Automic Earth…Thank You!

    Well, they’re on oil company. What did you expect?

    • No Choice But To Invest In Oil, Shell CEO Says (R.)

    Royal Dutch Shell still sees abundant opportunity to make money from oil and gas in coming decades even as investors and governments increase pressure on energy companies over climate change, its chief executive said. But in an interview with Reuters, Ben van Beurden expressed concern that some shareholders could abandon the world’s second-largest listed energy company due partly to what he called the “demonisation” of oil and gas and “unjustified” worries that its business model was unsustainable. The 61-year-old Dutch executive in recent years became one of the sector’s most prominent voices advocating action over global warming in the wake of the 2015 Paris climate agreement.
    Shell, which supplies around 3% of the world’s energy, set out in 2017 a plan to halve the intensity of its greenhouse emissions by the middle of the century, based in large part on building one of the world’s biggest power businesses. Still, the amount of carbon dioxide emitted from Shell’s operations and the products it sells rose by 2.5% between 2017 and 2018. A defiant van Beurden rejected a rising chorus from climate activists and parts of the investor community to transform radically the 112-year-old Anglo-Dutch company’s traditional business model. “Despite what a lot of activists say, it is entirely legitimate to invest in oil and gas because the world demands it,” van Beurden said. “We have no choice” but to invest in long-life projects, he added.
    [..][ “We can sustain an upstream portfolio all the way into the 2030s if there is an economic rationale for doing that and a societal rationale for doing that,” van Beurden said. “Fortunately enough, we have more of those than we have money to spend on them.” Van Beurden rejected as a “red herring” arguments that Shell’s oil and gas reserves, which can sustain its current production for around eight years, would be economically unviable, or stranded, in the future. A lack of investment in oil and gas projects could lead to a supply shortage and result in price spikes, he said. “One of the bigger risks is not so much that we will become dinosaurs because we are still investing in oil and gas when there is no need for it anymore. A bigger risk is prematurely turning your back on oil and gas.”
    Shell plans to increase its annual spending to around $32 billion by 2025 from the current $25 billion, with up to one tenth allocated to renewables and the power business. The company, the world’s largest dividend payer, plans to return $125 billion to shareholders in the five years to 2025.

    Bless their little hearts….BAU is kicking and screaming all the way down the road Full THROTTLE 🙄

    • We all know the Simpsons predicted the predicted the Trump presidency. But not a lot of people are aware that Lisa SImpson wrote and beta tested Greta’s big speech.

      • I wish someone would dive out a window like that when I tell a room of people how bad our future is likely to be. Most times I just get a lot of blank stares and/or yawns 😐


    • I expect that there have been fires in Texas caused by power lines too, but fortunately the population level is lower.

      At least one of Venezuela’s big outages seems to have been caused by fire.

    • That’s ironic. PG&E cuts off power to hundreds of thousands, but a downed power line in an area with power still on, leads to a fire. Apparently it’s very difficult to anticipate weather related or otherwise, downed power lines that cause fires. My suggestion to PG&E is to leave the power on and improve the infrastructure.

      • PG&E is in NORTHERN CA (where I am), not LA — EG, LA City has their DWP (Department of Water & Power), which runs the power grid there; elsewhere, there are various utilities.

      • Unfortunately, we can realistically only look forward to infrastructure decline in every respect, following this last phase of build-out – mostly worthless, badly-built, real estate, motorways, business parks, wireless networks, etc – based on cheap debt.

        Everything is desperately short-termist, and regular upkeep doesn’t bring the returns which everyone is desperate for today.

        Fossil fuels, flowing in abundance, have temporarily obscured the essential reality that all things human must rot, shatter, break down and decay to nothing – except perhaps our plastic waste, that’s new! What a lasting memorial for our idiotic species……..

