HAGMANN REPORT: Precious Metals To Protect Wealth During The Global Energy Collapse

There will be very few assets worth owning when the “Energy Collapse” begins in earnest.  Precious metals will be one of the few assets that will protect wealth as the U.S. and global oil industry disintegrates.

I had the pleasure of being interviewed by Doug and Joe Hagmann about the upcoming energy collapse at what that will look like in the future.  Very few people truly understand how bad the situation will become as the low oil price continues to gut the U.S. and global oil industry.  Oil is the lifeblood of our economy.  In addition, a significant portion of the coal we use to generate electricity to power homes and business is transported by trucks constantly running up and down the interstates and highways.

I explained in the interview that 99% of investors have their wealth in Stocks, Bonds and Real Estate.  These three assets will collapse along with the disintegration of the U.S. and global oil industries.  The reason physical gold and silver will protect wealth is because they are stores of “Economic Energy”, while Stocks, Bonds & Real Estate are “Energy IOU’s.”

You can check out my interview with Doug and Joe Hagmann here: SRSrocco interviewed by the Hagmann Report.

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51 Comments on "HAGMANN REPORT: Precious Metals To Protect Wealth During The Global Energy Collapse"

  1. Nothing new to me. Excellent summary though. Seems you have surplus energy Steve. For free, so maybe there’s still hope.

    😁

    BTC, is it stock or is it flow? A car battery, is it stock or is it flow? The flow has been good to us for the past century. The stock will take over power, before the year 2025. The flow was enough for 7 billion people. The stock however…

    What’s BTC, stock or flow? Anyone?

    • I’m not convinced gman.

    • houtskool.

      Yes, I realize some posts-interviews repeat a lot of things many of my long-term readers already understand. However, 40+% of my viewers each day are NEW EYEBALLS. So, I try to be a good host and provide them with information that they can understand.

      Furthermore, I continue to receive emails from readers who are WAKING UP after reading my work for 1-2 years. So, it takes time for this stuff to sink in and everyone is on a different level.

      That is why I try to provide new original information along with providing summaries or repeating things for the benefit of those who are still on the journey of WAKING UP.

      steve

    • Robert Happek | March 24, 2017 at 7:43 pm | Reply

      BTC is a flow powered by fossil fuels (via electricity dissipated in computers). Since it is decentralized, its value fluctuates widely displaying the vagaries of demand chasing supply.

      A car battery sitting on a shelf in the auto parts store is a piece of stock.

      The same battery powering the starter of a car is part of a flow (fossils fuels into heat then into rotational energy which is converted into electricity which then is changing the chemistry of the battery so it can later start the engine again after the car ran out of gas).

      Stock can never take over power. Power is the flow of energy per unit of time. The opposite of a stock.

      • Thanks RH. When the flow of energy stops, the flow through BTC will also stop. In that case its better to have your wealth in stock (gold and silver). Imho.

        • Thanks for the reply. The flow of solar energy will continue for many millions (if not billions) of years. But you are right. Eventually the sun will stop shining. I doubt however, that we (as a species) will make it to that point in time. Enjoy your stock and make sure you do not lose it !

          • Maybe, just maybe, i will be able to exchange a part of my stored energy for something productive. Like a small farm. My crops could enjoy the sun. Without hope, we’re dead.
            Pity i lost a big part in a boating accident. Watch your back RH. And thanks.

          • Actually, whatever will is still alive at the time will be BURNING up before the sun stops shining. Google “sun red giant” and you’ll find loads of stuff on the fate of our main energy source (yes, fossil fuels are also nothing els but stored solar energy if you think about it).

  2. The increasing difficulty in supplying cheap oil to economy already beleaguered with high debt will cause the economy to turn down faster than the rate of decline of the oil supply, implying a relative “surplus” of oil in a dying economy. This counterintuitively will cause the price of oil to decline.
    Am I understanding this correctly?

