SRSrocco: Blunt on Gold, Silver, Energy, Analysts & the Economic Collapse

myelchreestSomething very foul is in the air.  I can sense it.  While it seems as if the fragile economic system of ours can be propped up, duct-taped, manipulated and held together for an indeterminate period of time, I believe things could get ugly… very quickly.

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From The SRSRocco Report:

Now, I am not 100% sure of my intuition on this one, but if you look around long enough and take some examples from the past, we are heading into some really serious trouble due to the fact that the folks on MSM have lobotomized the investing public.

I wanted to take this time today to communicate one-on-one with many of those who have been reading my work for years as well as those who have happen to come across this site more recently.  This reminds me of a past experience I had when I went to see George Carlin at concert in Las Vegas several years ago.

My wife knew I was a big fan of Carlin, so one day she surprised me by getting tickets to see him while we were visiting some family in the area.  I remember sitting in the audience when after 10-15 minutes of Carlin’s routine, people started to get up and walk out.  There weren’t many… maybe a dozen or so.

However, George took a pause from his act and said, “Do you notice the people walking out of here… they didn’t know what they were getting into did they? (audience laughs)”  He goes on to say that he had three kinds of fans, those who have been listening to him for years, those who followed him years ago but haven’t seen me until more recently… and then those who got free tickets from the hotel or casino, and are now walking out the door… (audience laughs again).”

George Carlin on THE AMERICAN DREAM

Here is a link to that video clip what Carlin thinks of “The American Dream.”  (Warning:  there is foul language)

You see, George Carlin’s act was filthy, crude, full of cuss words and down right nasty at times, but the man spoke the truth so bluntly, only a few could really appreciate his genius.  One of my favorite lines from his HBO Comedy Specials was, “Folks…. there’s a lot of BS out there and it ain’t good for you.”

There is so much BS in the world, and especially the U.S. that I am amazed we have kept it all together this long.  The U.S. economy should have died years ago, except those in charge of the fiat monetary regime figured out how to export our inflation while transforming our domestic manufacturing economy to a pathetic service one.

YOU BETTER UNDERSTAND ENERGY…..

Many economists and investors don’t realize that our transition to a service economy wasn’t a choice… it was done to keep the illusion that we still had a functional economy.  The Falling EROI- Energy Returned on Invested forced the United States to ship manufacturing overseas where it was cheaper so we could continue spreading our domestic economy:  THE SUBURBAN DREAM.

Our whole economic suburban system was built on a HIGH EROI oil & gas of say 15-20/1… which means 15 to 20 barrels of oil from 1 barrel of cost.  Thus we had a great deal of energy profits to spend in building the great Inter-State Highway System, water-sewer infrastructure, electric grid, commercial-residential real estate and the huge retail-strip mall-big box business model.

Then, the U.S. peaked in oil production in 1970 and had to import that HIGH EROI oil from the Middle East by exchanging FIAT PAPER MONEY for PHYSICAL OIL & GOODS… a very successful enterprise over the past 4 decades.

Unfortunately, all good things come to and end, and now that the world has been in an oil production plateau since 2005, the oil industry has been forced to extract the LOW EROI OIL to make it seem like we can continue “Business as Usual.”  Shale oil has an EROI of approximately 5/1.  So even though we are currently pumping a great deal of this oil from the Bakken & Eagle Ford Shales in the United States, its low EROI ratio does not return enough “Profitable Barrels” to support our economic LEACH & SPEND ECONOMY.  We probably need somewhere near 10-12/1+ EROI of oil & gas to support our present economy.

So, it really doesn’t matter if there are billions or trillions of barrels of shale oil or oil shale resources in the United States, if the energy profits (2-5/1 EROI)  are too low to pay for the suburban economy huge energy debts (10-12/1 EROI).  Simply, it all comes down to basic mathematics that a 1st grader can understand.

This is the very reason why the Porter Stansberry’s of the world (who promote the wonders of shale energy) have totally misguided their readers and investors.  Even though some shale energy companies may earn profits, the industry as a whole, will be short-lived.

ENERGY & THE PRECIOUS METALS

One of my biggest challenges in writing articles for the SRSrocco Report, is to incorporate energy into the mix.  I have been writing for quite a while and I know exactly what sells, is read or listened to.  If I posted an article with a picture of Jamie Dimon mooning a bunch of precious metal investors with a silver dollar sticking out of his tuckus, I would receive tens of thousands of hits-reads.

