The Dark Side Of The Silver Mining Industry

There is an insidious Dark Side to the silver mining industry that goes unnoticed by the majority of investors and analysts.  Actually, I haven’t come across one mining analyst who puts out comprehensive data on this very subject for the silver mining industry.

According to my figures for 2013, the top primary silver miners suffered the lowest average silver yield ever.  That’s correct… another year of declining ore grades and yields.

Looking at the chart below, the top 6 primary silver miners average yield for 2013 was 7.6 ounce a tonne (oz/t) compared to the 8.1 oz/t recorded in 2012.  Thus, the top miners shed another half ounce of silver yield… falling 6% in 2013.

Top 6 Silver Companies Production & Average Yield

The top primary silver miners average yield declined 41% from 13 oz/t in 2005, to 7.6 oz/t in 2013.  The top 6 mines and companies included in the chart above are BHP Billiton’s Cannington mine, Fresnillo, Pan American Silver, Polymetal’s Dukat & Lunnoye mines, Hochschild and Hecla.

Four of the mines suffered year over year declines while two actually increased yields.  Here is the breakdown:

Change in Yield (2012-2013)

BHP Cannington mine = – 1.0 oz/t

Fresnillo mine = -1.2 oz/t

Pan American Silver = -0.3 oz/t

Polymetal = +0.6 oz/t

Hochschild = -0.4 oz/t

Hecla = +1.0 oz/t

Both BHP Cannington and the Fresnillo mine will continue to see their average ore grades decline in the next few years, however Fresnillo’s silver grades should stabilize at 271 grams per tonne.

Hecla increased its average yield at its Greens Creek mine in Alaska by more than an ounce in 2013, which was the contributing factor pushing its average yield higher last year.

Declining ore grades are the Dark Side of the mining sector because the industry would rather not advertise its impact on the cost of producing silver.  This next chart shows the increase in total processed ore since 2005.

Top 6 Silver Companies Processed Ore & Average Yield

Even though the average silver yield only declined 41% since 2005, the amount of processed ore increased 65% from 9.4 million tonnes in 2005 to 15.5 million tonnes in 2013.  Not only has the amount of processed tonnage increased to produce less silver in 2013 compared to 2005… the costs of energy, labor and materials have doubled or tripled during the same time period.

The negative impact of falling ore grades can be seen using Fresnillo as a perfect example.  Fresnillo Plc only had one primary silver mine prior to 2009 — it’s Fresnillo mine.  Since then, it added another silver mine (Saucito) and several gold mines.  The charts above present data from the Fresnillo mine only.

Adding Fresnillo Plc’s Saucito silver mine, which started production in 2009, this would be the net result on average yields for these two operations:

Fresnillo & Saucito Silver Production & Average Yield NEW

From 2005 to 2008, the Fresnillo mine accounted for total production in this chart.  In 2009, Saucito came online which is shown by the ramp up in total production from 2009-2011.  However, total mine supply started to decline in 2012 due to Fresnillo’s average yield and production falling sharply that year.

Even with production from both mines in 2013, the total was barely a million oz more than what the Fresnillo mine produced alone in 2005.  Furthermore, it now takes the cost of running two mines to supply the same amount of silver in 2013 as the company did in 2005.

The table below shows the increase in workforce over a five-year time period from 2008 to 2013.

Fresnillo & Saucito Production vs Wokers table BRAND

In 2008, Fresnillo had approximately 1,500 workers at its mine producing 33.8 million ounces of silver.  I estimated the worker figure for 2008 as they offered no employee data in their 2008 Annual Report.  According to their 2009 Annual Report there were 1,531 workers.

Now, if we look at the situation in 2013.. we see a much different picture.  In 2013, the Fresnillo mine increased its workforce to 1,674 and Saucito had 999 for a total of 2,673.  Thus, it now takes nearly 1,200 more workers to produce about the same silver in 2013 than it did in 2008.

Furthermore, the type of workers at Fresnillo have changed in the past five years.  In 2008, the Fresnillo Mine had 894 employees and 637 contractors working at the project.  By 2013, the number of employees grew 13 to 907, while its contractors increased 130 to a total of 767.

Moreover, the Saucito mine has no company employees whatsoever… the 999 workers are all contractors.  So, the amount of contractors working at these two mines are nearly double (1,766), compared to 907 company employees.

This is the new way of the mining industry…. utilizing contractors so the company isn’t responsible for providing any healthcare or retirement benefits.  You see, the mining companies are forced to make these kind of changes to keep costs from getting out of control.

Using Fresnillo as an example, the company added 1,200 more workers since 2009 to maintain silver production at the same level.   In 2008, Fresnillo produced an average of 23,200 oz of silver from each worker, but by 2013 this figure fell to 12,832… nearly half.

Falling ore grades and yields are impacting all mining companies.  It will become more expensive to produce silver in the future as ore grades continue to decline while costs of energy, materials and labor increase.

For those analysts who believe the price of silver is heading lower in the future… the falling yields and increased costs will prove otherwise.

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84 Comments on "The Dark Side Of The Silver Mining Industry"

  1. Steve,

    This analysis may be your best yet in explaining why, if silver is forced lower in the commodities futures’ manipulated trading, at some point the physical acquisition price breaks from the paper/ETF/Comex/BS set price.

    • Consider…

      Sept 1990 – US and Japanese 10yr Bond yields were within 80bps (8.82 vs 8.02%).

      Japan peaked in ’90 @ 8% and moved to sub 1% yields in 9yrs time…a 90% reduction in financing costs

      US peaked in ’81 @ 17%+ and has moved to sub 1.5% yields in 31yrs time…an 89% reduction in financing costs

      Japan now .6%, US 2.7%

      Lowered costs of financing has allowed miners worldwide to finance / refinance / rollover activities, capex, purchases, etc. @ ever lower rates…this has to have been a primary driver offsetting the rising inputs and allowing a mining business to maintain even though inputs are outpacing output.

      The question is how much lower should we expect to see the ultimate manipulation, the 10yr rates to fall and the potential impact of still lower cost of money in mining? I’m guessing we’ll see 1%’ish in the next year or two on the US 10yr if 40 yr trends continue.

      Thoughts on this topic appreciated.

      • declining impacts as we near the zero bound???

      • you have certainly done the home work. I’m in awe. Unfortunately i have no answers to your questions,only the belief, that while most focus on gold,silver is the sleeping giant. All the best to you.

      • Interesting argument, thanks.

        As for the 1981-> trend in 10-yr US bonds continuing, it looks to me like it reversed in summer 2012.

  2. I was looking forward to these updated charts Steve as I am too lazy to do it myself. Nice job and thank you

    • Same here, was looking forward to the ore grades for 2013. Thanks so much Steve.

