Energy Insecurity is the major factor underlying market angst. I’ve been warning about it for years; initially because of mis-investment due to the ESG/climate change bandwagon, and then bad government policy ignoring security of supply. Look where we are now…

This morning let me present 2 morning porridge offerings: 1) Why Energy Insecurity remains the Long Term Threat, and 2) The potential of Hydrogen/Ammonia to solve it. This includes a guest post from Brett Morris on what the Australians are looking at.

Energy and Food Security are intricately linked – and constitute the biggest and most immediate “no-see-um” threat markets have faced in decades. It’s time to get real about addressing energy transition and security, and climate change by accepting Nuclear energy is the most viable solution in the time left us.

Markets and Politicians share many common traits – they over enthuse on the upside and fail to grasp hidden costs and dangers. The Morning Porridge is resolutely in favour of climate change mitigation, but the current headlong plunge into renewable energies and lithium batteries has the potential to end up an environmental and market disaster.

I’d like to introduce you to my latest theory on markets: the D-Jay Wave, a 35-year recurring cycle of irrational market exuberance. I have carefully and diligently researched this over a couple of pints.. It’s therefore better underpinned than most SPACs or Disruptive Tech funds. (Glossy pitchdeck not available.)

It’s going to be a testing week for markets as a whole slew of negatives, challenges and no-see-ums threaten to overturn everything. It couldn’t look worse… unless of course you remember my key market mantra (read on), and that the sun usually comes up tomorrow. Happy Valentines.. 

It’s easy to say no to an investment likely to generate hostile news. It’s simple to go along with increasingly Militant ESG rhetoric on gas to avoid negative headlines. But - we will fail to reach Carbon Net-Zero unless gas remains part of the transition equation and governments get a grip on energy strategies.

Climate Change and Energy Transition is one of the great challenges to capitalism and market economies – but there is no reason to fear it. Its complex, but infinitely solvable. The technologies exist to achieve carbon neutrality by 2050 at a cost far less than doomsters fear.

“The future may dimly be perceived through the veil of the past”, sounds like bad poetry, but has a point. The confusions and conflabulations that characterised 2021 will likely set the tone for what’s coming – what were the key themes of 2021? Best to understand them before trying to fathom what comes next.

Did you feel markets judder when Powell spoke? The mood has changed as markets wake up to the danger Central Banks might just start doing their jobs. As Winter begins, Europe faces a bleak energy crisis of its own making. My solution? Buy a generator!

Greta Thunburg was right – there was a lot of blah, blah, blah at COP26, but also positive steps. The perception remains of rising climate risks, and that’s fuelling an increasingly de-growth extreme climate change populist agenda – which could prove even more disastrous than rising temperatures!