The majority of precious metals investors do not understand the important fundamental factor to acquire and hold gold and silver. While most precious metals analysts promote investing in gold and silver due to the highly leveraged money supply, debt, and derivatives, they fail to warn about the “Energy Impact Factor.”
In my newest video update, The Amazing Untold Facts About Gold & Silver Investing, I discuss why energy is the primary driver of the economy and will be the leading force pushing the value of gold and silver to new highs. Analysts suggesting that the value of gold should be based on the debt backing all the outstanding Federal Reserve Notes do not account for the ENERGY that allows the money supply to function.
Furthermore, most precious metals analysts do not explain how the cost to produce gold and silver is directly tied to their current market value and ratio. In the video, I discuss that Barrick Gold consumes 52 times more diesel (gasoline and fuel oil) to produce an ounce of gold than Pan American Silver does to supply an ounce of silver.
Moreover, I show just how little silver is held by Central Banks versus gold. In the video, I stated that the Central banks held 100 times more gold (value) than silver. However, I failed to add one more ZERO. Actually, the Central Banks hold 1,000 times the value of gold than silver. This, along with the fact that there aren’t that much more above-ground investment silver stocks in the world as there is gold, will make SILVER the GO TO ASSET in the future.
Lastly, in the video, I stated that Jean-Marc Jancovici did a presentation in front of the OECD on why “Classical Economics” is pure RUBBISH and also that Energy is the leading driver of the world’s economy. I highly recommend you watch his presentation below… which was sent to me by a new follower:
Jean-Marc explains that the Classical Economists, even today, totally disregard the resource in their models. Thus, not only is Classical Economics taught in Universities, useless, even the Austrian School of Economics also ignores the resource base and do not truly understand the Thermodynamics of oil depletion or the Falling EROI – Energy Returned On Investment.
I found it quite fascinating that Jean-Marc stated the peak of the U.S. Shale Oil Industry would be the peak of Global GDP… for good. Virtually no Economists understand this factor. Thus, the peak of U.S. Shale Oil Production will help collapse the highly leveraged Fiat Monetary Debt-based System. It would be very wise to own precious metals at this time… and likely before. Those who try to time the collapse to get into precious metals might find out their assets won’t buy as much then as it would NOW.
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I’d highly recommend this article on seekingalpha:
according to the author we may already be at peak shale oil.
The relationship between energy usage and GDP is almost a perfect correlation. I’ve seen similar charts for miles driven vs. GDP etc.. and it’s the same kind of relationship. A few have pointed this out (Gail Tverberg comes to mind) but it’s amazing this is not even considered a factor in most analyses, even on the alternative media. Even people with the most in-depth understanding of the monetary system and the Fed (Peter Schiff comes to mind) never mention oil in their commentary. To add to the confusion, even the peak oil community never predicted the current situation, they were focused mostly on Hubbert’s curve and didn’t see the fracking boom without correspondingly high oil prices.
I got another oh sht moment when he deductively explained, no more cheap energy, then no more growth, and then no more promises will be able to be kept by politicians which have enabled democracy. It will be dictatorial rule over the shrinking economic pie.
I fear you/he are all too right. I’ve got the silver, time for the guns and butter.
Gold, Guns and God
I read this about 2 hours ago and I was going to add to the thread but you beat me to the punch.
that article quotes the original one from Rolling Stone:
it’s lengthier, with more details and examples.
read the comments. some say it’s not as bad but who knows.
Steve everything you say makes a lot of sense. You are one of the reasons I have been purchasing physical silver for many years. I know that my silver will be worth quite a bit more than it is today. However my silver after years of purchasing is worth less than my average cost price. My real concern is I am now in my seventies and do not have ten to fifteen years to capitalize. Just when do you think these fundamental issues will happen?
David, shoot over to Kitco and check out the Doug Casey interview with Daniella. I believe it was some time in late December…about 16 minutes long. (year end/in review) Doug thinks within 2 years that both gold and silver will take its rightful place far above all this paper bs…and yeah, there will be other issues depending on where you live.
I know, all the “metals pumpers/talkers” have been saying this for a long time.
Disinfo/diversion has never been higher than it is right now. With all that is going on and with this added black swan of coronavirus, I’m with Doug.
The writing will be on the wall…within 2 years.
Stand fast brother…battle stations.
Having watched how the last 10-11 years have played out, I can easily see another 5-10 years of pure manipulation taking place. NO bankers have gone to jail, in fact they seem to have been given the green light to do whatever they need to do to “avoid the pain”. Does that mean it will? Who knows.
I do know this though, I’ve seen many of well schooled economists fall to the wayside trying to predict the future with this situation.
