Happy New Year – Kyoto Is Dead

Russia Abandons Kyoto Protocol

From Dr. Benny Peiser at The GWPF

Moscow won’t join the second phase of the Kyoto Protocol, which starts on January 1st 2013. Russia decided to discontinue its participation in the protocol because the world’s major producers of greenhouse gases – the United States, China and India – are still refusing to commit themselves to reduce greenhouse gas emissions. —Voice of Russia, 31 December 2012

Ukraine may join Russia in shunning the extended Kyoto Protocol after United Nations envoys approved a text the two nations didn’t agree with, according to the Centre for European Policy Studies in Brussels. —Business Week, 14 December 2012

The controversial and ineffective Kyoto Protocol’s first stage comes to an end today, leaving the world with 58 per cent more greenhouse gases than in 1990, as opposed to the five per cent reduction its signatories sought. –Max Paris, CBC News, 31 December 2012

As of today, the Kyoto protocol is a zombie treaty. It’s a corpse that keeps moving, but it’s dead. Kyoto died Monday at midnight when the greenhouse gas cuts it set for 37 industrialized nations between 2008 and 2012 expired. –Lorrie Goldstein, Toronto Sun, 1 January 2013

We are entering a new Renaissance in the oil market, not just in the US, but globally as well. New technology, slower growth in the emerging markets over the next decade, and an era where a decade of high prices will finally bear some fruit with market dynamics working as their supposed to leading to more supply, and an eventual reduction in prices.–EconMatters, NASDAC, 30 December 2012

A “rational optimist” like me thinks the world will go on getting better for most people at a record rate, not because I have a temperamental or ideological bent to good cheer but because of the data. Poverty, hunger, population growth rates, inequality, and mortality from violence, disease and weather — all continue to plummet on a global scale. But a global optimist can still be a regional pessimist. When asked what I am pessimistic about, I usually reply: bureaucracy and superstition. Using those two tools, we Europeans seem intent on making our future as bad as we can. It is entirely possible that ten years from now the world as a whole will be 50 per cent richer, but Europeans will be 50 per cent poorer. –Matt Ridley, The Times, 2 January 2013

0 0 votes
Article Rating
Newest Most Voted
Inline Feedbacks
View all comments
Drave Robber
January 2, 2013 6:52 am

–Voice of Russia, 31 December 2013

The year might be misspelled. 🙂 [typo fixed -mod]

Peter Gulutzan
January 2, 2013 6:56 am

Your initial quote ends with “Lorrie Goldstein, Toronto Sun, 1 January 2012”. No, click to the article. It was 31 December 2012.

January 2, 2013 6:59 am

It’s kind of like someone you detest because he’s a loathsome, bullying oaf finally kicks the bucket after making his family miserable for years…you know you should say something comforting and sympathetic to his friends, but just can’t bring yourself to do it.
May the Kyoto zombie be blown to intifestimal, impotent pieces, and soon.

Frank K.
January 2, 2013 7:01 am

Good news! Sadly, the global warming industry here in the U.S. will still be wasting billions of our tax dollars this year, driving our nation further into debt…and there appears to be no mitigation strategy for that.

January 2, 2013 7:26 am

Put a stake in it’s heart, shoot it with a sliver bullet and bury it in a lead casket with garlic cloves..

January 2, 2013 7:27 am

One monster slain–but beware the others lurking in the shadow. Those who “save the world” do not go quietly into the night.

John West
January 2, 2013 7:38 am

@ Frank K
Not to mention the EPA is making real industries waste money on GHG regulations:

