Look, it’s really this simple: Anything that can’t go on forever, won’t.
PM & Oil expert Steve St. Angelo joins the show this week for a power packed interview discussing:
- Mexican standoff in the silver market– will Asian physical demand overwhelm naked paper shorts?
- Steve Explains Why Peak Oil Will Destroy the Value of Paper Assets, & Decimate the US Market
- US Gold & Silver demand ROARS back: Wholesale US gold market CLEANED OUT of all secondary market coins in past 48 hours
- Steve compares what is coming to the US in the next 3 years to the end of the Roman Empire, and discusses why backing the US’ $17 trillion in debt won’t prevent A COLLAPSE WE DON’T COME OUT OF!
The SD Weekly Metals & Markets With The Doc, Eric Dubin, & special guest SRSRocco is below:
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.
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.”
You can buy more than three times the amount of silver compared to oil today than you could during the decade of the 1960′s.
The Central Banks and Monetary Authorities have done a fine job bamboozling the public in making sure that gold and silver remain as silly investments only the fringe in society would purchase and hold.
When the price of silver reached $35 an ounce in 2011 it wasn’t a parabolic move higher, rather it was behaving more like a balloon being released from far below the surface of the water. The coming explosion in the value of silver will be a shock to the world.
If we were to value silver today compared to its oil ratio during the following periods, this would be the result:
The U.S. and Global financial system is being kept alive by a highly leveraged paper system. The Fed’s recent announcement of a $10 billion taper has had the anticipated impact on the precious metals and bond market.
Even though I thought the Fed would never taper, the end result will be the same. As I have mentioned several times, Energy drives the markets… not Finance.
The so-called U.S. Shale Revolution is the only thing that is holding off the collapse of the global markets as it has brought on more oil supply (only temporarily), desperately needed by the world.
Unfortunately, it looks like the “Illusion of Sustainability” in shale oil production took a BIG HIT, as the forecasted decline rate at the Eagle Ford Shale Field increased double-digits in just one month.
What happens when the Dollar finally collapses (AS ALL FIAT CURRENCIES DO) including the $100 trillion in paper assets? Where are investors going to store and protect their wealth?
Because the gold and silver market are so small, any move into the precious metals will make their values increase to insane levels.
The world is awash in ENERGY IOU’s masquerading as paper assets. Gold and silver are not Energy IOU’s, as they are bought and paid for ECONOMIC ENERGY. While this may be hard to quantify with data as the future is hard to predict, we can be rest assured that what happens going forward will be directly related to Energy values and physical assets and not paper trading based on Financialization.
Business as usual in the world will be over when the impact of peak energy is finally felt. Well, let me clarify that…. the market is already feeling the pain of peak oil, but due to the Fed and Central Bank monetary printing it is being masked.
What the h*ll happens when interest rates rise? The whole thing blows up in their face.
Silver and Gold will become great stores of value and excellent investments in the future due to Peaking of the Driver of the Economy — ENERGY.
The U.S. and world are heading towards serious trouble. The financial markets are being kept alive due to the monetization of debt on a massive scale. This has produced a huge dislocation in the fundamental valuation of assets.
Currently, stocks, bonds and paper assets are on the receiving end of this monetary stimulation, while the physical assets such as the precious metals & commodities have been beaten down to assist in lowering the already low manipulated inflation rate.
Investors who once thought the precious metals were a safe store of value, are now beginning to question their confidence in gold as the price continues to head down towards its low set in June. This is precisely what the fiat monetary authorities planned for and the public has taken it…. HOOK, LINE & SINKER.
The nearly $90 trillion in Global Conventional Assets will perform rather badly in a peak oil environment. The reason why gold and silver will be a hedge against peak oil is due to the store of “Economic Energy.”
THERE’S NOTHING LEFT but a huge ride down. And when I mean a ride down, it will be like a roller coaster. As I have mentioned before, the FIAT-MONETARY-US TREASURY-PAPER-PONZI SCHEME gets its power from a rising energy supply. It is this energy supply that has been able to allow them to kick the can down the road.
Not only will the United States peak in oil production, but so will the rest of the world.