      Only half as much silver in the same amount of ore as in 2005 – remarkable!

  3. Thanks Steve, love your work.

  4. Stever, when do you think Mexico’s silver mine production will hit the peak? Mexico has been mining silver for hundreds of years but the country still keeps producing a lot of silver?

    • Adolf,

      When I first starting writing about Peak silver back in 2008, I initially thought peak would be soon due to the ensuing economic collapse after the housing and investment banking system disintegrated in 2007. However, the wizards at the Fed kept the DEAD ECONOMY alive a little longer allowing global silver mine production to grow.

      Fresnillo plans on producing 65 million oz of silver by 2018. Fresnillo Plc produced 42.7 million oz altogether in 2013 including their SilverStream agreement. So, in another 5 years they want to add 22-23 million. This will come from a ramp up of Saucito and two additional mines.

      This does not include any other primary silver miners adding new projects. On the other hand, the new Mexico mining tax increase may put a Kibosh on some of these new projects.

      Now, unless Mexico increases oil production, their net oil exports will continue to fall and they may have to start importing oil after 2020. I believe the biggest factor in determining PEAK SILVER PRODUCTION will be due to the fall in global oil production.

      Of course we have to include the decline of global net oil exports which makes a bad situation even worse. If we don’t have a collapse of the system before 2020…. I don’t think Mexico will peak until at least 2020.

      steve

  5. Steve,

    I also agree with the former commenter, but want to add detailed for readers on the point that rising production costs only set a, logical, lower bound area for prices that are ultimately subjectively formed (not that you or this detailed objective research suggests otherwise), rather than acting as the sole or primary price determinant.

    ie; for gold, it is widely recognized annual mine supply is trivial versus the outstanding stock / supply, thus imparting the property of having the smallest decline in marginal utility for each additional atom of the element obtained. The spread in tumultuous times remains small, or even shrinks, meaning liquidity in the metal’s market as diverse participants enter to offer and bid on publicly listed books / exchanges

    New mine supply is made much of where a trend (such as shown above) versus anticipated availability in “investable supply” effects the order books on various public exchanges says more about anticipated price direction.

    • JC,

      I totally agree with you. I am familiar with the aspect of “Marginal Utility”, however one important factor the Austrians and even Antal Fekete fail to include in their monetary analysis… is ENERGY. Without energy, money is useless.

      Without energy, the Gold Bills Doctrine would also cease to work.

      While I agree that the cost of mining gold or silver only provides a BASE in determining price.. it is still a good indicator. Furthermore, the energy factor provides a BASE for most commodities, goods and services.

      Again… I believe the biggest factor that will push the values of gold and silver to new highs is the GLOBAL ENERGY DYNAMIC:

      1) Peak and decline of global oil production
      2) The falling EROI – Energy Returned On Invested
      3) The decline of Net Oil Exports

      The hundreds of trillions of Dollars in global Derivatives and the tens of trillions of Dollars in Paper-Digital Assets all derive their value from a growing economy… which is based on a growing energy supply.

      When the energy supply turns south, and it will… it will create a huge SUCKING SOUND destroying a great deal of presumed wealth. Thus, investors will be forced to move into safer physical assets such as Gold and Silver to protect their wealth.

      Again… this energy principle is not discussed by the Austrians or Fekete.

      steve

      • Regarding oil, the fracking sensation is not a good thing,it destroyes,pollutes,and as is being .learned not extremely cost effective. I’m kinda with the lone ranger “High yo silver”

      • We will be swimming in oil and natural gas. Natgas price was high a few years ago so the drillers left the oil fields and went to the more profitable gas fields. That led to too much gas production and the price of natgas crashed. Now the drill rigs have been moving back to the more profitable and recently discovered gigantic oil fields. This will eventually lead to too much oil production (just like it did with natgas) and the price will decline (or at least not go up as expected).

        So, what affect will this have on silver prices?

        • Yeah, you’re right, let’s convert all big trucks, tankers, planes, everything heavy that uses fossil fuels, to NatGas!

          That’ll make things cheap!

  6. commented David at 6:31pm

  7. Look at the turbulence that just a PLATEAU in global crude oil production has caused in recent years. We haven’t even seen production DECLINE yet. We also haven’t seen extreme inflation yet either. Good thing because even the cheap $109/barrel oil that we have right now is a stiff kick to the economic balls.

  8. Add into the mix the human population increase. According to the UN world census there are approx. 6.8 billion people now. This is expected to top 9 billion by the end of this decade around 2020.

    When I was born the earths human population was approx. 2 billion. This has been more than a tripling in the span of one lifetime. During recent travels I can see the massive change that has taken place because of this population pressure.

    The advent of cheap energy (oil) 125 years ago, along with the internal combustion engine, has allowed this population bubble to be blown. Through the ever increasing efficency of farming technology. This will come to an end, with the winding down of cheap energy because of a lack of supply.

    In future only the very rich will be able to afford oil powered transportation, food, heat, etc. Unless some alternate form of energy that matches oils efficency can be found, or invented. A very large portion of the food question is – water and its availability.

    Societies fail when their population can no longer feed, shelter, nor clothe themselves.

    The one instance when gold and silver fail. You can’t eat it.

    • And there’s also historical accounts of Pompeii where they were buried alive.

      “Hundreds of refugees from Herculaneum had taken shelter in the vaulted arcades at the beach, perhaps hoping to be rescued, clutching their jewellery and money. ”

      ” Some had bulky silver pots, which would have made it hard to escape with any speed, but would have been seen as a valuable item that they could trade for food or money.”

    • lastmanstanding | April 18, 2014 at 7:08 am | Reply

      The industrious trader/barterer ALWAYS has a keen and futuristic sense for what someone may need or want in the days ahead.

      A farmer with lots of good food may know of someone with fuel who only parts with pm’s for it.
      Someone in the mix buys food from the farmer with pm’s…with which he buys fuel, etc. etc.

      Do not live in a tunnel if one wants to survive. Be on the look out in your community to be diverse in options down the road.

      If everyone is in hiding and cannot work the earth for her goodness, well, humanity is done.

      That is how the earth works.

    • “In future only the very rich will be able to afford oil powered transportation”

      Perhaps, but certainly not within our lifetimes. We have recently discovered enough oil and natgas to power the U.S. for a hundred years (if we don’t export all of it to other countries). Stop reading the extremist green blogs, if you want to invest wisely for the future. We should have affordable oil for a long time.

      • Larry,

        While its nice (and makes us feel good) to make glorious assumptions of 100 years of oil and gas reserves in the United States… you couldn’t be more wrong. I am not going to try to convince you as your mind is already made up. However, 3-5 years should wake up those who have fallen for the GREAT SHALE ENERGY HYPE.

        steve

        • Interesting. Sounds like you’ve been reading Chris Martenson. But for every guy like Martenson that says we will quickly run out, there is a guy like Andrew McCarthy that says it is just starting. But like you say, in 3 to 5 years we should know.

