Financial, Economic and Social Mood Update (January 1, 2020)
Happy New Year 2020 to all!
The asset markets reached yet more “nominal” highs in December 2019, driven largely by the Central Bank’s relentless creation of yet more credit out of thin air – the modern version of printing worthless money. The volume of this credit is a staggering USD $10 TRILLION since the middle of September 2019, done to shore up dried up liquidity in the global banking market. The economy is quite frankly no longer a “real” economy. 99 percent of purchases are made on credit, interest rates are at artificially low levels (often near or below zero), the overwhelming majority of the population receives some sort of financial subsidy and almost nothing is being produced (no production of physical goods). The population continues to implode due to collapsing demographics, which spells disaster. An imploding population translates into an inverted (i.e. upside down) population pyramid, spelling eventual disaster for economic growth, asset values, tax collection, pensions, insurance and banking. When the credit bubble does finally burst, expect asset values (the stock markets and real estate values) as well as the consumer economy (automotive purchases and everything else) to fall to zero.
The subject of this month’s update is the progress with the International Thermonuclear Experimental Reactor (ITER), an all-important nuclear fusion power reactor located in Provence in southern France just 44 miles north of the coastal city of Marseilles. Nuclear fusion power is the great promise of safe, efficient and affordable power generation for the future of the entire world, a source of power generation used by our sun and by all of the stars in the limitless universe. 35 countries representing 50 percent of humanity and 80 percent of global GDP are part of this huge project. To give us an overview of the present situation, all forms of global energy usage now equal 85 percent fossil fuels (crude oil, coal and natural gas in this order). In merely 4 years by the year 2023 this will decline to just 58 percent of total worldwide energy usage. The goal is bring this down to zero shortly after the year 2050 – only 31 years from now.
One short side note or observation: it would be more efficient (and environmentally friendly) if we were to phase out gasoline as soon as possible and use both diesel fuel and natural gas as substitutes in the interim period between today and the year 2050. Why so? Because with diesel fuel in lieu of gasoline or petroleum, global crude oil consumption would drop as much as 40 percent. And natural gas (methane) although not perfect, is far cleaner than crude oil in terms of overall emissions and pollution. With respect to diesel fuel, some elements thereof pollute more than gasoline – but some other elements of diesel actually pollute less than gasoline. In sum, the goal here must be to reduce and ultimately to eliminate the production and the consumption of all fossil fuels (coal, crude oil and natural gas).
Unlike nuclear fission power plants (which generate power by splitting atoms inside of fission reactors – a potentially very dangerous and explosive process), the ITER reactor will fuse atoms together at 150 million degrees Celsius / Centigrade, a temperature 10 times hotter than our sun. This project grew out of collaboration between the governments of the former USSR and the USA when Mikhail Gorbachev and Ronald Reagan were in office, respectively. An international ITER treaty was signed in 2006 which welcomed China, the European Union (EU), India, Japan, Russia (the main successor state of the former Soviet Union or USSR) and South Korea to this very important global project. Construction of the USD $22 billion reactor is already 65 percent complete and is scheduled to commence testing in 2025. This is the largest and the most important nuclear fusion project in the world, and the goal of this effort is to give the world limitless emissions-free (pollution-free and carbon-free) power generation by the year 2050.
Here is the link to an article on the project, complete with recent color illustrations: https://www.bloomberg.com/features/2019-iter-nuclear-fusion/.
