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Relaxing last Friday, with my laptop in my lap, remote working in the Green Mountains.
Taken on Tuesday July 14, 2020 at Uncategorized.
strong>Since the start of pandemic the federal reserve has printed over $1,720 billion in cash to buy assets in the economy, to force interest rates below a 0.25%. This hasn't caused inflation yet -- as the velocity of money is lower and falling -- people are saving or investing money all this extra money, not spending it right now. That said, the velocity of money is something to watch carefully, as if it upticks, we could see inflation start to kick in. The federal reserve could have to slam the brakes on the economy in 2021 to break inflation, which would be an unpopular thing to do, if unemployment remains high.
The way the fed would do this is to start selling assets they own, reducing the amount of cash available in the economy. This would push up the interest rates, which make it more expensive buy houses and cars on credit. It also would increase the cost of government borrowing. This would slow down the economy, and if pushed hard crush inflation -- along with crushing the economy, it would crush farmers, local governments, car dealers, and housing builders -- and anybody who relies on credit. Obviously, this would be incredibly unpopular to have Jerome Powell, the Trump appointed fed chair, slamming the brakes on economy when President Biden is in his first term, and there would be all kinds of conspiracy theories, even ultimately it's sound economic theory to bleed inflation out of the system.
One of the saddest parts of Obama’s War on Coal is the retirement of really old coal fired power plants. In 2008, there were 10 operating coal fired units that cranked out their first electrons between 1920 and 1929, including a unit that first was fired up during Calvin Coolidge’s Presidency in 1921.
Sadly though as of 2015, only one coal fired generating unit from the roaring twenties is still operational in America. That unit is a 2,500 Kw cogeneration unit at American Eagle Paper Mills in a Blair, Pennsylvania. That unit burns coal, as it has for 88 years to make stream and electricity.
Back in 2008, five out of ten coal fired generating units were built prior to 1966. Thanks to Barack Obama’s War on Coal, the median age of coal generating units by 2015 was 43 years old. 50% of all coal fired power plants in 2015 were built prior to 1972. A lot of World War II era and 1950s power plants have been retired in the meantime. Kind of sad for those of us who loved those grandfatherly, dirty old plants.
I wonder if Donald Trump’s FCC will fine radio stations for playing Chuck Berry’s songs as indecent.