Prepare For Asset Price Declines Of 50-75%

What we have is a totally propped-up market based upon debt. Energy isn’t producing positive growth, really. So instead of having real economic growth, we have inflated economic growth and inflated asset values.

When growth starts to decline, I think we’re going to see the valuations of assets decline considerably. It’s anyone’s guess how quickly they can fall, but according to what I have been looking at, I think we are going to see a 50% decrease in real estate values right off the bat. I am not saying this will happen in a day, but the first wave will be a 30-50% decrease in real estate values when the markets really start to crack. They are already at the edge of the cliff — and I see prices falling down the cliff, struggling to recover, and then falling even further. Actually, I predict within the next 5-10 years, we can easily see a 75% or more reduction in real estate values.

This was part of my interview with Chris Martenson at Peak Prosperity.  During the interview Chris and I discussed how the disintegrating energy industry would negatively impact the value of most assets…. Stocks, Bonds and Real Estate, while the precious metals would ultimately be the higher quality safe haven and store of value.

Out of all the analysts in the alternative media, I find that Chris Martenson’s work at Peak Prosperity gets closer to the root of the problem as it pertains to the future of our financial system and economic markets.  This is due to the fact that Chris focuses on energy and the Falling EROI – Energy Returned On Investment.

Unfortunately, most precious metals and resource analysts overlook energy.  Thus, their analysis is likely flawed because they view the future as a continuation of “business as usual”, once the debts and leverage are taken out of the system.  This is an incorrect assumption, because the debt and leverage actually have allowed our financial system and markets to continue to function well beyond its expiration date.  Getting rid of the debt and leverage would cause a collapse of the system… one that we will be unable to grow back out of.

Lastly, I believe it is important to continue focusing on the information and data as it changes.  This will provide the investor-public with a guideline as to the timing of the upcoming disintegration of our highly leveraged debt based financial market.

You can also access my interview with Chris here: Steve St. Angelo: Prepare For Asset Price Declines Of 50-75%

Also, if you have not watched Chris Martenson’s CRASH COARSE, I would highly recommend it.

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29 Comments on "Prepare For Asset Price Declines Of 50-75%"

  1. Hi Steve,

    I just sent you a small donation. You deserve much more . I am a stacker so when silver goes up I won’t forget i am in debt to you.

    Did you know there is a Saint Rocco ?

    MIke

  2. Very good interview, covers all of it. Gail Tverberg from OFW says collapse could come within a few months. We are dangerously close to disrupting events. My guess is central banks will try to paper it over, again. Not because they want to, but because they don’t have a choice.

  3. Fantastic interview Steve. Especially concerning the bizarre behavior of the Saudis the last few months. It’s really difficult, but I’m convinced that this is right, the world fiat system will come to an end during the 2020’s, then all hell is going to break loose. The 21st Century is going to be like the collapse of the Bronze Age.

    I’m pushing myself to buy more silver in the next few weeks.

    • The Saudi’s are running a war for Yemin. That’s expensive. Maybe, the Saudi’s/CIA have a plan and are not crazy.
      Saudi military is typical ME (poorly commanded,under-trained, badly maintained _except by foreign MXS troops_, and overly dependent on imported high-tech US weaponry), but lazier and fatter, so not effective. Yemin is a poor country, not so lazy/fat, and doing an okay job absorbing fire and defending (on the cheap, with vintage Communist weapons)). Yemin has some HUUUUGE unexploited NG fields and maybe some good pools of liquid oil to make a war/occupation worth while, maybe.

      More silver, and fractional oz gold coins as they are available cheap (spot +>3%), is a rational response.

      You. Don’t. Have. Enough. Ammo.

      Cheers!

  4. Not to be outdone, I also just made a small donation.

    I am often amused by the comments of those who cannot shake off their indoctrination and value Silver by its price in fiat. Who cares if the price of Silver goes to $10,000 if the price of a loaf of bread is also $10,000? Would that mean the value of Silver is the same as a loaf of bread? Nope.

    As a fan of Mike Maloney, I agree that PMs should be valued relative to other commodities, not to fiat currency. We can bake a lot more loaves of bread than we can
    mine and refine ounces of Silver.

    I accumulate PMs as a hedge, savings and for insurance and am grateful to have this opportunity to load up at these undervalued prices. Its kinda like turning the tables on the CBs.

    And yes, there IS a Saint Rocco:
    http://www.stroccosociety.com/strocco.html

  5. If the collapse of the market is several years off, it means that first another PMs decline will take place. People were wrongly advised and bought too early.

    • Well, it depends on your outlook and how you view things on whether you bought too early or not.

      If you put 20k into silver and gold and don’t have to sell any of it to pay the mortgage or whatever, then the dollar value of silver and gold is irrelevant.

      The dollar value of gold and silver is irrelevant regardless… Since gold and silver didn’t all of a sudden become valuable when America was born and the dollar was created.

      But of course if you have to sell gold and silver you previously bought to pay bills because you have a small net worth then clearly the dollar value matters in the fiat paradigm.

    • Better 5 years early than 1 day late. I have no problem paying an extra dollar per oz for real silver, in my hand, without delay or shipping cost/risk.

      There have been weeks without ANY silver available at local shops when spot price dropped below $14. Why would anyone sell into the lowest price for several years? Local dealer inventory is VERY THIN compared to the loose money available to buy. Astute dealers may also be “playing” the price by closing shop for price downturns and buying from known customers by appointment only. Buyers emerge from the woodwork to get the good deals (myself included). On several occasions I bought the last 90% “junk” coins from local dealers, and it was only a few hundred bucks worth. One semi-criminal dealer offered to take my money and deliver “when it comes in”. Good to know that’s “the deal” at that shop.