However, if I insert the word “ENERGY” into my precious metal articles… well then the readers just dry up and blow away.  This is indeed the problem with the precious metal community.  I know exactly what they want to read or hear…. “Their gold and silver will make them rich and they will be able to buy and do whatever want in the future.”  Anything else becomes increasingly BORING.

That being said, it is extremely important that the typical investor and even the precious metal enthusiast needs to understand energy to know where we are going from here.  Why?  Because… ENERGY is the DRIVER of the economy, and GOLD & SILVER are the BATTERIES that stores this economic energy.

Energy is Driver Gold & Silver are Batteries

As I have mentioned before many investors, the clowns on Wall Street and  CNBC believe that finance runs the world’s economies.  It doesn’t.  Try to shove an interest rate swap contract into a haul truck’s fuel tank at a gold mine, and see how far it can move that 300 tonnes of ore.

The only reason why the Fiat Monetary System based on Compound Interest and Fractional Reserve (term from Mike Ruppert) has worked up until now is due to the fact that the world has had a growing oil supply.  Fiat means DEBT.  A growing energy supply pays the interest on FIAT DEBT.  When the energy supply peaks and declines… so will the Grand Fiat Monetary System.

Don’t worry, this event isn’t years away… it’s taking place right now… right in front of our eyes.  A good percentage of the energy that we presently consume in the United States, the public cannot afford.  Thus, the huge increase in debts and monetary printing.

There are many details to the ENERGY EQUATION that needs to be addressed.  I have not been writing much on energy at my site because I don’t want to be the “Old Guy in the Cartoon with Long Hair holding a sign saying THE END IS NEAR” standing on a street corner with no one really listening.

So, here is a warning to all my readers and those who link my work to their sites.  I will be including more posts and articles on energy as it is extremely important factor that will impact GOLD, SILVER, THE MINERS and the overall ECONOMY.

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GOLD & SILVER:  SOME OF THE BEST QUALITY FUTURE INVESTMENTS

Part of the inspiration for this post was due to some of the replies and comments I have received from readers and members of the site.  Furthermore, I want to take this time to thank everyone for their comments and to let the other more active members know how much I appreciate their insights to the many different aspects of the market.  Yes… you know who you are.

I have been known to make some mistakes and lousy assumptions even though I try to focus on the facts and the data.  Some members (here or from other sites) have challenged me by presenting conflicting information to one of my articles or positions.  While it hurts to be wrong… if I want to be truthful to myself and to those who are reading my material… I have to digest this information and see if I need to correct a mistake or reconfigure my position.  Again, I appreciate that feedback as much as the positive reinforcement.

One thing that has been brought to my attention is that “I SHOULD STICK TO PROVIDING ANALYSIS AND LESS TO PUSHING THE ONE-SIDED BULLISH HYPE.”  I thoroughly agree with this assessment.  While I realize there is indeed a great deal of back stroking, back slapping, bullish regurgitating and hopium coming from many of the more popular precious metal websites, at least they are on the right side of the equation.

Yeah… I could say that they are being a bit frothy in the tooth when it comes to gold and silver, but there are so many more important things to focus on, I just tend to tune it out… and move onto the next looming disaster on the horizon…LOL.

Getting back to gold and silver.  I have been writing some articles that may seem a bit “BULLISH” on gold and silver.  Yes, I have…. and yes I am receiving a great deal of hits-reads.  However, I am not doing it just to get the traffic, I actually believe it.

Hear me out.  The reason why I believe gold and silver are going to increase in value substantially from here is due to the fact that most other assets are going to decline in value due to the present and future energy constraints.  If we look at the chart below of Citigroup, we can see how things can change very quickly.

CITI PRICE SHIFT

I have used this chart several times in other articles to show how a company-stock can disintegrate due to fundamentals even though the nitwits on the financial main-stream-media (MSM) didn’t see it coming for miles.

This is exactly how is see the values of gold and silver unfolding in the future… but in the opposite manner by heading up much higher.  I am not HOPING for this to occur, rather I see it the same way Peter Schiff did when he was on Fox Business & CNBC from 2004-2007, warning about the upcoming housing and banking collapse.

