Global Gold Value In The Ground Per Dollar of ExplorationThe world is heading towards an economic and financial collapse of epic proportions.
ENERGY drives the markets, not FINANCE.  Finance is supposed to steer the economy in a straight line on the road, not full speed over the cliff.  Without a growing energy supply, there would be no U.S. Dollar Fiat Monetary System.
That being said, the global gold mining industry is now in serious trouble as the current low market price impedes exploration which would guarantee future production.  How bad is it? 
Well, let’s look at the following chart:

Oil Production Per Drilling Rig 2014If it wasn’t for the United States Triple “A” Credit Card Rating, its economy would have collapsed years ago.
Why?  It’s low 4,577 barrels per day of oil per drilling rig is not a sustainable EROI model.  Basically, the U.S. economy could not sustain itself on its own energy production without exploiting the world by exchanging PAPER GARBAGE TREASURIES for real goods and services.
The day is approaching when the producers of the world such as the BRICS countries will no longer take paper IOU’s for goods and services.
The falling EROI is the key fundamental factor that shows the U.S. Empire is indeed in serious trouble:

silver crashThere was a time when $1 of government stimulus money would boost the GDP by $16.  Now we talk daily about it taking $3.8 trillion to run the Federal Government and for each dollar of stimulus the GDP grows 8 Cents.
This equation of how much it takes to run the government and the results that are achieved could be called the EROI.  
Today it is less than 0.1. Government is just a sucking black hole of negative returns and dry wells that would make an wildcatter weep.

The 32 to 1 gold-oil ratio will turn out to be too conservative when the world switches out of increasingly worthless paper assets and into the precious metals.  We have no idea of what the price or value an ounce of gold would be once the public tries to invest into a market that has an estimated 100/1 fractional reserve.
Very few investors realize how much energy factors into everything in the economy.  Gold and silver’s stored “Economic Energy” is derived from the EROI  energy ratio.  The falling EROI of energy is going to destroy a great deal of supposed wealth in the world.  The best way to protect that wealth in the future will be in physical assets such as gold and silver.

economic collapseSRS Rocco (Steve St. Angelo) of the  SRSRocco Report joins Sean of to discuss precious metals and the falling EROI (Energy Returned On Invested) which Steve says will ultimately destroy the U.S. empire, just as it led to the collapse of the Roman empire.
We also discuss the alarmingly quick depletion of PHYSICAL silver inventories at the Shanghai Futures Exchange which are down more than 50% in recent months, and the raid on PHYSICAL Gold inventories at the Comex, which are down nearly 40% in half a year.

SRS3By SD Contributor SRSrocco:

The problem today with the typical analysis coming from the BULLS & BEARS concerning future silver investment demand and price is that it is based upon an ENERGY SYSTEM that is more than 1,000 years old.  You cannot understand silver if you DO NOT UNDERSTAND ENERGY.

Most of the investing public and the folks from FOFOA have no clue how energy will impact the future silver investment demand as well as its price.  They FAIL TO THINK OUTSIDE THE BOX.


…mark my words!

roadBy SD Contributor SRSrocco:

While gold is known as the King of Monetary Metals, Silver will become the “OFFICIAL ROYAL UNDERDOG”.

Investment demand for silver hasn’t even begun yet.  This is what I will be discussing in my upcoming presentation.  Investors who are worried about silver selling off after the big move up with gold (AS JIM SINCLAIR HAS STATED)… shouldn’t be.  Sinclair is excellent in understanding gold, but is still forecasting the future price of silver based on 1970-1980 world economic conditions.

Energy will be a MAJOR FACTOR going forward that will impact SILVER INVESTMENT DEMAND.

silver_11-image012.gifBy SRSrocco:

The one important aspect that the world has not yet grasped… is the decline of NET ENERGY.  ENERGY is what allows the formation or growth of the money supply… whether that be gold & silver or fiat.  Without the growth of energy… you can’t grow your money supply and you can’t PAY HIGH INTEREST EITHER!
In the graph below, we can see the big change coming in NET ENERGY that will be available to the market:

Submitted by SRSrocco:

I apologize for not posting much lately, but I have been busy with other coals in the fire.  Anyhow, I still keep reading articles and blog posts and I am quite surprised at the current bearish sentiment of gold and silver.

When gold and silver sold off after the FOMC minutes (stating that they may stop buying Treasuries in 2013)… I just laughed.  Then I watched as the precious metal bugs started to get extremely nervous… thinking that the BOTTOM COULD FALL OUT.

I am so glad that I have a good understanding of the GLOBAL ENERGY MARKETS & SITUATION as it allows me to steer through all the B.S on CNBC, MSM and etc.  Things are far worse in the energy markets than the typical PUBLIC GADFLY realizes… much worse.