January 2, 2013 7:40 am

Sallie Baliunas, Tim Patterson and I published an article in the PEGG in 2002 that opposed the Kyoto Protocol. Our Summary included some remarkably accurate predictions of current events.
Since 2002 there has been no net global warming, and perhaps some modest cooling (see point 1 below).
We also predicted the debacle in green energy, where a trillion dollars of scarce global resources have since been squandered on alternative energy nonsense (point 8 below).
Our eight-point Summary* includes a number of statements that have all materialized in those countries in Western Europe that adopted the full measure of global warming mania. Canada was foolish enough to sign the Kyoto Protocol, but then wise enough to ignore it.
Prediction Number 9:
In a separate article in the Calgary Herald, also published in 2002, I (we) predicted imminent global cooling, starting by 2020 to 2030. This prediction is still looking credible, since there has been no net global warming for about a decade, and solar activity has crashed. If this cooling proves to be severe, humanity will be woefully unprepared and starvation could result.
This possibility or probability concerns me.
Full article at
Kyoto has many fatal flaws, any one of which should cause this treaty to be scrapped.
1. Climate science does not support the theory of catastrophic human-made global warming –the alleged warming crisis does not exist.
2. Kyoto focuses primarily on reducing CO2, a relatively harmless gas, and does nothing to control real air pollution like NOx, SO2, and particulates, or serious pollutants in water and soil.
3. Kyoto wastes enormous resources that are urgently needed to solve real environmental and social problems that exist today. For example, the money spent on Kyoto in one year would provide clean drinking water and sanitation for all the people of the developing world in perpetuity.
4. Kyoto will destroy hundreds of thousands of jobs and damage the Canadian economy – the U.S., Canada’s biggest trading partner, will not ratify Kyoto, and developing countries are exempt.
5. Kyoto will actually hurt the global environment – it will cause energy-intensive industries to move to exempted developing countries that do not control even the worst forms of pollution.
6. Kyoto’s CO2 credit trading scheme punishes the most energy efficient countries and rewards the most wasteful. Due to the strange rules of Kyoto, Canada will pay the former Soviet Union billions of dollars per year for CO2 credits.
7. Kyoto will be ineffective – even assuming the overstated pro-Kyoto science is correct, Kyoto will reduce projected warming insignificantly, and it would take as many as 40 such treaties to stop alleged global warming.
8. The ultimate agenda of pro-Kyoto advocates is to eliminate fossil fuels, but this would result in a catastrophic shortfall in global energy supply – the wasteful, inefficient energy solutions proposed by Kyoto advocates simply cannot replace fossil fuels.

Kevin Kilty
January 2, 2013 7:42 am

Didn’t Kyoto actually die when it couldn’t come close to meeting its targets? What we have here is the official certificate. RIP

January 2, 2013 7:46 am

Frank K. says:
January 2, 2013 at 7:01 am
Sadly, the global warming industry here in the U.S. will still be wasting billions of our tax dollars this year, driving our nation further into debt…and there appears to be no mitigation strategy for that.
Most Americans are unaware that the US Federal Reserve is a privately owned bank. It is not owned by the government. When the US government prints money, it owes this debt plus interest to the Federal Reserve. The books for the Fed are not subject to government inspection.
Why would the bankers and families that own the Fed want this situation to change? The more debt, the more interest, the more they call the shots in US politics from behind the scenes. Want more money? Then be prepared to play ball. No matter what politician or political party is elected, without money they have no power.

January 2, 2013 7:53 am

I guess we now know why Gillard put a “price on cah-bin” on Australia…to secure a seat on the UN security council.

January 2, 2013 8:07 am

I’m thinking back 20 years to the ridiculous Rio Declaration of 1992 which was the start of all this nonsense, specifically Principle 15:
“In order to protect the environment, the precautionary approach shall be widely applied by States according to their capabilities. Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.”
How could any rational person sign on to spending hundreds of billions of dollars on a hunch? How could any rational person vote to be represented by people willing to spend hundreds of billions of dollars on a hunch?

Doug Huffman
January 2, 2013 8:12 am

Thank you very much for some good news, at last, for 2013. I pray many pendulums are swinging similarly.

January 2, 2013 8:29 am

Kyoto would not have been implemented without Russia. Ratification required approval by no fewer than 55 countries that were responsible for 55 percent of emissions. At the time the US produced 36 percent, but had refused to sign. This left Russia as the only country producing enough to reach the 55 percent level. Approval required the Russian vote and Putin announced he would not sign.
His economic advisor, Andrey Illarionov, went on a global lecture tour titled “Apocalypse Now!!!!” explaining what was wrong with IPCC science.
Then Putin did a complete about face and signed in November 2004.
He explained publicly that he signed because the European Union told him they would not support Russia’s application for admission to the World Trade Organization unless he signed.
Illarionov resigned.
All this proves what I said years ago, “The Kyoto Protocol is a political solution to a non-existent problem without scientific justification.”
Ironically, Putin’s political games are much more open, blunt, and self-serving than most other politicians.
Despite all this the belief that CO2 is causing warming/change prevails in most legislation, policies, planning and costs. Even without Kyoto, the lie persists and pervades.

