Ask Elon Musk How We Can Fix Climate Change With an Inflationary Monetary System
I can answer that question easily: we can’t. Why?
To have an inflationary monetary system, you have to have growth forever, and you debase your currency to have that growth forever. So, it’s not real growth.- Jeff Booth in The Investor’s Podcast Network
Last week I wrote an article about Elon Musk’s previous dance on Bitcoin.
Don’t get me wrong. I still think the guy is a genius, but not on Twitter. Elon is changing the world. He made all the morons who thought climate change was a conspiracy suddenly start to build electric cars, rockets, and hyperspeed tunnels, to get on the innovation train.
But about money, I frankly think Elon does not see the real change yet. I also think he doesn’t have time to do so. Come on, man- do you really think Musk has superpowers?
Elon is building Giga factories to build electric vehicles all over the world. Elon is building rockets to go to Mars and beyond. Elon is building hyper-speed tunnels to avoid traffic in the big metropolis. Elon is building micro ships to install in our brains to fight diseases.
Do you really think he has time to deeply reflect on money and macroeconomics? I think one day he will, but not now, and indeed not with what he has done lately.
So, why an inflationary monetary system affects the climate change so much?
Money does not change people; it unmasks them.
After the 2008 Great Recession and the dump of more than 1 trillion dollars into the system to save banks and the financial system worldwide, all central banks thought it would be over after manipulating the financial system at that particular point.
The problem was that technology disruptions took place and kept prices cheaper and cheaper. Meaning, with the digitization of everything, where music, libraries, videos, retail, everything started to be sucked into the Cloud, physical things disappeared. And in an environment where digital things tend to be free, the deflationary innovation didn’t stop in 2008- it continued to move forward.
On the contrary, it gets stronger and stronger. So, measuring GDP starts to be a misleading measure since the production of wealth produces a large part of products and services that tend to have zero cost.
An example: CDs or DVDs. A few years ago, we had factories with workers as far as the eye can see in China, producing plastic objects imported from the United States and Europe to provide videos and music at our homes. The entire distribution chain involved making plastic, molds, labor, factories, distribution, among others.
At the present time, John Doe produces a song on his personal computer, turns it into an NFT (non-tangible token), protects it with a smart contract, and withdraws dividends for the rest of his life without spending the entire production chain previously necessary.
More than that, John Doe sells the product for a negligible amount because billions of users will pay dividends to make him one of the most modern billionaires on the planet.
The production of constant dollars and euros will only postpone a problem in a war that will never be won. Technology is deflationary by default, and if we want to have the technology to solve our problems, we cannot have institutions like central banks fighting wildly against an indestructible Goliath.
Ask Elon Musk how we can fix climate change with an inflationary monetary system.
Whether Musk doesn’t know about energy consumption, or he has a secret agenda.
“We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk said in a statement posted to his Twitter account.
I don’t think Elon is ignorant about energy consumption, so maybe he has a secret agenda.
For Tesla to produce electric vehicles, how much non-clean energy does it consume? How much energy consumption does the steal industry spend? Or any other industry? Is this really an issue?
You want more of this BS argument, here’s more:
The world generates 160 thousand terawatt-hours of energy per year. Of that, 50 thousand terawatt-hours are wasted every single year. The Bitcoin network uses 120 terawatt-hours a year. Putting it into perspective, that’s seven and a half basis points of all the energy in the world.
50 thousand terawatt-hours are wasted every single year. The Bitcoin network uses 120 terawatt-hours a year. Read that again.
Of course, global warming and climate changes are enormous issues. But that’s another discussion.
If Elon Musk wants to discuss the rapidly increasing use of fossil fuels for Bitcoin mining and transactions, let’s use data and a well-reasoned argument.
Ark Invest recently shared:
In our view, the concerns around Bitcoin’s energy consumption are misguided. Contrary to consensus thinking, we believe the impact of bitcoin mining could become a net positive to the environment.- Yassine Elmandjra, Ark Invest’s analyst.
Elmandjra added:
With real-world data, we demonstrate how mining could impact the amount of renewable energy provisioned to the grid by transforming intermittent power resources into baseload generation by way of energy storage.
Jack Dorsey’s Square Inc. recently published a white paper where they explain bitcoin’s energy consumption, reporting that “Bitcoin is key to an abundant, clean energy future.”
We illustrate that renewables would satisfy only 40% of the grid’s needs in the absence of bitcoin mining but 99% with the commercial ‘subsidies’ associated with bitcoin mining.
I’ll give one last question to answer about Elon Musk’s last primary concern:
If Elon Musk is concerned about the rapidly increasing use of fossil fuels for Bitcoin mining and transactions, why didn’t he sold all of his personal Bitcoin?
Final Thoughts
I think we have to wait for further episodes, to see what Elon Musk is preparing about the Bitcoin network and the future of energy consumption.
My opinion? I think in his genius mind, he’s building another forward innovative infrastructure that will blow our minds.
Remember, he’s the guy that created a full-electric car industry. He’s the guy that invented the electric store powerwalls. Powerwall is a battery that stores energy, detects outages, and automatically becomes your home’s energy source when the grid goes down.
Don’t ever underestimate a rocket scientist.
Whatever Elon’s intent to do with the public statement he made, what he really did was making the Bitcoin network stronger. He raised a potential problem that the Bitcoin network was supposed to cause but gave the opportunity to people who work on that same network to justify that this isn’t true.
The truth is that the Bitcoin network took yet another major correction, typical of new industries, but which is prepared to rise even stronger and more resilient.
In a way, with Elon’s declaration, the world is beginning to understand better who the polluting industries really are, but the world is also beginning to realize that the monetary policy carried out in the last two decades is leading us into the abyss.
The passage of time will do the rest. Truth always comes out on top.
Truth is like the sun. You can shut it out for a time, but it ain’t goin’ away.- Elvis Presley
This article is for informational purposes only, it should not be considered Financial or Legal Advice. Consult a financial professional before making any major financial decisions.
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