This is an interesting analysis that will stand or fall on parts two and part three.
The Extent to which the well-described distortion in the balance of economies due to misallocation of credit to purely financial speculation is a difficult calculation to perform.
Prof. Richard Werner’s work on the theory of disaggregated credit will assist in those inquiries.
The prosperity index of seeds remains a black box apparently based upon the Surplus energy available for consumption as essentials or non-essentials or indeed for Financial speculation.
The Seeds Cart before the Usury Horse. Why SEEDS ECOE Doomsday has not and may never arrive.
Putting the Peakist cart before the usury horse. The Carbon Credit crucifixion of democracy.
The next aspects of the political social contract around Pensions and other rights inherited, expected, and earned under a mixed social democracy form of political economy is also fraught with analytical bias barbs.
No one ever said SEEDS was not an ambitious departure from financial analysis of the economy to an energy-based analysis.
Carbon Pricing Is Now Forcing Electricity Prices Higher, Not a lot of people know that!
rogerglewis on December 21, 2019 at 11:57 am said:Nord Stream 2: Trump approves sanctions on Russia gas pipeline
The Medium is the message?
Gas Wars, Pipelines, Silk Road
It’s not the Energy Substantially but the Means of Exchange, I.e petrodollar Hegemony.
A debt-based PetroDollar has been the most powerful Geo-Political and Soft Power Tool of the Rules-Based International Order for a century or So.
The Paradigm Shift being witnessed in front of our eyes but not seen for what it is is a move to a Carbon Trading based Unit of Currency. This is a proxy for energy usage as so much energy is generated by burning carbon. It is though the social control and governance mechanism embedded within the Debt Based currency and Taxation system which the “Masters of The Universe” are interested in maintaining.
It is Debt-based money at Interest that drives the need for Growth as the system does not reverse it only works one way.
https://www.bbc.com/news/world-europe-50875935
Money does not initiate Economic activity, in all cases, it is an intermediary token or rain check
rogerglewis on June 28, 2018 at 6:25 am said:
Reblogged this on MUSO MUSINGS ON FATHERHOOD THEORY AND STUFF and commented:
https://www.bloomberg.com/news/articles/2018-06-27/from-goldman-to-deutsche-bank-what-to-watch-for-in-stress-tests One to Watch
Can large U.S. banks hand $170 billion to their shareholders in the next 12 months? Will a top European investment bank botch the first public stress test of its entire U.S. business?
The Federal Reserve will answer those questions and more when it posts results from the second and final stage of its 2018 stress test Thursday at 4:30 p.m. While investors got hints during the first stage last week, the central bank has repeatedly found ways to surprise in past reviews of banks’ risk management and proposed cash payouts. #ConquestofDough
rogerglewis on June 28, 2018 at 6:26 am said:
https://www.bloomberg.com/news/articles/2018-06-27/from-goldman-to-deutsche-bank-what-to-watch-for-in-stress-tests One to Watch
Can large U.S. banks hand $170 billion to their shareholders in the next 12 months? Will a top European investment bank botch the first public stress test of its entire U.S. business?
The Federal Reserve will answer those questions and more when it posts results from the second and final stage of its 2018 stress test Thursday at 4:30 p.m. While investors got hints during the first stage last week, the central bank has repeatedly found ways to surprise in past reviews of banks’ risk management and proposed cash payouts.
rogerglewison June 28, 2018 at 7:12 am said:
Great Article, I particularly liked the explanation of ECOE
“Because the world economy is a closed system, ECoE is not directly analogous to ‘cost’ in the usual financial sense. Rather, it is an economic rent, limiting the choice we exercise over any given quantity of energy. If we have 100 units of energy, and the ECoE is 5%, we exercise choice (or ‘discretion’) over 95 units. If ECoE rises to 10%, we now have discretion over only 90 units, even though the gross amount remains 100.”
One great question ( Big, Inponerable) not I am asking a great question, Is, To what extent are different energy solutions Mutually exclusive? That is, If you choose one then, you can not have the other.
Alluding to the long discussion on the previous Article, for instance, Are Thorium Based MSR mutually exclusive to Coal Fired and Gas Fired Power Stations.
Is WInd Turbine, Tidal Lagoon and Solar PV/Concentrate Solar Lens technology mutually exclusive.
As well as this idea of, are we resource restrained? as opposed to, are we Finance restrained? I am still slightly confused with Seeds and its approach to Debt, Money and the distinction between Productive Investment and Consumption Spending.
