Martin Armstrong, BitCoin, Electronic Money & the Precious Metals

There is this notion that Bitcoin or “Electronic Money” will become the new wave of the future.  While this sounds like the inevitable outcome in our high-tech society and economy, I believe we will eventually head back towards a more modest physical system of barter and trade.

Martin Armstrong wrote this as it pertained to Bitcoin & electronic money in one his recent blog entries:

We are headed into an electronic currency regardless of what people say. Bitcoin will not survive, but it is useful to get people accustomed to a cashless society. The difference will be that the government version will be no ”anonymity”  and what it being touted as a benefit is the elimination of crime – drug dealers will be eradicated (plus the government will get 100% of all its taxes).

This is why they have been waging war on gold. The only real role for gold will be as an alternative. currency not to the paper dollar – but to the electronic dollar. What maybe more practical is silver coins. But this is why Europe is also moved to a 19% tax on silver starting January 1st, 2014 (see former post). It is not that there is some dark sinister conspiracy against keeping gold prices down, the only concern about government with respect to gold is the untaxable underground economy. France has made it illegal to buy or sell gold for cash or to mail cash. The US has made it illegal to store cash in a safe deposit box. Even India banned gold sales without a license.

This is all about the Sovereign Debt Crisis, the collapse in socialism, and the driving deflationary trend as government clamps down on everything that moves. The precious metals are NOT going to be a hedge against the dollar, hyperinflation, or any of the other nonsense the gold promoters have spun to sell whatever they can like snake oil salesmen. The role of the metals will be as an alternative currency to ELECTRONIC when they terminate “printing” paper money. Wake up and stop listening to propaganda. Open your eyes and look at the real world. It is closing in a hell of a lot faster than people suspect.

FULL BLOG ARTICLE HERE

At face value, Martin actually makes a lot of sense here.  However, he fails to incorporate the coming OIL-ENERGY constraints into his forecasts.  This is indeed the biggest flaw in his excellent work and forecasting based on his “Pi cycles.”

I have read a great deal of Martin’s work, especially his long detailed article on the Roman Empire.  Martin’s company had acquired a great deal of the different ancient Roman coins that were minted showing each Emperor-Ruler on one side and on the back, a historic event of the time.  Basically, the Roman coins chronicled the history of the Empire.  As a researcher, this is the kind of work we love to find.

That being said, the most important concept of money-currency that individuals and investors need to realize is this simple equation:

ENERGY = MONEY

I believe analysts cannot correctly forecast aspects or events in the future as they pertain to the precious metals, mining, paper-electronic currency, governments or the overall economy unless they have a good grasp of the energy situation.

For example, how can there be a viable electronic monetary system in the United States if the energy supply that powers the electrical grid starts to decline and suffer shortages?  After the banking and housing collapse of 2007-2008, many small towns and cities were shutting off public street lights and reducing services when their tax revenue plunged.  This will only get worse during the next phase of the economic collapse.

Energy has been the vital component of our complex infrastructure that allows the economy to function and flourish.  We are already seeing cracks in the system as our infrastructure is starting to suffer from years-decades of neglect.  There are on average 850 water main breaks in North America every day.

Water Main Break Clock

(courtesy of Watermainbreakclock.com)

You can check out the Water main break clock as it continually updates its figures.  Maintaining the infrastructure not only consumes a great deal of energy, but it is also becoming increasingly more expensive.  Estimates show that to update the entire U.S. water infrastructure would be over $1 trillion.  Where are the funds going to come from to update this system when we are now suffering from $17+ trillion in debt?

Okay, let’s get back to the ELECTRIC aspect of money-currency.  As I stated, it takes a reliable electric grid to allow an electronic monetary system to work.  Not only are we suffering from problems with our water systems in the U.S., we are also dealing with increasing problems with the electric grid.

