Gold, Silver, Shale Oil Industry & The Economy: My Interview With James Kunstler

How insane are the markets today?  Well, it’s always a pleasure to discuss this and other topics with James Howard Kunstler.  Jim and I had a lively conversation about gold, silver, the shale oil industry and the overall economy in his most recent KunstlerCast.  James is one of the few that understands the dire energy predicament we face.

I started following James Kunstler after listening to an interview he had with Art Bell on Coast-To-Coast AM, back in 2005.  James is way ahead of his time and in his book, “The Long Emergency” and in the video, “End of Suburbia” he describes what the world looks like after peak oil… and it isn’t pretty.

During our interview, James and I chatted about precious metals manipulation, the soon-to-be disintegrating shale oil industry, the insanely overvalued markets, peak oil, and many other topics.  One of the more important items I brought up was the incorrect notion that the Central banks can continue to rig the markets indefinitely.  They can’t.

And why is that?  Because Central banks can’t continue to prop up the market with paper when the problem is one based on a limitation of PHYSICAL OIL.  If the Central banks want to really solve our problems, they have to find a lot more oil… but there just really isn’t much left to find.

So, there lies the rub

To listen to my interview with James Howard Kunstler, please click on the link below:

KunstlerCast 306 — Gold, Silver, and Oil with Steve St. Angelo

Also, please check out James Kunstler’s website as he is a prolific writer and has many interesting books on his website.

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34 Comments on "Gold, Silver, Shale Oil Industry & The Economy: My Interview With James Kunstler"

  1. To be credible, PMs analysts should provide statements on their PMs holdings first. Secondly, Their advice should bring profit for investors. It has not happened yet. So, supposedly the cartel is to blame.

    • Ed, ask your financial advisor for the same please

    • DisappearingCulture | August 16, 2018 at 5:29 am |

      “Their [PM analysts] advice should bring profit to investors? Absurd.
      A PM analyst is not a registered/licensed financial advisor, and their advice only brings profit to an investor during a bull run or bubble markets.
      The “cartel” is to blame based on facts compiled by organizations like GATA

    • Most of these PM analysts have titles like director of sales or make their bread and butter from fees selling PM’s of PM products.

      I personally only buy 5 oz a pay check and save some cash out of the system. It’s my small “insurance policy” that I hope I’ll never have to use.

      Realistically, the average Joe can’t make good money even if PM’s go to crazy levels (like bitcoin did). If you are an average Joe who is in a position to make lots of money if PM’s explode up — you are over invested in PM’s and in a foolish position. (Also, don’t rely on any of these same PM analysts to tell you when to sell…)

  2. stephen hyland | August 15, 2018 at 1:13 pm |

    Steve, I got so excited when I saw you posted this interview! Haha. Look forward to listening to it!

  3. Thanks for the podcast link.
    I see you still believe that precious will save you when the SHTF.
    Unfortunately, no amount of metal will save you when this system goes over the cliff.
    It will be root hawg or die. Same thing I said three or four years ago and you laughed.
    Keep up the good work. You’ll eventually talk yourself over to the darker side…

  4. The problem is that we don’t live our lives all in one instant. I can’t store and eat all the food I expect to eat over the next twenty years all at once, or put in the garage the next two or three cars I expect to be driving over the next 20 years, or spend my entire net “paper profits” in one day if I sell all my stocks and bonds today. In theory, I could make a huge profit, but that isn’t useful to me because I can’t simply spend them all in one day. Hence, we do need some store of value like PMs, farm land, etc. A PV panel may last for 20 years, but stored diesel fuel, even with preservatives added won’t.

    A steady state supply of resources and energy is still needed and that requires some mechanism for future ability to trade to buy these as future needs require. With the possibility of a return to more localized economies to save energy on the costs of shipping, maintaining roads, trucks, etc. PMs which are more amenable to local barter like payment may thereful be useful. In contrast, the only good thing I can hang my hat on BTC for now is its ability to transmit payments across the globe- even though I make an assumption of the internet being a global “constant.” However, even if I can pay via BTC, it will still cost energy and money to ship them, hence I think a gradual return to more localized economies.

    • stephen Hyland | August 15, 2018 at 4:03 pm |

      Actually, if you go about it a smart way, you can easily store enough of the ‘essentials’, given you have the money to do so. For example, you can live off of 2700-3000 calories of rice for a dollar or so per day. White rice if stored properly will keep longer than 20-20 years as well. At that point, just stock up on some cheap but health multi-vitamin supplements, and some bulk protein powders for some protein on the rice diet, and you can easy have many years worth of storable food for a few thousand. Get some of the portable water filters that will filter up to 500 gallons of water and the perma-matches for fire needs, and you have food, water, and fire needs all taken care of. Then a few first aid kits and some weapons and ammo for self-defense, and maybe warm clothes for the cold, and you will have enough to long outlast most people when the collapse happens. Of course, this doesn’t cover every little thing, but it covers all the essentials. I can easily stock up on a 30-40 year supply of white rice and it really doesn’t take up that much space compared to most storable foods.

