Why Green will save the economy
Just a thought:
Recent stock volatility in the world economy presents a crisatunity for The Next Great Project of humanity: namely, the development of clean, green energy.
There are several reasons why this crisis has a bright, silver lining.
One: People still need to invest money.
Whether they’re purely capitalist day traders or pension funds building for peoples’ retirement, those with money are looking for investments with good returns over the long run. There’s simply no reason why they would take their money out of the markets and sit on the cash: so what would they do with it? Rich folks don’t keep substantial cash out of the markets. Warren Buffet doesn’t swim in his own money. In reality, taking your money out of the market is a bad business decision. Investing it always makes you more cash. No matter how bad the market may be, there will always be people with money looking to invest into something.
Two: The fall of the market was due to poor investment options, not due to the failure of markets and capitalism as a whole.
All of the recent market volatility is based entirely on one key problem: the lack of sustainable investments available in the market. Key stocks and funds in the market were a deck of cards built on the rickety table of American consumer spending. With US banks drastically tightening up the rules on who gets and who doesn’t get credit, the entire house of cards is falling, one card at a time. So where do people invest now that they can’t put their money into companies whose revenues are based on relatively frivolous spending?
Three: The Price of Oil will start to rise again
It’s important to recognize the difference between the actual supply-and-demand value of an item and the perceived value of that item in a commodities market. The recent drop in the price of oil has nothing to do with the actual demand of the product. Instead, it was a reaction that the markets had to the economic crisis. Investors didn’t drop their oil stocks because they expected the actual demand would drop: they dropped their oil stocks because they knew exactly what the market reaction would be. In other words, the massive drop in the price of oil was due to speculation. Similarly, the $140 price of oil that we experienced over the summer was due to speculation in the other direction.
The speculation on the price of oil, however, has nothing to do with the actual availability, where trends point to us having already reached (or on the way to reaching) peak oil. At this point, oil prices will be dictated more by actual availability than by speculation.
Four: Renewable Energy and Energy Efficiency are good long-term investments
Along with food, clothing and shelter, energy has become a basic requirement for human survival… powering everything from computers and lights to cellphones and medical equipment. There are two reasons why renewable energy is an attractive investment right now. First, the majority of the world’s current energy generation comes from non-renewable resources that need to be replaced. Second, there are large portion’s of the world’s population that have no reliable source of energy at all. These latter regions are particularly exciting for renewable energy development, as it’s likely that they’ll benefit from the technological leapfrog effect.