According to the article, Aging U.S. Power Grid Facing Game-Changing Threats:

It notes that the country’s electric grid is more than 100 years old and was designed to carry much smaller loads. The study quotes figures from NERC, the nonprofit North American Electric Reliability Corp., that 70% of the grid’s transmission lines and power transformers in the U.S. and Canada are now more than 25 years old, while the average power plant is more than 30 years old.

 and then we have this from another article, BAD NEWS: The U.S. Power Grid is Getting More Expensive and Less Reliable:

U.S. electric customers are now paying 43 percent more to build and maintain local power grids than they did back in 2002. At the same time, the grid is also becoming less reliable, with blackouts now taking 20 percent longer to fix.

….Problems with the power grid now cost the economy some $150 billion per year.

What is taking place in both the aging and decay of the U.S. infrastructure can be attributed to the falling EROI – Energy Returned on Invested.  I have not discussed the aspect of the EROI on this site much, but I will be focusing more on it in the future.

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However, to put it simply… the larger and more complex a society becomes the more energy it takes to sustain and run it.  Thus, our U.S. economy is suffering from the same ravages of a falling EROI as did the Roman Empire.

If we look at the chart below, we can see the EROI ratios of U.S. oil & natural gas.:

US ERIO Ratios

(chart courtesy of David Murphy-TheOilDrum with my annotations)

What this chart represents is the falling EROI of U.S. oil and gas since the 1930’s.  In 1930 the U.S. could produce 100 barrels of oil for the cost of one barrel of oil in energy.  This has continued to decline and in 2000, it fell to 11/1.  Thus in 2000, the oil industry could only produce 11 barrels of oil for the cost of each barrel of oil.

Folks, it just takes a great deal more energy to produce energy today than it did just a few decades ago — and a hell of a lot more than during the 1930’s.

Shale oil with an approximate EROI of 5/1, makes the overall EROI of the U.S. even lower.  The United States was built on a high EROI of energy and is now coming under stress as the present EROI is falling below the carrying capacity of the society and economic system.

For all those who still don’t believe that shale oil will peak soon and think we are going to become energy independent with this stuff, fail to realize that the shale oil’s EROI of 5/1 is too low to sustain our complex society and economy.

Furthermore, there is now a growing concern by governments that the peaking of global oil production will have a severe negative impact on the U.S. and world economies.

Imminent Peak Oil Could Burst U.S., World Economic Bubble – Study

A new multi-disciplinary study led by the University of Maryland calls for immediate action by government, private and commercial sectors to reduce vulnerability to the imminent threat of global peak oil, which could put the entire US economy and other major industrial economies at risk.

The new University of Maryland study, in contrast, conducts a review of the scientific literature on global oil production and argues that the bulk of independent, credible studies indicate that a “production peak for conventional oil [is] likely before 2030”, with a “significant risk” it could occur “before 2020.” Unconventional oil such as Canadian tar sands is “unlikely to expand enough to fill the gap”, and this also applies to “shale oil and gas.” Shale wells, the study argues, “reach their maximum production levels (peaks) much earlier than conventional ones and are therefore difficult to operate profitably.”

As I mentioned in a prior article, the CEO of Core Lab, Dave Demshur believes the global peak in oil production will occur in the next several years.  Core Labs has over 70 offices in 50 countries and their business is to analyze drill results from the largest oil & gas companies as well as 100’s of smaller ones located throughout the world.  If anyone has an idea of what the future oil production outlook will be, Dave Demshur is certainly one of the most qualified.

This is something that Martin Armstrong as well as the overwhelming majority of analysts fail to comprehend.  While their forecasting and opinions receive a great deal of weight and exposure in the media, their opinions will most certainly fail the test of time because they are doing so in an “Energy Vacuum.”

Even if the U.S. did try to transition to an electric monetary system, its lifespan would be very short due to the coming energy constraints and the falling EROI.

I believe the viability of either Bitcoin or an electric monetary system will be problematic and not functional in the U.S. and world as we enter into a new more local economic paradigm due to a declining energy base.

