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Wednesday, August 10, 2011

Desire Meets Reality, Reality Kicks Desire's Butt

Auf Deutsch, yet.

German inflation is up on energy costs. And they really ain't seen nuthin' yet. In the meantime, the green jobs are just proliferating. The Germans are going to wrest the top place in the "Hike Consumer Energy Prices" away from Denmark.

I was working on a long post about the German Grünholzkopf syndrome, but it looks like we can all watch it play out in the news.

The complicating factor here is that not only are the Germans spending big chunks of money for expensive, unreliable power, they have burdened their future budgets with big payouts for solar. Solar power is not a good fit for Germany and they get relatively little out of it, but their feed in-tariff is over 50 cents a kwh. This is guaranteed for over a decade more. Add to that the need now to build more coal plants, and then combine that with the credit hit they are slated to get from their obligations under the European bail-everybody-out scheme, and German economic growth is going to be impaired.

That's unfortunate, because Europe really needs them cranking along.

But note, there is no bad idea so bad that it won't win admirers. Chicago Boyz on the fallacy in the US.

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