We seem to be locked in an endless financial crisis. Starting with a sub-prime housing bubble, complex financial derivatives linked to those assets contaminated global finance, subsequently crashing the global economy, leading to unprecedented austerity in the developed world. If we think the current financial crisis is bad, just wait until the real global crisis kicks in.
Money is a man-made instrument of exchange. Currencies bear the promise to ‘pay the lender’ and ‘in God we Trust’ but has virtually no intrinsic worth. Through the fractional reserve banking system, much of the money that flows around has been created by banks – the same banks that crashed the economy – and it exists in electronic form only.
Banks create money?
Only 3% of money in the system is the kind of money you find in your wallet or down the back of the sofa. It used to be called M0, or the narrow measure of money, and students of monetarist economic theories studied the measure in detail and its inflationary impact. You can read a little more on the FT.
To the horror of the aforementioned economics students, the Bank of England stopped reporting M0 in 2006 and now publishes the more straightforwardly named Notes and Coins in circulation .
Our economy is in deep trouble, but the current problems are relatively short-term and, with some inflationary consequences, we can simply print more money as the Bank of England has done with quantitative easing (QE).
As we pointed out in May, the £325bn total of QE at that stage (now £375bn) was equivalent to 12.4m people being given the average UK salary of £26,200, who would have then spent it or paid off debt. The Bank does not actually print the money; it creates it electronically.
Instead of injecting the money directly into the economy and risking inflationary pressure, financial services players such as high street banks and insurance companies, who created the original crisis, sold their assets to the Bank in return for QE cash. They then hoarded the money to increase their reserves. If you want to know more about quantitative easing you can watch the Bank’s explanatory video here or the BBC’s explanation here.
The rather excellent film Inside Job goes into more detail than we can in this piece, looking at the causes of the crisis and co-conspirators (banks, policy makers, regulators, academics and the media), but it will make you feel angry and robbed. You should be angry and you were robbed. We are still being robbed. While private sector success was profitably pocketed by investors, private sector failure was nationalised into taxpayer loss.
The economy may be in deep ongoing systemic trouble, but our ecology is in a deeper crisis.
From financial austerity to resource scarcity
Ultimately we may be able to ‘print’ and cut our way out of the financial crisis, as long the self-same credit agencies that scored sub-prime debt as triple A prime maintain confidence in our economy. It still leaves our economy in perilous state.
Put simply we cannot print more food, water, fossil fuels, minerals, forests or ice caps.
Demand for grain intensive meat in emerging economies’ middle classes means our food supply is under strain. Our water supplies are under pressure from farming that is more intensive and as trans-boundary rivers are dammed to provide energy.
The Oil & Gas Journal, CIA and OPEC, not one of them part of some liberal-lefty plot, all predict coming crises with peak fossil fuel extraction being reached.
Our environment-regulating and stabilising ice caps and forest are melting and being cut down at a terrifying rate.
The limits of markets in scarcity
The perversity of the market system is that scarcity creates higher prices.
The cost of food, water, fuel and minerals (commodities) rise, destabilising economies and threatening everyone other than the fantastically wealthy. While our economy has simply produced more of the stuff in previous periods of high prices and depressed those prices to equilibrium, this cannot happen if the stuff actually runs out. The price will rise until the commodity runs out, or an alternative is found.
The coming crisis will follow this simple trajectory. Scarcity drives higher price meaning it becomes more economical to extract in harsh, previous uneconomic, environments. Emerging economies will actively hunt out resource-rich countries to secure their future supply. In turn, this leads to even greater depletion of finite resources. At some point the resource simply runs out or becomes prohibitively expensive to extract and economies that haven’t found sustainable alternatives such as renewable energy or sustainable farming will falter.
The first role of government is to provide security for its people
The UK, as a significant but declining global power relatively, should take heed urgently.
Relying on unstable commodity imports and not taking a leading role in climate change discussions threatens our future security. Even the most die-hard free market ideologue, and we believe in markets, will accept that the first role of government, no matter how small, is to provide security for the people. Moreover, that does not just mean militarily.
Money might be in short supply today, but if there were no money, we would return to earlier systems of exchange such as barter. While this would be economically disastrous in the short term, the ingenuity of humanity would find a way.
Critical resources are increasingly in short supply, and if there are no resources left or they become so scarce as to be priced out of most people’s reach, our nation and society faces an existential threat.
We cannot quantitatively ease our way out of this one.
How Going Green Can Save A Company Money
What is going green?
Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.
The first step in going green
There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.