When an individual really understands the future energy situation, they will realize that one of the best and safest investments will be the precious metals.  Because, in a declining energy environment, most other assets will fall in value.  More about this in future articles.

THE MAJORITY OF ANALYSTS ARE LIKE A DEAD FISH….

Most of the analysts out there are like a dead fish… rotting from the head down.  Yes, I have said that before, but it is still true today and sometimes its fun to repeat these terms for the newer readers.  The majority of analysts miss the whole picture because they base their analysis and forecasts on superficial and manipulated data.   Their failure comes from not getting to the ROOT OF THE PROBLEM.

I learned about looking at the root cause of problems and events from a chance encounter I had with a retired NASA engineer several decades ago.  It’s actually a very interesting story for another time.

However, you really can’t be a successful analyst anymore unless you understand energy.  To forecast future silver production or to give price guidelines due to supply and demand factors in say 3-10 years becomes increasingly impossible when energy constraints are part of the picture.

There are several organizations out there that are still putting out forecasts on how future supply and demand forces of silver will impact its price.  I say… you can’t rely upon that information anymore (to a larger degree) because the world is heading into a future that is nothing like the past…. mainly due to energy issues.

As I have mentioned before, one of the biggest problems with the precious metal analysts is their failure to understand the energy market.  I will get into this in more detail in the future, but I wanted to focus on one analyst as he happens to be the week-end guest on King World News.

James Dines is one of the first precious metal analysts who saw gold and silver as great investments in the 1970′s.  I have a lot of respect for the man as he thinks outside the box and he understands the psychological nature of the markets.  However, there is one huge disagreement I have with him.  And that is on the subject of uranium and nuclear power.

Dines has been a big promoter of uranium and uranium stocks.  He lets the audience know during his interviews that he was the “Original Uranium Bug.”  Furthermore, I believe he also has stated that he was the original gold, silver and rare earth bug as well.  I might be exaggerating a bit, but I have heard him say he was the “original so-and-so bug” on many occasions.

Regardless, Dines as well as other analysts are still big promoters of uranium.  I would like to remind the reader that the Fukushima multi-plant meltdown is still a huge nightmare for the world and its only going to get worse from here.  Dines states that the problem with Fukushima is not uranium’s fault, but rather one due to mankind using the technology incorrectly.  Well, isn’t that the case with just about anything that mankind screws up?

I am not going to get into details here, but we as a human species have proven time and time again that we rather screw each other over for a buck including cutting back on maintenance of nuclear power plants to show a profitable balance sheet than do what is prudent and right.  Does Dines actually think the morons who are in charge now are going to finally get religion and build PROPER NUKE PLANTS that are safe?

Moreover, the United States is so far in debt that we may not have the resources in the future to properly decommission all or a fraction of the damn nuclear plants we have running currently.  Then of course we have the HOPIUM that these so-called mini-nuke plants such as the Toshiba 4S can be buried 40-50 feet underground and work for 30 years, safely.

Folks the problem with Fukushima is that 3 of the reactors have more than likely melted all the way down into the ground and are contaminating the ground water.  Why on earth would you want to bury a nuclear power plant 40-50 feet underground in the same place where our ground water supply is located???  Have we gone completely insane?

I don’t care how safe and cheap these mini-nukes are touted as being, I learned my lesson from the Nuclear Industry that bragged in the 1950′s that it would provide safe and cheap energy.. that was TOO CHEAP TO METER…. oh really.

Anyhow, Dines needs to wake up and drop the whole URANIUM BUG BULL MARKET PROPAGANDA.  Furthermore, the world needs to band together and form some kind of international agency to fix the nightmare called Fukushima, or we are going to be in serious trouble.

THE COMING ECONOMIC COLLAPSE

There are two different collapses taking place at the same time.  One is a the Fiat Monetary-Derivative-Paper collapse and the other is the Physical Collapse.  Even though these are two different methods of collapse, they are both interrelated.  Jim Willie does an excellent job focusing on the paper-manipulated collapse, while I like to concentrate on the physical aspect… which stems from the energy issue.

I will be writing a great deal more about this in detail, but I need to wrap up this post so I can get outside and spend some time tending to our 5 acre property.

FUTURE PLANS FOR THE SRSROCCO REPORT

Originally I had the intention to have a public blog and a membership service that provided monthly reports for a fee.  Currently with precious metal sentiment in the toilet (up a bit in the past week), subscription services in the industry are down significantly.  Furthermore, it takes a great deal of time for me to put out original work and I don’t want to be forced to put out mediocre material each month just to publish a report and collect a lousy buck.