    • DisappearingCulture | March 25, 2017 at 9:13 am | Reply

      Hubbs,

      I’d also like to know if you if you are “understanding this correctly”, because you wrote a very succinct summary. Sounds good to me.

    • This is what Steve and the Hills group say. I’m not sure about the price though. In the other scenario they will inflate the system in overdrive (prices moving up once more) before the terminal decline/collapse of the global economy in a global hyper inflationary event that we already seem to have started. The price right now is too low for producers to operate profitably and too high for the broke consumers. If free money is given to the consumers – which may happen in different ways than is already happening, then all price predictions down to the old lows and lower are off the table. One thing is sure though. A guaranteed ever falling EROEI will ultimately collapse the production of fossil fuels, and then it is game over for this fiat system and the world as we know it. What is less clear is the timing and the route we take to get there. Steve thinks this is relatively close at hand (a few short years), and he may well be right… We’ll find soon enough and hopefully can hopefully still share our experiences here, though I highly doubt it; TPTB (or energy) will at some point pull the plug on the www.

    • Hubbs,

      Yes…. that is a pretty good definition. Zero interest rates and the massive money printing since the crash of 2008, allowed the shale oil and gas industry to prosper, or should I say, to function. Without ultra-low interest rates or money printing, a lot of that shale oil would not have been produced.

      The Low interest rates accomplished two things. 1) it forced investors looking for yield to put their money in higher risk ventures such as shale oil and gas production. Because interest rates were low, the shale industry was providing decent yields to attract investment. 2) Low interest rates allowed shale oil companies to service their rapidly increasing debt with low quarterly or annual interest on debt payments. If real interest rates were much higher, they could not afford to pay much higher interest payments.

      Money printing allowed Americans to continue business as usual for a while. By pumping Trillions of dollars into the U.S. economy, it back-stopped the collapse and allowed Americans to continue buying crap they didn’t need with money they didn’t have. Thus, it gave the United States another boost to continue CONSUMING like mad.

      When the next CRASH occurs, this is the one that we don’t PRINT our way out of. That card has been played already. It will be very interesting.

      steve

  3. Steve,

    I do appreciate and respect the work that you do. I am however struggling with the assertion that Real Estate is an Energy IOU but gold is a store of economic energy.

    Refined gold has taken energy to produce and, due to declining ore quality, will require an ever increasing amount of energy to produce in the future. So, we can say that is definitely an energy sink but I don’t know of any mechanism to release that energy back to do work in the future. So, whatever value it has in the future it is not due to releasing any stored energy.

    Given that gold is not an energy source, its future value will be determined by its scarcity and the psychological preference that people MAY have to own it versus any other uses for their money.

    I think it easier to make a case that real estate is ‘stored economic energy’ because it can provide the utility of shelter and that can be to one’s direct benefit (by living there) or provide an income stream by renting it.

    The value of real estate will be subjected to the supply/demand and also impacted by taxes and maintenance/entropy. Gold also is subjected to the same forces: supply/demand, taxes and, though it does not decay, it needs secure storage that will erode some of its value.

    • A. Lurker,

      You bring up some excellent points to discuss. Actually, I am glad you did because I would imagine many other people are thinking the same way.

      While it is true that less and less gold will be produced as oil production declines, there is still a lot of it around the world to be used as a STORE OF VALUE or MONEY. Same with silver. There is still gold around that was mined 2,000 years ago.

      However, the difference between GOLD & REAL ESTATE is that gold can still be used in the future as a STORE OF ECONOMIC ENERGY because we will be using more HUMAN LABOR once again. As oil production declines, we will have to be doing more work via human labor. Thus, gold will still store ECONOMIC ENERGY, it will just be more in the vein of human labor or reduced energy production.

      Most real estate will not function well as oil production declines. THIS IS THE IMPORTANT THING TO UNDERSTAND.

