Good Morning Everyone,
While in the US the fed has hiked rates by a further 75bps, in Australia the beginning of the energy crisis seems to have begun with the government regulator suspending the energy market nationally. Channel 9, one of the major legacy propaganda outlets in Australia issued a warning urging NSW residents to reduce their electricity consumption immediately to avoid a blackout last night.
Only a few days prior this same regulator enforced pricing controls in the state of Queensland.
Wholesale prices in Queensland were controlled at $300 a megawatt-hour at 6.55pm after the cumulative total of seven days of prices topped the set limit of $1.3591 million, the Australian Energy Market Operator said.
The cap was only for the trading day initially, however was said to be extended if cumulative price threshold was exceeded.
This madness is as a direct result of central planning and classic naive interventionism. Pricing controls literally never work. Like clockwork as soon as governments introduce pricing controls, what follows shortly thereafter are shortages. Literally every time, without fail.
We are living the effects of this right now, and this energy crisis is not unique to Australia. Energy markets are global.
In a free and open market it’s not that we would never have problems, but the problems would get addressed and solved in a more robust way that would sustain more effectively over time. Because the problem presents an opportunity for someone able to solve it, and the incentive is not to create a bandaid solution, the incentive is to create long term solutions as it is necessary to solve long term to recoup the capital allocated to the problem in the first place.
Central planners are reactive to isolated events, and completely miss the interwoven complexity that exists. They are at the mercy of political opinion, and are incentivised to create short term solutions to diffuse any political opposition before people move on to the next current thing. This is what free markets do best, they solve this problem, and they do it at no cost to consumers unlike government bodies.
As we descend further into this mess, the need to remove money from the hands of central planners has never been more important. Bitcoin remains the most powerful solution to many of our current problems. Hopefully more and more people continue to understand why and how it does so, so we can course correct before we drive ourselves off a metaphorical cliff.
Hope you have a great day. I’ll talk to you tomorrow.
AK
