CRUSH THE STREET: SRSrocco, Will We See A 10/1 Gold-Silver Price Ratio?

The world economic and financial system is in serious trouble.  With the coming collapse of U.S. and global oil production, this will destroy the value of most paper assets and real estate.  Thus, the 99% of investors trying to move into physical gold and silver to protect wealth, will find out how very little metal will be available.  This could cause the gold-silver price ratio to drop closer to 10/1… or even lower.

I discussed this with Kenneth Ameduri at Crush The Street.  This was their summary of the interview:

China’s rise, energy & oil shale collapse, world debt levels growing exponential & More: This has got to be our best interview of the year! Steve St. Angelo is an energy, metals and mining expert with statistics and information you simply cannot get from anyone else. The stats WILL shock even a veteran in the alternative economic space and this is a must watch for everyone especially with the IMF SDR basket to add the Chinese Yuan less than one month from this release.

To check out the original interview, click on the following link:  Crush The Street & SRSrocco Intereview.

TOPICS IN THIS INTERIVEW:

02:30 Diminishing Energy Returns: Something other PM Analysts Don’t Talk About
04:55 History of Oil and energy return on Investment
06:00 Technology Does Not Mean More Energy Return
06:50 $13.5 Trillion in Bonds at Negative Interest Rates
07:45 Supply vs Demand of Oil – Price to Collapse to $0
10:00 $12 per barrel Oil by 2020 Prediction
12:40 Global Silver production to crash 75% by 2025
16:20 Debt Collapse, base metal mines close, Gold/Silver Spike
17:30 2.2 Billion Oz of Gold Investment, 2.5 Billion Oz of Silver
19:40 $3 Trillion in Gold, Only $50 Billion in Silver
20:50 Silver Could reach 1:10 Ratio to Gold’s Price
21:20 Pivot East: SDR Backed Bond with Yuan in IMF’s basket
23:00 China will Announce Significantly Higher Gold Reserves
25:10 Indian Gold Buying Season to spike Gold Price 2016
26:00 Yuan in SDR Oct 1st will Change World Financial System; US Dollar & America’s world position is in jeopardy
27:30 Earthquakes from Shale oil to add to crash
29:20 Waste water a huge problem from fracking
34:30 Debt Growth worse than exponential, collapse soon
36:20 Get more from Steve & Buy Metals from Tom Cloud

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23 Comments on "CRUSH THE STREET: SRSrocco, Will We See A 10/1 Gold-Silver Price Ratio?"

  1. I will look forward to the gentlemen presenting their opinion that oil prices will collapse [to like $12], and I will listen. But my physical science background and economics studied formally and informally says no way. Not for something as needed as gasoline, diesel, and jet fuel that come from that oil. I don’t think there will be that much overproduction….and we are talking about reduced supply in the future.

    I believe the supply/demand dynamics beats their “thermodynamic” explanation any day. But I will read or listen.

    • Price is not important at all. The scorcerer is trying to make us think we can grow forever. Currencies out of thin air that promise future profits out of affordable energy. We ran out of affordable energy, so we added mountains of debt, exponential as you must have read. I’m looking forward to the interview.

      • You can’t just say “price is unimportant” and have that be the case, becasue it is important until there is some massive collapse. We are talking about price paid by real people, not central bankers.

        The price of things people need the most [quality clothes, shoes, cars, health care, food] trends upward as dollars buys less. During the summer when north America grows a lot of produce the price goes down. But the trend is that food costs more. I think gasoline will be the same way in the longer term trend. Right now with a lot in storage prices are low. In time with less production and people needing gasoline for transprotation prices of fuel go up.

        We will see of course, but I can’t see a long-term trend NOT conforming to supply & demand.

        • The way I see it oil and the energy sector (and big money that determines prices) are between a rock and a hard place. The current prices are too low for the producers to make any (meaningful) profits below 50, so investment and exploration are going south and new discoveries do neither replace current production nor consumption. Meanwhile inventories ARE pretty full for now, so in the short term there is no lack of oil. On the other hand, the world’s real economy cannot afford prices above 50, or at least the bottom 80% cannot (who actually ARE the real economy) as they are already tapped out – real inflation is much higher than the official statistics suggest. On top of it all there is the declining EROEI issue our host has been pounding the table with for quite a while… So my best guess is a slow decline of inventories, coupled with overall declining production, rangebound prices (30 – 60) determined by TPTB and a limping and more and more hurting world economy until three will be an unexpected all lights out moment (financial/economic collapse and possibly open war)… I really hope we don’t go there, but I have a hard time seeing a way out as there is simply 2. much. debt. As always, time will tell who and when things unravel. A say big thank you to our host, and wish GLTA… …we will ALL need it.