      If one owns a very modest, small 3 bedroom 2 bath home in the country about 1-1,500 square feet on a few acres with small garden and orchard, it will be worth more than a $750,000 McMansion on very little land in a typical suburb. Why? Because a typical suburban home consumes a lot of energy in its use or maintenance.

      A typical suburban home needs to have a car or two in the garage to get everyone to work, school or the supermarket. Suburban homes use electricity to heat or cool, or natural gas as heat and cooking. Furthermore, the millions and millions of suburban lawns have to be cut, and most use gasoline powered lawnmowers. The maintenance on a typical suburban home must be done by the homeowner or service technicians that all consume a lot of energy.

      I could go ON AND ON AND ON…. However, the typical suburban home will become increasingly DYSFUNCTIONAL in a peak oil scenario.

      Which means, as oil production declines, automobile traffic will decline as well. Less traffic means less economic activity. Less economic activity EQUALS falling housing prices and values. If the U.S. housing market experienced a 30-35% decline 2007-2009, what do you think it will be like when the next PERMANENT CRASH takes place??

      I see the value of a typical suburban home falling 50% for starters, and 75-90% (or more) as the collapse picks up speed.

      steve

      • Thanks for clarifying. I guess I was not comfortable with the idea that all real estate is equally bad. Investing in owning your own home debt free still seems like a good investment to me.

        The worrying thing about the scenario where real-estate goes down 90% due to decreased economic activity is the potential collapse of social order. One cannot assume that in that scenario things just wind down linearly. I cannot imagine the chaos that would ensue and that would make investment values a secondary concern to survival.

        The issue of gold being a store of economic energy is still a bet, a guess. I think it is likely that it is the right guess because of gold’s history as money but I don’t see how one can be sure of that.

        • A. Lurker,

          Yes, the disintegration of the Suburban Way of life may be quite CHAOTIC. And yes, there is no guarantee that precious metals will provide us with RICHES or the ability to BUY lots of things in the future. However, we know that STOCKS, BONDS and REAL ESTATE values are going to plummet, that is a given. So, there isn’t much else that I can point to as a GOOD OPTION to store wealth.

          So, given these perimeters, owning physical gold and silver will likely provide BETTER OPTIONS in the future than holing onto INVESTMENT REAL ESTATE, STOCKS & BONDS.

          steve

  4. This all makes good sense…but…there’s a major elephant about to walk into the room which will change everything and invalidate the entire EROI argument. There’s a considerable amount of ‘smoke’ in the field of LENR (Low energy nuclear reactions) research appearing right now. At some point, probably within 10 years, this will turn the reliance on oil for energy on its head. LENR will likely provide almost limitless energy at a negligible cost, with none of the associated waste issues of conventional nuclear reactions. It’s certainly a field of research that should be taken into account when trying to work out where all the current immense problems the world faces in terms of debt and energy will lead.

    • DisappearingCulture | March 25, 2017 at 9:16 am | Reply

      Will believe that IF and WHEN it happens to any degree. Right now that’s just hope. And, what replaces liquid fuels that powers trains, vehicles, and aircraft?

      • Liquid fuels are just a storage medium for energy. Given enough energy, liquid fuels can be produced in a plant. For instance, by making methane out of hydrogen and carbon dioxide. Once methane is available in huge quantities. gasoline and kerosine can be produced easily. The problem is energy.

        • “Liquid fuels are just a storage medium for energy.” -Robert Happek
          I disagree. Current liquid fuels are the source of energy (much more energy contained in the gallon than it took to get the gallon from the well to your fuel tank), unlike a chemical battery that takes energy to charge from some other source of “excess energy”. Liquid fuels are incredibly dense sources of energy when compared to any batteries/hydrogen storage of any kind. You may be correct in the future or in embargoed South Africa of the 1970’s (SASOL Fischer-Tropsch carbon reforming made synthetic crude to provide Diesel at about $30/bbl when Saudi crude was $12/bbl).

