Ah, Donald Tusk you absolute scallywag. Surely you have better things to do than talk Brexit all day?
What am I saying. You’re a politician. You’re an EU politician. Of course you don’t have anything of real value to contribute!
If you haven’t heard Tusk’s latest speech, he has a suggestion for you. If you believe that Britain can keep its single market membership without accepting freedom of movement, try this: “To all who believe in it, I propose a simple experiment. Buy a cake, eat it, and see if it is still there on the plate.”
I’ll have a go, Donald. But not because you told me to. I was going to eat a cake anyway. Clearly he believes that people who aren’t smart enough to understand politics might understand cake instead.
This culminated in Tusk boiling his position down to: “It’s either Hard Brexit or no Brexit.”
We’ll see. Tusk – like many people preparing the battleground ahead of negotiations (which keep in mind haven’t started yet, this is just the preamble) – appears to be operating from a position of strength. The falling pound probably reinforces that.
But really, Tusk is operating from a position of desperation. The EU must be defended at all costs. Brexit is a challenge to that. If Britain gets what is perceived to be a good deal then who else will leave? That’s what’s keeping people like Tusk up at night.
Another nail in the coffin for fossil fuels
We’ve been writing all year about the end of fossil fuels and the rise of solar energy. It’s a huge opportunity to profit from the reordering of the energy industry.
It won’t happen overnight. But it will happen: solar and other renewables will overtake fossil fuels, making them obsolete. They’re two trends heading in opposite directions.
We got more confirmation of that earlier this week. The German Bundesrat – the federal council made up of the 16 different German states – voted to ban all petrol and diesel powered vehicles by 2030. In of itself that isn’t important. The Bundesrat could vote to stop the sun coming up tomorrow and wouldn’t make the slightest bit of difference.
Laws like this don’t trigger changes in the market. They reflect the trends that are already present and enshrine them in law. The falling cost of renewable energy and increasing efficiency of battery technology means most cars will be non-fossil fuel by 2030 anyway. Market forces will actually achieve what laws attempt to accomplish.
But still, it’s a signal. A small one. But a reminder of just how important this story will be. There have been plenty already this year. For instance, here in Britain solar technology produced more energy than coal in six months up to September of this year. That’s the first time that’s happened. Another signal.
Negative interest rates: great for the rich
A report from the Danish Economic Council, a group rather strangely known as the “wise men”, claims that negative interest rates help the rich get richer, faster. Negative rates have increased the return on capital as a percentage of overall income, whilst reducing the amount of interest paid on debt.
Increased return on capital. Lower debt costs. More inequality. That makes sense. Those in power look after their own.
At least, that’s according to the wise men.
What is wisdom, though? Isn’t true wisdom knowing the limitations of your own knowledge? In that sense, the wisest thing to do would be not to meddle in the economy by claiming you know the “right” interest rate, because you cannot ever know exactly what consequences your actions will have.
The wise men in question aren’t responsible for setting the interest rate. We can’t point the finger there. There’s an irony, though, in a group of “wise” men critiquing the actions of a group of powerful (and arrogant) central bankers.