Gold and silver will provide a necessary function as money (as they have for over 2,000+ years) at some level because they are a store of “Economic Energy” (term by Mike Maloney) and can be used in either a high-tech or more local low-tech environment.  Bitcoin and electronic currency will not be able to function in a society that will have to survive with less energy and technology in the future.

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28 Comments on "Martin Armstrong, BitCoin, Electronic Money & the Precious Metals"

  1. I completely disagree with everything Mr. Armstrong thinks. I stopped reading his pablum 2 years ago. To his generation, gold is a barbarous relic. Period.

    Who among us would possibly trust an electronic system in a country (U.S.) with a third-world infrastructure susceptible to crashes or outright failure? How many NASDAQ flash crashes or MF Global style events must occur before all loss of trust in paper money IN ANY ITERATION occurs? And as far as international banking and trading goes, we’re already in the electronic age of currencies. Trading futures contracts to the tune of 500 tonnes of paper silver in a day to crush the physical price is proof of it.

    What difference does it make how banking will be done in the future anyway? Won’t gold be convertible to these electronic currencies? I refuse to believe that digits on a screen will expunge forever gold’s unique role in economics. Perhaps it is Mr. Armstrong who needs to wake up and stop listening to the propaganda. Let us also not forget that his wealth is the result of the current fiat petrodollar system (THE ONLY SYSTEM HE AND HIS ILK HAVE EVER KNOWN), so the last thing this clown wants is ANYTHING be it bitcoin, gold, silver, etc to undermine his HFT trades and OTC derivatives. He, like all traders, are the main, only recipients of the government largesse and Fed counterfeiting- If for no other reason than to protect his digital zeroes perceived value, lest they have no purchasing power in the real world! It is he who resides in the matrix, not those of us seeking sound money with enduring value.His paradigm is collapsing and he knows it.Gold is the only antidote and the fewer people who have it the better.

    To say that governments are clamping down on gold to prepare its citizens for some electronic currency system is flat out wrong. Governments are clamping down on gold ownership because people ARE RAPIDLY losing faith in some piece of paper(or digital zero) created on a whim, contributing nothing of any tangible value to their life or society at large. Furthermore, if there truly is no hedge against an electronic system like he believes, what should one do to protect themselves? Have faith in those electronic credits while peacefully surrendering all manner of future prosperity to the fascist regime in control at that point? No, gold will always be wealth, it will always be coveted, and will always have its place.

    • I wish I could believe what Scott says. I am an advisor and people believe what they say in the mainstream press. They believe the US dollar is king and will always be that way, I have lost lots of clients for being a truth seeker and saying it the way it is…it is over for the real money crowd.
      The banks own the politicians and the regulators. Joe retail is as dumb as a door knob…a door knob who thinks they know which is even more scary.

      • Fortunately, Joe door knob does not control the global financial system, going forward that control is passing from West to East, if you believe all the reports, which I do, that the world’s gold is moving to places like China, India and Russia then maybe the Eastern nations will make their currencies backed by gold and we in the West will be forced to do the same.

        This will be a very negative events for most Westerns, but as some of the articles on this blog layout in plain terms those wise enough to purchase physical gold/silver now will be making the best financial decision for their futures of a lifetime.

        • I agree that with gold moves also the power to change the future. So when enough gold moves to China, she will be in a position to strike a deal with the current power — the US. But it will have to be a deal and not a revolt. China will not be in a position to destroy the dollar, it will only be in a position to demand rational change. Unless the Chinese communists are prepared for an outright WW3, that is. Remember, the dollar is backed by a massive US military force… The dollar is certainly at the end of its life-cycle but it won’t simply go away for decades to come. Instead, the Chinese will work towards a new monetary system which will include gold in some portion. According to my preliminary calculations, that portion will be somewhere between 15-20%.

          • anon @ Nov 21 @ 3:14. I agree. The real-time tool of USD/oz (floating) is the intellectual property of the US and if China has the physical reserves then they could combine resources for a huge global gold weighted payment system where weight is the unit of account for digitized currency. It combines debt-free gold with instant global liquidity in real-time. I like the content. It’s the structure that bothers me. I’d much prefer to see market support for the small , competitive, gold based payment processors rise from the grass roots. The competitive forces are hugely important, IMO. Gold is money …. now with completely scalable liquidity in real-time.