      • It is hope at this moment, but having spent many hours researching this fascinating field of new science, I would say it’s not a matter of IF but a matter of WHEN. If we want to believe all great discoveries around energy and understanding ‘matter’ have been made, then we can dismiss it. I think this would be a mistake. Also, to ask the question ‘what replaces liquid fuel’ misses the point. Current engines that require liquid fuel will become obsolete, as was the case for steam power! I would simply suggest caution in thinking that there will not be a breakthrough, probably quite soon, that will radically change our reliance on oil for energy. Here’s a website where you might want to have a look to understand more about LENR http://www.e-catworld.com/what-is-lenr/ . There are many labs across the world, some within major organisations and government centres, conducting the research and producing positive results, for which the mechanisms are not yet fully understood. Let’s hope the breakthrough happens sooner rather than later…although the geopolitical destabilization ramifications from such an event could lead to a whole different set of other problems!

    • Since the beginning of nuclear power roughly 60 years ago, people always talked about “unlimited” and “too cheap to meter” energy. It did not happen yet.

      • Light water reactors do one thing well: make fuel for bombs. Without the want of bombs, light water reactors are non-economical.

    • In the 60ie they talked about nuclear fusion being 40 years away. Today it’s till the same 40 years. Maybe Thorium would be a road that *might* work, but then again, how to do the big-scale thorium mining, refining etc of the thorium fuel without the reactors running in the first place? It will be tough, no matter what, and solar and wind will only cover a small part of what’d be needed. The global economy will be forced to drastically scale down it’s energy consumption, there is no way around that IMHO.

    • Andrew,

      Gosh, you don’t know how many emails I receive on the ENERGY SILVER BULLETS that are going to save us all. I probably have received dozens on the LENR. The one important factor that LENR fails to address is that it takes FOSSIL FUELS, to mine, extract transport and manufacture the LENR.

      Also, our problem really isn’t with generating electricity, rather its the LIQUID FUELS that are our real problem. The LENR first fails the test of being produced with the use of FOSSIL FUELS and second it does not provide liquid fuels that are the lifeblood for our society.

      If we were serious about transitioning away from oil, we should have done so 20-25 years ago. Trying to introduce LENR now is pointless as we don’t have the cheap and abundant energy to do it.

      Lastly, we have a JUST IN TIME INVENTORY system in the United States that only functions on liquid fuel transport. When oil production seriously declines, that will break down. Thus, the WONDERS of having thousands of food products at the supermarket will be a thing of the past.

      steve

      • Liquid fuel transport *and* solid fuel transport (= fossil fuel). Solid fuel transport in the form of steam locomotives transformed commerce in my country in the 19th century as it allowed the transport of goods nationwide. IMO as the fuel for transport runs out, we will see reverse “globalisation” where more and more goods are produced and consumed locally. For example, my town butcher sourced his meat from local farmers within 15 miles/25 km of his butcher’s shop, not from 100’s (Europe) or 1000’s of miles (New Zealand) away. It also spells the demise of the out-of-town or edge-of-town mall, because no-one will be able to afford liquid fuel transport to travel to these malls to shop. This already applies to people who cannot afford a car or cannot afford to use public transport.

