Tuesday, December 27, 2016

In a post-fossil fuel world, ACREAGE is wealth

We watch with bated breath as government entities expand their reach.

Zero Hedge informs us that we do not own the rain that falls on our property.

What will be next?

Image from HERE
It is a fair bet that the courts will extend that to sunshine as well.

Property taxes are a proxy for income taxes.  It was reasonable to assume that a farmer with 240 acres of tillable ground had twice the income of a farmer with 120 acres of tillable ground.  If the farmer with more property did not farm it all, then the farmer was guilty of sloth and the tax was an incentive to bring the property into production or to sell it to others who would.

In a post-fossil fuel world, property ***acreage*** is wealth.

Energy is the uber-resource.  It is easy to envision folks with non-liquid investments in Chicago or New York City demanding that folks in Western Kansas put up solar farms...or that the Feds invoke eminent domain to boot the backward yokels off the land.  It was done for hydro-electric power.  You can bet that it will be done for solar power.

The land owner in Western Kansas would be within his rights to ask, "Why is my ownership of this land being condemned when it is 'irrational'  to have factories so far from the power sources?  Wouldn't it be more sensible to the property in Chicago and New York, pay them fifteen cents on the dollar and have them relocate to Scottsbluff or Garden City?

The Russians did something similar to the Ukrainians in the early 1930s.  They taxed each of their fruit trees and dairy cows.  Much of the Ukraine has a brittle, continental climate similar to Oklahoma City or Pierre, South Dakota.  Many of those fruit trees and dairy cows were "marginal", as in, they were the margin of survival in bad years.  A flat, annual tax on them squeezed the kulaks.  Cutting down the trees and slaughtering the cattle would avoid the taxes...but then the family would starve during the years when the rain did not come.

This was not an oversight by the Soviets.  It was a design feature.  Submission or extinction was the goal.

Charles Hugh Smith recently wrote an essay about how many Greeks are petitioning the courts to relinquish inherited property.  Mr Smith regards Greece as the canary-in-the-coal-mine.  This too will be coming to a theater near you.

In a competitive environment, what is the next logical "play" when all traditional forms of wealth are corraled by the "players"?  What is left?

My vote is to tax land owners on the solar energy that falls upon their property...whether they harvest it or not.

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