          • “What is just starting” is shale oil, and all those other low yielding, energy intensive forms of drilling for oil.

            What is already over is cheap oil.

            There will always be oil, don’t worry. Just a matter of how much you are willing, or able, to pay for it.

  9. So let me get this straight. In the future world, say about 2014ish we’re going to lose the petrodollar, suffer hyperinflation, stop eating meat, get chippped and walk everywhere. At that time there will be some jobs shoveling dirt in our mines that the Chinese have just purchased from JP MOrguen for pennies on the dollar and now subcontract to the thriving privatized prison system. When someone falls over from exhaustion, they get thrown down a mineshaft, kind of like workers who died building the Great Wall of China wound up as part of the wall.

    Its hard to imagine that the average ounces/ton yield will be going up anytime soon.

  10. “without energy, money is useless”

    i can never agree with the above sentence(especially when using it to belittle the great austrian economists like Mises, et al).

    the chinese empire and other asian civilizations was doing OK before the oil age and the western invasion. but these asian countries were using gold/silver as money.

    the world can and was able to live without oil. but the world need honest money to survive.

    without money, energy is useless.

    money is medium of exchange, which greatly facilitates trade and enables division of labor and produces all of the human civilization. without the invention of money, humans would still be savages.

    steve is diligent enough to write nice articles about silver miners. but he simply fails to understand the concept of money and its absolute importance.

    i appreciate steve’s data and charts, but can’t help criticizing his ncorrect views of energy over-towering money, which is totally wrong.

    in a honest money world, peak enery can be solved or adjusted to peacefully, may or may not painlessly.

    • Judejin,

      You say this:

      “the chinese empire and other asian civilizations was doing OK before the oil age and the western invasion. but these asian countries were using gold/silver as money.”

      Human labor is another form of energy… and was a large portion of the energy that drove the markets before the industrial age.

      We must remember ENERGY is everything. Without the ENERGY from human labor to extract gold and silver BEFORE oil came on the market… money would have been useless.

      Judejin… if you have ever been so sick that you didn’t have the ENERGY to get out of bed to go to work, you will understand what I mean.

      Unfortunately, we have tied just about all of our WAY OF LIFE to OIL. To say we would be fine without it is a GROSS UNDER-ASSUMPTION by several orders of magnitude.

      steve

      • Steve,

        What does this sentence even mean: “Without the ENERGY from human labor to extract gold and silver BEFORE oil came on the market… money would have been useless.”

        You say this as if human labor is everything. Maybe it is in a completely primitive society, maybe it should be called animal labor then. But only when a form of money emerges, can there be a capitalist who organizes human labor into the best possible way. The best way is that which produces profit for the capitalist.

        So, yes, judejin is correct. Money is absolutely crucial and precedes your energy concept mightily.

        • Lionel,

          Thanks for the comment. Unfortunately, you made one seriously wrong assumption. Energy is the most important factor… whether that be human labor, animal labor, wood, coal, oil, gas or etc.

          Before the industrial revolution, the majority of ENERGY came in the form of animal and human labor. Even though humans were using wood or coal as energy, the majority of economic growth stemmed from human and animal labor…. which is energy.

          Gold or silver money would be useless if humans were suddenly removed of their energy…. including animals. I am using this example prior to the industrial revolution.

          The majority of farming, manufacturing, construction and etc were done by human and animal energy prior to oil coming on the scene.

          I am sorry to say… this is not up for debate. You cannot have an economy or gold-silver coins unless there is energy to extract the metals or power the markets… FROM WHATEVER SOURCE, I don’t care.

          steve

          • lastmanstanding | April 19, 2014 at 8:05 am |

            They don’t get it Steve.

            Spoiled people do not realize labor/energy is how they survive whether it is theirs or someone else’s.

            If animals didn’t move, graze, etc…they would starve to death.

            Ignorant people will end up the same way. Humans are just so fucking smart and the earth is nothing.

            You are the point man on this brother…if you want to visit Big Sky Country in your relocation process, please contact me.

          • This issue is so clear cut that I can’t believe people would dispute it. The thought that money is more important than energy is absurd.

            How hard can it be to understand that without energy there is nothing? That human labor, animal labor, wood combustion, coal, oil are all forms of energy, and that oil has been the highest quality form of energy without which our industrial civilization would not exist?

          • Don’t try Steve, this one is hopeless.

            I can only second GJH: I don’t get how people can even dispute this.

            Money is just a mechanism that we need for controlling/directing something. And that something is energy, in all its forms.

            Money without energy is like a gas pegal without an engine attached to it.

          • Yes, Steve, were we not humans, then money would be useless. However, there is this little thing called reality in which we actually are humans. We are not animals because we are able to create markets in which we use money. We are also not angels living off pure energy. It is just too simplistic a view to call EVERYTHING that is necessary for humans ENERGY. Yes, if this was a physics blog then we could discuss energy and we would actually know what we are talking about. Otherwise, it’s nothing more than buzzwords. And to all the idiots who think that personally attacking someone in an internet discussion is an argument of sorts… good riddance in your futures with that kind of energy. 🙂

  11. to clarify things, not all austrian economists are the same.

    i’m with Mises and Rothbard, not with Fekete.

  12. Steve,

    If I was wealthy enough I would play with some silver and gold equities. I have someone who has the experience to provide guidance.

    Many say mining stocks will do extremely well [at least up until a fiat collapse] in the future. In light of the information in your article what do you think this means for mining stocks? Silver is absolutely essential to industries that support life [like silver-based disinfecting solutions that keep antibiotic resistant pathogens in check], and electronics. We must mine it.

    Your thoughts?

    • David,

      Here is how I look at the precious metal mining stocks. I would hold the majority of my assets in physical gold and silver and then invest a smaller portion in the mining stocks. Because of peak oil, the situation going forward for the mining sector will be different than it has in the past.

      Which is why I would invest in only PRODUCERS and few if any JUNIORS. Furthermore, the only good reason to purchase mining shares would be if the availability of physical metal becomes in short supply in the future.. which I think it will. Owning the mining shares at this point in time allows an individual to capture GAINS because investors will not be able to purchase physical… so the next best thing are the shares.

      steve

      • Finally, something we can agree on, although for completely different reasons. Gold mining stocks will become very hot (and wherever gold goes silver usually follows), and are tremendous buys right now because they have been in the toilet for a year. When the herd is afraid of something, it is more often than not the time to buy it.