January 2, 2013 8:50 am

Any news signalling another step in ending the Kyoto Protocol brings more optimism.
Remember though, an end to Kyoto does not stop the UN’s efforts to promote globally sweeping socio-economic-politico changes based on the IPCC’s corrupted assessment processes.
Vigilance wrt CAGW activists is still needed now more than ever.
I suggest that the AR5 process needs to be suspended pending an independent audit of the IPCC.

January 2, 2013 9:00 am

Would not the worlds biggest beneficiaries of actual global warming be Russia and Canada?
Seriously, if you lived there you would almost have to root for it. North of Moscow they hide under a pile of blabkets two months a year drinking vodka through a straw and peeing in bed. Its like -40F out with stiff winds.

Lars P.
January 2, 2013 9:31 am

Here is Matt’s blog post in full:
unfortunately I tend to give him right. We europeans seem to want to replace democracy with bureaucracy, science with green superstition and relative decline with absolute decline.
If this keeps hold of the continent the outcome will be bad. Well maybe others will be able to learn from our failure, if we are not able.
BTW, it Kyoto really dead? I understand Australia and Europe have prolonged Kyoto 2 to 2020 together 194 countries. If we substract from here 27 european and Australia, we are left with 166 from which around 160 have no obligations, but it is somehow difficult to find the names of the ones with obligations – who is in with any obligation besides Europe and Australia?

January 2, 2013 9:40 am

KevinM says:
January 2, 2013 at 9:00 am

Seriously, if you lived there you would almost have to root for it. North of Moscow they hide under a pile of blabkets two months a year drinking vodka through a straw and peeing in bed. Its like -40F out with stiff winds.

And for good reason: with 80 proof vodka freezing at -16.5 F, taking your drink outside would pose a problem unless you upgraded your vodka to 100 proof, which freezes at -40.8 F.

Lars P.
January 2, 2013 10:29 am

RockyRoad says:
January 2, 2013 at 9:40 am
And for good reason: with 80 proof vodka freezing at -16.5 F, taking your drink outside would pose a problem unless you upgraded your vodka to 100 proof, which freezes at -40.8 F.
I’ve seen this recently somewhere, and now I found it: this is how vodka looks like at -38°C or -36.4°F at an outdoor party in Russia:

Leo Morgan
January 2, 2013 10:29 am

Kyoto may be dead, but sadly the rotting corpse is tied around the neck of us Australians. Our government has agreed to extend their participation, costing us more hundreds of millions of dollars on a scheme they know ahead of time is a failure.