      • “I wish I could believe what Scott says. I am an advisor and people believe what they say in the mainstream press. They believe the US dollar is king and will always be that way, I have lost lots of clients for being a truth seeker and saying it the way it is…it is over for the real money crowd.”

        Americans may think that the US dollar is king. However the rest of the world is increasingly turning away from the USA and US$ because of the ongoing appalling fraud and manipulation of markets by Wall Street, the non-stop warmongering of the rotten and corrupt US Government and global spying by the NSA. The USA, once admired, is now globally despised and a movement to a new financial system without the US$ at its head is a certainty and coming soon. Gold is certain to feature prominently or why on earth would China and Russia be massively increasing gold reserves. This system also will not be controlled by the US/UK criminal banking system. Why on earth should the rest of the world pay multi-billions in transaction fees/commission to US banks every time they want to buy oil and other commodities? It is outrageous.The rest of the world has had enough and that is why all these currency swap agreements are being arranged with China. The US dollar will be completely bypassed. The Chinese PBOC recently announced that they would no longer continue to build up foreign currency reserves which means the Chinese will no longer need to buy US Government debt. The US dollar is finished. It is as simple as that.

        “Remember, the dollar is backed by a massive US military force…”

        The USA is bankrupt. How on earth would the US fund a war against China and Russia when the Chinese are one of the USA’s biggest creditors? The US dollar would simply collapse. It’s not going to happen unless the US wish to start a nuclear war but then everyone would lose. If the US military is so powerful how come they backed off against the Russians regarding Syria? There is a large geo-political shift occurring in the middle-east. The Russians and Chinese are moving into the middle-east and the US is slowly withdrawing. The Russians have been allowed back into Egypt after forty years and are also building a naval base in Lebanon. The Chinese are building a massive oil refinery in Saudi Arabia.

        As far as what Arnstrong says, we basically already have electronic currencies ie US$, Euro, Pound Yen etc. and they have been a disaster. Obviously you need tangible backing of a currency (gold) to limit excessive money printing by central banks.

        Armstrong’s historical writings on such things as the fall of the Roman Empire are fascinating but his discussions regarding the future of currencies are bizarre to say the least. Armstrong suggested that with a digital currency, governments would not need to implement taxes and could create all the currency they needed to pay for expenses. I’m sure that nations like China would be really happy with that. He also claimed that money has never been tangible. Unfortunately for the Armstrong/US crowd it will be China/Russia/Asia dictating how the new financial system will operate, not the bankrupt money printers in the US and UK.

  2. Portable
    Fungible
    Divisible
    Reliable
    Store of value
    Recognizable

    Physical gold and silver are all of these things. They have been and are, the ONLY true money the globe has ever known, since the dawn of mankinds need for trade. This will not change, no matter how much the ‘talking heads’ wish it to change. When all is said and done, physical gold and silver will still be present and accounted, for their lasting value.

    The globe is heading for a new epoch. One of smaller size in all things. The large cities will become nothing more than wastelands of raw materials. Mankind will be returning to an agrerian base, of much smaller population concentrations, in line with what the biosphere can support through biomass.

    The population of the world for thousands of years was approx. 2 billion people. A farmer and his oxen/horses could support himself and four other persons. Then along came the industrial revolution utilizing coal, steam, then oil and gas in conjunction with the internal combustion engine. Now heavilly reliant upon petroleum, a farmer can support himself and ninety nine others. And the human population continues to grow. A break point will be reached.

    When that break point arrives, whether it be the end of petroleum, or some other ending, the biomass of the earth will determine the human population boundaries as to numbers supported. If reverting back to historic norms of 2 billion, then this means 6+ billions of humans will dissapear.