      • stephen Hyland | August 15, 2018 at 4:05 pm |

        That said, we are definitely going back to a time when people will have to hunt and use fire wood to survive and have heat. It will be like the 1800’s all over again, or maybe even worse than that in some areas.

        • What should 100s of millions of people be hunting ? Curious minds would like to know…

          … the answer is very dark and not pretty…

  5. So if Amazon can’t continue making money from the only profitable art of its business model, the cloud storage for the NSA and Google, its energy hog delivery truck dependent model for shipping stuff should be a bust.

  6. Michael Kohlhaas | August 15, 2018 at 4:32 pm |

    The Long Emergency is definitely a must read. Tells you everything about the future and it’s already happening. This book was written more than a decade ago. People say it’s a pessimistic book. I beg to differ! The movie The Road is but not this book.

  7. Michael Kohlhaas | August 15, 2018 at 4:59 pm |

    Awesome interview. Congrats!

  8. OutLookingIn | August 15, 2018 at 6:21 pm |

    Everyone eats to maintain life.

    From the dawn of time until about the year 1800 the world human population remained constant at about 2 billion inhabitants. Almost all were involved in the production of food, depending upon animal and human energy.
    Then came the industrial revolution and the use of steam power, followed closely by the internal combustion engine and its dependency on oil. Now big agra business could feed multitudes and the population of the world exploded from 2 billion to almost 8 billion at present.
    When the world finally runs out of petroleum, those extra mouths that depended on the food that it provided will go away. The population will again stabilize at a level that the worlds biomass can support. Only this time around it will be a smaller number, because of the massive amount of environmental damage that has occurred. Read Jim’s “World Made By Hand”.

    • Umm, if you meant 1920 as being “the dawn of time,” then you are correct that the planet had 2 billion humans on it. However, I don’t think that is what you meant. Here’s a great site for understanding population growth over time:
      https://ourworldindata.org/world-population-growth

    • I also think so, population has risen because capitalism needed it. When this production mode will disappear, it is quite probable that population trend will reverse.

      • DisappearingCulture | August 16, 2018 at 5:39 am |

        Population has grown because humans reproduce more and live longer in safety from diseases, physical danger, when dwellings are heated, when food is abundant…all enabled by coal, oil, and natural gas, and electricity…the generation of which comes directly or indirectly from fossil fuels.
        Other reasons are a distant second.

        • Don’t worry, alternative energy will save the day and it will be limitless. At least that’s what a poster told me on Kunstler’s podcast comments section.

        • yes but humanity cannot continue with a a fertility rate of 4 or 5 with a low “mortalité infantile”.

      • RD,

        Population increased not because of Capitalism, but rather due to the exponential increase in oil, natural gas, and coal production.

        The Green (Produce) Revolution was due to oil, not capitalism.

        PERIOD.

        steve

        • That’s an interesting typical “aufklärung” philosophical position !
          In your sentence, you consider the “work” as a transhistorical substance in which production is likewise out of the scope of the historical field and of wich one consequence would be that finally the production and distribution would be something like separate items (one of the biggest mistake from “orthodox marxism”).
          However, for example, some steam machine had been discovered several times before the 18th century but it did not expand much because there was no social relationships for further usage.
          As far as energy is concerned, capitalism developement required some increase in energy consumption/use to simplify, as so oil was subsequently used. You can always say, but what would happen if oil had not existed, yes but it is coming into the science fiction and speculative field. By the way, the same can be said with nuclear power, radio waves and nearly everything.
          Your assumption is interesting imo as you are interverting the essence of a concept and its phenomenon form. Another example could be said regarding debt explosion since 1971.
          This confusion is “funnily” made within most both sides (leftist, progessive,…) and conservative as they are the two inseparable faces of their “aufklärung” ideology. Another logical consequence of it, is the personalization of history (another current fabulous example is Brandon Smith) and its retroactive view and its retroprojection on the precapitalist eras (cf. the incredible Martin Armstrong’s rants).

          • OutLookingIn | August 17, 2018 at 10:33 am |

            Sorry, just do not understand your incoherent babble.
            eg: “interverting (?) the essence of a concept and its phenomenon form”.
            It seems you are using a form of “double speak” to sound more intelligent than you actually are. I have followed your commentary on this site and it sums up to something of a confusing pile of dung.

