Energy Debt vs. Energy Equity

Non-Renewable Energy creates a Debt-Based Economy

  • We are currently leveraging our land value with non-renewable or “borrowed” energy debt.
  • Non-renewable energy owns the 1st Mortgage Debt on our Land.
  • When energy debt costs grow, our land’s 1st mortgage grows.
  • Such increases in costs are inflationary.
  • Non-renewable energy is debt that we never amortize or pay down.
  • We “owe” or are indebted for non-renewable energy every day we utilize it (think clock radio).
  • The annual debt payment is the annual consumption (i.e. gas or utility costs) of non-renewable energy; or the growing production and distribution revenues of the non-renewable industry.
  • The outstanding debt principal amount is the current capitalization of the non-renewable energy industry (i.e. drilling, mining, transportation, retail production and distribution).
  • Non-renewable energy debt is produced by commodities that have value (costs) as it relates to scarcity such as oil, coal and gas.
  • As we consume and don’t pay for our Non-renewable energy debt, we limit our potential economic progress.
  • Perpetually increasing non-renewable energy debt costs, perpetually increase the core risk of inflation.
  • Someone, somewhere at sometime will have to pay non-renewable Energy back (by definition) regardless of its costs or its type.
  • Borrowing energy will inevitably increase the risk of land rent inflation and thus a business cycle.
  • Using Non-renewable energy to grow will only grow a Credit-based (Keynesian) economy (borrowed growth).
  • Non-renewable energy has no sale or terminal value.


Renewable Energy Appreciates the Economy’s “Equity” Value

  • Alternatively, we pay for Renewable energy ONCE, with up-front “earned” equity capital
  • Renewable Energy appreciates in value as costs of non-renewable energy increase (a function of supply and demand or scarcity).
  • Renewable Energy equity is more secure than a top-down “Treasury” Yield investment (a net product of the economies “energy” stability or instability – i.e. inflation).
  • Renewable Energy equity is a dividending, natural, inflationary hedge.
  • Renewable Energy equity has more utility than alternative inflationary hedge instruments such as gold.
  • Renewable Energy equity is more secure long-term than cash (U.S. currency lost more than 20% last year).
  • Renewable Energy equity is earned long-term and not borrowed.
  • The investment cost of Renewable Energy equity is fixed.
  • Renewable Energy equity is produced by commodities such as wind, water and sun that have no utility value as it relates to scarcity.
  • Renewable Energy equity increases the marginal utility of all our energy resources (land, labor, innovation, air, water and light) infinitely.
  • Renewable Energy equity stabilizes land costs and sustains real labor wage growth or net value (wages relative to rent of land).
  • Using Renewable energy to grow will grow a sustainable equity-based economy (i.e wage or free time growth).
  • Renewable energy will decrease our risk of a business cycle.


Renewable vs. Non-Renewable Energy: No Contest

  • Renewable vs. Non-Renewable: No Contest
  • In our short-term minded credit-based economy, renewable energy seems expensive.
  • However, its natural equity return characteristics make it cheaper long-term than any short-term non-renewable debt returns.
  • Renewable energy is the cheapest or most valuable form of economic currency.
  • Until we recognize that fact, we will continue to cycle as history has shown until our population runs out of energy.
  • Public Utility Companies (non-renewable) currently yield 3.0% to shareholders. However, there is no fixed commodity asset value (i.e. we drill and burn more everyday), only a retail mark-up (by definition). Its yield is really a mark-up with perpetually increasing costs and prices due to scarcity.
  • Renewable investments such as solar electricity are currently yielding more than 3.5%. This is a true asset yield as costs are fixed.
  • The premium return for Renewable Energy is the greatest inefficiency in the marketplace today.
  • Why? Because credit (non-renewable energy) likes credit; until credit eats credit.
  • Our credit based non-renewable energy markets dramatically increase our costs of financial services.
  • The raw material production, manufacturing, transportation, and distribution of renewable energy is currently the single largest job growth opportunity for Americans.
  • Renewable Energy growth will require (labor) time, but limited (land) resources.
  • Renewable Energy growth increases our standard of living.
  • Yes, it makes sense, but we will never know for sure until we try it!

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