January 2, 2013 10:38 am

Since “New Year” is mentioned, I’ll post this here for those interested.
2012 rain totals (inches) for some US NWS stations. From:
Just change the “md” in the above address to the appropriate state. My own number is first. Multiply by 25.4 to get mm.
beng (western MD)————–39.51
Hagerstown East MD————-47.00
Hagerstown AP North MD———37.83
LaVale MD———————-38.33
Salisbury, MD——————43.23
Baltimore MD——————-37.42
BALTIMORE Harbor MD————39.65
Wallops Island VA————–49.03
LYNCHBURG VA——————-29.84
ROANOKE VA———————32.91
DANVILLE VA——————–28.83
NORFOLK VA———————48.35
RICHMOND VA——————–36.52
DULLES AP VA——————-35.62
PITTSBURGH PA——————41.74
HARRISBURG PA——————45.22
ALLENTOWN PA——————-41.02
MOUNT POCONO PA—————-48.57
READING PA———————38.91
AVOCA PA———————–38.09
ERIE PA————————39.68
WILMINGTON DE——————36.31
GEORGETOWN DE——————36.00
BECKLEY WV———————44.37
CHARLESTON WV——————41.48
ELKINS WV———————-46.45
HUNTINGTON WV——————41.11
COLUMBUS OH——————–37.27
DAYTON OH———————-32.59
CINCINNATI OH——————38.78
CLEVELAND OH——————-44.62
AKRON OH———————–37.93
YOUNGSTOWN OH——————45.09
MANSFIELD OH——————-40.16
TOLEDO OH———————-30.34
WILMINGTON NC——————50.46
LUMBERTON NC——————-45.04
ASHEVILLE NC——————-44.66
CHARLOTTE NC——————-33.69
FLORENCE SC——————–41.61
GREENVILLE SC——————38.86
COLUMBIA AP SC—————–42.76
SHREVEPORT LA——————50.38
MONROE LA———————-56.53
LAKE CHARLES LA—————-72.01
ALEXANDRIA LA——————53.77
LAFAYETTE LA——————-66.97
BATON ROUGE LA—————–63.81
NEW ORLEANS LA—————–68.26
LONGVIEW TX——————–37.71
LUFKIN TX———————-42.16
TYLER TX———————–34.61
VICTORIA TX——————–28.07
HOUSTON TX———————41.75
GALVESTON TX——————-47.21
MIDLAND TX———————12.80
SAN ANGELO TX——————21.96
ABILENE TX———————23.20
AMARILLO TX——————–12.33
AUSTIN TX———————-35.00
WACO TX————————32.34
LUBBOCK TX———————11.43
FORT WAYNE IN——————28.58
SOUTH BEND IN——————34.69
EVANSVILLE IN——————33.13
MOLINE IL———————-27.25
PEORIA IL———————-27.08
ROCKFORD IL——————–23.35
PADUCAH KY———————30.06
LEXINGTON KY——————-42.62
LOUISVILLE KY——————45.68
JACKSON KY———————51.99
TRI-CITIES TN——————46.15
KNOXVILLE TN——————-53.64
NASHVILLE TN——————-45.82
MEMPHIS TN———————36.90
TRENTON NJ———————37.46
NEWARK NJ———————-36.35
WATERTOWN NY——————-34.54
ROCHESTER NY——————-34.15
ISLIP NY———————–44.71
BUFFALO NY———————32.80
CENTRAL PARK NY—————-38.51
LAGUARDIA AP NY—————-36.71
KENNEDY AP NY——————39.85
BRIDGEPORT CT——————40.99
ALBANY NY———————-36.99
BINGHAMTON NY——————39.34
SYRACUSE NY——————–35.11
FLINT MI———————–30.85
DETROIT MI———————27.11
GRAND RAPIDS MI—————-33.85
GREEN BAY WI——————-31.53
LA CROSSE WI——————-26.68
MILWAUKEE WI——————-29.29
MADISON WI———————26.36
EAU CLAIRE WI——————24.26
ST. LOUIS MO——————-32.30
COLUMBIA MO——————–30.69
GOODLAND KS——————–9.58
TOPEKA KS———————-22.97
WICHITA KS———————25.00
VALENTINE NE——————-10.68
NORTH PLATTE NE—————-10.04
LINCOLN NE———————19.11
OMAHA NE———————–22.61
PUEBLO CO———————-5.00
ALAMOSA CO———————5.50
DENVER CO———————-10.11
REDDING AP CA——————36.45
MODESTO CA———————12.73
UKIAH CA———————–41.62
STOCKTON AP CA—————–13.59
THERMAL AP CA——————2.54
CAMPO ASOS CA——————10.52
FRESNO CA———————-9.97
OLYMPIA WA———————59.59
YAKIMA WA———————-9.32
SPOKANE WA———————21.32
ATHENS GA———————-37.36
ATLANTA GA———————37.03
COLUMBUS GA——————–35.21
MACON GA———————–32.41
AUGUSTA GA———————44.59
SAVANNAH GA——————–40.21
NAPLES FL———————-37.93
MELBOURNE FL——————-39.71
MIAMI FL———————–86.94
FORT MYERS FL——————49.61
ORLANDO FL———————41.09
SARASOTA FL——————–45.79
TAMPA FL———————–55.99
PENSACOLA FL——————-58.39
EL DORADO AR——————-43.40
TEXARKANA AR——————-31.88
DE QUEEN AR——————–28.52
HARRISON AR——————–29.53
PINE BLUFF AR——————45.46
DUBUQUE IA———————24.07
DES MOINES IA——————26.29
WATERLOO IA——————–24.07
SIOUX CITY IA——————24.12
MONTGOMERY AL——————43.07
HUNTSVILLE AL——————52.21
MOBILE AL———————-69.10
TUSCALOOSA AL——————48.12
BIRMINGHAM AL——————49.36
HARTFORD CT——————–38.44
BRIDGEPORT CT——————40.99
WORCESTER MA——————-43.88
BOSTON MA———————-36.69
BANGOR ME———————-42.30
CARIBOU ME———————38.60
PORTLAND ME——————–54.47
DULUTH MN———————-33.20
TWIN CITIES MN—————–29.59
ROCHESTER MN——————-24.85
FORT WAYNE IN——————28.50
SOUTH BEND IN——————34.69
EVANSVILLE IN——————33.07
PROVIDENCE RI——————41.19
FLORENCE SC——————–41.61
PHOENIX AZ———————4.28
TUCSON AZ———————-7.91
ROSWELL NM———————6.20
BURNS OR———————–10.33
MEDFORD OR———————26.87
ASTORIA OR———————91.29
PORTLAND OR——————–50.44
SALEM OR———————–54.40
EUGENE OR———————-50.19
SAN JUAN PR——————–55.12
ANCHORAGE AK——————-21.48
KING SALMON AK—————–21.10
HONOLULU HI——————–8.60
HILO HI————————90.39
KAHULUI HI———————5.18
LIHUE HI———————–41.06
LAS VEGAS NV——————-5.31
ELKO NV————————7.82
ELY NV————————-12.24
FARGO INTL AP ND—————14.52