        Gold mining stocks have been kept down because the worlds largest consumer of gold by far (India), has been in government lock down for the past year and has had gold imports sharply curtailed. Corrupt government leaders and Indian Mafia have been making a fortune from their cut of the slowly building smuggling trade that can’t meet the demand. Haresh Soni, head of the huge Indian Jewelry Association said “more gold has been smuggled into India in the past 4 months than in the previous ten years”. The only reason that China has recently passed India in gold consumption is because of the Indian government controls, and also a part of that Chinese gold is for smuggling into India for the nice $200 mark up per ounce.

        The Indian elections are currently going on and the leading candidate, Modi, is for removing the government gold restrictions and rapidly building the economy, which would give the Indians even more money to spend on gold. However, India has one of the more corrupt governments (yes even worse than ours), so his election is not guaranteed. But, IF Modi can keep from having an “accident”, and IF not too many dead people vote for the current crook, the Indian market will open up, and their pent up demand, along with the new Chinese demand, within a year or two after the election, will start pushing consumption up to the level of current mine production, and soon thereafter past current production. If Modi does not win, it will still happen, but it could take a few extra years.

        I have read that it could take 4 or 5 years to ramp up current mine production levels significantly higher. So imo for at least 2 or 3 years (and probably more) mining stocks will be going gangbusters. I also agree with you that Producers are safer than Juniors. However, when the herd catches on and starts chasing the mining stocks “before the price gets away”, they will be buying anything that claims to have gold (a rising tide lifts all boats). Juniors with lots of measured and indicated gold in the ground could outperform producers by 5x or 10x during the mania phase.

        • There are some truths here, but mostly it seems you just read the FT or Bloomberg and repeat their manure here.

          Regarding India: you said it yourself, gold smuggling is off the chart. So, real consumption has basically stayed that same as before the ban & tax campaign.

          India and China already consume the entire world’s gold supply.

          But let’s assume increased demand in the years ahead, without the ability for the miners to produce more: that is bullish for the physical metal prices. It does NOT mean added bullishness for the miners.
          The miners will enjoy higher margins, but they will not be able to produce more.

          • Logic fail.
            With the usual dismissive hostility thrown in for good measure.
            same ol same ol.

          • I have heard of Bloomberg (but don’t read it) and have no idea who or what FT is.

            Gold smuggling is off the chart in India but still does not even meet 10% of the normal demand. Gold consumption in India is nowhere near the same. Why do you think gold prices haven’t been able to recover for the past year? Perhaps in 3 or 4 more years they could come close, but to say smuggling is meeting anywhere close to demand shows total ignorance of the facts.

            Yes, in a normal, free market, you would expect that bullion would go up sharply in that situation, and I’m not saying it won’t. It may go to the moon. Five years ago I would have said and believed 100% the same as you. But I’ve learned the hard way to not underestimate the power of the banksters to manipulate bullion prices. If bullion does go way up, I will hold most, but sell some. But if they can figure out ways to keep it down, I will keep buying and stacking, hopefully with the profits from my mining stocks. I’ve learned to react to the price of bullion, not try to predict it like all the “experts” do. Life is much simpler that way.

            If you cannot understand why stock prices would go up on a business that has more demand for its product than it has product to sell, then I have no further arguments for you.

          • You buy your miners Larry. If you think physical bullion prices are too subject to manipulation, then good luck with a 100% paper/electronic investment.

            Regarding India, yeah, you’re right too – a couple of hundred million Indians will just stop buying gold, if the government says they can’t.

  13. We can use more energy to take a planeload of tourists to see the pyramids than it took to build the pyramids in the 1st place and nobody even thinks twice about that. The sheer magnitude of the paradigm shift will be astounding.

    • This is an excellent example which continually proves the precedence of money over energy. The exact point I was making a bit higher up in the thread.

      Should there be a lack of oil in the near future, all that is needed to cure the energy problems of the world is a return to a non-fiat world. The same that we lived in just a 100 years ago. My great-grandparents lived in that world. No oil. Yet silver and gold as money. No biggie.

      • Your great-grandparents lived in a world with 1/7 the population and far more natural resources. Do you think that 7 billion of us can survive on the energy economy of your great-grandparents’ time?

        • The majority of our great grandparents lived on farms and raised their own food in huge gardens, and spent weeks caning so it would last for the rest of the year.

          All those high rise dwellers will have to garden their 3′ by 10′ terraces and learn how to cook their neighbors.

          • Yeah, sure, we will all die. The elites are planning the destruction of all mankind even as we speak. We will become neighbour-eating zombies in rugged clothing, clashing with rival clans from the surrounding high-rises. We will be eating newborn babies, but wait, no, there won’t be any progeny because the government will infect us with something… Hey, I like the X-Files just as much as the next guy but if you actually want to do something with your lives, stop spreading this bs propaganda. Humans can easily double or even triple in numbers and we can still live on this planet very nicely thank you very much. But if you are bound to fight the facts all the way to the bitter end and believe that any day now the world will burn and civilization will collapse, be my guests.

        • Lionel: “Humans can easily double or even triple in numbers and we can still live on this planet very nicely thank you very much.” “if you are bound to fight the facts”

          Okay, Lionel. Bring some facts then. As in data. Personally, given the trends in topsoil, oil, fresh water, the marine environment and fisheries, endangered species, etc., I doubt 14 or 21 billion people could live just fine on this planet, certainly not ‘fine’ if that means the modern industrial (US) lifestyle. But if you want to bring some serious data and analysis to the matter, I would be interested.

          Now, if we were willing and able to completely rethink the way we live, then a much higher population might actually be able to live much better than we currently do–better in terms of ‘quality of life’. What would be the nature of this lifestyle? That, to me, would be an interesting discussion.

  14. WhatsUpDoc1958 | April 18, 2014 at 6:08 pm | Reply

    Some argue that silver will continue to be mined regardless of other factors such declining ore grades and increased energy costs because it is mined as a byproduct of mining other metals, such as copper.

    Yet, within the last 3 to 6 months, there has been a glut of copper and the price of copper has decreased by 10%. Will the lower price for copper and copper supply glut cause less copper to be mined, and consequently less silver? Is this situation temporary, or will it continue for some time?

    Will this have any significant impact on silver mined, or will the impact be minimal?

    • That’s an EXCELLENT point…hadn’t considered that, thanks.

    • WhatsUpDoc1958,

      Copper prices are manipulated also. Less physical copper may have been bought as well, if construction and industrial use is down. But the price decrease isn’t just due to free-market supply/demand.

      A lower price to miners and/or refiners may well reduce copper mining is sustained. However copper price manipulation isn’t as pronounced as gold and silver, or platinum or palladium, as it is not viable competition to fiat currency paradigms.

