A ‘Climate Change’ of Hypocrisy

Our PM recently found himself swept up in a rising tide (or, perhaps sea level) of emotion at the recent Pacific Islands Forum.

The myth of sinking Pacific Islands was actually sunk last year by researchers at the University of Auckland.

In a research paper published in Nature Communications on 9 February 2018, the research abstract stated…

…we present analysis of shoreline change in all 101 islands in the Pacific atoll nation of Tuvalu. Using remotely sensed data, change is analysed over the past four decades…Results highlight a net increase in land area in Tuvalu of 73.5 ha (2.9%), despite sea-level rise, and land area increase in eight of nine atolls. Island change has lacked uniformity with 74% increasing and 27% decreasing in size. Results challenge perceptions of island loss…

When it comes to climate change, never let the facts get in the way of the money or the need for constant adulation from fellow cult followers.

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According to The Australian on 15 August 2019, Kiwi PM Jacinda Ardern…

‘…has put climate change at the centre of her international agenda. At the UN General Assembly last year, she urged other countries to put self-interest aside to help save Pacific nations from being swamped.’

And what’s Ms Ardern’s climate change agenda?

According to the NZ Ministry for the Environment…

New Zealand is on the path to a low emission, climate resilient future; the Government aims to reduce our emissions to net zero by 2050.

All very virtuous, until you realise…

To achieve her carbon-neutral pledge, Ms Ardern has excluded agriculture and methane, which contribute about half of New ­Zealand’s greenhouse gas emissions.

To phrase this oh-so-virtuous pledge differently…my New Year’s resolution is to become a teetotaller, but consuming beer and wine doesn’t count.

And people are naive enough to be taken in by these meaningless gestures.

Amazing.

According to NASA, the rising sea levels threatening Pacific Islands can be contributed to melting ice…

When ice on land, such as mountain glaciers or the ice sheets of Greenland or Antarctica, melt, that water contributes to sea level rise.

And it’s true, the ice sheets do melt.

This is an extract from a report written by a highly regarded patron of science…

‘…a considerable change of climate, inexplicable at present to us, must have taken place in the circumpolar regions by which the severity of the cold, that has for centuries past enclosed the seas in the high northern latitudes in an impenetrable barrier of ice, has been, during the last two years, greatly abated.

Mr. Scoresby, a very intelligent young man, who commands a whaling-vessel from Whitby, observed last year that 2000 square leagues of ice, with which the Greenland seas between the latitudes of 74 degrees and 80 degrees N[orth] have been hitherto covered, has in the last two years entirely disappeared.

Over a two year period, a change in climate has melted 10000 square kilometres (the equivalent of 2000 square leagues) of ice in the Greenland seas.

That’s alarming…until you find out when the report was written.

20 November 1817.

The author of and reason for the report?

The world renowned botanist, Sir Joseph Banks was informing his Lordship Robert Saunders Dundas, the 1st Lord of the Admiralty, of his findings from a recent expedition.

If only Sir Joseph had known about the dire consequences that awaited the world from ‘a considerable change of climate, he could have been the Al Gore of his time.

But in all likelihood, no one would have cared.

Why?

Because the climate was, is and will continue to change…so what’s the big deal.

The ice must have come back, otherwise why write a story about it melting (again).

Rum Rebellion 23-08-19

Source: NY Times.com

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The article is a classic case of extrapolating a trend into the future…what has melted will continue to melt.

Here we are sixty years later and the ships are still turning left, not right, outside the Narrows.

Why else would they spend 10 years and US$5 billion on building new infrastructure? As Wikipedia notes:

The Panama Canal expansion project also called the Third Set of Locks Project, doubled the capacity of the Panama Canal by adding a new lane of traffic allowing for a larger number of ships, and increasing the width and depth of the lanes and locks allowing larger ships to pass…The expanded canal began commercial operation on 26 June 2016.

The climate has been changing (warming and cooling) for millions of years and will continue to do so.

Yet, against all common sense and logic, the cult of climate change has managed to indoctrinate people into believing that somehow ‘this time is different’.

That what we’re witnessing has never happened before and if it has, well it’s not the same as before.

Bureaucracies love this sort of populous stuff that captures people’s imaginations.

More paperwork. More red tape.

Remember the media coverage and hysteria whipped up over the Y2K bug?

Planes would fall out of the sky. Lifts would stop, trapping people inside. Banks would lose our records. The world was on the brink of shutting down.

Back then, I was a holder of an Australian Dealers Licence.

For compliance purposes, ASIC required a signed declaration stating we’d taken all necessary steps to mitigate the risks of Y2K.

The business community spent countless millions (lining the pockets of computer specialists who should have known better and most probably did) to protect systems from this completely fabricated risk.

And here we go again.

The very institution that has created a very real risk in society — a property bubble caused by its accommodative interest rate policy — should be the last one to lecture us about ‘this time its different’.

