A coming bubble in alternative energy?
That’s the verdict of Eric Janszen’s provocative cover story in the current Harper’s magazine:
The next bubble:
Priming the markets for tomorrow’s big crash
Online access is limited to Harper’s subscribers, but here are two choice tidbits:
Our economy is in serious trouble. Both the production-consumption sector and the FIRE [finance, insurance, real estate] sector know that a debt-deflation Armageddon is nigh, and both are praying for a timely miracle, a new bubble to keep the economy from slipping into a depression.
. . .
There is one industry that fits the bill [for the new bubble]: alternative energy, the development of more energy-efficient products, along with viable alternatives to oil, including wind, solar, and geothermal power, along with the use of nuclear energy to produce sustainable oil substitutes , such as liquefied hydrogen from water. Indeed, the next bubble is already being branded. . . .
As a member of a venture-capital firm that invested in technology companies in the late 1990s, Janszen had a front-row seat for the dot-com boom and bust. He also writes engagingly, and he offers a clear narrative of post-WW2 economic cycles — clear along a certain line of analysis, anyway. On the other hand, his business is to make contrarian, bubble-oriented economic analyses, and in his treatment alternative energy — or, I should say, the market in it — becomes a punching bag.
I have no doubt that alternative energy will reap huge investments over the next 20 years. But will it create the up-to-$20-trillion bubble that Janszen predicts? He says it “must” be so; I have my doubts.
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In Revelation chapter 5, it states: ” A day’s wages for a pound of wheat.” What do you make of this? Will we reach the cost of food Argentina suffered in the 1980s? What with the illegals being deported (the only ones willing to work for substandard wages and putting food on our tables), what will happen next? Would you agree?
Why not?
Well, Nadine, I think the Rev. 5 quote is probably more applicable as poetry than prophecy here. That said, I think there are going to be lots of highly predictable, and not always pleasant, repercussions of higher food prices.
As you suggest, those prices are going to affect a lot of other areas of the economy, plus many areas of policy (immigration, farm policy, trade barriers, etc.).
We already live in interesting times, like the old Chinese curse said. They’re going to get *more* interesting, is my guess.
[...] the beginning of this year, I pointed to Eric Janszen’s Harper’s cover story “The Next Bubble: Priming the Markets for [...]
[...] A coming bubble in alternative energy? [...]
alternative energy….. two bubble referrals: 1). T.Bone Pickens and his DonJuan windmills scheme. (Now, the bubblehead TBone sez that he was really talking ’bout natural gas and not wind power). #2). Case study is the Iowa ethanol debacle. Corn fed greed where the politicians sold American taxpayers a bill of goods for early caucus victories.
Eric is right. … a bubbling crude. Ask Jeb Clampett.