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The Bretton Woods 2 system – where China and then the oil-exporters provided (subsidized) financing to the US to sustain their exports – will come close to ending, at least temporarily. If the US and Europe are not importing much, the rest of the world won’t be exporting much.

And rather than ending with a whimper, Bretton Woods 2 may end with a bang. In some sense Bretton Woods 2 has been on life support for a while now. China’s recent export growth has depended far more on Europe than on the US. US demand for non-oil imports peaked in 2006. One irony of the past year is that the US was borrowing far more from China that it was buying from China. Campaign rhetoric that the US was paying for Saudi oil with funds borrowed from China isn’t far off – though it leaves out the fact that the US also borrows from Saudi Arabia to pay for Venezuelan, Mexican and Nigerian oil.

If Bretton Woods 2 ends in 2009 – if US demand for imports falls sharply in the last part of 2008 and early 2009, bringing the US trade deficit down – it won’t have ended in the way Nouriel and I outlined back in late 2004 and early 2005. We postulated that foreign demand for US debt would dry up – pushing up US Treasury rates and delivering a nasty shock to a housing-centric economy. As Brad DeLong notes, it didn’t quite play out that way. The US and European banking system collapsed before the balance of financial terror collapsed. Dr. DeLong writes: All of us from Lawrence Summers to John Taylor were expecting a very different financial crisis. We were expecting the ‘Balance of Financial Terror’ between Asia and America to collapse and produce chaos. We are not having that financial crisis. Instead we are having a very different financial crisis. Catastrophic failures of risk management throughout the entire banking sector caused a relatively minor collapse in housing prices to freeze up global finance to a degree that has not been seen since the Great Depression. The end result of this crisis though could be rather similar: a sharp contraction in credit, a fall in US economic activity, a fall in US imports and a fall in the amount of foreign financing the US needs.* The US government is (possibly) trying to offset the fall in private demand by borrowing more and spending more — but as of now there is realistic risk that the fall in private activity will trump the fiscal stimulus.

A European Union report is calling for immediate support for hydrogen energy projects, saying member states could gain an ecological and competitive edge by starting work now.

A new report has found that thin-film cadmium telluride solar cells have the lowest life-cycle emissions primarily because they consume the least amount of energy during the module production of the four types of major commercial PV systems: multicrystalline silicon, monocrystalline silicon, ribbon silicon, and thin-film cadmium telluride (CdTe).

Party balloons may be the next big thing in solar power. Cool Earth has made some giant balloons with gizmos inside that will convert the collected sun and focus it onto a cell. They have been given a big chunk of moola to make 10,000 balloons to cover 80 acres in California and hopefully in a couple years be generating 10 megawatts of power.

Scientists have unveiled a super LED powered technology to replace filament models within 3 years. In your home, the less brighter LEDs have been used in most electronic gadgets as indicator lights on computers and cell phones

In the future, utilities will pay you to plug-in your vehicle. Millions will plug-in their electric vehicles (EV), plug-in hybrids (PHEV) and fuel cell vehicles (FCV) at night when electricity is cheap, then plug-in during the day when energy is expensive and sell those extra electrons at a profit. Vehicle to Grid (V2G) technology is a bi-directional electric grid interface that allows a plug-in to take energy from the grid or put it back on the grid.

What can you say about an MP4 player that will never run out of power and will recharge your cell phone and much more? The imaginatively named “Solar Powered MP4 Player 2GB - Mobile Power Station” is an electronic Swiss Army knife.