{"id":64099,"date":"2022-11-10T07:26:58","date_gmt":"2022-11-10T12:26:58","guid":{"rendered":"https:\/\/olduvai.ca\/?p=64099"},"modified":"2022-11-10T07:26:58","modified_gmt":"2022-11-10T12:26:58","slug":"242-the-dynamics-of-global-re-pricing","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=64099","title":{"rendered":"#242. The dynamics of global\u00a0re-pricing"},"content":{"rendered":"<header class=\"entry-header\">\n<h3 class=\"entry-title\"><a href=\"https:\/\/surplusenergyeconomics.wordpress.com\/2022\/10\/19\/242-the-dynamics-of-global-re-pricing\/\">#242. The dynamics of global\u00a0re-pricing<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>IN SEARCH OF EXPLANATIONS<\/strong><\/p>\n<p><em>SUMMARY<\/em><\/p>\n<p>There is a growing acknowledgement that the World economy has entered a new era. We know that the cost of capital is trending upwards, with adverse consequences for asset prices. But there\u2019s been remarkably little inclination to examine the underlying processes that are causing this to happen. Neither is there much in the way of recognition that entire sectors could be crushed, or even eliminated altogether, as re-pricing becomes more selective.<\/p>\n<p>We need to\u00a0<strong>dismiss any idea that this is temporary<\/strong>. There are some linkages connecting the resurgence of inflation with pandemic-era QE, and with the war in Ukraine, but these are little more than symptoms.<\/p>\n<p>The underlying dynamic is that\u00a0<strong>the economic driver of the industrial era<\/strong>\u00a0\u2013 the supply of low-cost energy from oil, natural gas and coal \u2013\u00a0<strong>is winding down<\/strong>, and there is\u00a0<strong>no assured replacement at hand<\/strong>. Transition to renewables is imperative, but there\u2019s no guarantee that an economy based on wind-turbines, solar panels and batteries can be as large as the fossil-based economy of today.\u00a0<strong>The probabilities are that it will be smaller<\/strong>.<\/p>\n<p>Had we been prepared to do so, we could have seen this coming. The chain of causation starts in the 1990s, when the authorities responded to \u201csecular stagnation\u201d with deregulation programmes that made credit easier to obtain. The subsequent financial crisis forced the adoption of QE, initially to prop up the banking system, and latterly as a self-standing form of stimulus. We were assured, quite wrongly, that QE would not be inflationary, but it has created a systemically-dangerous \u201ceverything bubble\u201d in assets.<\/p>\n<p>\u2026click on the above link to read the rest\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>#242. The dynamics of global\u00a0re-pricing IN SEARCH OF EXPLANATIONS SUMMARY There is a growing acknowledgement that the World economy has entered a new era. We know that the cost of capital is trending upwards, with adverse consequences for asset prices. But there\u2019s been remarkably little inclination to examine the underlying processes that are causing this [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3],"tags":[328,13351,31315,31314],"class_list":["post-64099","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-fossil-fuels","tag-price-inflation","tag-surplus-energy-economics","tag-tim-morgan"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/64099","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=64099"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/64099\/revisions"}],"predecessor-version":[{"id":64100,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/64099\/revisions\/64100"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=64099"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=64099"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=64099"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}