Month: March 2010
An Architect of Hyperinflation
Even if you’re a very-well-informed individual, I bet you’ve never heard of Rudolf von Havenstein–I certainly hadn’t until I read this piece at Isegoria. (Follow the links for much more detail.)
Havenstein was a “decent, hard-working, intelligent and well-intentioned public servant” who, as president of the Reichsbank, had much control over Germany’s financial policies during WWI and in the early interwar era. These policies ultimately led to the great hyperinflation of 1922-23. Sebastian Haffner, a teenager during this era, describes what it was like:
By the end of 1922, prices had already risen to somewhere between 10 and 100X the pre-war peacetime level, and a dollar could purchase 500 marks. It was inconvenient to work with the large numbers, but life went on much as before.
But the mark now went on the rampage…the dollar shot to 20,000 marks, rested there for a short time, jumped to 40,000, paused again, and then, with small periodic fluctuations, coursed through the ten thousands and then the hundred thousands…Then suddenly, looking around we discovered that this phenomenon had devastated the fabric of our daily lives.
Wind Power and the Grid
The Wall Street Journal wrote a front page article titled “Natural Gas Tilts at Windmills in Power-Generation Feud“. This article was well written and describes a controversy in Texas related to wind energy and their (inherent) inability to deliver reliable power.
Texas is unique in that it is “walled off” from the rest of the USA on its own grid called ERCOT. To be technically correct, the Texas grid doesn’t include El Paso (I used to consult out at El Paso Electric) but that part of the state really is more like New Mexico, anyways.
Texas has a large percentage of wind power – 6% for 2009. The other sources of generation are about 20% for nuclear, 30% for coal, and 45% for natural gas. Per the article:
Texas… has 9,400 megawatts of wind-power generation capacity – more than all the power plants in Utah. Texas has more wind power than any other state… more than three times as much as California.
Power is generally dispatched in the following manner:
1) the grid control operator makes a request for how many megawatts of power that it needs for the next day
2) the various owners of generating capacity (wind, gas, coal and nuclear) submit their available power for the next day
3) the wind power is always taken because it has the lowest incremental cost, along with the nuclear power available as well as coal. Then natural gas is selected until demand is equal to supply, with older less-efficient “peak” gas plants turned off if there isn’t enough demand
The issue is that wind power can’t guarantee its available capacity. In general, if a generation owner “commits” to a certain amount of supply capacity and can’t provide the electricity, then that generation company is charged a penalty for failing to deliver.
Upcoming Events at The Men’s Leadership Forum of Chicago
There are two good events scheduled for the The Men’s Leadership Forum of Chicago:
Brian J. Gail, will speak about his novel Fatherless, on March 18, 2010.
Francis Cardinal George, Archbishop of Chicago will be speaking about his new book, The Difference God Makes: A Catholic Vision of Faith, Communion, and Culture, on May 6, 2010.
Both events will be at 7:30 a.m. at the University Club of Chicago.
Register here if you are interested.
I will be at both of these events.
Stephens Looks at Chile
Bret Stephens compares Haiti and Chile, corruption and transparency. How often we forget that corruption and a state economy kills. And in times like these, we see that the rebar metric measures lives saved.