george e smith
January 2, 2013 10:50 am

Welll Russia has it wrong; the USA is not the largest emitter of GHGs, nor is it one of the top three cited. The USA is the largest land carbon SINK, because of its agriculture including farmed forestry. We are in fact, the ONLY sizeable land carbon sink. All the other large land areas are either carbon neutral, or net carbon emitters. Australia is a net carbon emitter, but mostly because plants don’t grow there; it’s a big desert.
New Zealand is also a net carbon sink,, for the same reasons as USA, but much much smaller.
And NZ finally wised up, and told Kyoto II to go jump in the Tasman Sea; along with Japan and Canada, and now apparently Russia too.
Canada, would also be a large carbon sink, because of its forests, but it is so cold and far north, that the growing season is short. Real global warming would be a boon to Canada, and also to Russia; not to mention world food supplies.

January 2, 2013 12:32 pm

Tim Ball
For the Kyoto Protocol to come into force the ratification by 55 per cent of the emitters of the Annex I countries of the IFCCC was required. The contention for those interested in extending the Kyoto Protocol is simply amending the expiration date. The amendment articles of the Kyoto Protocol does not require ratification by 55 per cent of the emitters as per Article 20 of the Protocol. The Protocol encouraged the amendment to be done by consensus and if a consensus is not reached then the amendment must be accepted by three fourths of all the countries that have ratified or acceded to the Protocol. Any party to the Protocol could propose an amendment and the secretariat is required to circulate the proposed amendment to all parties at least six months before the amendment is considered for discussion. If the expiration date is amended, the proposal must have been in the list of proposed amendments at least last May 2012. However, the IFCCC website on the list of proposed amendments when I accessed it in the first week of December did not include any amendment proposal for extension of the expiration date. This raised the issue if the extension agreed upon last December in Doha is a valid amendment to the Protocol. Second problem of the extension is the constitutional process in the parties to the protocol. If congress or parliaments have ratified the Protocol with specific validity date will the extension require parliamentary or congressional approval. While article 20 recommended consensus, the three fourth rule is rather awkward as more than three fourth of the parties are non-annex I countries of the UNFCCC, i.e. parties that have no obligation to cut their emissions. The reductions and GHG specie controlled in the Protocol are however covered under articles 21 of the Protocol.
By the way, the Kyoto Protocol is not designed to cut 5 per cent of the global greenhouse gas emissions. It is only designed to cut an average of 5 per cent of the GHG emissions in Annex I countries. Based on the communications of the Annex i countries they have mostly meet this requirement through the various mechanisms ranging from internal reduction ( actual reduction) to the clean development mechanism where the reduction takes place in the developing countries. The internal reduction are often meet by closure of energy intensive industries and the movement of those industries to developing countries like China and India. In some instances, the target is meet because the definition and methodology of the way the sink is calculated has been changed. While most of the Annex I countries could go on the record as having meet their obligations, the actual GHG levels have gone up dramatically.

Alan Watt, Climate Denialist Level 7
January 2, 2013 12:34 pm

george e smith says:
January 2, 2013 at 10:50 am

Canada, would also be a large carbon sink, because of its forests, but it is so cold and far north, that the growing season is short. Real global warming would be a boon to Canada, and also to Russia; not to mention world food supplies.

