Climate change is the lie you can make an honest dollar from

Tuesday, 12 September 2023 — South Melbourne

[10 min read]

Dear Reader,

‘If you tell a big enough lie and tell it frequently enough, it will be believed.’

Adolf Hitler (1889–1945)

History is replete with big fat lies being told and more astonishingly, being believed.

Socialism is the perfect model for equal distribution of wealth (I am pausing to have a chuckle at that one).

Religion based on men in spaceships (oh stop it).

Hitler laying blame for Germany’s economic ills at the feet of the Jews (what a tragedy on so many levels).

It’s ironic the lie that began as ‘Global Warming’ attracted mainstream attention from a movie (ironically) titled “The Inconvenient Truth”.

Al Gore’s work of fiction was (for him) inconveniently exposed by the findings of a UK High Court judge.

When Gore’s alarmist forecasts, like ‘a sea-level rise of up to 20ft would be caused by melting of either west Antarctica or Greenland in the near future’ did not eventuate, there was a very clever shift in narrative…Global Warming was abandoned for ‘Climate Change’.

I say “clever” because who can argue with climate change?

Countless conversations begin with a passing remark on the weather.

“Bit cold today”…

“Gee, it was warm on the weekend”…

The one constant in all our lives is a changing climate…well before the River Thames froze over…

The real inconvenient truth about climate change is it’s ‘a big enough lie, that’s been told frequently enough to have been believed by enough people.’

As ridiculous and non-sensical at it is, we now have Western Governments sanctioning the sabotage of reliable base load power supplies.

The demonisation of fossil fuels is as astounding as it is mind-blowingly stupid.

The gun these idealistic imbeciles have cocked and loaded is not pointed at our feet, they’ve put it to society’s temple.

(Editor’s Note: Such a plan is bound to have some sort of motive behind it, however ridiculous. And with the facts failing to justify its viability to ‘save the planet’, these motives could be entirely selfish in origin. Watch the interview at the end of this article for more…)

The real cost of renewables

The whole snow job (maybe this term won’t be used anymore with global warming) about ‘low cost’ renewables was laid bare in this Wall Street Journal article on 4 September, 2023…

To quote (emphasis added)…

‘The Inflation Reduction Act (IRA) includes hundreds of billions of dollars in subsidies for green energy, yet now renewable developers want utility rate-payers in New York and other states to bail them out.

‘According to a report late last month by the New York State Energy Research and Development Authority (Nyserda), large offshore wind developers are asking for an average 48% price adjustment in their contracts to cover rising costs. The Alliance for Clean Energy NY is also requesting an average 64% price increase on 86 solar and wind projects.

‘The IRA includes federal tax credits that can offset 50% of a project’s costs. But renewable developers say their costs are increasing faster than inflation and that the projects will “not be economically viable and would be unable to proceed to construction and operation under their existing pricing,” says Nyserda.

‘The climate lobby says power from wind and solar is cheaper than from fossil fuels, but that’s true only with generous subsidies and near-zero interest rates. Price adjustments that renewable developers want in New York would make solar and wind two- to five-times more expensive than natural gas power.’

Who would have guessed that absent huge (and, never-ending) Government subsidies and increased rates, renewables are about as economically viable as a surf shop in the Arctic?
Never saw that one coming (tongue now firmly in cheek).

Far from being the solution, renewables are part of the problem…and opportunity for astute investors. We’ll circle back to this shortly.

But first, let’s…

Follow the money

Wall Street could not give a flying fig about Environmental, Social or Corporate Governance.
Sure, words are mouthed. Virtues are signalled. But, underneath the stage managed socially conscious veneer, it’s all about the money.

Blackrock (the world’s largest asset manager) actions speak far louder than any words.

To quote from Blackrock’s Press Release on 17 July, 2023…

‘BlackRock, Inc. (NYSE: BLK) announced today that it is naming the Chief Executive Officer of the Saudi Arabian Oil Company (“Aramco”), one of the world’s largest integrated energy companies, to BlackRock’s Board of Directors (“Board”), while also preparing for the departure of a Board member.’

Why would BlackRock appoint the CEO of the world’s largest oil producer to its board?

Could it be…

a) wanting to get a slice of the fees associated with the potential sale of a US$50 billion stake in Aramco or

b) getting an insider’s view on how to position the firm’s allocation to the most sought-after commodity on the planet or

c) wanting to convince the newly appointed director of the error in his ways and persuade him to abandon oil production in favour of renewables?