      • Thanks for your reply Steve. I have to respectfully disagree with you. I completely understand why people are quick to dismiss LENR as ‘snake oil’. When I first came across the research several years ago, having an R&D engineering background, I needed to really satisfy myself that there was a likely phenomena at work which current materials science and conventional nuclear physics does not yet fully understand. In actual fact ‘conventional’ understanding is rapidly catching up and there have been many recent papers published which seem to be narrowing down the mechanisms at play. One of the reasons I became so interested in energy is because I decided to invest in PM’s having also reached a conclusion that sometime very soon, they’ll be one of few ways to preserve wealth. I wanted to understand what curveballs might threaten my PM strategy, i.e. in a nut shell, what could save the global economy from certain meltdown. My conclusion was a new energy source such as that resulting from an LENR breakthrough. In all honesty, I think it’s a little more complex than that, given the repercussions likely to result from such a disruptive discovery, but it would fundamentally change the EROI narrative. It’s also probably going to come too late to be of help in the immediate future. Again, I must say, with respect, it seems a little naive not to think there’s at least a reasonable probability that there will be a breakthrough that is off the radar of conventional current understanding, given the results that are now being recorded in this field of research. This is not just wishful thinking and hoping for magic silver bullets. It’s considered thinking backed up by considerable research. I disagree that LENR would fail to address the problem of fuel extraction. Any power system of this nature would be creating a vast amount of power in excess of that needed to split hydrogen from water, or mine the few grams of nickel, or whatever metal ends up being required for the reaction. Why are liquid fuels the lifeblood of our society? This might be true today, but there’s no fundamental need for a liquid fuel. You do not need a liquid fuel if you have an alternative energy source of sufficient power density. The LENR process will likely produce power in orders of magnitudes greater than any chemical reaction can. I would simply urge people to remain a little more open minded about the possibilities that lie ahead even if the ideas do upset a simplified way of looking at oil and extrapolating its ongoing assumed relevance as an energy source. There’s some good material here that’s worth reading about one of the companies striving to commercialise LENR – http://brillouinenergy.com/
        Only time will tell!

  5. Yes, I still do not get the idea that the price of oil will decline as it runs into shortages and increased production costs. It just doesn’t make any sense to me that buyers will not buy the cheaper it gets. The corrolorary is that the higher the price results in more demand? Steve has never explained this in anyway that makes any sense to me. Is there a link?

  6. OK, I will try another approach: We have four laws of thermodynamics:

    Zeroth law of thermodynamics: If two systems are in thermal equilibrium with a third system, they are in thermal equilibrium with each other. This law helps define the notion of temperature.
    First law of thermodynamics: When energy passes, as work, as heat, or with matter, into or out from a system, the system’s internal energy changes in accord with the law of conservation of energy. Equivalently, perpetual motion machines of the first kind are impossible.
    Second law of thermodynamics: In a natural thermodynamic process, the sum of the entropies of the interacting thermodynamic systems increases. Equivalently, perpetual motion machines of the second kind are impossible.
    Third law of thermodynamics: The entropy of a system approaches a constant value as the temperature approaches absolute zero.[2] With the exception of non-crystalline solids (glasses) the entropy of a system at absolute zero is typically close to zero, and is equal to the logarithm of the product of the quantum ground states.

    Which one(s) of these laws makes me decide (or be unable) to buy gasoline (say) when it’s price falls? What is the mechanism?

    • Robert Happek | March 26, 2017 at 1:55 pm | Reply

      The price of gasoline is an expression of equilibrium between the supply of gas and the demand for gas. The supply of gas depends on oil production and the ability of refineries to refine that oil into gasoline. The demand for gasoline depends among many other things upon monetary policies. In times of hyperinflation, the price of gasoline will rise independently of what oil companies do. In times of severe deflation the price of gas will fall as most people will not be able to pay for the gas. So the price of oil is ultimately also a function of monetary policies. Predicting falling oil prices due to thermodynamics laws alone does not make much sense. A statement about prices is always a statement about monetary policies.

    • In short, it takes X amount of energy (oil) to produce Y amounts of new energy. As oil is slowly but surely depleted, it takes more and more every (X) to produce the same amount of Y. It Used to be X/100 = Y, currently we’re closer to X/10 or even X/5. As X approaches Y over time it gets less and less economic until no oil will be produced (think X=Y), irrespective of price and debt.

