how can renewable energy stop the bubble conomics?

4 Comments

1. Carlo Ancelotti says:

   September 11, 2009 at 12:12 pm

   It can’t – it has nothing to do with the supply of money and credit, which is the primary cause of economic bubbles.

   Oil didn’t go over $140/bbl because of anything structural to the oil industry – oil prices spiked for the same reason that all commodity prices (gold, platinum, palladium, copper, etc…) spiked: the dramatic increase in the supply of money and credit, as the Fed maintained historically low interest rate targets and Bush kept raising spending to pay for two wars, a new Cabinet Dept., a new entitlement program and increases in domestic spending. Now Obama is increasing that spending by an order of magnitude and the Fed has cut rates even further. That is why commodity prices are coming back even though economic activity is not.
2. Thom says:

   September 11, 2009 at 12:12 pm

   I think what he means is that if we have a reliable and plentiful source of renewable energy we can insulate ourselves from the affects of the crude oil (and other types of energy) bubbles (which undoubtedly exist, especially with the types of fundamentals we have nowadays in energy markets). Energy is an input to just about everything we consume, so controlling those costs (and at least making them more predictable) would be a big help. Nevertheless it’s a total pipe dream in the short run. I’d say maybe in 50 years or more we won’t be as dependent on oil. And I’m confident in saying that becaue neither the technology, scale nor the infrastructure for alternative energies even exists. And those things take many years to build up.

   If Obama was really serious about avoiding bubbles he’d allow us to produce more oil right here at home. He’s not serious though, he’s a politician who is playing political games.
3. whsgreenmom says:

   September 11, 2009 at 12:12 pm

   I guess he is talking about how things like rate spikes for gas and other energy products can affect all aspects of the economy. When energy prices spike, it costs more to produce, transport, and store items, so prices go up, people buy less, profits go down and people loose jobs, which decreases demand so prices fall, etc…
4. rules_of_a says:

   September 11, 2009 at 12:12 pm

   bubble economics has nothing to due with renewable energy, what obama is saying is that by switching to more renewable types of energy we can avoid bubble economics in the future

   bubble and burst economics is what caused the great depression and our current economic collapse, basically what happens is our consumerism and capitalism goes on a rampage, people buying too much on credit, and when they do the economy sky rockets and the numbers are kept artificially high by super banks and mega lenders. However as the bubble of money gets bigger and bigger, the support for it begins to collapse. When people buy too much on credit, many of them cannot pay it back, and then suddenly people start losing money, and it casues a chain reaction which causes complete economic collapse.

   renewable energy will not solve this problem, but what it will do is help soften the blow of America’s mega consumeristic lifestyle. When our electricty comes from the sun and our cars run on hydrogen Americans can focus on other issues instead of wondering how they are going to get to work. So what this plan will do is create a buffer zone, so that when the economy falls again (and unless people stop being greedy its going to happen) people will still be able to go about their daily lives. renewable energy will (eventually) lower the cost of food, fuel, electricty, and possibly even water and heat, which will make life a lot easier when you lose your job.

   hope this helps