    • WhatsupDoc,

      I see you run into some heat posting some of my articles at the Kitco blog. Every once in a while I go in there to see what is being said. Unfortunately, many are making seriously wrong assumptions on several factors. The one that gets thrown around a lot is the subject of By-Product silver cost.

      For some strange reason, there is this silly notion that by-product silver is produced for free and thrown on the market. This is the furthest from the truth. Base metal mining companies are struggling now to remain profitable… even with their by-product silver revenue.

      Here is a quote from Teck’s 2013 Annual Report on their financial situation with RED DOG, the largest Zinc mine in the world located in Alaska:

      Red Dog

      Red Dog, located in northwest Alaska, is one of the world’s largest zinc mines. Red Dog’s gross profit before depreciation and amortization in 2013 was $418 million, compared with $440 million in 2012 and $547 million in 2011. The lower 2013 gross profit was mainly due to lower byproduct revenue from silver.

      Now, that’s GROSS PROFIT before a great deal of costs are included. Furthermore, the idea that Depletion, Depletion and Amortization are just another way for the companies to write-off more costs, making more profits is unfounded. If we look at many mining companies CASH FLOW STATEMENTS, they are spending more CAPEX each quarter than the amount of DD & A they are including as a write-off.

      There is a quote that many bloggers in Kitco might find interesting.

      steve

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    RUSS SMITH, CA. (One Of Our Broke, Fiat Money States)
    resmith1942@gmail.com

  16. The future is not going to be that much different than the past, except everything is going to cost a lot more. LOL

  17. Someone draw me a graph of predicted gold and silver prices for the next 10 years based on this learned discussion. Be brave- you will be held in high esteem in the goldbug community if you get it right. If you get it wrong, everyone will forget.

  18. Peak Everything (Except Money Printing & Stupidity) | April 19, 2014 at 9:51 am | Reply

    In regards to energy costs, we are now paying $1.50 per litre in Vancouver now – that’s $6 bucks a gallon just for the cheap/junk gas …. premium gas is almost $7 bucks a gallon here now.

    The mines up here in BC are heavy heavy users of diesel fuel … their fuel bills make up a large percentage of their overhead, and their fuel bill costs have risen by aprx. 25% in less than 2 years …. and when your shipping your fuel into remote locations into the bush, it rises the costs (of everything) even more.

    To be successful in the mining business these days, it’s all about picking small private projects that have a very low cost per ounce basis, that also have a very low risk profile from an operations/location point of view …. the typical hardrock mine is a black hole that’ll swallow up your money quicker than you can write the cheques.

    • Peak Everything (Except Money Printing, Govt, & Stupidity) | April 19, 2014 at 5:59 pm | Reply

      When your costs are going thru the roof, the margin squeeze restricts you from going deeper into the ground, or into more remote locations to find/work higher grades…. the squeeze on mining budget from lower margins means you have to be less aggressive and work the low grade deposits that are easier/cheaper/less risky to reach/work.

      Nowadays, even when they find a mega deposit, there’s often too many environmental & social impacts to put the deposit into production anyways – IE: you can’t get your production permits anyways.

      • “even when they find a mega deposit”

        Do you have a particular one in mind? My understanding is that the low-hanging fruit motherlodes have already been found. Kind of like in the oil industry

        • Peak Everything (Except Money Printing, Govt, & Stupidity) | April 19, 2014 at 11:10 pm | Reply

          I can think of 3 off the top of my head … the problem is the cumulative area disturbed & under pressure to remove these deposits are so large and/or disruptive they cant be permitted …. your right, the low hanging fruit is gone, the remaining mega deposits cannot be classified as low hanging fruit.

          Pascua, Taskeo, and one of the big Alaskan deposits – getting the permits are elusive as finding Bigfoot.

        • Peak Everything (Except Money Printing, Govt, & Stupidity) | April 19, 2014 at 11:19 pm | Reply

          If you find or gain control of a mega deposit where the glaciers or groundwater provides the drinking water for thousands of people or are the headwaters for millions of salmon – walkaway or kiss your money goodbye.

  19. steve’s energy theory of value, in essence, is a variant of the labor theory of value, which was proven wrong a long time ago by the Austrian economists.
    What makes humans different is human behavior, or human’s superior intelligence.
    Without intelligence, energy is useless.
    Money is the pinnacle of human intelligence.
    Energy is everywhere in the universe. It is human intelligence that harnesses various forms of energy. Energy can never be exhausted. But human’s greed and fraud can put humans onto a deadly path of no return. Humans can exhaust/extinguish itself long before the universe comes to an end just like so many other lowly species. Peak energy is the problem. Peak fraud is!

    • Peak energy is NOT the problem. Peak fraud is!

    • Interesting to see a discussion devolve to the point of arguing the primacy of energy versus money. In what parallel universe would the two operate in isolation from each other?

      Is money anything other than the metric by which energy is measured for exchange? The value of an item secured through labor or trade is determined by negotiation between buyer and seller to be an agreed sum of

      Money. Whatever the amount of labor or energy which went into it’s manufacture or delivery is not the measure of it’s value in the marketplace. That can only be measured by demand. In a situation such as the present, where the dynamics of supply/demand for both commodity energy and commodity monies are hidden by intervention of non-market players, a true exchange value for either cannot be found. It is this distortion which leads to imbalances in production and distribution, NOT declines in primary production per se, which are less cause than effect.

      Energy vs money? Asphalt as surfacing for roads allows high speed travel and distribution. It costs a lot of money to construct but returns that investment in time savings and increased velocity of trade. If only carts and bicycles are using it, however, due to an absence of fuel to power the vehicles it was built for, the economic rationale is removed. An argument for energy over money, or vice verso, is equally pointless.

      If you wish to insert ‘intelligence’ in place of ‘money’ for purposes of argument, the same dead end will be reached. Yes, ‘energy is everywhere’ – the problem with energy lies in it’s distribution, not quantity. “Money” is a metric for what ‘delivered’ energy costs; whether the gas in a pipeline, or the steak in a store, the costs of an item’s production and delivery must in some way be measured for inclusion in its’ exchange value or no producer will bring it to market.

      Perhaps ‘intelligence’ suffers the same distribution problem – it is indeed ‘all around’, but seldom seems to get applied in appropriate doses to situations where it is most sorely needed. The genius of a Tesla, which if applied could greatly ease or remove constraints of energy supply in this world, has not been applied or distributed due to the systemic interference of hidden players whose intent is that scarcity rather than abundance controls our lives. In that sense, yes, fraud is at the center of everything.