  3. Serious stuff:
    Farming is hard, really, really hard; we all eat(yes, there are many who question what we are eating) because of farming and to a lesser extend fishing. I am not sure the Green New Deal can do much about this, CB’s have yet to master 3D printing of grains. There would seem to be some issues with what is sold abroad as well given that this appears to be a political year. This ignores the economic impact entirely.
    Losing a crop is heartbreaking; there is an old hymn, “Bringing in the Sheaves,” that with each year is more appreciated by me. God smiled on my farm this year, good crop, good yields and crop is almost in the bin, last year much corn lay on the ground after heavy rain and wind storms. It is not personal, it is the fickleness of the gods or whatever.

    Dennis L.

    • Thank you for your farming posts.

      My family farrned for centuries: olives, wheat, apples, and nothing makes me happier than to see rows of well-tended vines and pruned olive trees, or apple trees laden with fruit, etc.

      A few years ago here in England the whole cereal crop was devastated by constant rain, the sight of it grey and rotting was depressing in the extreme.

      But no one really noticed in town: when I mentioned it they looked blank……

      Vegans make me rather angry with their small-minded determination to get rid of small, well-run and humane mixed farms, and the hardy sheep farmers of the hills – nothing nobler to my mind.

      • Indeed. We had a couple of years here where potato and grain production failed completely. I got the same reaction when I pointed out we’d have been looking at a famine in an earlier generation.

    • I expect that one of the major functions of governments has been to try to provide some stability to food supplies. For example, store up extra from good years, to use in good years.

      • they award Nobel prizes for economics but not for more practical disciplines like geology. Hubbert deserved a Nobel prize, but his work scared the sheep.

      • They got the price for aiming at reducing the poverty (nothing new in economics since Adam Smith):
        «Banerjee and Duflo co-founded J-PAL with Sendhil Mullainathan at the Massachusetts Institute of Technology in 2003 with a mission of reducing poverty by ensuring that policy is informed by scientific evidence. J-PAL conducts randomized evaluations of innovative policy ideas and programs to identify what works, what doesn’t, and why in the fight against poverty; and works with partners to bring the most effective programs to scale.»

  4. “The UK just got more power from renewables than fossil fuels for the first time”

    This has a bunch of links, to more claims than I have time/info to try to deal with now — but, my questions remain: how could any of this — including hydro, nuclear, geothermal (in Iceland), or even wind or solar, or the power grids themselves, even exist without the fossil-fuel-based infrastructure?
    Why are places like Hawaii still importing lots of diesel fuel to run their power grids?

    • All these claims about ‘renewables’ ignore the fossil-fuel foundations of their performance.

      About as credible as the ‘everyone’s going Vegan, sales of vegan food up 20%’ headlines we see every week.

    • In the event of a cold winter—and they still happen occasionally—the UK requires up to seven times as much thermal energy (an extra 350 GW of current renewable power capacity) in winter as in summer.

      I wish them good luck with securing that from unreliables or mitigating the need through better insulation.

      Decarbonization zealots are a death cult, seriously!

  5. Even though the S&P 500 is trading at lofty levels, skittish investors don’t believe the good times will last and instead are preparing for the worst.

    “They’ve shifted $322 billion into money market funds during the past 6 months, in the biggest flight to safety since the 2008 financial crisis… Meanwhile, the latest release of the Global Fund Manager Survey by Bank of America Merrill Lynch reveals that leading investment managers around the world also are getting nervous, reporting that their holdings of cash, defensive stocks, and bonds are at historically high levels, with cash topping the list.

    “Investors are suffering from “bearish paralysis” resulting from worries about the trade war, Brexit, the Trump impeachment investigation, and the possibility of a recession ahead, strategists at BofAML led by Michael Hartnett write in a recent note to clients, as quoted in another Bloomberg article. In just the 7-day period through Oct. 9, they observe that global equity funds saw $9.8 billion of net withdrawals, while bond funds recorded $11.1 billion of net inflows.


      • Again, the second term for Donald seems as given now, the demographics has not changed much since last time, the true “red storm” will come to the US eventually (in a decade or two) but not this time yet. And the top Dem candidates have comparatively negative appeal to average population. So, yes there is overall increasing uncertainty over the US system going forward (unpredictable policy, int treaty busting, ..), not much about the way of the elections are going to end up though.

