Particularly noteworthy this weekend has been the George Soros appearance on CNN. The first question was on the US economy v the rest and the very first thing that Soros mentions:
Fareed Zakaria: George, what is your prognosis of the American economy right now? It does seem to be doing better than the Eurozone, than Japan. How do you read it?
George Soros: It definitely shows some signs of revival, very important is the emergence of shale gas and shale oil as a cheap source of energy, which has made manufacturing more competitive. Also the fact that you now had several years of no wage growth. So wage disparities have been reduced. And so all this is bringing a very welcome relief.
I'm worried that the politics of the election are going to interfere and put a lid on this –because the Republicans don't want to face elections where Obama can claim to have sort of seen the economy recover. So they will continue to push for austerity, no new taxes, and therefore cutting of services, which will depress economic activity and employment.
Soros and I are both smart and very liberal. Unfortunately,that's about it, proving the Meatloaf Theorem. i.e. two out of three ain't bad. It's signifcant that Soros does put his money where his mouth, being a big investor in 3 Legs, San Leon and BNK and probably more active in Polish shale. It's ironic that in the US, he is a huge enemy of many and I have had to give up correcting the flood of right wing wing nuts who insist that Soros and Obama are Socialist shale deniers.
What would be nice to happen now is that the conventional European wisdom is going to find shale too difficult to ignore and the argument can come down to the two channelers on European shale.
Soros channeling No Hot Air (not as vain as it sounds)
2012 will be the year when the acceleration in US economic growth becomes the global growth story that came out of left field -just as shale itself appeared to most to come out of nowhere. Shale will be the story too big to ignore. The elephant in the North American room is becoming increasingly obvious, but here in Europe too many conventional economic experts have made the key mistake of listening to energy experts who constructed a peak oil scenario of scarce and expensive energy at at time when a glut of cheap (and clean!) energy is swamping North America. Those experts dismiss the impact of shale. They tell us that shale won't work for any number of self-serving reasons constructed to serve their narrow interest: Europe is too crowded, shale is too dirty, the geology isn't right and it destroys renewables are only some of those rationales.
Or the opinion of conventional UK money. They, on hearing about shale, will 9 times out of 10 seek the advice and assistance of Ofgem or DECC aka "the energy experts". Ofgem paid Poyry £50K for a report on shale which they rolled out two weeks ago. Apart from Poyry having no upstream oil and gas experience combined with a vested financial and emotional interest in UK energy policy trundling along regardless, the report is eight months old. So in contrast to George Soros, the UK is stuck with the Alistair Buchanan of Ofgem analysis:
Environmental Concerns are likely to prove a considerable hindrance to the development of unconventional gas resources in Europe, making our Boom Scenario a low probablility outcome.
Who has the better track record on outcomes. AB or George Soros?