      • value of a product is not measuring energy spent producing it.

        value of a product is purely its exchange value, which is subjective, has little to do with energy spent acquiring/producing it.

        guess you haven’t studied the fallacy of the labor theory of value, thus don’t understand the fallacy of your version ,the energy theory of value.

        the problem is most ppl don’t understand the fraud while those evil souls in control of the fraud can’t live without it.

        the world still has vast unpopulated and uncultivated land in canada and russia.

        to say that the world population peaks and many ppl will die because of peak energy is quite evil and ignorant, and plays right into the hands of those wanting to launch wars.

        chinese ppl cultivated desert land using bare hands and shovels. energy required to sustain basic living is very low.

        it is the fraud of monetary matters that makes the energy situations worse, not the other way around.

        subjective value causes exchange and determines value. money is the medium of exchange.
        energy has little to do with the above.

        • Judejin wrote: “guess you haven’t studied the fallacy of the labor theory of value, thus don’t understand the fallacy of your version ,the energy theory of value.”

          I agree that you are indeed guessing. And while that has it’s place in the grand scheme of things, it’s no substitute for taking the time to read and comprehend. If you want to continue your argument about the above with the blog owner, address your comments to him directly.

          I have no part to play in your straw man argument on labor vs energy theories of value. Believe me, apprehension of the shortcomings of Smiths’ original thesis IS NOT restricted to those who adhere to the Austrian persuasion.

          OTOH – If you wish to critique the notion that money is the metric by which energy is measured for exchange, by all means, knock yourself out. But as a bare minimum of what’s required to participate in a discussion, please do actually READ what is written before writing back.

          In addition to doing that, allow me to suggest that it would serve your cause to make an effort to display a less partisan approach. There is no end of those who sit at the feet of various cult leaders who share in common the conceit that Economics is a branch of Science, rather than of Rhetoric. Whether you identify with the Keynesian, Misesian, or Friedmanite school of pretentious jargon masquerading as the revelation of natural ‘laws’ is of no consequence here.

          The thinking person will always gravitate towards what is in keeping with common sense in an argument, rather than pathetic attempts to impose the primacy of one schools’ argument over another. If you can remember that, and act under that guidance in future, we will forgive you for the overt insanity of “the world still has vast unpopulated and uncultivated land in canada and russia.” [hint: they may be unpopulated for a reason.]

          • Energy is really not the problem. Energy was distributed about the same way throughout the existence of humanity, yet, only 200 years ago were we able to harness it in any meaningful way. Was it because we were un-intelligent up to that particular point in time? Obviously not. So it must be something else. Maybe markets, capital creation and personal profit… ?

      • I can find oil in my back yard, extract the oil, and use it, without any money.

        I can also install a solar panel on my roof, and use its energy, without money.

        • I have to call bs on that one Markus.

          There is no way you can do either one of those without money up front.
          And don’t try the old barter and trade nonsense, I’m not that gullible.

          • You are beyond saving my friend :). Your brain does not work. Best stay away from here, you will not be happy. Also stay away from investing, it will not work out for you.

    • “human intelligence that harnesses various forms of energy”

      No. The last 100 years of oil was a 1-time lottery ticket win for humanity. Without cheap oil, there will be no more significant growth and human population will decline dramatically. That’s where the Austrian school has a blind spot. Like the Keynsians, the Austrians think their way will cause growth again. That party is over.

      • so you can predict the future by the last 100 hundred years? nuclear energy is perfectly fine if used properly.

        • There is unfortunately currently no substitute for what light sweet crude oil can accomplish. Not even close.

          Maybe some years down the road people will be flying around on magic nuclear carpets. Who knows? But my point would be that any new energy paradigm is not going to get here in time to save us from hyperinflation, starvation and WW3.

          Are you also considering what constraints there will be on mining uranium with increasing energy costs, You don’t mine uranium with nuclear powered heavy machinery. OK, off topic….

          It is worth it to note, that if solar continues on its current trajectory: (that is exponential growth in PV capacity and rapid price deflation) its actually on track to power the world in 18-20 years! I’m talking about continuation of the growth rates we are NOW witnessing, I’m not speculating…. However, again, not in time to save us….

          • Actually, Rojelio, oil was not a lottery ticket. The whole capitalism thing started a 100 years earlier and had nothing to do with oil. To think that capitalism equals oil and the rise of mankind is solely due to oil is very Rockefeller-centric to say the least. All hail the American supremacy propaganda. Oil was nothing but the logical outcome of hundreds of years of changes within the European power structure. The giving up of stupid and useless belief systems. Eventually, these changes reached the shores of economic thought, too. And once it was possible to create markets akin to today’s markets and operate for personal profit, the road to today’s world was created. Oil is nothing but a stepping stone.

            All I see when I read comments of the energy fanatics here is stressed out people in need of therapy. Hyperinflation, war, the end of the world, zombies, apocalypse. Maybe you secretly wish for all those things to happen so that you can release your pent up stress in the orderly fashion of military command? Otherwise what’s the point of fantasizing about such highly unlikely outcomes? Try to find more happiness in your life.

    • I’ll remember your nick as “do not read, wasted effort” from now on.