In keeping with the ‘follow the money’ theme, my money is on a) and b).

Blackrock knows the demand for fossil fuels is only going to increase NOT decrease.

Why?

Because renewables and electric vehicles do not magically appear in some carbon-free other world.

Milk does not come from the carton

They are made here on Earth from things mined on this Earth.

We laugh at city kids who think milk comes from containers.

Yet, there are a lot of adults out there who have no clue what it takes to manufacture wind turbines, solar panels (made with slave labour in China) and EVs.

In July 2019, the left-leaning film maker, Michael Moore released a movie titled Planet of the Humans. You can watch it here on YouTube.

Climate change activists (who remained ‘surprisingly’ silent about the inconsistencies in Al Gore’s 2006 work of fiction) found their voice and campaigned to have it removed from the public domain…

Whether you agree with everything in the movie or not, the one thing that’s abundantly evident is the amount of ‘stuff’ that needs to be extracted from this Earth to turn the renewable dream (or, nightmare) into a reality.

Governments have too much political capital invested (and, no doubt money invested via their spouse’s portfolio…did someone say Nancy Pelosi?) to abandon the Green Dream.

Therefore, rivers of taxpaying dollars are going to flow into the coffers of mining companies who can get this stuff out of the ground and into the outstretched hands of subsidy-seeking renewable developers.

Net zero is a pipe dream

The reality is Net Zero is not within a ‘bull’s roar’ of happening.

Capitalising on this mismatch in ideals and the real world (the one we extract commodities from) is where my mate Greg Canavan comes into his own.

Greg has been all over this story for years now and knows how to clinically assess what’s real and what’s not in the commodity complex.

We are in the early stages of a massive trend in commodity markets…one that’s destined to be fuelled by higher inflation and lower IQs.

To find out more about the opportunities from this trend, listen to Greg Canavan…someone who has the intelligence — as proven by his investment track record — to add value to investor portfolios.

His controversial research report, NOT ZERO, drops this week. Keep an eye on your inbox and be ready to stream the video. This one’s going to rattle a few cages…but it reveals a seriously compelling investment opportunity for those who can handle being called ‘heretics’…

Regards,

Vern Gowdie,
Editor, The Daily Reckoning Australia

PS: As promised, check out this cracking interview where Greg talks to former Liberal Senator and founder of the Australian Conservative party, Cory Bernardi.

Cory has been a strident critic of the energy transition, seeing it as a global movement driven by Marxists, aided and abetted by what he calls a ‘spineless and leaderless’ political class.

In short, Cory says that the climate catastrophe scare tactics are more about fear and control, rather than anything else. It’s a compelling take on this controversial topic, and one that won’t see the light of day in mainstream media circles.

It’s definitely worth checking out…

Dear Reader,

A dear reader wrote to tell us, in effect, how dumb we are. He writes:

‘The most ridiculous, crazy, imbecilic thing I’ve ever read of yours is the so-called “comparison” between the cost of an early 1970s pickup and a 2020 pick-up.’

He must be a new reader. Surely, over the years, we must have written things much stupider than that.

The gist of it was that working people get their income from selling their time. So, what really matters is how much they get per hour. In 1948, when the Ford F series began, each hour of his time, at an average wage of 40 cents/hour, bought him 1/3000th of the truck.

Yesterday, when we looked up the median hourly wage in 2023, we got US$11. Today, we get — from the ListFoundation — US$16 and change. The average wage is another thing, it includes the salaries of Wall Street executives and sports stars. It’s more than US$28 per hour. But it is irrelevant. The median actually measures what most people get…so let’s stick with that.

Goin’ Nowhere

At US$16 an hour, a guy can buy — guess what — 1/2,937th of a new Ford F-150. Almost exactly the same as 75 years ago. And while new tech improved the truck, it should have improved the making of it at the same pace. Automated assembly lines, plastics, robots — all should have made the truck cheaper to produce. And it should have made him more productive…and raised his wages, too.

But other studies show the same thing. Wages, adjusted for inflation, have not gone up in more than half a century.

Inflation-Adjusted Weekly Earnings of Full Time Male Workers, 1979 to 2023

We also got a response from George Gilder and Gayle Pooley — two of the leading proponents of the ‘time price’ concept (the idea that prices are actually ‘tokenised time’). They agree with our Dear Reader, maintaining that our numbers are all wrong…and that today’s F-150 is far superior to the truck from 1948.