Free markets always prevail, and I myself will take my metals to my grave if that’s the way it plays out. I hope to see.
Bring on the negative votes folks…lol
Interestingly,that’s exactly what has always happened to a huge percent of stacker’s loot. Their metals are found many years later when a ceiling caves in or a lot is excavated. In Pompeii, many years after the volcano, there were corpses found clutching gold coins in the merchant hall. They also found a guy frozen in his very last act of masturbation.
Timing is everything…
I stacked like crazy in the ’90s. It paid off well. Dealers let me pick their bags for better stuff and starting about 2004 coins were red hot. I sold in many cases well over bullion value. This time should be a lot better because we all know what’s coming. Most people today haven’t experienced gold (and silver) fever and they don’t even know they’ll get it.
Thanks Steve, another great video. I also like the progression of your graphics, looks very professional. But in the video at around 12:00 minutes you state that the ratio of silver held by governments versus gold held by governments is 1:100, but I think it’s actually 1:1000
Gold = $1.58 trillion = $1,580 billion
Silver = $1.6 billion
The graphic is fine, just the commentary. I know it’s too late to change and I’m nitpicking. Otherwise very good explanation, thanks you’re making converts to peak energy.
Yeah, I made a comment on Youtube and in the article that it was 1,000 times.
Ah okay I must have missed that. At least you know I was paying attention 🙂
Steve, distraction is everywhere. Look here…..not over here: https://www.zerohedge.com/geopolitical/americas-dirtiest-little-secret-exposed
Plus with the show Palladium has put on over the list year and a half…. next to nobody has even noticed; Apparently it makes no difference to the market…..who says Silver moving to $45 or $56 or even $266 an ounce would make a hill of beans diff to the ‘market’??
Thanks for sharing Steve. *I’m currently trading fiat dollars for cords of wood which require more labour than I want to produce at the moment 🙂
I just came across a Fox Business News article that says Chevron loses 6.6B due to American Shale write down. It’s in Apple News App so I can’t post the link. Here’s the content of the article:
“Chevron posted a massive fourth-quarter loss after taking $10.4 billion worth of writedowns related to North American shale projects.
The San Ramon-California-based oil giant lost $6.6 billion, or $3.51 a share, in the three months through December as revenue fell 14 percent to $36.3 billion. Adjusted earnings of $1.49 a share topped the $1.43 that analysts surveyed by Refinitiv were expecting.
“Cash flow from operations remained strong in 2019, allowing the company to deliver on all our financial priorities,” Chevron CEO Michael Wirth said in a statement. Those included paying $9 billion in dividends and buying back $4 billion of company shares, which typically drives up value for remaining stockholders.
Chevron loses $6.6B after huge writedown of North American shale . . .
It’s going to be interesting to see where gold (Comex) closes tonight, because as you have stated,trader action is predicated on month end close
Steve, where do things stand today on the huge debt wall the oil producers were facing starting in 2017? Were they able to get near zero percent loans or something to temporarily sidestep this seemingly devastating problem?
Unless my reference chart is wrong, gold just month-end closed at the highest price since 2013.
How will this be seen by the contract/paper traders?
I believe you are correct. Gold has closed above the $1,550-$1,560 Resistance line on a monthly basis when it closed at $1,587 on Jan 31st.
It seems to me that Gold and Silver may continue higher even with elevated Commercial Net Short positions. Interestingly, Silver’s Commercial net short position this past COT Report declined while gold increased.
Well maybe some of those short positions were getting hurt financially, and had to back off.
As far as the gold COT net shorts increasing but the price continuing to go up, Kranzler offers his perspective on the stock market and gold, this time with no mention of the COT structure: https://investmentresearchdynamics.com/printed-money-blowing-the-bubbles-even-bigger/
At about the 3:50 point of the video, you show 114,000 BTUs of heat energy/gal of gasoline then divide that by 254 BTUs representing an hour of human labor and get 449 hrs of humor (human) labor equivalent. The 114,000 BTUs in a gallon of gas is heat energy. Please realize that to convert the gasoline’s energy to work (so it can be compared directly with human labor), it needs to power an internal combustion engine, which is far less than 100% efficient. Text books I have show only about 30% of the heat energy being converted to useful work. (About 40% goes out the exhaust, while the remaining 30% is carried away by the cooling system of the engine.) Hence 114,000 x 0.30 / 254 = 135 hrs human labor equiv. This is still huge and shows how the US population was able to transform from highly agricultural in the early 1900s, to largely urban today.
Thanks for your tremendous insights into the importance of oil and for shedding light on the shale oil and alternative energy fallacies. These are the real issues we face.