How to reduce ‘bill shock’ this win ter

Thursday, 22 June 2023 — South Melbourne

[6 min read]

Dear Reader,

Unless you’re living in northern Australia, you’ve been experiencing wintery conditions well before June. In fact, May this year was the coldest month for over half a decade.

No doubt most households turned up the heater or put an extra log or three into their fireplaces to keep warm.

Many likely experienced ‘bill shock’ when their utility bills arrived.

Speaking for myself, our usage hasn’t changed much year-on-year, but I’m paying 30–50% more for my electricity and gas.

As of 1 July, it’s going to get just that much tougher.

I received an email from my electricity supplier explaining it’s increasing the price of my usage by another 50%. The daily supply charge will increase by 20%. Similarly, my gas supplier increased the price of my usage in March by around 40%.

You’ve probably heard about this already from family and friends.

It’s a kick in the guts for many households already struggling to make ends meet. We lived through the ravages of the Wuhan virus outbreak thanks to measures by the government and public health bureaucrats which crippled our economy.

The economic ‘broken window’ fallacy at work

Many Australians went to the polls last May to oust the Coalition in the hope that the ALP would follow through with their promises to cut electricity bills.

The ALP did have this as a major promise in their election campaign.

However, last October the ALP quietly removed that page from their website.

Do you want to guess why they did that?

To be fair, the ALP did roll out a rebate on electricity bills to provide relief for eligible Australians (pensioners, ex-veterans and family carers). These households and small businesses could see a $175–650 relief on their bills.

Don’t forget the sharp increase in our utility bills is partly due to the government trying to quickly phase out fossil fuels.

We’re seeking to reduce our reliance on the most dependable and cheap fuel source (coal) to transition into something that has yet to pass the test of powering large cities (solar and wind).

It’s the good old economic fallacy of a broken window!

Don’t forget that a significant proportion of Australians embraced this last May. They elected more than 10 climate change advocates into parliament (the Teal party)!

We made our beds, so now we lie in them.

A not-so-obscure solution waiting at the wings

Now I’m not denying that climate doesn’t change (look up solar cycles and the Maunder Minimum). Nor do I reject the notion that society should consider moving to cleaner sources of energy.

I just take issue with those who embrace the idea that climate change is some form of ‘settled science’. Especially if this brand of science is sponsored by multinational corporations, international think tanks, and wealthy people who are the biggest consumers of fossil fuels.

It’s hard to take someone seriously who warns of the Earth overheating and rising ocean levels caused by man-made pollution, when simultaneously, they’re buying waterfront mansions, flying in private jets, and cruising in their yachts (hello Bill Gates, Barack Obama, and Al Gore).

Governments and corporations around the world embracing this radical ideology are now experiencing severe backlash from the public. Small businesses and households especially have borne the brunt of soaring utility costs, causing many to take to the streets to demonstrate their dissatisfaction. Throw into the mix the increasing burden of government regulations that can restrict business growth and operations.

Funnily enough, many European countries that pushed hard on going green hit a brick wall, as their gas supply all but dried up after the Russia-Ukraine conflict erupted. It caused the European Union to reclassify gas and nuclear as ‘green energy’ to fit their agenda, which was as embarrassing as it was laughable.

You can always ‘trust the science’ with this lot. They’ll paint a black cat with white stripes and call it a skunk!

Speaking of nuclear, you should brace yourself for its return.

Uranium has recently grabbed the spotlight, as many countries including the US, Japan and France scrambled to build or restart nuclear reactors to cover the power shortfall.

The price of uranium has held steady at around US$50 a pound in the past year. It seems the decade-long nuclear winter caused by the Fukushima nuclear disaster has finally ended. This price stability has allowed many uranium mining companies to gain a foothold in the equity and debt markets. These funds allow them to develop their projects or restart production.

My colleague, Murray Dawes, has recently recommended his subscribers get into late-stage uranium stocks. For a few months, he’d indicated that he was keeping a watchful eye on this industry.

He’s now declared it’s the right time to jump in.

It’s sad that Australians won’t be able to enjoy the benefits of our vast uranium resources as we’re still a nuclear-free country.

Building nuclear plants is a logical solution as it provides reliable, clean, and cheap baseload energy. Unlike Japan, there’s a low risk of earthquakes or other tectonic activity that can trigger nuclear disasters.

Since our government isn’t going to get their act together and consider nuclear, one option to offset the rising utility bills is in speculating on uranium stocks.

If you’re not up for that level of risk, that’s fine. There’re other ways to relieve yourself of the pain of soaring living costs.

A solid gold portfolio is one of them.

Find out more by signing up here.

In the meantime, stay warm and in good health.

God bless,

Brian Chu,
Editor, The Daily Reckoning Australia

Dear Reader,

It’s the longest day of the year (in the Northern Hemisphere). Could it get even longer? Brighter? Sunnier?