    • The notion that 6 billion people are just going to disappear is tenuous at best. The biomass has been supporting more than 2 billion people for years now. With the ever-increasing degree of technology and innovation, the prospectus that the earth can continue to support more than 2 billion people going forward becomes more probable. If anything, global commerce and interconnectivity are going to increase making local agrarian communities a permanent relic of the past.

      • JTM,

        First.… I am not one who thinks 4 or 6 billion people need to go on the planet. However, the EROI is the rule of natural law when it comes to systems. As the EROI declines, so will the very systems that allow our modern societies to continue.

        Second… the modern food production-distribution system is a huge NET ENERGY LOSER. It takes upwards of 10 units of energy (calories) to put 1 unit of energy (food-calorie) on the U.S. dining room table. Thus we have a 1/10 EROI… a huge net energy loser

        Human farming = 5/1 EROI

        The only reason why our modern food production-distribution system has survived as long as it has is due to the relatively high EROI of oil and gas. Now that it is declining significantly, it is putting pressure on all social and economic systems.

        Third…. Globalism will go the other way as world oil production peaks. James Kunstler discusses this a great deal at his site Kunslter.com. I recommend checking out his site.

        Lastly, we are heading back to more humble, local and simpler way of life whether we do it in a positive transition or kicking and screaming all the way.

        steve

  3. Congratulations to another great article, Steve!

    Regarding the price of energy and peak oil, here is the link to a noteworthy article addressing the question why Buffett is now buying Exxon and Suncor. It seems that Charlie Munger and Warren Buffett do believe that peak oil is real. Munger is even going as far as suggesting the US government should buy up all available oil on world markets and store it in US salt caverns for
    future generations.

    http://seekingalpha.com/article/1845182-why-did-warren-buffett-buy-exxon-mobil-his-partner-charlie-munger-reveals-all?source=email_the_daily_dispatch&ifp=0

    Steve, we need a thorough article investigating the question why buying oil stocks is not the correct response to peaking oil production and declining EROEI ratios. When are you going to write it?

    • Robert,

      I don’t know if you realize, but I spoke with Bill Powers (energy analyst) a few weeks ago and put an article out about his views on the shale industry. He knows a great deal more about energy stocks than I, so I plan on having more of his work on this site as well as what energy companies he recommends in this peak energy environment.

      steve

  4. Steve,

    Thank you for your fine work here. I have read all of your writings since Jim Willie informed me about you. That energy is the pivotal variable in economic growth is so obvious and yet has been discounted by so many analysts is remarkable. As you have pointed out, we are at an inflection point vis-à-vis cheap plentiful energy which was the norm all during the heyday of the British and now American empires. Armstrong’s models are based entirely on the paradigm of cheap plentiful energy. Therefore, his predictions may be completely wrong. Caveat emptor. For myself, I see today’s economy as akin to a person living in an ungrounded house. He lives normally while in the house, though the house is floating at a net 10,000 volts relative to ground. He will do just fine unless he tries to step outside and then ZAP! Gold is the grounding conductor that normally connects the nominal valuations of assets to the real world of energy consumption, labor, fabrication and the like. We have removed gold from this critical linkage for decades. Now, asset valuations are completely divorced pie in the sky from reality. This incredible distortion will continue, seemingly normal and functioning, until some arcing effect occurs, wherein the floating state of credit will crash with a flash and bang down to ground. I would say that declining EROI is effectively reducing the spark gap between artificial nominal valuations and real world sustainable valuations. When EROI drops low enough, probably very soon, we will have our cataclysmic credit arcing event. After the smoke clears above the rubble that was our system of credit, gold will remain, completely unfazed and unchanged, except for how it will be rediscovered by mankind for its unique and storied history and preserver of wealth and foundation of economic growth.

    • Mambino,

      Thanks for your comment. Yeah, I have been following Jim Willie a long time. We email each other several times a week. He is one of the few out there that REALLY HAS A GOOD GRASP OF THE SITUATION.

      There seems to be a disconnect between Energy and the World in general by the public. People give the NWO – New World Order too much credit. Yes, they control most of the world and resources, but they are going to be in just as much trouble as the ordinary folks when things get really interesting when the ramifications of Peak Oil finally hits in a big way.