          • OutLookingIn,

            At one time, I tried to make sense at of RD’s comments, but no longer.

            If we look at the exponential increase in Oil Production on a chart and superimpose the POPULATION as well as most metals’ production, such as Gold, Silver, Lead, Zinc, and Copper, they have all gone up in the same exponential manner. This had nothing to do with Capitalism and everything to do with the quantity of oil.

            Anyone who suggests otherwise is a complete fool.

            Sorry to be so blunt, but there it is.

            steve

          • That’s is quite difficult per se and especially in english which is not my natural langage. By the way for these words such “phenomenon form” is the usual term I saw many times for this kind of issues because “consequence” is not at all an accurate term. Sometimes, it could be interesting to try to explore beyond the “bourgeoise psyche” !
            By the way I do not pretend to be intelligent but at least we know now for sure that you are not…
            “This had nothing to do with Capitalism and everything to do with the quantity of oil.” : so, when oil production will go near 0 in 2100 or 2200, human population should back to less than 100 million I guess ?

  9. Look at the gold and silver dollar prices for yourselves.

    At this point, it’s getting harder and harder to care. I don’t know if you people noticed, but all of us face the task every single day of living in this world. We can no longer afford delusions about gold and silver going to the moon.

    • Northwest Resident | August 16, 2018 at 12:06 am |

      That’s a really short term view of the situation, dolph. Even two or three years in the investment world can be considered a very short time span when measured against the ideal long term investment horizon. If you look at the long term price history of gold and silver and calibrate the ups and downs to overall economic financial performance, you’ll see a pretty direct relationship. If you believe that the global economy is headed for a cliff and due to arrive any time now, then you’d have good reason to hang onto PMs. But sure, sell all the worthless paper gold/silver asap before it evaporates with the rest of digital/paper “wealth”. Free advice.

  10. Dolph,
    I think that it has been the temporary “sugar high” and the delusion of easy living afforded by plentiful relatively cheap oil up to this point, the industrial age, which in turn unleashed abundant food supply, ease of transportation, mechanization for mining, building, etc., and a population boom as Outlookingin has summarized above, and from there easy an almost incidental substitution of fiat for traditional money. This daisy chain of one time historic confluence of events has made it easy, indeed, rendered the need for gold and silver unnecessary- for now, and people have simply “forgotten.” But if suburbia collapses, and the self-sufficient local community style of human existence returns after the plentiful gas supply has run out, then gold and silver could re-emerge. The requirement of long-distance payment transactions enabled by the internet and “cryptocurrency” transactions could fade in the coming generations.

    In other words, why bother paying for your groceries or your farm tools with cryptocurrency, credit card, or fiat paper? You will have to walk to the store to pick the items up anyway. You will no longer have them shipped and delivered to your house by the USPS/Amazon.

    Things change not necessarily with a bang, but an insidious whimper.
    Meanwhile, gold down to 1165. IMHO it is for insurance and generational transfer, not for investing.

  11. Paladinbst3k | August 16, 2018 at 2:12 am |

    PM miners are an investment and profits must be taken or suffer the downside like we are experiencing now. We are not headed for Mad Max. People push that theory to sell stuff to people they put hope to put into a panic. A garden is a good idea period. Emergency supplies are a good idea period. People in Venezuela would love to have a roll of Silver Eagles so some physical is a good idea. The rest is a trade like any other.

  12. Buy low, sell high – try doing that now. Real Estate in NY, SF, LA and other places is through the roof, and the DOW at 25,000+ is a BALLOON not ever seen before. Consider that TSLA has not made a penny profit, is subsidized to the max, and sells for more than $300 per share, and you want to buy that. Does any financial commentator even mention the National, Global Debt? Just saying!

  13. SRS is a blog that is needed in the mix of information. It provides cold hard facts about energy. Period. We can argue about gold and silver, but that’s not the fucking point.

    Capiche?

  14. It’s a great interview but inaccurate about ETFs. I assume Steve was refering to ETFs participating in the derivatives/options markets. There are lots of ETFs like this but also lots of ETFs that are not. An S&P 500 ETF will have a weighted ownership of S&P 500 company stocks, not derivatives. So it will not have any counterparty risks. GLD also doesn’t hold gold derivative contracts. Maybe there is some counterparty risk depending on where the gold is held and the legal status of it but it’s not a function of the derivatives market. I haven’t seen any studies of the size of derivatives vs non-derivatives based ETFs and this should have been explained better.

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