But they do. This is an extract from the 12 March 2019 edition of The Sydney Morning Herald (emphasis is mine)

The Reserve Bank has warned climate change is likely to cause economic shocks and threaten Australia’s financial stability unless businesses take immediate stock of the risks. 

The central bank became the latest Australian regulator to tell business that they must analyse their investments…

In a speech to the Centre for Policy Development in Sydney, the Reserve’s deputy governor Guy Debelle said challenges for financial stability may arise from both physical and transition risks of climate change.

We need to think in terms of trend rather than cycles in the weather. Droughts have generally been regarded as cyclical events that recur every so often. In contrast, climate change is a trend change.

Economic shocks.

Threats to financial stability.

Challenges for financial stability.

If these passages were in an RBA statement warning about the perils of too much debt in the system — resulting from the RBA keeping rates too low for too long — then I would stand and applaud our central bank’s honesty.

But alas, our central bank ignores the clear and present danger of the greatest asset bubble of all time and instead turns its furrowed brow to…a change in weather trend.

If you believe the RBA, cycles are out and trends are in.

I’m really looking forward to hearing what they have to say when the current debt cycle turns nasty.

The only trend I can see, is the populous trend of playing follow the clueless leader.

When the RBA tells ‘business that they must analyse their investments’, then analyse them they must. As the Guardian reported last month:

A declaration by the head of BHP that tackling the climate crisis will require “the biggest global mobilisation since World War II” has prompted claims the world’s biggest miner is more serious about the problem than the Australian parliament.

How magnanimous of the corporate sector to mobilise shareholder funds to wage an offensive against a fictitious enemy.

Truly inspiring.

I wonder whether board members will follow the example of Greta Thunberg and sail to their next board meeting?

Probably not. They’ll keep flying at the pointy end and most likely use shareholder funds to buy carbon offset credits

Oh the warm and fuzzies of being a corporate climate change warrior.

Our corporate regulator is also upping its agenda on climate change.

Rum Rebellion 23-08-19

Source: ASIC

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Here’s an edited snippet from what ASIC now expects…

in RG 247.66, highlight climate change as a systemic risk that could impact an entity’s financial prospects for future years and that may need to be disclosed in an operating and financial review (OFR);

What if you don’t believe the changing weather patterns are a systemic risk, but just Mother Nature going about her business?

Word of advice…don’t even think about bucking the trend.

Go with the flow.

Employ an in-house climate change ‘professional’. Seek counsel from a ‘climate change’ consultant. Fill the disclosure report with all the ‘airy fairy’ feel good rubbish they want to hear. Put it all on the shareholders tab.

But what about dealing with the very real risk to personal wealth from poor advice given by the big banks and insurance companies?

This is from the Banking Royal Commission Interim Report released in September 2018…

Much more often than not, when misconduct was revealed, little happened beyond apology from the entity, a drawn out remediation program and protracted negotiation with ASIC of a media release, an infringement notice, or an enforceable undertaking that acknowledged no more than that ASIC had reasonable ‘concerns’ about the entity’s conduct.

The inconvenient truth is the real change we should be concerned with is a change in our economic fortunes.

The RBA and its central banker mates, with their ultra-low interest rate policies, have actively encouraged people to do three things:

  1. Borrow an additional US$100 trillion since the GFC
  2. Go in search of higher yielding investments
  3. Spend NOT save

These factors have made the world a far more dangerous place than coal fired power stations.

When the economic cycle turns from positive to negative, here’s a trend you can bank on: central bankers denying any culpability for the wealth destruction caused by their inane policies.

Regards,

Vern Gowdie Signature

Vern Gowdie,

Editor, The Rum Rebellion

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Vern has been involved in financial planning since 1986.

In 1999, Personal Investor magazine ranked Vern as one of Australia’s Top 50 financial planners.

His previous firm, Gowdie Financial Planning, was recognised in 2004, 2005, 2006 & 2007, by Independent Financial Adviser magazine as one of the top five financial planning firms in Australia.

In 2005, Vern commenced his writing career with the ‘Big Picture’ column for regional newspapers and was a commentator on financial matters for Prime Radio talkback.

In 2008, he sold his financial planning firm due to concerns about an impending economic downturn and the impact this would have on the investment industry.

In 2013, he joined Fat Tail Investment Research as editor of Gowdie Family Wealth. In 2015, his book The End of Australia sold over 20,000 copies and launched his second premium newsletter, The Gowdie Letter.

Vern has since published two other books, A Parents Gift of Knowledge, all about the passing of investing intelligence from father to daughter, and How Much Bull can Investors Bear, an expose on the investment industry’s smoke and mirrors.

His contrarian views often place him at odds with the financial planning profession today, but Vern’s sole motivation is to help investors like you to protect their own and their family’s wealth.

Vern is Founder and Chairman of The Gowdie Advisory and The Gowdie Letter advisory service.


The Rum Rebellion