I have been contacted by several people requesting information on my membership service so I have come up with a good compromise.  I will be offering “Single Paid Reports” with a great deal of detailed information on the different aspects of the precious metals, mining, energy and overall economy.

The intent of the SRSrocco Report was to provide as much original information and data as possible on the precious metals, mining, energy and economy that you really can’t find in one place anywhere else on the internet.  As you all probably are aware, it takes a great deal of time and effort to provide this sort of analysis as well as run an internet blog.

I know Turd at TFmetalsReport went to a subscription service for his personal analysis on the site.  So, if anyone wants to read or be apart of the discussion, they have to pay a small monthly fee.  While I realize this may not seem fair to some individuals, I can totally understand his reason to do so.

That being said, I still will be providing what I believe as important analysis, information and data on the SRSrocco Report to the public as I have been in the past.  However, I will be focusing more time researching and writing these single paid reports to generate some income to justify what my wife calls as an INSANELY AMOUNT OF TIME ON THECOMPUTER….LOL.

Lastly, it looks like I will be speaking at the 2013 SILVER SUMMIT this fall in Washington State.  David Morgan was kind enough to put in a good word which earned me a 30 minute spot at the conference.  It’s going to be fun.  I will be able to really speak BLUNTLY as I see things unfold in the silver market.

 

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Comments

  1. It has never ceased to amaze me how nuclear energy has been allowed to become so prolific when it could render the whole planet uninhabitable. Some scientist suggest that if the spent fuel pool in building 4 goes critical, that the entire northern hemisphere could be rendered uninhabitable. I don’t believe that it is “necessary” to supply a goodly portion of the world’s energy. This planet is actually an energy producer on it’s own, has been and will be for a very long time. The problem is the love of money and power.
    J.P. Morgan was funding Nicola Tesla’s “free energy tower” that was to extract electrical energy from the planet itself, without depleting any resources and without ANY pollution. It is inexhaustible energy. The only reason Morgan stopped the funding, was because he realized it would be too difficult to meter and sell, and that once the technology was in use, others would recreate the invention to extract their own power and become energy independent. So, your writing is so on target for this very reason, energy is truly the controlling force that allows the tyranny to develop and become prolific.
    If you do not know much, (or anything) about Nicola Tesla, then by all means, you should look him up. One example of his genius is all around us today……he invented alternating current that runs most of our electrical devices and requirements. The man claimed he could cause an earthquake by oscillating a relatively small amount of mass at a certain frequency, and he actually caused the building that housed his workshop to be evacuated one day as it was rocking so violently that the occupants thought it WAS an actual earthquake. The “Mythbusters” recreated the effect using a 20 pound weight oscillating on a steel framed bridge and were shocked to realize they were in fact rocking the whole structure. Tesla, a true genius, died penniless, and immediately following his demise, the FBI confiscated all of his notes, files and drawings. This world is in serious need of a renaissance of biblical proportions if we are to survive as a species.

    • nuclear has proliferated for weapons, that is it. If they used Thorim based reactors we could have safe and abundant fuel, but then they could never had made nuclear weapons. Sad really.

    • Always remember: NOTHING is EVER free! Newton’s laws of thermodynamics should be enough evidence, proven time and time again, to illustrate that concept. Tesla’s towers avoided the one simple fact that when extracting energy from the Earth’s resonance and concentrating it in one area can have tragic results not only in that one area but also changes the resonance and alters the Earth’s system as well as our own. NOTHING is FREE! Our biggest problem is that we want to use more than we need to gain advantage over the rest of mankind. Man has to learn symbiosis with nature instead of harnessing it to expand his manifest destiny desires. I know it’s a hard pill to swallow but, if you expand SRSrocco’s analysis to it’s ultimate end, you come to that unavoidable truth.
       
      Energy does not just appear out of nowhere. Never has, never will.

