Guest Post: Federal Reserve Carbon Footprint And The End Of Cheap Coal

Tyler Durden's picture

Submitted by Joaquin Ferrer Benat of Qmunty

Federal Reserve Carbon Footprint And The End Of Cheap Coal

When analyzing the Federal Reserve
monetary expansions, pundits only assess economic issues like inflation,
balance sheets, bubbles or public debt. Significant as they are, it
will be very useful that all this smart people were added to the camp of
those who want to “save the planet”. Let me to try pin down it.

On January 27 OTC Derivatives Supervisors Group (ODSG) and major market participants met at the Federal Reserve Bank of New York
to discuss how to improve infrastructures and reduce risks in
derivatives markets, supporting G20 objectives. They agreed to set out
those plans in a letter to the ODSG by March 31.

We will continue to focus on increasing
standarization and transparency, as well as the further development and
innovation of central clearing facilities to reduce counterparty credit
risk. We must continue to advocate for solutions that will extend
central clearing benefits to a broader set of participants in a safe and
sound manner.

These are the words of Mr. William
Dudley of the New York Fed. But before the letter reaches its
destination, the President sould take a look at this charts.

Direct relationship between OTC market
growth, foreign purchases of US debt and China’s coal consumption is
obvious. And of course also between the disorderly monetary expansion
cheered by the Fed, american deficits, global imbalances and Asian
country CO2 emissions. This chart is enough.

We are in luck, because ODSG wants to support “G20 objectives” and we can read the notes of an attendee
of the 2010 G20 meeting. According to the documents, the delegates
concluded that a process of fiscal consolidation would be the key
solution to the crisis, involving country-specific ideas with central
coordination. Although the delegates evidently discussed the need to
address the sovereign debt crisis “through cutting expenses and not
through increased taxes”, that statement is immediately followed in this
attendee’s notes by the idea of introducing carbon taxes.

I have never bought “save the planet”
lema, because to save something we need first to find the culprit and
the fault. And in this case the matter is really subjective. But now I
like it so much, because to reduce carbon footprint G20 wants to tax
everybody. But brother, is necessary to see first financial institutions
practising what they preach and began to grab the taxes where the root
is. OTC markets are the key to reduce carbon emissions and we need more
“fiscal consolidation” and “increased transparency” indeed to do it.
Otherwise they were watching the straw in the eyes of others, but not
the beam in them.

If someone wants to audit the Fed, what
will need first is to change the moto and search something banks seems
to understand very well: the carbon footprint. And this is a really
pretty one: