Like
a host at a dinner party, the International Monetary Fund (IMF) put the
performance of the U.S. economy on the table last week to be gnawed over by
world markets. When the IMF presented its annual review of the world’s largest
economy, it stated that:
“Despite
some improvements in economic indicators, particularly in the housing market,
the very rapid pace of deficit reduction… is slowing growth significantly… U.S.
growth is expected to slow to 1.9 percent in 2013, from 2.2 percent in 2012.
This projection reflects the impact of the sequester ($85 billion of automatic U.S.
government spending cuts), and the expiration of the payroll tax cut and the
increase in tax rates for high-income taxpayers…Growth could pick up to 2.7
percent next year with a more moderate fiscal adjustment and a further
strengthening of the housing market.”
The
IMF also said the Federal Reserve should continue quantitative easing through
2013.
It
was not the only one pondering the Fed’s quantitative easing program. The major
U.S. stock market indices finished the week lower. The Dow Jones Industrials
Average fell 1.2 percent last week, the Standard & Poor’s 500 Index was off
by 1 percent, and the NASDAQ dropped 1.3 percent. Remarkably, the Dow experienced
four straight days of triple-digit swings.
The
next Federal Open Market Committee Meeting is on June 18 and 19. While few
people expect the Fed to announce it will reduce the pace of bond buying
immediately, the majority of economists surveyed by USA TODAY predict the
Federal Reserve will begin to reduce bond purchases by early fall.
Are emerging
countries leading the way in renewable energy? It seems that
way sometimes. According to UNEP’s report, Global Trends in Renewable Energy
Investment 2013, “Renewables are picking up speed across Asia, Latin America,
the Middle East, and Africa, with new investment in all technologies… Markets,
manufacturing, and investment shifted increasingly towards developing countries
during 2012.” For instance, after running even with the United States during
2011, China became the dominant country for renewable energy investment in 2012,
according to the report.
This doesn’t mean
the United States isn’t in the race. According to The Economist, an analysis by Bloomberg New Energy Finance found
the U.S. and China traded about $6.5 billion in solar, wind, and smart-grid
technology and services during 2011. America sold about $1.5 billion more to
China than it imported. The Economist
concluded, “American ingenuity is required to supply Chinese factories with
such things as polysilicon and wafers for photovoltaic cells, and the
fiberglass and control systems used in wind turbines.”
So, what does the
future hold? Kiplinger’s Letters said solar power production will double in
2013 and move ahead of geothermal power as a source of clean energy. They
believe wind energy will soon rival hydroelectric power, as well. The United
States added more wind power capacity last year than any other type of power
generation. Currently, wind comprises about 5 percent of power generated in the
United States.
Global investment
in renewable energy may have fallen during 2012, but that doesn’t mean the
industry has lost momentum. Renewable energy is gaining share in a growing number
of countries and regions, including the European Union where renewable energy –
primarily solar and wind power – accounted for about 21 percent of electricity
consumption in 2011, and almost 70 percent of new electric capacity in 2012.
Renewables just may
prove to be the tortoise in the energy race.
Weekly Focus – Think
About It
“It
is not in the stars to hold our destiny, but in ourselves.”
--William Shakespeare, English poet and playwright
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