    • @not sure
      never heard solar cell… who able to suck up lot of “free energy” from the sun ?
      and the good news is… if solar cell are increasingly produced and used… so does silver
      why ? because silver are the best electrical conductor, that’s why silver are used in every solar cell
      .
      or we can used 5000 year proven free energy…
      yup… sail… driven by wind
      the equivalent of sail in modern life are wind generator
      ( oh don’t say we must pay for the wind )
      .
      ahhh again the good part of wind generator are … it also using silver
      as we know silver have property like lubricant… because it’s slippery
      so modern industry are using silver for coating bearing surface
      also because of anti corrosion properties of silver, making it suitable for “coating” critical electrical part like in cable joint, electrical connector or in cable it self as high conductor alloy with copper
      .
      Tesla is a crackpot guy with a bunch of freaky gadget ?
      never heard Tesla have hundred ( more ) of patent ?
      AC electricity, AC transmission, AC Motor, AC generator, Flourescent lamp ( not like edison lamp that throw off lot of electricity converting to heat ), Radio ( Marconi learn from Tesla’s patent about sending electromagnetic signal ), and lot more ( lot of Tesla invention still exist in your house )
      .
      so it’s a bad joke if Tesla who invent hundred of proven ( and still used now ) patent and have good reputation
      sez “Ere many generations pass, our machinery will be driven by a power obtainable at any point of the universe”
      yup… cosmic ray… ether… including solar “electromagnetic” storm which pouring earth in every milisecond

    • Yes DL, nuclear was initially brought about to provide material for weapons but it morphed into a sought after power source globally, with weaponization as a secondary usage.
       
      @Not Sure
      Sorry but there are several methods used to collect “free” energy, (after the start-up costs and maintenance), from the planet, just as I suggested. Solar electromagnetic, tidal, wind…….. all viable and renewable energy from the planet without pollution or consumption involved. This is a fact and these sources have been beaten down and kept out of the loop intentionally. We could be free from the need for foreign oil and poisonous nuclear power. It would be fully developed by now had it all been allowed by the power brokers who would rather us be in their pockets. As far as Tesla’s tower is concerned, it was not a resonance device but an antenna that collected and redirected static electricity from the atmosphere and ground interaction from what I can gather.

    • “Some scientist suggest that if the spent fuel pool in building 4 goes critical…”
       
      Absolutely NOT possible.  Could it melt down?  Yes.  Could it leak?  Yes.  Could it have a steam or by-product hydrogen gas and air explosion?  Yes.  Could it have a nuclear explosion?  Nope.  If one looks at what was required to get the 1st primitive atomic bombs to explode, one quickly understands just how very difficult it is to make that happen on purpose.  Really, guys… the situation at Fuk’dshima is bad enough as it is.  We don’t need to create any worse but impossible scenarios to jazz it up.
       

  2. Outstanding piece, Steve, wanted to be the first to comment, but alas I was too slow.
    You so echoed so many of my sentiments, so naturally I am a fan.  Best, keep up the good work.
     
    DG    http://www.denaliguidesummit.blogspot.ca/

  3. Good report, I liked the fact he didn’t feel the need to include aliens, prisons underwater, fecking giants (what’s that all about), UFO’s, Nibiru, planet X and or anything totally goofy.

  4. Glad to have you on our side Steve.

  5. My lights flickered three times Saturday afternoon then went out for 20 minutes. I took a look around and saw my life as it really is, without electricity. Our power infrastructure is fragile. Every local electric company only keeps minimal numbers of replacement transformers on hand. East coast power grids are in very poor condition at over 100 years old. All of the “stuff” you have is worthless without electricity. SCANA is building two 1,117-megawatt (MW) reactors in South Carolina. Georgia is also building two new reactors. All reactors are due to be online 2017-18. SC’s project will cost consumers 9 billion dollars. All for naught if the power is not delivered and transformed using the aging grid complex. Real life begins when the power is off for hundreds of millions of Americans. This is much more closer than anyone cares to realize. I am a Cheech and Chong fan myself…
     

  6. SilverSlicker and Thomas make good points. Steve, I am new to your work, but this essay is outstanding. Uranium-lovers Dines and Doug Casey, whom I greatly respect, seem to completely ignore the ongoing, ever-worsening, increasingly polluting Pandora’s Box that is Fukushima. It’s like a blind spot in their analyses based perhaps on the assumption that man will invent some new technology that will miraculously save the day. Chris Martenson, who discusses this technology-faith syndrome at length and who at least acknowledges that Fukushima is a problem not solved, is the one who really opened my eyes to the the EROI issue in his book, The Crash Course, which I recommend wholeheartedly to every human being on this planet. So thank you, Steve, for pulling this into the gold and silver bug conversation. Energy drives our entire civilization, and as shortages unfold, it will be interesting to see how this affects the valuation of the metals and all other resources on the planet.