  7. R. Stephen Dorsey | March 25, 2017 at 10:54 am | Reply

    I agree with A.Lurker that a piece of realestate is also a store of value. It can be owned outright (no debt) and many places can be heated and provided with water and food just as in the old days. Criticizing realestate as a bad investment in the same category as Bitcoin and bonds is a false argument. Also, if a corporation is viable, their stock may value or devalue but a stock, provably owned is not a bad investment necessarily. If overpriced, of course it is but its value can fall, then rise again, depending upon what happens to the economy and society. I think the argument against realestate and stocks has been way too broad brush.
    What point Mr. St. Angelo DIDN’T make was why the price of oil is going down. He makes a good case for EROI, then talks about the price of oil dropping but doesn’t explain why. The price of oil in the US has dropped because the economy has been poor because our productive jobs have been offshored and the US working population now has much less income to afford oil and oil-related products. That was a POLITICAL and BUSINESS decision based on the desire to increase profits by offshoring – which has nothing to do with the EROI of oil drilling/processing.

    • R. Stephen Dorsey,

      You also bring several points worth discussing. Stephen, I believe the reason you don’t see what I do is that you have to LOOK FAR AND WIDE. I have been looking at this for years and it has made a lot more sense recently.

      While I stated a small modest home in the country on a few acres will be in more demand in the future as oil production declines, its value will also decline… but a lot less than a 5,000 square foot McMansion in the suburb. This is the difference. The modest home in the country can still function during the collapse of oil production, whereas the McMansion is completely useless.

      I gather you have not been listening to my interviews, especially the THERMODYNAMIC OIL DECLINE with Louis Arnoux. If you have been listening to my interviews, you would understand WHY THE OIL PRICE WILL DECLINE.

      I have provided many examples why this is happening, and it really has nothing to do with SUPPLY & DEMAND. It has to do with the cost of production. While supply and demand do add volatility to the price of oil, the falling value of the oil is the reason the OIL PRICE WILL CONTINUE TO DECLINE.

      steve

  8. Steve, what do you think will happen to the major oil companies in the next 10-15 yrs? You have Saudi aramco ipo coming up and big oils balance sheet exploding with debt. I personally see mergers and downsizing coming. I’d be interested to read your opinion on their future.

    • What makes you think their future value will be measured in currencies?

      • The British paid for access to the Aramco super fields in gold Sovereign coins- 10’s of thousands of them. Old school Arabs didn’t trust paper money, as commanded by Mohammed in the hadiths.

    • Adam,

      That is a hard one to forecast. To try and continue business as usual for a while, we may see Central Govt’s step in and try to backstop the oil industry. However, Large Centralized Systems will be impacted the most as the EROI continues to decline. So, making LARGER and LARGER oil companies by mergers did work for a while, but this will not be a solution in the future.

      I think the the U.S. and Global oil industry will just continue to disintegrate as the oil price falls and as the Hundreds of Trillions of dollars of Debt and Derivatives implodes. I just see a much smaller oil industry going forward, but I can’t really explain how it will look like.

      steve

      • Steve, thanks for the reply because I have ran countless scenarios through my head and come up with more questions than answers. We know what the predicament is but not necessarily what the final outcome will look like and that’s just another reason to own pm’s

  9. James Papsdorf | March 25, 2017 at 6:27 pm | Reply

    There is a new energy source being developed by a Dr. Mills which involves developing a constant plasma of unique hydrogen molecules which produce massive light waves to drive nearby solar panels. The claim is that this can produce electricity at about a tenth of its current cost. I belive the company is called Brilliantlightpower.com, and it looks very convincing. The company plans to distribute the stand alone generators in 2018 and they are scaleable. Current global electrical capacity is about 12,000 Gigawatts and you would need about 12,000 metric tons of silver to replace this with this new system, which is about 43% of the world’s annual silver production.Will this serve to prevent the collapse as EROI theory predicts? Incidentally the process uses silver as an electrode to initiate a self-sustained plasma. Silver is not consumed in the process, but water is.

    • James Papsdorf,

      Brilliant Light Power is another “supposed” ENERGY SILVER BULLET that I receive in my email box that some believe will SAVE THE DAY. Unfortunately, Brilliant Light Power is another version of SNAKE OIL peddled by salesmen in the early 1900’s.

