Wednesday, March 19, 2008

What may kill the Goose

The truly horrid effect existent in economic life consists of deviant practice seems always to be the cheapest route. Coal production has suddenly become more Profitable, so heavy investment shifts to the Coal industry, exactly when We are trying to curtail CO2 emissions. I have always been the advocate of the Double-Whammy, where Utilities must by law make as much investment in alternative energy systems as they pay in increased Costs to purchase traditional fuels. The beauty of the system resides in both increased Energy production under heavy consumption, and that alternative energy systems will assume a natural increase in total Output percentage. Now to convince Legislator, Economist, and Utility owner that the system is the best conversion methodology.

A cold Splash on a warm March day! It does not require much Comment, the article says it all. The Producer Price Index means a bit more than the CPI, which tells one only where the Economy has been, whereas the PPI tells one where We are likely to go. Cutting Fuel and Food out of the Estimates becomes increasingly foolish, as Fuel absorbs an increasing percentage of Disposable Income, and Food increases in percentage of actual Purchases. People are buying less but Eating better, and Driving less but paying more. Everyone become a Gourmet as One can drive to less Entertainment, which cannot be budgeted in the new Household reality. What worries me is the new direction of the Construction industry, there is too much Housing for both the Apartment complexes and new Housing to be filled at the same time; one or the other is going to be a big loser, producing more bad paper and lower Unit pricing.

China may be in even more trouble than the United States. They already have the Inflation, and they have not developed the domestic and alternate foreign markets to cut themselves free of the American economy. The antipathy between Japan and China extends beyond the cultural, with China notorious for shoddy Workmanship, and Japan fanatical about Quality Control; all within the Context of each other being the only real alternative to a slow death from a failing American economy. Everyone realizes the EU will not step into the breach, they with a long history of raising Trade barriers to protect ancient Interests. The World economy is like the Wind farm I know of, where the Vanes do not turn simply because no one is willing to do the High-Rise maintenance on the Equipment; not matter the level of Capital investment already implanted. lgl

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