“Prosperity
To get from GDP to prosperity, then, two stages are involved. The first is to arrive at a ‘clean’ GDP number by removing the distortions introduced by pouring cheap credit into consumption. The second is to deduct ECoE from this underlying number.
The results show a deterioration in prosperity across all major Western economies other than Germany. Typically, Western citizens are getting poorer at rates of between 0.5% and 1% annually.
Moreover, the share of debt – personal, business and government – that these citizens are required to support on the back of dwindling prosperity has grown markedly. Because servicing this debt at normal (above-inflation) interest rates has become impossible, we are locked into monetary policies which are themselves destructive.”
In the first part of the article, you refer to “The Seeds ECOE Algorithm” and maybe it is in that where my difficulties, following the reasoning lay?
Another unresolved question is How big is the Final Real Output Pie and which proportion is Hoarded as Financial Wealth by “The elite” “Oligarchs” “The Ruling Class” “The Winners”, call them what you will. Are the people at the top deluding themselves into thinking that they are better off now than in 2007/8, we all know at whose expense this has been if they are better off either In Real terms or Relative terms to the Losers, i.e, real falling wages and the distribution of Wealth ( Oxfam publish that every year). Income distribution and Wealth distribution and Who are net payers of Interest are all intrinsic allocators of the Pie whether it is getting smaller or whether it is getting bigger, With positive Interest rates, it is mathematically certain that all Wealth migrates to the Very top leaving debt distributed with the Losers.
As part of a SEEDS stocktaking of the Energy Wealth and Energy Potential of the Total Economy where there are resource restraints on providing an Optimal Energy Output ( This will be electro Magnetic in nature ) Electro Magnetism is present in all matter inert and organic and whilst we might run out of Crude oil and other natural stores of Hydro Carbons, we are only really in any trouble when we run out of electrons.
The idea of our discretionary energy spending comes through in the article and I wonder if this is where we can really nail where our Energy Investment Challenges have been Failed.
The Analysis in the article Gives us a Gross Energy and a Net Energy available for total use. I suspect that the Available energy will be dynamic and has always been so and perhaps always will be and therein lies the question.
“Within the dynamic range of Net available energy for Use we meet political economy”. Discuss?
rogerglewison March 8, 2018 at 8:05 am said:
Two helpful annual reports from Lazards on Levelised cost of electricity. Very informative.
Click to access levelized-cost-of-energy-v100.pdf
Click to access lazards-levelized-cost-of-storage-analysis-10.pdf
https://en.wikipedia.org/wiki/Cost_of_electricity_by_source
Also this is a very interesting Wikipedia article on OTEC ( Ocean Thermal Energy Conversion.
https://en.wikipedia.org/wiki/Ocean_thermal_energy_conversion
Just by way of explanation by Profession I am a Chartered Surveyor and Valuer. I began my Career at Shell UK Limited where I was involved in the Tax Assesment of the St Fergus Gas Terminal in Peterhead, To Tax large oil industry plant and machinery open market valuations of Property Value based taxes like Property Rates do not exist and to calculate a property value for taxation purposes a Valuation Technique called the contractors principle of Valuation is employed.
The Contractors Principle of Valuation is a residual method of valuation which adds up all the input costs and then applies a discount rate to generate an annual economic rent ( Net Present Value )
which can then be used to calculate the rating assessment. At shell I did hundreds of these types of Valuations and the Largest such valuation was for the St Fergus Gas Terminal.
Concepts such as Embodied energy also feed nicely back into measures of Levelized costs of electricity. Pulling these concepts of energy value as opposed to financial value into the equations should hopefully result in seeing what the problem we are trying to solve is? DO we want to save Society or the financial system as it currently operates?
Discount rates based upon the cost of Capital are pretty subjective as you will know Tim but it seems to me that EROIE measures Levelised costs of Electricity production and so forth and a residual valuation approach can yield a good method by which to assess the Economic potential for future prosperity based upon access to energy.
Energy and Capital are very different things.
The best description of this dichotomy I have encountered is this from Carol Quigley in Tragedy and Hope,
”Thus, clearly, money and goods are not the same thing but are, on the contrary,
exactly opposite things. Most confusion in economic thinking arises from a failure to
recognize this fact. Goods are wealth which you have, while money is a claim on wealth which you do not have. Thus goods are an asset; money is a debt. If goods are wealth; money is not wealth, or negative wealth, or even anti-wealth. They always behave in opposite ways, just as they usually move in opposite directions. If the value of one goes up, the value of the other goes down, and in the same proportion.”
Quigley Tragedy and hope.
Energy and Money are different.
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