  6. Steve,
    It’s good to see that your contributions are more and more relayed and well received in other in other alternative media with substantial reading like ZH.
    Good job with Chris Martenson.
    I also am in debt to you for your so valuable articles that have helped me realising where we are heading and preparing for it.
    I have therefore also just made a modest contribution.
    Keep on!

    • Chris Martinson fixed his distorted audio. Much easier to listen when it’s clean.

      There is a transcript posted on the Peak Prosperity page if anyone wants to do a quick skim and not listen for an hour.

  7. How does this info from OilPrices.com fit into the info here?
    Finally, we would like to present our special report on investing in the Mexican Oil Boom – this nation has recently opened its door for private investors after 80 years of state monopoly.

  8. Hi, in the east where I am from, silver is not so well perceived, gold everyone understands. Was wondering how to sell silver in future.

  9. Thanks Steve, regards

  10. I haven’t listened to the interview yet but I believe the stock market will continue its climb to 30000 and beyond. As it continues to climb the standard of living will decrease. I think the world will be “Venezuela” with mass social genocide and constant tension. It’s going to be a chaotic mess!

  11. Steve, I think you are way too conservative on this one. Asset values down 75% in 5 – 10 years? Come on. It’ll be down 50% by Christmas and another 25% by next Christmas.

    The big boys usually control these crashes the way they see fit.
    In the forest service they call it a control burn. This coming crash will not be controlled, it’s just gonna burn. They can’t control it because they have lost control. There will be no buyers to catch a falling knife. So when it does burn and they can’t control the burn they will go in to panic mode and print like they never been before (possibly).

    My put options will be just fine.

  12. I think we are just days away from a market crash. Usually they occur in Sept or Oct but I think this time around it’ll be a suprise and be this month. It will catch everyone off guard.

  13. Hi Steve, nice job with Chris. I am glad your work is getting recognition beyond your cite. Your charts and explanations really drive home the predicament we are in.

    One thing I wish you had had more time to go into. When Chris asked you who was going to eat all the losses from the collapse of the oil industry, you talked about Saudi Arabia as one of the major dominoes to fall. True, but there was so much more to be said. Obviously, anyone in stocks, bonds and real estate is going to see major losses in their financial instrument “wealth,” a virtual wealth backed by the illusion of future growth and the assumption (illusion) that the energy IOUs they represent will be fulfilled. When people finally realize that is an ill-founded illusion, for the West, we are talking about a psychological dislocation on a scale unlike anything that has been experienced since, say, the Copernican Revolution. It is hard to predict what will happen, but certainly pensions, 401ks, insurance companies, the entire FIRE section of the economy will be hit hard. Like Lehman, many funds and institutions will just disappear.

    But this is not just some future event; we are already eating the losses. Like a retiree spending his savings to stay alive and modestly enjoy life a bit, any pension fund, insurance company or other “investor” who is buying the bonds of oil companies is basically just expensing its “wealth” to keep the oil flowing and BAU alive a little longer. As you have so amply demonstrated, we appear to be well past the point where oil companies can earn a return AND find future reserves to keep supplying oil in the future. Those OilCo bond “investments” will never be returned. So its not just that oil companies are cannibalizing themselves, we are already cannibalizing our collective private savings to postpone the inevitable.

    Keep up the great work.

  14. I think the the world has recognized that peak oil is a reality. My fear is that as the largest and least efficient consumer of petroleum the rest of the world will see fit to cut us off from the cheap easy to source oil which is in Africa and the Middle East. The last of the easily sourced oil is a long way from the U.S. and should the world move to a commodities based system of trade then we could see the devastation of a low energy economy sooner rather then later. If I were China I’d want to cut the U.S. out of the loop and focus on manufacturing and infrastructure. If I were the rest of the world eager to consume finished goods and rare earth metals from China at a low price, I’d cut the largest least efficient energy consumer out of the market sooner rather then later. I believe the wars in Syria, Ukraine and soon N. Korea are all energy related and the U.S. appears to be faltering both internationally and domestically.

  15. Virginia in Eastern Oregon | July 5, 2017 at 10:44 am | Reply

    Hey, you slackers, you know who you are. I sent Steve a silver round. Send NOW and pain is very small for all Steve’s hard work. Later, you maybe too greedy. Pay it forward, my friends.

  16. Virginia in Eastern Oregon | July 5, 2017 at 10:50 am | Reply

    Elliott Wave count on Dow is verging on a high degree fifth wave terminus. Probably a lot of futzing around until top breaks. Interesting for Xians out there, I believe the fifth seal of Revelations has been broken. Fifth of a fifth of a fifth… Time to buy that non-GMO popcorn. Buckle up.

  17. Virginia in Eastern Oregon | July 5, 2017 at 10:55 am | Reply

    Lots of mining problems in Tanzania. Permits cancelled, not renewed. Chinese moving in, I speculate; promising infrastructure, defense, the moon…

  18. Farmer Steve A. | July 5, 2017 at 10:18 pm | Reply

    Steve. What do you think will happen to farm land values

  19. Steve,
    You mention that oil companies need higher prices which you don’t see happening. Wouldn’t TPTB be able to accomplish higher oil prices through some military conflict/war? Wouldn’t that postpone any collapse a little longer than you currently expect?

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