Why should we, the indispensable race, be constrained by nature? Aren’t we masters of it, not subject to it? After all, if we can set the world’s interest rates and its thermostat, what can’t we do?

So many breakthroughs, advances, and improvements; we can scarcely catalogue them, much less keep up with them. Stocks are up. Consumer price inflation is going down. After falling for two years, real wages are stabilising. And the Russians are going to wave a white flag any day now.

And there’s Jake Sullivan. After advising Hillary Clinton and Barack Obama, he’s now at work for the Biden Team. Every day on the job, he makes the world a better place.

One Giant Step

Let us begin there…and look at a giant step forward for humanity. The Biden Administration has just said goodbye to the free enterprise system that was holding us back for so many years. Now, we will have un-free enterprise; surely that will be an improvement.

Like it or not, you must admit that capitalism is messy. That is its nature. It creates new wealth, but it destroys old wealth, too. You never know exactly which way it is going. But now, Sullivan tells us that he and his fellow elite apparatchiks are going to fix it. They know where they want to go. And they’re going to force US enterprises to take them there. The Wall Street Journal:

‘… laissez-faire is out, industrial policy is in. Markets allocate capital to achieve the highest return to private investors, but as Bidenomics sees it, they don’t take account of issues like climate change, fragile supply chains or geopolitical vulnerability. That is why Germany became dangerously dependent on Russian natural gas and China dominates the supply of many critical minerals and pharmaceutical ingredients.

‘To correct these market failures, Bidenomics aims to direct private capital toward favoured sectors via regulations, subsidies and other interventions. “Advocating industrial policy…was once considered embarrassing — now it should be considered something close to obvious,” Sullivan and Jennifer Harris, a colleague in both the Obama and Biden Administrations, wrote in a 2020 essay in Foreign Policy magazine.

‘Under Bidenomics…US foreign policy champions a range of economic interests, from workers’ rights to climate policy and tax compliance. Consumers and competition are not primary concerns.’

Bidenomics accepts the value of markets but sees market failure all around.

Who decides?

Let us simplify and clarify. People create wealth by providing goods and services to each other. Neither acts of Congress, agency regulations, or presidential proclamations add a penny to our prosperity.

Then, after the people have created wealth, they decide what to do with it. Or someone else decides for them. Sullivan is saying that people have failed to use their money the way he thinks they should. From now on, he says, the Feds will be the deciders.

We all know that this will make us poorer. The Feds are terrible investors. They don’t know what they are doing. And it’s not their money. Neither theory nor experience — nowhere, at no time, by nobody — provides any reason for optimism.

But money isn’t everything…and the well-meaning, pure-of-heart federales are aiming higher. They will help reduce inequality, keep the glaciers topped up, allow people to vote for the candidates the elite selects for them, and make sure their pals — deep staters, propagandists, indoctrinators, and crony capitalists — are properly rewarded.

And this is not just another sleazy power grab by the Democrats. Republicans are in on it too. The New York Times explains:

‘A rising generation of Republican politicians is more sceptical of the free market and more comfortable using government power to regulate the economy than the party has traditionally been…

‘Tomorrow afternoon, these four Republican senators — Cotton, Rubio, Vance and Young — will speak at an event on Capitol Hill that’s meant to highlight the emergence of a populist conservative movement in economics. The event is organised around a policy manifesto, called “Rebuilding American Capitalism: A Handbook for Conservative Policymakers.”

‘“We really like capitalism, but we recognise it’s not working right now,” said Oren Cass, a former aide to Mitt Romney and the executive director of American Compass, a think tank that published the manifesto.’

A rigged economy

What a bunch of jackasses. The only thing wrong with free markets in the US is that there aren’t any. They’ve been fettered with so many thousands of laws and regulations — including some 50 million pages of ‘classified’ documents — it’s amazing they work at all. That’s why small enterprises find it hard to stay in business — they can’t afford a personnel department staffed by diversity lawyers…or an accounting office full of tax experts. Mom-and-Pop operations don’t have lobbyists in Washington looking out for their interests. Nor can they borrow money at the Fed Funds rate or pay their bills by issuing more stock. Instead, they pay real wages to real workers…and deliver real goods and services to real, paying customers.

The Feds have rigged the whole economy against the productive middle class. They pushed up asset prices with fake money lent out at fake rates. They caused inflation so that now ordinary houses are so expensive that ordinary people can’t afford them. They lowered growth rates and productivity by discouraging real saving and investment. And they loaded up the federal government with US$32 trillion in debt, so that next year, the interest will take up more money than the Pentagon.

But take heart, dear reader. Happy days are here again…these same Feds, Republican as well as Democrat, are no longer even pretending that US enterprises should be free.

Regards,

Bill Bonner,
For The Daily Reckoning Australia