      Glad to have you as a member commenting. I plan on putting out some great info and stuff in the future.

      steve

  5. This is my present email account. The first one is inactive. Old habits!

  6. Good article and reasoning. I’m a big fan of M.A. he makes very learned and relevant points which are contrary to the permabulls positions but which are playing out. He was vilified by Sinclair et. al. for suggesting gold would decline, which it has, his calls for deflation make perfect sense, his experience and expertise in many areas of finance make him second to none in my book.
    He is NOT anti gold just that there is a time and place for everything and the time for gold to decline, per his models, which are proving to be correct, is now. The perma bulls will never suggest it is possible for gold to go down…but it does, insisting they are right when the market is proving them wrong…you have to wake up and look for some one who has called the market correctly.
    As for the electronic currency SRSrocco makes a good point but when the worlds financial system depends on electricity that is precisely where all the resources will be going! As M.A. says , the PTB don’t give a rats arse if you can’t get your money because of blackouts or not, as long as they can get yours and control it. Having said that, I remember reading about a guy who went through Argentinas hyperinflation and remember him saying even under those trying circumstances the power and water remained on….
    Just my 2 cents and if you’ve been following the likes of Sinclair, Franklin mint guys etc. Look at their track record over the last several years, calling bottoms all the way down, issuing buy recommendations all the way down, never a sell. You have to come to the conclusion they have a conflict of interest, is a person whose livelihood depends on you buying precious metals really going to advise you to sell? Or are they just plain incompetent with good intentions? Either way time to look at some one who has been right more than they.

    • Kiwicox,

      Thanks for the reply & you brought up some great points. Let’s discuss some of them.

      First.…If we agree that the PTB or the NWO want to make sure that they have an electric system so they can have an electric currency… then why in the living Hades is China, Russia and great deal of other countries buying gold hand over fist? I would imagine the PTB & NWO are in these countries… correct?

      Second…. yeah Sinclair has made some bad calls, but I will tell you, Armstrong has too. I was reading all his stuff while he was in jail and he put out a great deal of Pi-cycle charts on this and that… and a many did not happen. Of course a TA chartist always puts a disclaimer in the chart so their forecast wasn’t wrong. His followers never remember his WRONGS… only his RIGHTS

      Third… hyperinflation in Argentina while having power is different than the peak of global oil production. I am not saying this is going to occur tomorrow, however each passing day the situation will get worse. Also, hyperinflation is a passing event, while the peak of global oil production is forever.

      Fourth… you don’t know how many of my readers have sent me an email on their subscription service that told them to keep buying the precious metal stocks on the way down. I wouldn’t have done it. There are two big subscription services out there that I have no respect for. That being said, I believe the primary silver miners will be one of the best investments in the future.

      Lastly, the price of oil has quadrupled since 2003. This has less to do with money printing and more to do with the peak of AVAILABLE NET OIL EXPORTS.. The NWO didn’t contain that price did they?

      I realize there are no guarantees in life, but I rather own the precious metals than anything paper or electronic. Call me old fashion, but in the end, I believe that will be the safer place to be.

      steve

      • Thank you Steve for your reply. If I may address a few of your points….
        First, the very fact china, Russia etc. are buying gold is probably a pretty good indicator that TPTB are not in those countries or they are different PTB. I’m not a great believer in the global cabal, the situation in Syria would also suggest same.

        Second, Armstrong has never put himself on a pedestal, claiming the views he has are not his opinions but what the models suggest. He also states its a work in progress not perfect, but he has made some amazing calls. Sinclair States he “feels” gold, he channels Selligman and Livermore etc. He’s also a great believer in the late Sai Ba ba…I have no doubt that Sinclair believes what he says and is providing a free service, very commendable, but personally I think he’s lost the plot.