        • 2nd term for President Trump is in no way a given, IMO, might not even be likely. Yogi Berra said, “Its tough to make predictions about the future.”

          Talk to President Bush about the difference between summer 1991 and Nov 1992.

          Additionally 2000, 2008 (wasn’t that supposed to be Senator Clinton’s year in 2007), 2016(GOV. Bush was supposed to be the REP. candidate). Heck in 1983 the US was having difficulties(big ones) and President Reagan was doomed, 1987 Black Thursday and President Bush(again IIRC). Just covering the big ones, all the eventual losers thought they could win, I would hope.

          I agree that the current Democratic candidates not being well viewed though that depends on who you listen to. A year can make some huge changes. The way the GND is viewed does/will have a lot to do with it. The one of a few things they agree on, though details vary.

          I am pretty sure if the recession people are forecasting happens a reenactment of President Clinton’s 1992 win is probable.

          Weather forecasters do better than most political forecasters for the US. Look at how well they do. The projected path of Dorian changed in a day or 2. It was doing across Florida into the Gulf of Mexico originally. Then it was going to skim inland starting in West palm Beach County. How much did that reflect what happened?

          Just have to see what happens next Nov.


  6. “The Federal Reserve Bank of New York added $87.7 billion to the financial system Tuesday, using the market for repurchase agreements, or repo, to relieve funding pressure in money markets. Banks asked for $67.6 billion in overnight reserves, all of which the Fed accepted, offering collateral in the form of Treasury and mortgage securities.”


  7. “China caught traders off-guard with a surprise injection into the financial system via loans to banks, ahead of data on Friday which is expected to show a further slowdown in the domestic economy.

    “The People’s Bank of China added 200 billion yuan ($28 billion) of one-year cash through the medium-term lending facility on Wednesday.”


  8. “There’s an “uncomfortably high” chance that a recession could hit the global economy in the next 12-18 months — and policymakers may not be able to reverse that course, an economist said on Wednesday.

    ““I think risks are awfully high that if something doesn’t stick to script then we do have a recession,” said Mark Zandi, chief economist of Moody’s Analytics. “I’ll say this also: Even if we don’t have a recession over the next 12-18 months, I think it’s pretty clear that we’re going to have a much weaker economy.”


      • The ‘co-ordinated response’ might well be everyone shrieking at once in terror, and fainting – there’s not much that they can do.

        Really, it’s going to be fascinating to see how this plays out as the indications of being on the road to GFC2 grow ever harder to ignore.

        • Agreed on both counts.

          And indeed, re the latter, the journey here has already been fascinating.

          I anticipated that our second global crisis would start as the previous one *ostensibly* did, with a major shock in the banking system.

          Instead we’ve seen a slow grinding down of growth, as energy-constraints, and the protectionism and geo/socio-political dramas stemming from them, take their toll on trade and manufacturing in particular, with that now starting to spill over into other areas of the worst-effected economies.

          So, where next? Oh, for a crystal ball!

          • I’m increasingly of the suspicion that although the GFCv2 in some form seems imminent it will be still again plateau stage/territory thing only, likely manageable to some extent. For example Dr. Tim at Surplus estimates the next destruction potential at ~400% of the previous GFC, which roughly rhymes with my previous estimate of needed ~600% upgrade of the liftathlon action necessary for the GFC2 resolution. And even by that for the proper Seneca Cliff phase we will have to wait for GFC_ver_final.. So, the end of the plateau say in ~2023(5)-35 would finally reveal more details about the shape of the proper swift collapse ~2035-45 for the various global IC hubs.

            • Dr. Tim at Surplus also suggests that “the window of opportunity” for GFC 2.0 is already open and I would suggest it is opening wider with every day that passes.

              The extent of its manageability is the great unknowable but when the IMF and many of those working for the central banks are themselves expressing concern at our paucity of fiscal/monetary options, one is not left with a great deal of confidence.

              Instead I envisage the central banks continuing to ease and stimulate in their desperation to postpone the next catastrophic shock, even as their cures turn to poison and help facilitate it. Then we are in ‘Trade Off’ territory, I would guess. Hopefully that will take a good few years.

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