Is Minnesota the next Kuwait?
When I first saw this video (hat-tip Athol Kay), I immediately started thinking of the massive potential impact of this emerging technology. While it remains to be seen if it actually proves to be a viable and clean fuel alternative, the promise behind it is mind boggling economically, politically, technologically and environmentally.
Imagine what this would mean to the following industries:
- Oil Companies
- Automobile manufacturer's
- Transportation Industry
- Plastic's
- Real Estate
- Defense related companies
- Travel
- Environmental
- Investment Banking
- Mortgage Banking
Now, from a geo-economic/political standpoint, how would this technology impact and change our foreign and economic policy towards the oil producing regions of the world when our energy dependence on them was essentially eliminated (Note - I'm NOT making a pro or con statement regarding our current policy)?
What would happen to countries like Iran, Iraq, Venezuela, Russia and China if their oil revenues dried up? Would the sources of funding for terrorist organizations be dramatically cut? How would that alter defense spending?
Would it spawn a new generation of eco-friendly automobiles and factories that are fueled by water? Would it give new life to a slumping automobile industry?
Just think about it - eco-friendly Hummer's.
Now, from a mortgage industry perspective, what could this mean?
One of the current factors the Fed and mortgage markets are concerned about is inflationary fears. Can you name two sectors of the economy that are heavily influencing those concerns? Answer: High energy costs and defense spending.
By substantially reducing those costs, could the United States balance their trade-deficit and become a creditor nation again? Would the theoretical surplus of money drive inflationary concerns downward and reduce the cost of money? If that happened, could long-term interest rates hit the 3-4% rate? Would that start the mother-of-all refi booms? Would it kick-start the building industry. With the reduced costs of borrowing money, would potential homebuyers be motivated to spur another boom.
While the actual complexity and time required for such a change is much more mind-numbing than what I just presented, think of the potential impacts this emerging technology could have upon the whole world if it proves to be viable.
To close:
Since Minnesota is the land of 10,000 lakes, it could theoretically be the next Kuwait.
Another post from The Mortgage Cicerone.
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