Making needed changes within the company
After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.
Reducing the common paper waste
Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.
Make money by spreading the word
Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.
5 Easy Things You Can Do to Make Your Home More Sustainable
Increasing your home’s energy efficiency is one of the smartest moves you can make as a homeowner. It will lower your bills, increase the resale value of your property, and help minimize our planet’s fast-approaching climate crisis. While major home retrofits can seem daunting, there are plenty of quick and cost-effective ways to start reducing your carbon footprint today. Here are five easy projects to make your home more sustainable.
1. Weather stripping
If you’re looking to make your home more energy efficient, an energy audit is a highly recommended first step. This will reveal where your home is lacking in regards to sustainability suggests the best plan of attack.
Some form of weather stripping is nearly always advised because it is so easy and inexpensive yet can yield such transformative results. The audit will provide information about air leaks which you can couple with your own knowledge of your home’s ventilation needs to develop a strategic plan.
Make sure you choose the appropriate type of weather stripping for each location in your home. Areas that receive a lot of wear and tear, like popular doorways, are best served by slightly more expensive vinyl or metal options. Immobile cracks or infrequently opened windows can be treated with inexpensive foams or caulking. Depending on the age and quality of your home, the resulting energy savings can be as much as 20 percent.
2. Programmable thermostats
Programmable thermostats have tremendous potential to save money and minimize unnecessary energy usage. About 45 percent of a home’s energy is earmarked for heating and cooling needs with a large fraction of that wasted on unoccupied spaces. Programmable thermostats can automatically lower the heat overnight or shut off the air conditioning when you go to work.
Every degree Fahrenheit you lower the thermostat equates to 1 percent less energy use, which amounts to considerable savings over the course of a year. When used correctly, programmable thermostats reduce heating and cooling bills by 10 to 30 percent. Of course, the same result can be achieved by manually adjusting your thermostats to coincide with your activities, just make sure you remember to do it!
3. Low-flow water hardware
With the current focus on carbon emissions and climate change, we typically equate environmental stability to lower energy use, but fresh water shortage is an equal threat. Installing low-flow hardware for toilets and showers, particularly in drought prone areas, is an inexpensive and easy way to cut water consumption by 50 percent and save as much as $145 per year.
Older toilets use up to 6 gallons of water per flush, the equivalent of an astounding 20.1 gallons per person each day. This makes them the biggest consumer of indoor water. New low-flow toilets are standardized at 1.6 gallons per flush and can save more than 20,000 gallons a year in a 4-member household.
Similarly, low-flow shower heads can decrease water consumption by 40 percent or more while also lowering water heating bills and reducing CO2 emissions. Unlike early versions, new low-flow models are equipped with excellent pressure technology so your shower will be no less satisfying.
4. Energy efficient light bulbs
An average household dedicates about 5 percent of its energy use to lighting, but this value is dropping thanks to new lighting technology. Incandescent bulbs are quickly becoming a thing of the past. These inefficient light sources give off 90 percent of their energy as heat which is not only impractical from a lighting standpoint, but also raises energy bills even further during hot weather.
New LED and compact fluorescent options are far more efficient and longer lasting. Though the upfront costs are higher, the long term environmental and financial benefits are well worth it. Energy efficient light bulbs use as much as 80 percent less energy than traditional incandescent and last 3 to 25 times longer producing savings of about $6 per year per bulb.
5. Installing solar panels
Adding solar panels may not be the easiest, or least expensive, sustainability upgrade for your home, but it will certainly have the greatest impact on both your energy bills and your environmental footprint. Installing solar panels can run about $15,000 – $20,000 upfront, though a number of government incentives are bringing these numbers down. Alternatively, panels can also be leased for a much lower initial investment.
Once operational, a solar system saves about $600 per year over the course of its 25 to 30-year lifespan, and this figure will grow as energy prices rise. Solar installations require little to no maintenance and increase the value of your home.
From an environmental standpoint, the average five-kilowatt residential system can reduce household CO2 emissions by 15,000 pounds every year. Using your solar system to power an electric vehicle is the ultimate sustainable solution serving to reduce total CO2 emissions by as much as 70%!
These days, being environmentally responsible is the hallmark of a good global citizen and it need not require major sacrifices in regards to your lifestyle or your wallet. In fact, increasing your home’s sustainability is apt to make your residence more livable and save you money in the long run. The five projects listed here are just a few of the easy ways to reduce both your environmental footprint and your energy bills. So, give one or more of them a try; with a small budget and a little know-how, there is no reason you can’t start today.
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