        • The ‘price’ of things, commodities, stocks whatever, under our current monetary system of makebelieve, has distorted everything. Even our minds. We will return to reality in the not too distand future. In the end days of a fiat currency system, ‘prices’ are made up. Until there won’t be any delivery for your dollars, euro’s or yuans.

    • David,

      I believe you are absolutely right.. What I think they mean is the when the ERO(E)I reaches 1/1 you have the thermodynamic collapse of that energy source. In effect, that “source of energy” is no longer a source of energy. If you want to use it you have to be prepared to put significantly more in than you get out. Governments and the uber rich will still drive their cars, boats etc. because they will be able to afford the fuel. The rest of us will be walking, riding horses or bicycles.

      SteveW

      • Men on bicycles win vs. men on horses, especially on maintained paths/rails. Men cool better than horses and eat less per mile.

        A Bicycle Infantry Regiment would be an inexpensive way to move soldiers when machines and fuels are limited.

    • I don’t pretend to understand an energy price decline in an energy starved world. However, whether the price sky rockets or falls below the required price to produce gasoline. Does it really matter? Either the gas isn’t produced or its for sale at such a price that impacts and inflates the price of everything associated with modern living. What matters in my opinion is the apparent validity of a low EROI world. Its readily apparent in the charts and its just starting to make an impact on the real world. This is a trend and where it ends is not good.

      • Once the real economy collapse due to a lack of energy it’s game over (affordable) energy overpriced financial assets (debt, stocks that are elevated due to CB purchasing and stock buybacks on cheap credit, and a 500 T derivative casino that actually drives prices in this black is white, good is bad, and right is left topsy-turvy world). An ever-declining EROEI pretty much guarantees this for oil, as a 1:1 ratio is an unbreakable floor to production and no amount of additional debt can change this.

  2. I’m in the camp that Mother Earth produces her own oil. The Rockefellers paid their Scientist to sell the Fossil Fuel theory to the world. That way, they could set the price on a diminishing commodity. I believe there is plenty of oil as long as we can get to it. That’s the key. Get to it and who has oil that’s easy to get at… I’m probably wrong but burning Prehistoric Dinosaurs and Ferns in my fuel tank doesn’t sit right with me.

    • Well sorry but you don’t know what you are talking about. And I don’t care fossil or abiotic, the big oil fields aren’t replenishing themselves. I’m not an oil geologist, but I do have a degree in geology, and belief doesn’t replace the reality. Again I don’t care fossil or abiotic.

      The people who search for economically viable oil fields are very good at what they do.

  3. Steve ,

    Great interview. It will indeed be a rude awakening for many who have been continuously kept in the dark for so many years regarding the truth about physical silver.
    For anyone who all of a sudden gets it and wants to invest in some real security , start by becoming familiar with the daily spot price. Not that this price is real but it is what the market overall uses as a gauge for doing business ( and is actually to the advantage of physical metal buyers).
    Next seek out your local coin shop and compare the daily spot price to their pricing. if prices for say silver are anything over 2 bucks to 3 bucks an ounce look for another dealer. 1964 and older dimes, quarters , and 1/2 dollars will be primo for accumulating as security. Watch out for the Morgan silver dollars as a number have been counterfeited by China. The same holds true with the silver American Eagles so you have to know who your dealing with. Do your research.

    • Very good counterfeits are out there. Numismatics are frequently made of the correct metal/shape/weight so that the quick checks pass it. US 90% “junk” coins aren’t worth faking, yet.

      I’d like to see some 20+ year sentences for importing/passing-as-genuine known counterfeits, as well as trade retribution against Nation-State sponsors of fake pm’s/coin/currency. It’s an act of war, after all.

  4. just as info: the exponent of an exponential curve doesn’t have to be 2 (doubling every period) it can be lower or higher: in case of US-debt it’s still exponential, but as you say: the exponent is more than 2.