Squishy and Fishy

We don’t really object to either criticism. The numbers are squishy and fishy. As for the truck, we own an old one…and a new one; the new one is definitely much better. Three times better (implied by the increase in price)? Not likely. For local chores and errands, the old truck is just as good as the new one. On the open road, however, the new truck pulls ahead.

We agree, too, with the ‘time price’ idea; it’s a neat way of measuring the rough progress of humanity. Our problem with it is that there is more to the story. It paints the working man as a stick figure…with no flesh, no heart…no jealousy and no sense of betrayal. It fails to take into account what kind of morons we really are — ready to do long division by day and howl at the Moon at night. We measure our progress, not in ‘time prices’, but in comparison to our neighbours, brothers-in-law, and our own parents,

Are we better off?

Thanks to capitalism and traditional fuels (drawing on the Earth’s stored up Sunlight), even the most humble working man in the US can eat fruits and vegetables out of season. He can enjoy entertainments — 24/7 — that Louis XIV couldn’t even imagine. He can see the US in his Chevrolet, coast to coast in a/c comfort, listening to Willie Nelson’s ‘Stardust’ album, for only about US$500 worth of gasoline. Even at the median wage, that’s only four days of work. And the truck doesn’t have to be ‘bought’. It can be financed…month to month. And the gas and snacks can be bought with credit too.

And now, thanks to the wonders of electronic communications, he can watch porn without going to a sleazy theatre in a dodgy part of town…and if he gets too fat, he might even be able to get disability.

There he is…the backbone of the American economy. He builds things. He fixes things. He makes things work. And the money he earns — every penny of it — is recycled into the economy, in sales and profits…to keep the whole shebang in business.

And yet, he is dependent on credit as credit tightens and interest rates go up. His truck is financed. His house is mortgaged. He has very little in savings. Almost no capital. Not much margin for error.

While the rich have gotten richer, he has gone nowhere…and by our calculations, gotten poorer.

‘So what,’ our dear reader wants to know. So what if he depends on credit? So what if he is deep in debt? So what if the elite, including his elected representatives north of Richmond, take him for a moron?

So what?

So…nothing. We’re just trying to figure out what is going on…and guess about where it leads.

Losing

How come all this ‘tech’ and credit didn’t lift him up? More scientists. More capital. More PhDs. Eight trillion in ‘stimulus’ from the Fed. More economists. More technology. More accumulated ‘knowledge’…available on our laptops. We don’t even have to think for ourselves anymore; we have AI. And who hasn’t read Jack Welch’s classic Winning? Jack laid it out for us. All we had to do was to borrow a lot of money, buy businesses, and hire some hotshots to run them.

It sounded so simple. And yet…it didn’t even work for Welch. His empire expanded…and then, overburdened by debt and dysfunction…it contracted. Today, the stock sells for about the same as it did in the mid-90s, nearly 30 years ago.

Jack’s idea seemed new…but there was nothing new about it. Stripped of its trendy jargon, it proved only what we already knew, that credit only works when it is used to increase efficiency and output. Just buying things — whether consumer items or businesses — doesn’t help.

That is obvious in the national accounts too. The Fed, with its spiffy gold-free dollar, could provide credit. Welch, ahead of his time, used it to build a tottery business empire. Consumers used it to buy big screen TVs and granite countertops. The feds used it to pay for, among other things, a 20-year war against nobody-in-particular, for no particular reason.

And now, credit is becoming more expensive…the screw turns…and the credit cycle (getting rid of bad debt) becomes painful, especially for the proletariat that depends on it.

You can pump up an economy — temporarily — with credit. People think it is real ‘money’. They think their wages are rising…their stocks are going up…sales are increasing. Later, they discover that the boom was a fraud. It was a roundtrip to nowhere.

What if the same were true for ‘technology’? What if it were mostly a distraction…a diversion…an idle entertainment? Dot coms…cryptos…the internet…TikTok…AI — the Fed’s EZ credit has juiced them up, one after another. But like Welch’s GE, the feds’ wars, or Wall Street’s buybacks…what if they don’t really add to our wealth…but subtract from it, by absorbing time and resources that might be better used elsewhere?

The new Ford F-150 is said to have 1,000 silicon chips in it. What if none of them takes you where you really want to go?

Stay tuned...

Regards,

Bill Bonner,
For The Daily Reckoning Australia