In other words, more global warming would increase the amount of land surface acting as a carbon sink, as well as reduce the amount of fuel burned by Canadians, Russians and other others to heat their hot tubs and saunas in the winter.

Alan Watt, Climate Denialist Level 7
January 2, 2013 1:14 pm

Addendum to above:
… as well as growing more grain and potatos to make whiskey and vodka.

Alan Watt, Climate Denialist Level 7
January 2, 2013 2:16 pm

“RIP” is the wrong epitaph for the Kyoto treaty. I prefer something like “EIA” for Exuro In Abyssus. Not really sure if that is proper Latin for “Burn in Hell” but you get the idea.

john robertson
January 2, 2013 2:25 pm

The Rio 1990 choice of the precautionary principle should have been the first clue.
As do-gooders, especially govt do-gooders, are predominately deceitful power-hungry rent-seekers, the precautionary principle required us to treat them as such.
This we failed to do and as bureaucracy is the natural home of weak minds and groupthink we have todays conditions where an unelected, non accountable group are seeking to use our civic institutions and public hysteria to seize power over us all.
Course cowardly, stupid and lazy people have always been with us.

January 2, 2013 2:32 pm

tgmccoy says:
January 2, 2013 at 7:26 am
Put a stake in it’s heart, shoot it with a sliver bullet and bury it in a lead casket with garlic cloves..
Oh, and the corpse should be lying face down, too, so if it does dig its way out, it will be digging the wrong way, as in deeper. Yes, it’s an old superstition, but, hey, it pays to be sure. 🙂

Political Junkie
January 2, 2013 3:18 pm

Canada’s CBC normally doesn’t permit comments on climate change articles.
However, they have made an exception on the article describing the demise of Kyoto.
The comments overwhelmingly celebrate the death of this ill-conceived and ineffective treaty.

January 2, 2013 4:38 pm

It is easy to say what is wrong with Kyoto. Instead, we should look at what is sufficient to make it a reasonable policy. The underpinnings of the Kyoto Protocol used benefit-cost analysis to achieve a compromise solution. To achieve is goal it needed ALL of the following assumptions to be true.
1. CO2 causing a massive increase in global warming.
2. For that warming to have massive catastrophic consequences.
3. For economic theory to provide a theoretical solution with benefits ≥ costs.
4. The actual solution matches the theory.
5. There are no unintended consequences of actual policy implementation need to be taken into account.
6. That the Kyoto Protocol was originally estimated at being 97% useless in constraining temperature rises.
ALL the assumptions do not hold. We should say “DNR”.

Robert of Ottawa
January 2, 2013 5:43 pm

Canada, leader of the free world!

lurker passing through, laughing
January 2, 2013 6:18 pm

It is not that Kyoto is ineffective. It is a non-cure for a non-crisis. It is a folly. Ineffective is a possible to solve a real problem that is either poorly used or badly designed. Kyoto could have never accomplished its alleged goal even if every nation had complied with its CO2 goals.

January 2, 2013 7:41 pm

/PC off
No love lost here. May The Kyoto Protocol and all of its facilitators rot in hell for what they have had a hand in bringing its share of hardship onto mankind as a whole. People will continue to suffer slow subtle deaths for decades from its ramifications of no longer being able to live comfortable lives.

John Silver
January 3, 2013 5:28 am

Truth is, it was DOA.

Mario Lento
January 3, 2013 5:16 pm

@ferd berple: Your explanation is correct, but I think I can make it clearer:
This is how I understand it and have written it down to help me get it all straight.
The “US Treasury” puts out bonds (think T-Bills) to raise money not covered by taxes. If and when the public or other countries’ people or governments do not buy them, the “Federal Reserve” “prints money” and buys the bonds.
This is correct right?

January 3, 2013 5:31 pm

Russia was persuaded to sign up to Kyoto 1 by bribery: because they had closed down old polluting, inefficient Stalanist industries which had been done long ago for financial reasons, the offer of juicy carbon credits to sell and no obligation to actually DO anything, a signature was assured. Then the Russians could sit back and laugh at the fools who would buy this fresh air!
They had no intention of signing up to anything that would actually cost them any money.
Cynical or what?

