There are several theories for why Americans are getting dumber, including the following:
The biggest flaw in Trader Dan Norcini as well as many other analysts who believe that the markets ARE NOT RIGGED, is that they fail to understand the global energy situation. The value of most STOCKS, BONDS and PAPER ASSETS are derived from a growing economy, which is based on a growing energy supply.
As the global oil supply peaks and declines, the value of most paper assets will decline.
The only way to protect wealth at this time will be in physical assets such as GOLD & SILVER. It was the SIPHONING of investor funds into paper assets such as derivatives, options, stocks and bonds that caused the REAL MANIPULATION of the precious metals market.
Peak Oil will destroy gold and silver manipulation by DEFAULT.
As metals prices boomed during the last decade, small explorers and big miners spent billions of shareholder dollars seeking new deposits. Investors wanted the high rewards of a discovery as metals soared in price. At $1,900 per ounce of gold, even mediocre finds could make money.
Richard Schodde, of MinEx Consulting, has studied past exploration cycles in detail. He says we are seeing a tightening of the sector, as the availability of capital has plummeted. Costs of exploration are coming down as companies cut back on high-salaried employees and reduce operating costs.
Let’s call the strategy of picking all the low-hanging fruit in an economy Plan A: you know, expanding credit, lowering interest rates, building infrastructure, fueling speculative frenzies, all the good stuff that fans the flames of “growth.”
Now that the central banks and political leadership of the U.S. and China have plucked all the low-hanging fruit, they have no Plan B.
With no plan to manage an economy in which expanding credit no longer generates growth, the two nations are rapidly reaching Peak Everything:
Precious metal currency was a fundamental factor that kept together the Roman empire and gave to the Romans their military power. But the Roman mines producing gold and silver peaked in the first century CE and the Romans gradually lost the capability of controlling their resources. In a way, they were doomed by “peak gold.”
Not only is there a battle going on between the East and West when it comes to increasing physical gold reserves, there’s also a gold production war taking place amongst these same nations.
The four Western gold producers (USA, Australia, Canada and South Africa) have already peaked in gold production while the top Eastern countries (China & Russia) are still in an upward trend.
The gold story will become more interesting in the future when the global financialization of debt with derivatives comes crashing down. Those who hold the most gold at this time, will be in much better shape than those who leased it out for a temporary paper gain.
It took a great deal of effort and several decades, but the Eastern gold producers have beaten their Western competitors by a wide margin.
I continue to be excited by the gold and silver market because it simultaneously provides both pro-tection and optionality on what I believe to be the ultimate tail event:
the inevitable reversion back to a tangible/commodity money standard.
This event is so alien to present avant-garde economics it has been ruled out as a solution to the problems facing the global economy. However, when analyzing the current state and trajectory it is not only more logical by the day, but mathematically inevitable and soon to be competitively sought by the remaining capitalists on the globe.
There are only 580 mines and deposits on earth with over 1 million troy ounces of in-situ gold with less than 200 in North America. Compare that to 2,000 billionaires, 50,000 Picassos, and $230 trillion in global ﬁnancial assets. I cannot think of a better asset class I would rather be invested in over the coming decades. As for physical gold, our research this year shows that we are nearing peak gold production as the total in-situ ounces when adjusted for metallurgical recoveries and average mine life are about 50% less than what is required to maintain the current production trends.
South Africa’s National Union of Mineworkers, which represents about two thirds of gold miners in the country, will start a strike over pay tomorrow.
There are concerns of unrest after the Marikana platinum massacre last year, when dozens of miners were shot dead by South African police in the worst mining violence in decades.
South Africa was throughout the 20th century and as recently as 1996, the world’s largest gold producer at almost 17 million ounces. South Africa has in recent years become less important to the global gold industry. However, should supplies be further hampered it may impact the already, very tight physical gold market.
The geological evidence suggests that we may be close to peak gold. It is signalled in the fact that most of the larger gold producing countries (such as Australia, the U.S., South Africa, Canada, Peru, Indonesia) have all seen production drops in recent years. China and Russia are the two only large producers to have seen production increases. Peak gold has yet to be considered and analysed by the international financial and investment community but there is a risk that it has happened or will happen soon with a consequent impact on the gold mining industry and on gold prices in the 21st Century.
We are rapidly approaching with the end of cheap resources. In our opinion, the wealth of most Americans could get wiped out during the next decade due to commodity inflation. Focusing on the preservation of your real purchasing power, this must see mini documentary delves into what makes gold so special and why the central banksters wish the public to remain completely ignorant to the attributes and fundamentals of gold.
The results are finally out and 2012 proved to be another record year for the continued squeeze in the top 5 gold miners. Not only did gold production decline 1.3 million ounces from the top 5 year-over-year, their average yield dropped another 6%. As gold yields continue to decline, it causes more stress for the mining companies. Thus, it takes more energy to produce the same or less gold.
This is indeed the major problem facing the gold mining industry going forward. Below we can see just how much average gold yields have declined in the top 5 gold miners (Barrick, Newmont, AngloGold, Goldfields & GoldCorp):
World conventional oil production peaked in 2005. Since then world primary energy consumption has been maintained (and even increased a bit) by the exploitation of tar sands, very deep-water offshore oil production, shale oil and gas production, and most of all, much higher coal production.
This is significant because it means that a growing proportion of capital is being allocated to the process of finding, extracting and refining primary energy resources of declining quality. This in turn means that there is a limit to the growth prospects of the world industrial base, whatever its location. The economic problem is that investment is failing to keep up with depreciation of the underlying asset stock.
The world is allocating more labour, physical and financial capital to support primary energy production in order to maintain a semblance of the status quo ante, which is another way of saying that the World Model base case is a very close approximation to what has actually happened. This has created a confusing analytical environment for economists, politicians, investors and corporate planners, all of whom would undoubtedly prefer business – and crucially consequences – as usual.