  7. Another great Thread as usual Steve, thank you and welcome to Doc’s dianecohn, any relation to Ellis with whom I work? Lol

  8. Great followon posts to Steve’s work which discloses the harsh realities of our 21th Century reliance on energy  Just a little nudge off the grid and any one of us gets to see how the 18th century functioned.  Light and hear was either the sun or fire.  Without the ability to produce light or heat things could get nasty in very short order. 
    And that high EROI must stay well above 10 for us to have a reaonable decent life.

    • Indeed so, AG.  For a really good, if fictional, look at what American life would be like without distributed power, read the William R. Forstchen book, “One Second After”.  That was one of the most fascinating and terrifying books I have ever read… and it is 100% possible.  It basically looks at what would be the likely result of another Carrington Event in the digital age when everything is controlled and monitored by computers that are extremely susceptible to EMP induced electrical currents.  These micro-circuits run on milli-amps in many cases, yet could be hit by an induced current of several amps.  That heavy a load would fry those delicate circuits almost instantly and there are no circuit breakers at that level of miniaturization.  ZAP!  POOF!  DEAD!  Instantly, there would be no drinking water because those systems are computer controlled and monitored.  Same for traffic control, all forms of transportation, hospital drug metering and monitoring machines, manufacturing, distributing, and thousands of other things.  Only things that are purely mechanical or so basic electrically that they could handle this would work. No food for the stores without trucks to bring it and their engines are computer controlled.  No fuel for the same reasons, so even if your car or truck still runs, without gas it won’t be going anywhere.  Emergency services?  They’d better be on bikes or horses because little else will be moving.  Transformers?  All dead, not made in the USA, and it would be several years before the foreign manufacturers caught up on the backlog.  No refrigeration, so food would spoil quickly and heat sensitive drugs could not be stored for very long.  Millions would die and not get properly buried, so prepare for epidemics soon after the lights go out.  This would be a VERY nasty version of SHTF, no doubt.
       

  9. Rocco, I agree with most everything you write. I do not agree with your energy assessment. Lindsey Williams has very good info that the world is awash in oil. I my self know of a big oil field in the Carribean.  There is much more to this EROI than some know. Respectfully I just don’t agree.

  10. Steve…Jim Puplava talks about the current boom and bust of the business cycle being caused by the price of energy.  Low prices stimulate business demand, but after a time create scarcity which leads to higher energy prices.  Higher oil prices consume capital triggering a bust thus reducing demand leading to lower prices.  Puplava is a peak oil advocate, but makes the case that oil consumption is somewhat self regulating. 
     
    But, here’s the thing.  There is a lot more to it than that.  I posted this before, but I will repeat in this space.  Gold is a huge part of the equation and the developments that we are seeing in the gold space are in large part caused by the collapsing petro-dollar system. 
     
    Let’s go back to 1971.  The reason the dollar is the reserve currency is because OPEC only sells their oil for dollars.  Kissinger struck the deal with the Saudi’s, but there is more to the petro-dollar arrangement.  It’s really the petro-dollar-gold arrangement.  That is what most people do not understand.  It’s this arrangement that is the foundation of today’s dollar hegemony.  Nations need dollars to buy oil.  The dollar becomes familiar to the people and is accepted all over the world.   From 1971 to about 1994 OPEC was able to take excess dollars and trade them for central bank gold through backdoor channels.  Around 1995 CB gold reserves were starting to run low.  That’s when sovereign gold stores began to be raided.  This gold was used to control the price of oil as measured in fiat dollars.  If the market price of oil was too low, then a higher gold premium was necessary.  TPTB could use their gold to drop the price of oil to stimulate economic growth at home when necessary.
     
    Now enter Asia.  They smell blood and are buying gold.   They know Western sovereign gold supplies are running low.  So, other sources of gold are being raided i.e. GLD, LBMA, COMEX.  Problem is there is not enough gold to satisfy both Asian demand and OPEC demand.  Solution, destabilize the Middle East.  Destabilize OPEC.  The ensuing turmoil will prevent any change to the petro-dollar-gold arrangement.  And use the confiscated Libyan gold to satisfy the OPEC gold premium.
     