        Third, sounds to me like you think we are going back to the Stone Age, or in that direction, I don’t buy it. It seems you have devoted a lot more time to this peak oil than most and I do find your argument has merit but I’m sure you know it’s not so much about peak oil per se than peak cheap easily accessible oil. If you believe in market forces as I do then then surely the insatiable demand will find a solution. Unfortunately there is so much info. out there on peak oil etc. I’m not sure what to believe.

        Fourth, good luck on your investments, for the record I’m heavily invested in both gold and silver. Unlike the perma bulls who only call for gold and silver to go higher and therefore create false expectations and therefore hesitation and uncertainty, Armstrong has stated a normal correction of 3-4 years is in order after a top, we have at least one more year to go before the bull market resumes. Knowing and understanding this lets me hold on and look to buy more at a cheaper price while others may cave and sell.

        And lastly, oil has quadrupled since 2003 but so has gold and many other commodities or close to it, so why do you think the NWO hasn’t suppressed oil but has suppressed gold? Why did gold decline from its peak of $850 an ounce for 20 years while everybody was printing money hand over fist for 20 years, isn’t that inflationary?
        Regards….KC.

  7. So Bitcoin is probably bullshit in the long run since it depends upon electric pulses from the matrix. Come to think of it, if there’s a full out collapse, how are we going to avoid multiple Fukishima’s all over the place when the grid isn’t able to reliably cool all those spent nuclear fuel rods?

    However, given that Bitcoin is not fiat, should it not be embraced while it lasts? The idea of competing currencies seems like a healthy idea to be promoted rather than ridiculed, no?

  8. U.S. TOTAL GASOLINE RETAIL SALES BY REFINERS.

    The month of August (thousands of gallons per day) since 2004, averaged 49,214.4 GPD.

    Actual retail sales by refiners for August 2013 was 24,111.3 GPD.

    This is 25,103.1 gallons per day less than the 10 year average!

    Economic recovery? Not so much. Lots more energy data at the link below.

    http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=A103600001&f=M

  9. +1 Steve… When the grid goes out and my Bitcoins disappear along with actual electricity, I’ll be glad to have a little gold and silver tucked away somewhere. I agree that so many commentators don’t even consider dwindling EROI and how it inevitably affects the greater economy, thanks to you for continuing to shine light on this topic.

  10. I’ve read enough of Martin Armstrong to know he is a very intelligent man, but I think he is wrong on some things. I agree with him that Bitcoin is a temporary phenomena. Bitcoin is not secure long-term and will eventually fall when its’ encryption is broken.

    “The difference will be that the government version will be no ”anonymity” and what it being touted as a benefit is the elimination of crime – drug dealers will be eradicated (plus the government will get 100% of all its taxes). This is why they have been waging war on gold”.

    No, that is NOT the primary reason for the war or suppression of gold priced in dollars, euros, yen, and pounds.

    “The US has made it illegal to store cash in a safe deposit box”

    That is the first time I’ve heard that, but who cares what they say one can or can’t keep in a bank safe deposit. Anyone that keeps much of monetary or tangible value in a bank’s safe deposit box is asking for trouble and governments get more desperate or over-reaching.

    “The precious metals are NOT going to be a hedge against the dollar, hyperinflation, or any of the other nonsense the gold promoters have spun to sell whatever they can like snake oil salesmen. The role of the metals will be as an alternative currency to ELECTRONIC when they terminate “printing” paper money”.

    NONSENSE. Gold and silver ARE hedges against the dollar and hyperinflation as long as the dollar exists. They will ALSO be an alternative to electronic government-issued “money” if and when it arrives. Other alternatives to government issued electronic “money” will be anything of tangible or barter value, including but not limited to copper, guns, long-storage food, gasoline or diesel, a well maintained used & serviceable car, clothing, and many other metals.

  11. Hi Steve,

    Good I can disagree with you a bit now (smile). I read quite a bit of mr. Armstrong when he was in prison and also when he was let out of prison. I noticed many differences in his writings before/after. No offence to mr Armstrong ment, since I could not imagine what he went through, but I have to say I find his current insights tending towards a bit misleading every now and then.