January 4, 2013 4:57 am

@Mario Lento:
A bit simplified, but basically right. One ‘nit’ though: “Print Money” is widely used as a metaphor for ‘increase money supply’, but there are many kinds of money. Technically, only the U.S. Treasury Dept. of Engraving and Printing actually prints paper currency (commonly called money):
The Treasury puts up a load of bonds for sale, and anyone can bid on them. If The Fed wants to drive down interest rates, they bid “not much interest required” i.e. they may say “I’ll take a $Billion at 1/2 % interest rate” while The Bank Of Japan might be bidding “$1/2 Billion at 1%”. Since the government doesn’t want to pay twice as much for the ‘loan’, The Fed ‘wins’ that auction. It collects the bonds, and makes an electronic entry in the U.S. Govt accounts saying it has $Billion of cash.
Now that isn’t currency (paper money), and it didn’t get printed, so it technically isn’t ‘printing money’, but it is increasing the “money supply”.
(Technically, again, it’s increasing M1 if it’s a checking account and M2 if a time deposit / savings account like. http://www.investopedia.com/terms/m/m1.asp “A category of the money supply that includes all physical money such as coins and currency; it also includes demand deposits, which are checking accounts, and Negotiable Order of Withdrawal (NOW) Accounts.”)
There is another bit of jargon / picky bit here too. “Money” is defined as a medium of exchange AND a store of value, while “currency” is just a medium of exchange. So while it is widely ignored (even by people who know better like The Fed Chairman) technically if you have inflation in your currency it is no longer money… as it fails the store of value test. This is the point the ‘hard money’ people fixate on…. So some of them tend to say things like “you can’t print money” at all. And our constitution does say “coin money” and that it ought to be precious metals; but that’s been ignored since the first time a budget hick cough came along…
Also, one sidebar: At one point the Treasury directly printed “U.S. Treasury Notes” for circulation as currency: https://en.wikipedia.org/wiki/United_States_Note
This played into a small drama where The Fed wanted to control money supply and some of our Presidents wanted to issue a bit more cash without playing footsy with The Fed. This all came to an end (though in theory could be restarted at any time). So now the Treasury prints the “Fed Reserve Notes” and trucks them off to The Fed, who adjusts their ‘computer account entry’ in exchange for the notes. (“buys them”). This leaves The Fed in charge of the actual money supply and forces the US Government into the business of issuing debt to get more money / M1.
Every so often someone suggests that the Treasury COULD just start printing and spending “U.S. Notes” directly and bypass that whole “public debt” issue via directly inflating the money supply ( currency). At present, that would require some ‘paperwork’ to reauthorize it… HOWEVER…
There’s a numismatic law on the books that lets the Treasury mint coins (that old gold and silver thing) but has a specific that platinum coins can be set at any value they want (unlike gold that is involved in that whole Fort Knox thing…) So it has been proposed that a giant Platinum Coin be minted and assigned the value of $Trillion. Then Obama could have it walked over to The Fed, who would be required to accept it as valid, and deposit it. “Presto”, they get $Trillion bank deposit, and no need for that whole “debt ceiling” issue or action by The House… I’ve looked into that and it looks like it is an accurate statement of the laws… But I think the political fallout would be lethal…
And folks of the Progressive-Liberal sort are advocating it:
At any rate, that’s probably more about money supply than you wanted, but I think it helps clear up the mixed mess we’re in. Where the Treasury has to print currency it takes to The Fed who then trades them electronic bits for it… and where we are mandated to use precious metals, but don’t. And where if we did what some people want, we’d use a couple of platinum coins to do an end run around congressional authority.
So, IMHO, it’s easiest if you just don’t think of those “pretty pieces of paper” or computer bits as money at all. Just think of them as “Fiat Currency” and it is much easier to follow…
Oh, and there’s also the whole issue of “Fractional Reserve Banking” that can create higher M numbers of “money” from M2 on up via various kinds of manipulation of “reserve requirements”, but that’s a bit over the top for here… If you want that, let me know at my place and I’ll work up a posting. But as it is really just making more or less computer bits and books entries (that can be very inflationary) it likely isn’t what you had in mind.

Mario Lento
Reply to  E.M.Smith
January 4, 2013 7:54 am

Thanks EM Smith… Yes, I do understand the print money is a methaphor for stacking up bits into one of the columns of a balance sheet. I did not think of the treasury as creating the money – and thought it was the Fed instead… confusing as hell.

Verified by MonsterInsights