Assessment: whatever one wants to call it, it’s all about greenlighting the biggest QE episode in history …
Last week, Bank of America sparked a firestorm of reaction amid both the pro and contra climate change camps, when it published one of its massive “Thematic Research” tomes, this time covering the “Transwarming” World (available to all ZH pro subs), and which serves as a key primer to today’s Net Zero reality, if for no other reason than for being one of the first banks to quantify the cost of the biggest economic, ecologic and social overhaul in modern history.
“ And I heard a voice in the midst of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not harm the oil and the wine.” Rev. 6:6
The bottom line: no less than a stunning $150 trillion in new capital investment would be required to reach a “net zero” world over 30 years – equating to some $5 trillion in annual investments – and amounting to twice current global GDP.
Needless to say, the private sector has nowhere near the capital required to complete this investment which is why Bank of America generously estimate that all or parts of the bill would have to be footed by central banks in the form of tens of trillions in QE.
And since QE is essentially debt monetization, and since $150 trillion in new debt would have devastating consequences on the economy, BofA was kind enough to share its calculation of just how inflationary this billionaire pet project would be: the “full monetization” scenario, where central banks inject $5 trillion in liquidity every year via QE for 30 years, would result in incremental 3% of inflation for a good decade.
This is inflation over and above whatever is already coming down the pipeline.
Which is where we get to the punchline, because as BofA admits, the crusade against climate change, the ESG doctrine, the “Net Zero” world, whatever one wants to call it, it’s all about greenlighting the biggest QE episode in history, one wrapped in the “noble” veneer of fighting for the most important cause in the history of civilization, but in reality it’s just the biggest wealth transfer scheme in history Read More