ENERGY FINANCE


ENERGY AS GOLD


Gold is the common practice hedge against currencies: if currencies goes down, gold goes up, so every asset mix that contains gold has a hedge against declining currency values. Gold is not more than an value insurance instrument. Unfortunately gold is a dead (not working) commodity that doesn't produce any outcome besides a gain of its market price. Renewable energy producing facilities are therefore a much better currency value hedge than gold. They deliver continuously a kWh capacity, that can be sold against a steady climbing price for actual currency values on that time. They deliver a) an income with b) a free build-in currency hedge. Hedging with gold is no longer needed and will be abandoned in the 21st century. All Central Banks of the world has leased their gold to financials, to get an income on the gold. We know the financial status of the financials. This promises not much for the return of these leases. This besides that the hedge funds that holds these gold leases are disturbing with these huge -leased- liquidities the financials markets, more specific: they go short with it on the weaker currencies. For this reason some people are declared unwanted individuals in several nations of Asia. If hedge funds go short on corporations: no problem. It's the duty of the management of a corporation to stay strong, if they go weak, the deserve to be attached. But for currencies this game isn't moral: Going short on currencies is robbing the savings and pensions of complete nations for just what money. Going naked short on currencies should be declared illegal globally. Not any governments will have any problem with underwriting this for implantation in their country. If this a ban on currency sales and currency insurance? No. An other instrument is installing a Tobin tax of 1% on derivatives, making financial gambling a little more expensive. But the first thing that must be done is feeding this funds with piles of cash by the gold leases of the Central Banks to them. Central Banks therefore should terminate their current gold leases by converting them back to cash and use this cash to acquire 'kWh as ROI' investments. The very valid risk of 'oops, it's gone' on the gold leases is than eliminated, and dead assets have become working assets, giving an ROI, securing the energy supply (and thereby the economy) and give a value support to the currency they operate. The value of a currency will be determined by the kWh production capacity the currency has an ROI on. Of course there is a financial direction (and of course stakeholders) that want currencies to go back to the old gold backed status. But gold is trouble. Currencies will never go back to a gold back status, therefore there is too less gold available in the world, unless the price will go through the roof: therefore there are stakeholders. Gold production is a dirty, environment poisoning and very violent industry. Gold possession has a negative influence on people: they hope everything will collapse: than their gold will be worth more. Gold is good for nothing. And yes, there are people who dream of a commercial gold back currency, these people are often also the people who promote a global united currency and hold large gold positions. It's time to abandon gold and activate other backing assets on both the governmental balances sheets and the Central Bank's balance sheets. Both should make a deal with each other and go hand in hand into 'kWh as ROI' positions, or do it separate from each other. The governments will hedge the payment obligations on their state debts this way and the Central Banks will replace their gold and foreign currency positions by this. Time to abandon gold and get not fuel demanding (as in: renewable) kWh production units take the lead in currency backing. Individuals with gold positions should also consider this: Procession of gold will be illegal if the going gets tough. See presidential Executive Order 6102 on April 5, 1933 by FDR declaring actual private procession of gold illegal in the USA. It's better to invest in kWh and by this get asset income, energy security and asset security, than holding dead gold that will be declared illegal if the going gets tough. Let's prevent economic collapse, fiscal collapse, governmental collapse and currency collapse and use available capital to get fuel free kWh production running. Holding gold certificates is something only wannebelievers do. Holding private gold in banks is something only people with a lot of confidence in banks and governments do (but was the concept of gold just the opposite: distrusting these both?). It's time to abandon gold for ever out of the financial system. Are their systemic risks on fuel free kWh generating assets? Yes. Two. First: When nuclear fusion gets up and running energy would become cheap again. This is not likely to happen in the next decades. See the Global Future Analysis for the only possible and also safe model for fusion: a virtual magnetic building powered by joint lasers laser cross point. If this type of fusion will become possible it will boost economies severely (never the less: resources/materials/elements still will be scare) and give time for redesign. Second: Regional induction/radiation that demolished integrated circuits. Could be an occasionally cosmic storm (see www.spaceweather.com) or man made (better said: enemy made) by EMP (Electro Magnetic Impulse: see http://en.wikipedia.org/wiki/Electromagnetic_pulse) by detonating an atomic bomb high in the sky, or by mad man HARP (High Altitude Research Project) experience on just the right frequency of one of the components the atmosphere. There should be an EMP protection legislation issued by the technological power authorities. And HARP experiments should become declared illegal by the UN. And EMP bomb design and procession also. Induction/radiation as possible technological (and therefore economic) danger has got much to less attention, while it's a real/valid danger with a high risk ratio. Are their other facets? Yes. Four. With the 'kWh as ROI' model we a) can save/transit our economies, b) save/transit our banks c) save/transit our pension funds and d) save/transit our currencies. Not bad for a concept of just three words. The same can be said for central banks issued CDSs. Energy as Gold is a concept very capable of generating a massive energy transition investment wave.


Author: Gijs Graafland


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