Once the MOTHER OF ALL PEAKS occurs, this will put severe stress on the nearly $100 trillion in global conventional paper assets under management. As investors wake up to this reality, there will be a huge move into the physical assets such as gold and silver. Which means… there is nothing the SILVER BEARS will be able to do about it at this time.
SILVER BEARS… you have been warned.
The precious metal investors are actually sitting on gold mine, and they don’t even know the real reason why this is true. Many analysts are focusing on the huge amount of debt and fiat money in the system to be invested in gold and silver, but the fundamental root cause continues to go unnoticed. The U.S. economy and world are heading toward an ENERGY WALL and the majority of the public and investors are not prepared for the ramifications.
The key to success is to be able to spot the next great investment trend before others realize it. The majority of investors in the world today have their wealth tied-up in assets that will become increasingly worthless in a peak energy environment. These assets will disintegrate in value due to a falling energy supply.
The world is holding onto trillions of dollars of Energy IOU’s masquerading as assets that will have no future… and the future is now here.
The much touted Oil Boom in the U.S. may be heading for serious trouble.
Even though the EIA – U.S. Energy Information Agency and the MSM have been putting out very optimistic forecasts for a growing domestic oil supply, present data and analysis shows that domestic production may indeed be hitting an “Inflection Point.”
Last decade, the term Peak Oil entered the mainstream. To be expected, the media stymied a calm and reasoned public discussion, informed by science. We were treated to distracting interpretations of what Peak Oil means, such as the silly notion that we are going to run out of oil. We will never run out of oil. We will, however, face ever rising cost of production and eventually, negative return on energy invested to produce oil. If it takes more energy than the equivalent contained within a barrel of oil to produce a single barrel of oil, that’s not a sustainable operation by definition.
Controlling Carbon Has More To Do With Controlling Resources And YOU, Not Climate Change.
The powers that be have a major problem. Peak oil is real. But they incorrectly assume we, the masses, are not capable of dealing with the ramifications of Peak Oil. Indeed, nasty challenges are on the horizon. Fearing mass panic, a decision has been made to advance the control over the next best thing: carbon dioxide output created by the burning of fossil fuel. Read More
As the FED turns up the heat in the central bank frying pan, the
frogs (public) don’t realize they are being cooked to death by inflation. Unfortunately, we are well past the point of no return. It’s only a matter of time now before the whole “Financial Cliff” falls off the mountain side.
The days of the Fiat Dollar are numbered. This is precisely why the present FED policy of printing money, buying bonds and other assorted pieces of paper garbage will not work for much longer.
The FED is not only pushing on a silly string, it’s also coming up against the GREAT ENERGY WALL. Energy is the precious metal investors greatest secret weapon because the Fed’s fiat monetary powers become increasingly worthless in a peak energy environment.
Energy is the key to understanding the true fundamental values of gold and silver. All I can say to the people of the world who are still holding onto upwards of a $100 Trillion in paper assets, time is running out to make the switch into physical assets such as gold and silver.
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):
By SD Contributor SRSrocco:
When there was extreme volatility due to the huge inflation in the 1980’s, Middle East Oil Production fell off a cliff. However, you will notice that during all the BIG DIPS in oil production, the Middle East Consumption of Oil (RED), did not MISS A LICK… did it? Even though the rest of the world cut back on oil use, the Middle East did not.
Saudi Arabia is the 6th LARGEST OIL CONSUMER ON THE PLANET NOW!
All oil producers PEAK… just like Indonesia… who used to be a apart of OPEC.
THE FOLLOWING CHART SAYS IT ALL…
By SD Contributor SRSrocco:
As I stated in the title… the Mining Industry is always one step behind. Now that they are COMING CLEAN with CASH COSTS… they still haven’t mentioned the upcoming ENERGY CRISIS.
MUM’S THE WORD….
Of course we will hear about the negative implications of the future energy crisis as it impacts the mining industry…. AFTER, and I did say…A-F-T-E-R the ramifications are already felt.
By 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.
SILVER INVESTMENT DEMAND WILL BE HOTTER THAN GOLD.
…mark my words!
By 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.
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.