    The biggest threat to the dollar is the loss of world reserve status which hinges entirely on the petro-dollar-gold system.  TPTB, in their eyes, are doing what they have to, to preserve the American way of life.
     
    That’s the angle for your first book.

  11. I rarely knew anyone with cancer. Now, there is always someone at work or in the community that I know who has it. I live up wind from Hanford, (about 1 1/2 hours). That’s another catastrophe that is likely much worse than they are telling people. Radioactive material has been in the ground and seeping into the Columbia River.
    It’s getting depressing. A woman at work says “I care about all that stuff (when I brought up the wars, etc), but I just don’t want to hear about it”.
    Read this one and weep: http://seattletimes.com/html/localnews/2003116801_columbia10m.html
    What gets me is how people laud these people who create this shit as genius. A good read is “American Prometheus”, about Robert Oppenheimer and the building of the bomb. These people (mostly all men…sorry guys) were supposedly the most brilliant people in the world, many came to America from Germany, Austria, etc. The bloated ego tells the story. In the end “man cannot live by bread alone”….Meaning we cannot live by pure logic and rationalism. There are other factors involved in genius (or should be). In the end, Oppenheimer, et al, seem to be idiots.

    • Reading the Seattle Times / LA Times / NY Times on the best of days is enough to make any rational person weep.  But I digress.  Yes, guys like Oppenheimer WERE geniuses.  They did what no other people had ever done before.  Whether that was good or bad is a separate issue.  For me, it is a good issue because it meant that Japan surrendered and my father did not have to participate in a land invasion of Japan to end WW-II.  He served in the Pacific during the war and his unit was scheduled for that operation.  Everyone who has written about that proposed invasion agreed that the casualty count would have been hideous.  I prefer that my father and many other Americans survived the war.  Self interest?  You bet!
       

  12. It’s fascinating that the disintegration of the banknote scheme and wind-down of oil supply capacities are both occurring in tandem. A fascination because they’re totally separate events and unconnected that I can discern. Stranger still, that their confluence seems almost pre-determined and fated. The historic nature of these times just keeps unfolding like a fractal pattern.

  13. It sure seems that the banknote scheme and wind down are connected.  It seems that oil funded indebtedness, both in the US and the rest of the developed world is tied to the original petro dollar scheme.  Are there parallels in the past such the the EROI of the Roman Empire, its devaluation of currency, vast increases of debt and the fact that its supply of ‘energy’ , human, food, military et al fell precipitously towards the end.
    I think Steve spoke about that in a past post
    One thing certain, we may ignore the fractals but they won’t ignore us. We will be fracked without a doubt.

    • As I recall, this ‘petro-dollar’ notion (energy generically, but principally oil-focused, trade ratios as a replacement standard for that of metals) began surfacing in discussions during the Eisenhawer period, though it wasn’t realized until the Nixon (Ike’s VP) years, well after both gold and silver were chased from general circulation.

      If you recall the chart I’ve posted a number of times, illustrating money volume back to 1789, the ‘M-1′ curve began in earnest in the mid-60s once silver no longer traded pari passu with banknotes … with a marked steepening after the late-60s when silver certificates were finally officially repudiated … accelerating further still in the mid-70s after the dissolution of ‘Bretton Woods’. These developments are the chief reasons behind my contention that gold and silver acted as a limit on debt growth, in spite of currency inflation, because their natural, non-financial source provided the banknote Interest-Service-Funds, independent from Loan of pure credit. It’s also my subsequent contention, that increasing incapacity to pay a real, metallic Interest Payment (confined now only in gold) to the backers of the banknote scheme, due to the exponential debt explosion gone ‘critical’, is most likely the decisive factor in the financial system’s unraveling. The backers don’t WANT notional gains … ONLY metal … back from loan of their metal to float the scheme.

      All of this played out well before the advent of the ‘Peak Oil’ phenomenon at the heart of Steve’s work. While the price increases (for diesel, wages and consumable supplies), deteriorate profitability and ARE connected to currency inflation’s effects on those expenses, these are still un-related to the troubling rate of oil-well volume recovery depletion and (apparent) failure to source new deposits in the same range of EROI as the original finds. It’s that phenomenon of oil well depletion rate, standing distinctly from the self-destructive design of the banknote scheme that I’m seeing.

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