Reply To: Space Fountain

[Duke Leto]

I wonder why the server stopped informing me about replies. Must just be my breath I guess.

KeithPickering wrote: You were doing just fine up until this point. But now there are a couple of problems with your analysis. First, FF coming online isn’t just waving a magic wand. It will take time, and during that time markets will adjust. So the effect isn’t immediate.

Well, firstly obviously implementation is not instantaneous, but I believe it will be vastly faster than Eric and Aaron give it credit for. The primary limiting factor will be expanding Beryllium and Capacitor production as best as I understand it. If LPPX is a strongly organized single producer, I think rollout to the developed world can be done in 3 years.

KeithPickering wrote: Second, and more importantly, you’re forgetting the Jevons effect (aka Jevons paradox) in which it is shown that more efficient use of energy increases demand.

I think you’re misreading Jevon’s Paradox. Jevon says that if usage of energy becomes more efficient demand for energy will increase, not that if cost of producing energy becomes lower the total spent on energy will increase. That’s a subtle but really important difference.

Let’s say that the price of energy drops from $120 per Megawatt Hour to $6 per Megawatt Hour. That means that if energy consumption increases twentyfold then there is the same Dollarwise consumption as there was before. That’s a pretty tall order.

I would really like to find some economic studies on the rollout of coal power but I’m having trouble doing so. Basically what I’m saying is that short term, although consumption of energy may increase dollars spent on energy will go down, which is the key when we’re talking about macroeconomics.

The real point here is that in the short run FF will increase the deflationary/disinflationary trend and high unemployment will remain.

DennisP wrote: The whole idea of “printing” money is kind of misleading, because with fractional reserve banking most of the money supply comes from debt. If banks must have 10% reserves, they can loan out ten times as much as you print, and when those loans are paid off or default, the money supply shrinks. You can print more money to give to the banks, but if they don’t lend, it doesn’t do anything.

Japan struggled with deflation for decades.

Thank you for the further explanation. Japan is struggling with deflation again, BTW.

Lerner wrote: First as Aaron says, the markets don’t exactly need us to create a downward economic spiral—they are doing it all by themselves, thank you! And what exactly will happen with this process in the next three of four years depends on a lot of political and economic events. FF won’t be able to influence that until we have a working prototype generator—not before 2014. I am sure that any announcement of “just” scientific feasibility will be shrugged off by the markets.

All that is very true. Main problem is that I see no likelihood of the US and the developed countries in general exiting their liquidity trap by 2014. So conditions prevailing now will be basically identical to conditions prevailing then. To backup this assertion, see more or less anything and everything written by Paul Krugman since 2009.

Lerner wrote: Second, there can’t possibly be a monopoly in focus fusion no matter how many patents we have and we do not promise any such goal to LPP’s investors.

What other producers would there be? Would there simply be other ways of utilizing the existing DPF to achieve Net Electricity or do you foresee alternative Aneutronic Fusion methods coming rapidly to fruition?

Lerner wrote: From our standpoint as a company, pricing way below the current market makes sense. You can’t penetrate an enormously established and huge market like energy without a really large price advantage in any case.

Well, yeah. I was thinking that a rate of $10-20 per MWh coming into LPPX as end revenue would be fair enough. Just low enough that you wipe out coal but not so low that you instantly make energy free. Maybe cut that rent by 25% every year after the rollout to the developed world and China and India are done and hand over the generators to municipalities when it hits cost. That’d only take 5 years or so.

At the same time it would be silly not to price the electricity as close to market as you can while there are still only a very few FF generators in operation. $10 under market per MWh would get you oodles of market share. I would assume that much is obvious.

Lerner wrote: But no matter how we draw up licenses, how much of the saving in cost will be passed to final consumers is ultimately going to be a political battle. If people insist that the saving be passed along and organize to make that happen, it will, but not otherwise.

Therein I am afraid we differ, my friend. My own jaundiced view of human nature says that money will decide how it gets passed on to the end consumers so if you want a say you better make sure you have money. I’d also point out that organization and advocacy are not something you can do for free, a fact I’m sure Rezwan has informed you of.

Lerner wrote: The key thing in the world economy today is WHO gets the money—the many or the few?

From my own study of history, the only time when the few don’t get the money is when the many establish a well organized political machine backed up by strong unions influencing major political parties. (The US desperately needs a multi-party system, but how to get to that is a whole other argument.) We don’t have that right now and it’ll take a lot to get us there. Post too long… Maybe write more later.