(CNNMoney) NEW YORK -- -- The northern Scandinavian landscape is dotted with fjords, lingonberries and, if you believe some locals, elves. But another sight is increasingly common on the Arctic horizon: data centers.Here is the real hitch:
Drawn by the promise of lower electricity costs, a growing number of tech companies are harnessing the region's abundant cold air to cool their servers, cutting expensive air-conditioning out of the equation.
Facebook, the latest tech company to take the polar plunge, announced this week that it will build a data center just south of the Arctic Circle in Lulea, Sweden, where the average low in January is 3 degrees Fahrenheit.
The facility, a set of three 300,000 square foot buildings, is the social networking site's first data center outside the U.S. It's scheduled to be operational by 2012.
Lulea's dry, frigid weather "definitely is a big part" of the company's decision to build there, Facebook spokesman Michael Kirkland said. Using outside air to cool servers is "absolutely beneficial not just from an environmental perspective, but also from a cost perspective."So what in the world could the left complain about here? Data centers don't exactly provide massive employment and it's in their favorite welfare haven of Sweden. If the environmentalists can't stand the thought of technological eye sores filing the tundra landscapes, they must face the reality that electricity usage will drastically go down as the need for air conditioning to keep the servers cool is eliminated. This cuts back on carbon emissions. Yet it all has nothing to do with wanting to improve the environment, it has everything to do with profits. Saving the whales is a non issue but only a beneficial side effect. Meanwhile the savings from electricity costs can be reinvested into other ventures. It's a win win and it's all thanks to mother nature.
Analysts agree. There are "overwhelming financial advantages" to building in the far north, according to Rakesh Kumar, an analyst with Gartner.
Utilizing free outside air can result in "tens of millions, if not hundreds of millions [of dollars], of savings per year" for each site, Kumar said. (my emphasis)
Also it is important to note that this development shows that land is indeed more scarce than labor factors, as pointed out by Murray Rothbard. A section of the Earth that may have once been deemed unusable from an entrepreneurial perspective is now being used to meet demand and save on costs. Man's market calculating labor process determined so, demonstrating not only the never ending capacity for demand but of innovation. Hence labor and idea generation, when not stifled by government intervention, isn't limited in physical bounds as the Earth and land in general is. (ht Tyler Cowen for the story)
Not too much other news today besides the Czech Prime Minister shockingly announcing revelations that perhaps joining the Euro Zone might not be that greatest idea. So I will end with these two great videos that do a fantastic job explaining exactly what is going on across the pond:
Both videos are short and highly recommended.
Update- Thomas Friedman gets it:
Our Congress today is a forum for legalized bribery. One consumer group using information from Opensecrets.org calculates that the financial services industry, including real estate, spent $2.3 billion on federal campaign contributions from 1990 to 2010, which was more than the health care, energy, defense, agriculture and transportation industries combined. Why are there 61 members on the House Committee on Financial Services? So many congressmen want to be in a position to sell votes to Wall Street.Yet his solution is for the government to break up the banks as if corrupt bureaucrats know what the right size is for financial institutions. Here I thought Friedman finally got the smarts to graduate high school but all he did was pass the 11th grade. Keep trying Tom! You'll get it sooner or later!
EPJ showing another sign of inflation:
Bernanke strikes again: I went to Taco Bell for lunch today and the $5 box meal is now missing from the menu. It is also gone from the website. The "Chicken Flatbread Box" which contains the same items as a $5 box is now about $6. Only a month ago, I visited Taco Bell and purchased a $5 box so this is a recent development.Also check out this excerpt from a great interview with Adam Fergusson, author of "When Money Dies," which deals with hyperinflation in Weimar, Germany:
Update 3- Well he's finally done, Paul Krugman comes out directly in favor of ECB money printing:
I’d still like to imagine that next week Mario Draghi, newly installed as ECB president, will suddenly reveal himself as a supporter of quantitative easing and a 4 percent inflation target, not to mention open-ended lending to crisis countries. And all this would be perfectly sensible — much more so than the way the ECB is actually behaving. But it’s not going to happen.Krugman is wrong but not for the obvious reason. He thinks Draghi won't go for 4% inflation; I think he will be pleasantly surprised as Draghi, a former Goldman Sachs exec., strives to help his banker friends.