Category Archives: Financial Implications

Can India come out ahead in an energy squeeze?

The slower the growth, the more sustainable an economy is over the moderately long term.

Energy consumption and the use of complexity tend to rise together.

Too much complexity can lead to collapse.

In general, the most “efficient” economies can be expected to do best.

Over the long term, all economies will collapse.

There have been shifts in which economies get a major share of available energy supplies. Shifting patterns are likely again in the future.

India may come out ahead in an energy squeeze because its warm climate and conservative culture allow its energy consumption per capita to remain low. Continue reading

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Fossil Fuel Imports Are Already Constrained

The big question for any fuel is, “Can consumers afford to pay a high enough price to cover all the costs involved in getting the fuel from endpoint to endpoint, at the time it is needed?”

Citizens become very unhappy if the cost of winter heat becomes extremely expensive. They demand subsidies and rebates from the government, in order to keep costs down. This is a sign that prices are too high for the consumer.

Both coal and natural gas are also heavily used in manufacturing. Their prices vary greatly from location to location and from time to time. If coal or natural gas prices rise in a particular location, the cost of manufactured goods from that location will also tend to rise. These higher prices will particularly hurt a manufacturing country, such as Germany, because its manufactured goods will become less competitive in the world marketplace. Continue reading

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The World Economy Is Becoming Unglued; Models Miss Real-World Behavior

A common belief is that if the world does not have adequate energy, the result will be high prices. These high prices will allow more fossil fuels to be extracted or will allow renewables to substitute for fossil fuels.

In my view, the real issue is quite different: Inadequate energy supply of the types the economy requires can be expected to affect the economy in a way that causes it to become “unglued.” The economy will gradually fall apart as infighting becomes more of a problem. Goods won’t necessarily be high-priced; many simply won’t be available at any price. Political parties will fragment. Conflict within countries, such as the recent Wagner conflict with the military leadership in Russia, will become more common. Continue reading

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Models Hide the Shortcomings of Wind and Solar

A major reason for the growth in the use of renewable energy is the fact that if a person looks at them narrowly enough–such as by using a model–wind and solar look to be useful. They don’t burn fossil fuels, so it appears that they might be helpful to the environment.

As I analyze the situation, I have reached the conclusion that energy modeling misses important points. I believe that profitability signals are much more important. In this post, I discuss some associated issues. Continue reading

Posted in Alternatives to Oil, Financial Implications | Tagged , , , | 3,344 Comments

The bumpy road ahead for the world economy

The path ahead looks very bumpy. The US is likely to be kicked out of its role as global hegemon. Rival countries may choose to attack the US with nuclear weapons, or the US may lash out with nuclear weapons as it sees its hegemony fail. Continue reading

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