    Abbout peak oil; To be honest I have some doubts it is now or the next few years. After all, Iraq production taken down, Libia production taken down, Iran taken down and some more production (partially) taken down. Is that not to extend the life of the Petro Dollar? After all, imagine the freeing up of all them dollars not spend on oil. What would they buy otherwise?

    Ofcourse I agree we will hit peak oil eventually. When that is I do not know..

    Have u read the book ”the Quest, subtitle, the epic quest for money (he talks quite a bit about gold), oil and power by mr D. Yergin? If not it sure is a tip. Iam reading the follow up to that book ”The Quest: Energy, Security, and the Remaking of the Modern World” now. So far really good.

    Have you read the blogger ”Another”? He blogged late 1990 era and wrote about, yes, gold, oil and fiat and their strange relations. After doing lots of research I tend think he was a grey cardinal. That kind of knowlegde was very, very scarce back then and still is. It is cryptic but if u know the concepts being discussed you will get it, at least parts. http://www.usagold.com/goldtrail/archives/another1.html

    The gold, oil, fiat (world reserve currency) system goes deep, very deep. That is for sure. to quote ”I ask you now: ” Is it hard to believe or hard to understand”? When it comes to money it’s usually both.”

    • Hugo,

      Always a pleasure for you to disagree…LOL.

      Of course no one knows the exact peak, but I did mention in a prior article that Dave Demshur, CEO of Core Lab stated at the August Oil & Gas conference in Denver that he believed the planetary peak would occur 2014, 2015, or possibly 2016.

      Core Lab does analyze the major and 100’s of smaller oil and gas companies around the world, so their scientists have a very good idea of what is going on. I will get into more details in future articles.

      I have not heard of the blogger ANOTHER. However, I will check out the link you provided.

      As for Daniel Yergin, he is a smart fellow and his books are very informative, but his forecasts on oil will turn out to be invalid in the future.

      steve

      • Hi Steve,

        Since my crystal ball broke a quite few years ago I now have to rely on research and opinions. It seems your crystal ball also broke so we both have that issue LOL.

        It sure is nice that our interests are roughly the same and we can have a polite discussion about it and share ideas even when they are not alligned. Such a shame that is not possible anymore at sites like ZH.

        I defenately look forward to your pieces about the research done by Core Lab. Though I would not call their researchers scientists (smile). The only science I accept as science is what can be replicated in a lab. 90+% of the so called science does not pass that test. Still very interested on their take on this theme.

        I decided to follow your pieces but not read the earlier pieces you written. So I have not read the piece where you quoted mr Demshur. If you written pieces that you think are a must read for me, please feel free to point them out and I will read them.

        Iam very curious about your take on silver from a macro point of view. It is strange but true that macro and micro views collide more then once. I do agree silver has a monetary metal legacy. Say we start to hoard it as money (not to be confused with currency). I say that is not a good thing for society to do since we need silver in so many things, computers, medicine, appliances and so on. Jacking up the price so its recycling makes sense seems logical to me. I see peak silver earlier then peak oil (smile).

        As a society having gold (with hardly any industrial uses) as hard money savings makes lots more sense to me. Central banks sure seem to agree (smile).

        Anyway, Iam glad I found your blog and keep up the good work! Way to few people write about what you write about. Enjoy the writings of Another!

        regards, Hugo

  12. I heard MA is going to have a conference in US (read in his blog today) where he will take q’s for his ai computing model. An energy q would be good. If his computer isn’t a sockpuppet that is.

  13. Steve

    I see First Majestic Silver Corp. is very close to its 52 week low. Is it a good time to buy?

    Is your report close to being released? I don’t want to pull the trigger on some mining stocks without reading your report first!

  14. armstrong’s sole mission after his release from prison is to bash gold.

    he lists all the pro-gold reasons, but bang, in the end, his conclusion is gold is NOT the answer!

    his shit defies logic!

  15. I see that Martin A. is still paying for his get-outa-jail-card.

    G.

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