  20. I have lurked here for a while, but simply wanted to watch, and get the lay of the land. Same reason, I suppose, that I used to have a facebook account: what do most folks who seem to have little understanding of the physical nature of the universe they live in(and also live in a top tier society) view things? I am an energy analyst in my day to day life, in somewhat of a similar fashion to Steve, which is why I came here in the first place. Keep in mind that what I write here is my OPINION, not fact, although I try to keep as many cognitive biases out of my thinking on this particular topic as possible…as an analyst who essentially works for himself, to not do so leads to hungry times. In other words, its pays to not be stupid. It also means, in very direct terms, that you really don’t have the luxury of proscribing reality based on how you FEEL about it, but rather, as close to AS IT IS as you can mentally manage. No easy task, some days. And reading some of the comments here, one in particular seems stuck to how they think things about to be, rather than what is. As they say, you can ignore reality, but you can’t ignore the consequences of ignoring reality…
    In simple terms, Steve, I believe is entirely correct. Energy is the key here. The reason I focused on it to begin with, almost 20 years ago, was that I lived in a society that used mega-tons of it, and yet seemed to have little idea where it came from, how it came to be useful to them, and what the trends are in the arena. As I saw it, literally the perfect contrarian play. It still is. As well, my family still farms in E. SD, and I pay the fuel bills. Anyone who thinks we don’t eat oil, is dreaming. Which, quite frankly, is a far larger problem that increasing fuel inputs for mining.
    In reading through the comments, one stands out as either a financial industry troll, or someone who could never be bothered by that actual messy science ‘stuf’. Since half of my house runs on solar(l live in AZ, how could you not?) and my VW TDI has done almost 150,000 on WVO, I have actual derived data with which to form ideas of what may happen in the future, or really, what is very unlikely to happen. My take on this is sort of simple: If this were a planet of 1-2 billion human beings, the word ‘peak’ would have probably never been used in the current context. With 7+ billion, its not even a question. If I had to pick two things that are the most likely ‘peak’ things to really screw with us, if would be oil first, and phosphates second. Although, today, the second is really a derivative of the first. Sadly this is also true, and yet equally unrecognized by most of the planet. Alternatives to oil? Ha!, where to start? I was a nerdy kid, and subscribed to popular science when I was like 8 years old. The promise of fusion energy was ‘just around the corner!’. 42 years later, it still is. If you read the best of the current research being done, by the scientists doing the work, it is not hard to believe that is may never happen. Certainly not in a time frame to ease our transition away from oil. Solar, wind, nuclear? Without oil, I have my doubt we could even maintain the infrastructure we have already installed to date. Nuclear has gone from being ‘too cheap to meter’ to perhaps not even energy positive when you add in the energy cost of dismantling plants, and dealing with the waste products, something never really mentioned by advocates. None of the alternative to oil, BTW, are easily applied to food production, and also leave out the gaping question of how to mine the vast quantities of minerals needed to simply grow food. It also leaves out how to get enough nitrogenous fertilizers from a source that has a constantly dropping EROEI. In some ways, its an academic argument, the world has been fed by the haber-bosch process for a hundred years, and the physical chemistry of the reaction is the same no matter what ‘energy’ drives it: It takes almost a volt of energy to simply break the di-nitrogen triple bond and another volt to reduce a mole of nitrogen gas to two moles of ammonia. That is the thermodynamics of the reaction and no matter what the technology is, the thermodynamics will never change. All you can do is make it more efficient and even if the reaction were 100% efficient, it remains a HUGE amount of energy on the scale required to produce enough fertilizer to feed everyone. If I were dictator for day, birth control would be my highest priority…well, that and having a sociopath hunting preserve.
    So, how does this relate to the topic at hand? Well, around the late 90s, I came to see all metals as proxies for oil, more so since I used to run a steam locomotive that used waste oil from the Homestake mine open pit equipment. Every oil change was 55 gallon for the biggest terex trucks and scrapers, so it was easy to see how intimately they were connected, in addition to the vast quantities of diesel used…when diesel was around $1/gallon. I picked silver as it was used, and used in a manner that pretty much precluded it ever fully recycled, certainly at these prices. Though I cannot, of course, say for sure, my feeling is that there is WAY less silver available than we think, and this ain’t good, as there is nothing on the periodic table to replace it. I remember the first 10oz. bar of silver I bought, for $40, and thought it was insanely cheap for something so useful. At $20, I still think that. Those that think money is somehow in the same realm as oil, well, good luck!

    • Enlightening post, thank you.

    • Good stuff.

      Agreed, it’s important to get a hands on perspective in order to be able to contribute anything of value to a discussion. Far too many here think that rhyming off their lessons from their chosen guide is a substitute for real life experience. Shame tho, you would need call somebody a troll if their POV is different than yours. Way too much of that here too. If your argument has merit, you can leave it at that. The rest is just pointless personal attack – even if referenced obliquely as in this case. And this site has become disconnected from it’s original promise due to tolerating the proto-fascism such attacks evidence.

      When I converted my tri-axle straight truck to run off of a diesel/veggie combo, I was still kind of starry-eyed about the future. After all, there were no TECHNICAL difficulties to being able to run equipment off of recycled waste material, the money savings were real, and the feel-good quotient about getting [part way]off of the petro-dollar treadmill by itself was enough to justify the less than $1000 cost of conversion.

      Then I slowly started to get educated in the way the world really works. If I wanted to buy good quality vegoil from a reputable recycler(so as to run MY business, rather than have to go into the waste oil collection and refining business) I was paying heavy taxes that went far to eliminating the fuel saving advantage. Legislative biases in general favoring the usual crony capitalist ethanol scams seemed to make the real-deal alternative fuel system no better than semi-legal. Kind of like their attitude towards alternative currencies.

      The real education was when I got down to the places where the ‘alternative fuel revolution’ was supposed to be based. And discovered that mega-big palm oil plantations in countries like Honduras were owned by the local mega-rich elite. Who had a nasty habit of running small scale farmers off of their lands so as to be able to put together these huge “sustainable development” projects. To mention nothing of the effects on the land via elimination of bio-diversity with this mono-culture resource extraction disguised as GREEN eco-friendly business.

      Like AGW, carbon taxation, Agenda 21, and the rest of the ECO-SPEAK shell games by which the progressive kleptocracy keeps one step ahead in RESOURCE EXTRACTING their dupe followers, alternative energy has been almost totally co-opted by the usual suspects. I’ll leave solar out of this for now, and the rest of what you were saying about fertilizers and such. Too many things to cover in one comment. Just keep in mind, what the kleptos are trying to pull off with the alternative energy scams they have equivalent methods for extracting the hard earned savings from the pockets of alternative currency/precious metals believers too. Full spectrum dominance!

      PS. it’s not clear to me what you are trying to say at the end about silver.

      “I picked silver as it was used, and used in a manner that pretty much precluded it ever fully recycled”

      Did something get cut off somewhere?

      • Yes, sorry! Something was left out there, let me rephrase now that I don’t actually have wine circulating in my bloodstream: We use silver in tiny amounts spread over millions of devices, that are then usually tossed, is just not going to get easily recycled. Most definitely at these low prices. Why would you, when it is at, or below, the cost of production? Nothing particularly profound there, it may have been a somewhat original thought on my part at the time, but many others have seen this trend as well. A similar trend is underway is other commodities that are really essential to human beings. Phosphorus comes to mind. The way that it is generally looked at also coincides with metals: it looks at thought we have a lot of it, but the localized concentrations are dropping(rather quickly), and the energy it takes to get them seems wholly unappreciated. Basically we are using ever more energy to diffuse it all over the planet. The reasons for this are, in my opinion, as much psychological as technical, although education(or the lack of it) seem to play a part as well. A few years back we graduated 50,000 lawyers in same year we graduated 300 petroleum engineers…not a good portent in a country that is so completely reliant on oil.