  5. Some questions Steve. If the eroi drops from 10 @$50/barrel to 5 @$100/barrel, doesn’t the productive capacity of the oil remain basically the same? It seems as long as the availability of oil matches the demand for growth, then we have not yet approached economic or thermodynamic collapse.?

    • glenn kallstein,

      The Falling EROI takes place regardless of the price of a barrel of oil. There has been some analysis showing that as the price of a barrel of oil moved above $20, the U.S. started to add a lot of debt. This was shown by Gail Tverberg on her site, OurFiniteWorld.com. So, it’s not that we can’t afford say, $50-$100… we can’t really afford much higher thn $20 without a lot of debt added to the system.

      Furthermore, the high oil price we have experienced since 2010 was more due to Fed intervention of zero interest rates and massive monetary liquidity. Without those two policies, high oil prices would have not been sustainable for 3 1/2 years. Thus, the world really can’t afford high oil prices.

      This will be discussed in more detail in our upcoming interview with Louis Arnoux and the Hills Group.

      steve

    • glenn,

      No the productive capacity per dollar is quartered. 1/2 by price 1/2 by ERO(E)I. 1/2 x 1/2= !/4.

      One 42 gallon of oil contains an average (by quality) of six gigajoules (6 GJ or six million joules) or 5,8 million Btus or 1,667 Kilowatt Hours of energy. For ease of discussion, let’s use gigajoules.

      So, at 10/1 ERO(E)I you invest 1 barrel of oil, 6 GJ, for $50.00 and you get 60 GJ (10/1). So your cost of energy is $50/60 GJ or $.833/GJ ($.862/mBtu).

      When the ERO(E)I goes to 5/1 you invest one barrel of oil at $100/barrel at 6 GJ/barrel and you only get 30 GJ of energy. So you energy cost is $100/3 GJ or $3,30/GJ.

      This is a four fold increase in cost, from .833 to 3.30 per GJ.

      Falling ERO(E)I is a bitch.

      SteveW

  6. Every time someone backs up their opinion by using the old saw that supply/demand fundamentals will come to bear and in the case of oil, the price will keep on rising as demand outstrips supply, I want to upchuck. The witch doctors that developed those useless metrics hadn’t a clue about resource limits which is why those bogus straight line charts don’t include one biophysical input. The so-called science of economics is complete and utter bullshit inhabited at the highest levels by courtiers of the elites. They exist because we found a treasure trove of cheap energy which led to industrialization. The problem is of course modern industrial society doesn’t and never did pay for itself. Now there’s a statement way beyond the pay grade of an economist (witch doctor). The price of oil CANNOT continue to rise because the consumer is broke and here’s a News Flash… more printed money isn’t going to do one damn bit of good to get anymore of it out of the earth and isn’t going to make the average person any richer.
    Economists will soon be held in the same regard as Bloodletters.

  7. Bill,

    You are right about “more printed money isn’t going to do one damn bit of good to get anymore of it out of the earth and isn’t going to make the average person any richer.”

    But you better get out the old barf bag. The economic principles of price theory, supply and demand are alive, are well and are relentless. They apply to all goods and services. You may be right that the “price oil CANNOT continue to rise because the consumer is broke” but that is just reduction in demand depressing the price. My belief is that the price will rise dramatically when the supply falls of the Seneca Cliff.

    Keynesian economist are economic bloodletters.

    Stevew

    • “….You may be right that the “price oil CANNOT continue to rise because the consumer is broke” but that is just reduction in demand depressing the price.”

      YES

      “My belief is that the price will rise dramatically when the supply falls of the Seneca Cliff.”

      I would bet on that.

      In addition to gasoline, diesel, and aircraft fuel, which there will be a need for regardless of anything, hundreds of essential items come from the hydrocarbons in oil.

  8. I might be wrong but I think that the elite have another energy resource in their back pocket, and when they bleed us dry with oil prices they reach in their back pocket with another energy and the bloodletting will continue. Should this not happen. Then we say what our might be leader said. ” What; at this point does it matter? ” We do what we have always done. Persevere, move on, believe in the LORD. We will keep moving on no matter what. Oh! by the way. I WILL NOT VOTE FOR CLINTON.
    This is what I do and have done for a long time. I believe in GOD first and after that. I just keep on stacking.
    Keep on keeping on. Don’t worry be happy your alive and Hooray For Us.

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