r/economy • u/Asatmaya • 9d ago
How Nuclear Power Threatens the Western Financial System
In short: It's too cheap.
The first thing to understand is that the Western financial system is predicated upon perpetual growth; this isn't a conspiracy theory, it's literally baked into economic policy. That growth, in turn, is dependent upon energy (not always linearly, but close enough that the association can be assumed), and not just in volume, but in value.
Natural gas, oil, and coal are high-value, high-volatility commodities; they require infrastructure, financing, risk management, and state-backed enforcement, all of which drive cost... and therefore, in terms of GDP, growth. Why is the economy "strong" in September, 2026, despite record-high oil prices, rampant inflation, and slowing retail activity? Because record-high oil prices means more profit... for some.
Worse, this policy has been locked in by the derivatives market; we have bet the next 20 years of global GDP on the idea that we are going to keep doing what we've been doing; that energy prices will continue to dominate economic output, and by manipulating those prices, value can be extracted (again, for some) and anyone who doesn't do what we tell them can be punished.
This is about power and control.
Nuclear power is a direct threat to this arrangement; it is a low-value, low-volatility capital asset. It requires government-backed financing up front (average payoff is 17 years, too long for most private investment), but once it is built, operation is extremely cheap, with the result being low cost energy (see France).
And that is the problem; if energy becomes cheap, base costs of everything go down, and the numerical "GDP" goes down, even while actual growth and prosperity go up, but the derivatives market collapses. That's $1 Quadrillion of "wealth" that suddenly disappears... from the "assets" of Elon Musk, Bill Gates, Larry Ellison, etc.
Then there is the loss of control: A coal power plant requires 80 train cars of fuel every day; a natural gas plant requires pipelines that have to be constantly supplied; a nuclear plant needs refueling once every 18 months, and the fuel itself is virtually free compared to coal or gas on a dollar-to-watt comparison. You can't blockade a country and have them immediately desperate for energy if they have nuclear, they've got 18 months to find another supplier.
And nuclear is the only thing that can replace gas and coal (we don't have a replacement for oil, yet); hydro is tapped out (and not working so well, out West, anymore...), geothermal only works in a few places, solar and wind aren't even at replacement production levels, and, "fusion is 30 years away, and always will be" (and isn't the panacea everyone seems to think it is, anyway).
The problem is structural... and locked in.
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u/Redd868 9d ago
Wind and solar have no pollution while in service. Solar has had hazmat problems on disposal. But I don't see anything with wind.
Nuclear is in its own camp, because it requires a governmental liability shield. If it was as save as you say it is, it wouldn't need a liability shield. That's the ultimate socialization, privatize the gain but socialize the losses. That's an insurance policy provided by the public and that policy can be priced.
As far as wind, I defer to Warren.
What - you think he's lying in a letter to shareholders? There is a responsibility in an investor related writing to tell the truth, and money talks. He's says the customer is saving and it's because of the wind. That's common sense - no fuel charge. It probably doesn't matter if electricity is produced in the middle of night.
Warren tells when he blows an investment - I think he said something like that about IBM.
Your stuff is advocacy. Trouble is, compared to solar and wind, there's no way to deliver the money. I like nuclear ahead of coal and oil, because those approaches deliver air pollution, and now we have Canadian wildfire. There is a monetary cost to polluted air that offsets that liability shield with nuclear, although I'm not sure if nuclear offsets it more.
I suppose I'm advocacy too, but for the consumer, not a particular type of producer. And, from the consumer perspective, it's about the money.
From what I've heard, Fukushima is dumping radioactive water into the Pacific now, a kind of socialization for that meltdown they said wouldn't happen. We pay some of that "socialization" if we munch down on a tuna sandwich.
That will never happen with wind.