      Brilliant Light Power was recently changed from its prior name of BlackLight Power because it never produced what its inventor said it would. So instead, they decided to put RED LIPSTICK ON AN OLD PIG. And that is, they decided to change the name to get more SUCKERS-INVESTORS.

      This is the oldest trick in the book and is used quite a lot in the precious metals mining industry.

      steve

  10. What will be the price of oil that can’t get to market?

    That is why both views are correct regarding oil: shortages increase price in final products – petrol, yet oil that cannot be economically processed will not – low price in raw oil.

    • To borrow from Jim Sinclair: The value of a non-performing contract is Zero.

      The value of oil-in-the-ground that will never come to be used is zero (for our civilization).

  11. Take a look at future eroei and the energy cost of energy, for example in the US:

    https://surplusenergyeconomics.files.wordpress.com/2017/03/united-states-2-01-317.pdf

  12. Precious metals will be one of the few assets that will protect wealth as the U.S. and global oil industry disintegrates.”

    money != wealth.

    “The reason physical gold and silver will protect wealth is because they are stores of “Economic Energy”, while Stocks, Bonds & Real Estate are “Energy IOU’s.”

    it’s amazing how someone can be so overcome by normalcy bias, observing correctly that stocks bonds and real estate (note: by this he means “skim” and “rentals”) are mere claims yet somehow failing to realize that gold and silver are just the same. gold and silver store nothing – they merely are good money and have utility where markets exist. in the “energy collapse” he describes there will be few to no markets of any kind. for exactly precisely the same reason that those infestors will wave a stock or bond or deed but get nothing, they’ll flash a gold or silver coin but get nothing – because there will be nothing to obtain.

    • DisappearingCulture | March 28, 2017 at 5:45 am | Reply

      “in the “energy collapse he describes there will be few to no markets of any kind. for exactly precisely the same reason that those investors will wave a stock or bond or deed but get nothing, they’ll flash a gold or silver coin but get nothing – because there will be nothing to obtain.”

      Let’s hope it doesn’t get that bad. At least not bad everywhere at the same time. The most likely bad areas…population density. Particularly in very cold winters [northern…like Chicago], and hot summers [like Houston or Phoenix].
      G & S may be like insurance. In terrible scenarios [massive cat 5 hurricane] some insurance company might bankrupt on their obligations. You hope your company is more solvent.
      Or maybe G & S give you a buffer…long enough to say your prayers? lol

      • “At least not bad everywhere at the same time.”

        oh no, not everywhere at the same time. but any location that does not rapidly and severely degrade will be outweighed by those regions that do, and will be like a mouse surrounded by cats.

        “G & S may be like insurance. In terrible scenarios [massive cat 5 hurricane] some insurance company might bankrupt on their obligations.”

        an excellent analogy.

        “maybe G & S give you a buffer…”

        here and there, sure. but I think most people will get further with a gold coin and a gun and a truckload of food than with a gold coin alone.

      • “Let’s hope it doesn’t get that bad.”

        food and water ship because it’s profitable to do so. as soon as the profit ceases, the shipments will rapidly decline and then cease – and once ceased this will generate a positive feed-back loop of decline and there seems to be no method or cause to restart those shipments. if you look around and see that the only source of food in your neighborhood is a grocery store, things will get terminal in a hurry. if you look around and see backyard gardens everywhere, things will be very bad but may stabilize after a few years, or decades, or generations.

  13. Apparently shell can pull oil out of the Permian and be profitable even at 20$ lol

  14. Hi Steve, I’m a petroleum engineer so I find this all very interesting. I’m trying to understand how the price of oil will continue to fall; In one of the Hill’s group charts it shows a positive correlation between the price/barrel and energy costs for extraction. As the energy costs for extraction are rising, wouldn’t we expect the price/barrel to continue to rise?

    Thank you!

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