        I applaud your WVO experiment! Hey, at least you were out there trying something. My experiment was a tad different, in that there whole purpose was to see if it could scale to any degree, and how would a modern diesel adapt to it? My sweety and I lived in Napa Valley at the time, and there was oil for the taking. So many high end restaurants, and virtually no one who wanted to get their hands dirty. I converted all of our VW TDIs(ALH motor) and kept careful track of mileage, maintenance, and wear. I did not, thank god, interact with the state of CA in any official fashion. As someone who has always been self-employed, it would be hard to even think of a worse place to try to do business. To sum it all up, WVO is probably a better fuel than diesel(great lubricity), if properly filtered, in a diesel that was correctly converted. I would call the experiment a success, at a personal level, but NO WAY would it scale to the degree that will keep Americans driving in a manner to which they are accustomed. At least, not if we also want to eat… With that said, I doubt that there IS anything that will keep Americans driving like they have in the past…unless someone pulls a Mr. Fusion out of their *ss, and soon. It is not the only factor in that equation, many towns in CA are already floating bonds for street repair and maintenance. To me, nothing screams FAIL like creating future debt just to service your current infrastructure. As well, one more sign that the oil-soaked American paradigm may have to change, and quickly. Which also plays in the current discussion, and Steve’s ideas and supporting data. Things that we derived from cheap oil, will simply have to be repriced as oil becomes both more expensive, and with a dropping EROEI. I would put the ignorance of this at most levels of our societies as almost a promise of a bad ending. Sort of like what the folks cutting down the last tree on Easter Island must have thought the next day… Hard data, history and psychology never really tell you what comes next, but it does give you clue of what has a low probability of happening.

        My wife is a clinical psychologist, and however one might feel about the field of psychology( I consider it a soft ‘science’ at best) it is still one of the best ways we have of explaining human behavior, and at this point in our history, we better use all the tools we have, as we have probably stepped way over the line of sustainability, in a wide variety fo ways. It can be a useful tool here as well. It is not difference of opinion that irks me, but the way that it is thrown out in a open discussion. If it is merely to distract, or create doubt for others, I honestly feel in should be at least brought up. You never really know why someone says the things they do, unless they directly share their motives, but you can gain SOME insight by the pattern. Having been on many investor boards in my life, there are those who have different opinions, and there are those who bash. They look, and smell differently, in my opinion. The reason to point such things out, is that they can inflict doubt and fear entirely disproportionate to their numbers, and this can be very counter-productive. The discussion of AGW or Intelligent design are examples, to the public, it seems to look like a 50/50 proposition, but in reality, there are probably 100,000(or more) of the planets brighter human beings working on one side, and perhaps a few hundreds, at most, ‘working’ on the opposing side. At some point, that inability to see how unbalanced the discussion is, will probably have some regrettable results…

        • ” the reasons for this are, in my opinion, as much psychological as technical”

          Yeah, I could really go to town on that. But comments don’t allow much amplitude, so I’ll just stick to the already discussed scope here.

          The reason for my chiming in about the WVO experience was to confirm what you and I have both been witness to – there is scads of unused ‘energy’ lying around(or actually consuming MORE energy just to get dumped!) . And then to extend that point to saying that there is a programmatic system-wide bias towards WASTEFUL resource extraction and AGAINST utilization of locally-available and small-scale sources of same.

          ERGO – we do not suffer from an ‘energy shortage’ – we suffer from an institutionalized effort to defraud us of AVAILABLE ENERGY as well as waste as much energy as possible while doing so!

          Once I found that confirmed by real life experience, it was possible to extend the observation to the wider scale – thereby allowing for a more complete understanding of what we are up against in ANY effort to protect against the erosion of personal or societal quality of life. It’s exactly that understanding which makes the intersection of ENERGY & CURRENCY such a potentially dynamite topic. And why I hoped this blog would be up to the task of handling the linkage.

          Yes, I agree with you. “Energy is the key” – and EROI is the most promising tool to uncover its’ role in defining our fates. But the potential for doing just that has not even begun to be tapped here. Which is why I was hoping you would flesh out your perspective of silver in order to add to the very interesting perspective on energy which you shared.

          This whole regurgitation of mining numbers and vault withdrawals have become a sideshow which, along with the usual gatekeepers here, actually prevents any creative break out in discussing the topic in the way it deserves. There’s got to be dozens of other sites that repeat those numbing numbers daily. No need for more of it here – just filler – in my opinion.

          Whether you agree with my on that or not, I’d like to see more on your take about the metals; as I believe they are subject to the same systemic biases – from the same usual suspects, as I have outlined to be ruling the energy side of the equation. Yours is the first comment I’ve come across here showing promise of getting to grips with the real meat and potatoes of “ER

        • Nice comments winelover, Thanks.

          I agree with your ‘smell test’. On many boards I see one or a few commenters who seem to intentionally exercise a destructive influence, whether by starting arguments over things intelligent people of good faith wouldn’t disagree on, diverting or diluting the discussion, etc.

          Yes we need to be tolerant of different views and styles, but sometimes it goes beyond this. I believe there is little question that there are trolls, whether paid or otherwise. As you say, it is hard to ascertain motives, but one can sure tell the difference between a constructive post and one that isn’t.

          Proto-fascist…where have I heard that term on this comment board before?…

          • “Trolls” don’t only exist on msg boards. They are the kids who always wanted to be class president, or always brown nosed the teacher. They are your work colleague who lets you do the work and presents it as his achievement. They are our politicians, who have invented the most astonishing ways to lie and cheat the people.

            “Trolls” are tolerated in our society. Decency and honor are no more. And these people only have destructive potential. That’s why things don’t work, and will not work, until the good people among us get angry, get their pitchforks out, and get rid of the trolls. There is no peaceful way to achieve this. There needs to be blood.

  21. CSGTheSilverStacker | April 20, 2014 at 9:57 pm | Reply

    Amy Winehouse liked Silver, she died though. I am a big thing over on Kitco I know how to invest

    I made my living laughing at investors that lost money and padding my bank account and pockets.”

  22. So the price of Silver is only UP! physical silver is. No ETF for me. I have 20 bars of 100oz left to purchase and that will be enough to survive the financial tsunami….

  23. At Curly-

    I guess I can sum up my thoughts on energy pretty succinctly: the next big thing in energy will be…using less. I do not see anything on the horizon to take the place of oil, or hydrocarbons in any of its various forms, at least in the amounts we need, much less use. And, if we are realistic about it, we need to acknowledge that most of the ‘alternatives’ to oil, are really derivatives of it. Even nuclear, as if it didn’t have enough other problems…
    Though I am a geek, and a wannabe engineer(my background was microbiology), I do not subscribe to the ‘technology will save us’ theme. For a number of reasons, all of which probably deserve their own monograph. Even though we live in interesting times, I still find it somewhat amusing to hear folks who are very much in favor of throwing ‘intelligent design’ in with high school science, along with other beliefs that I(personally) would deem ‘magical thinking’ still think that the very same science, and scientists, whom they despise, will save their *ss. I applaud Steve, and the other sharp, insightful thinkers who blog. I once thought of doing so myself, and was going to title it the blog ‘Somewhere, someone is working on something!'(so that I don’t have to change), because that is how most folks who seem to have forgotten whatever they ever knew about physical sciences, sum up why the future will be better. They know the stats of every single player on their favorite NFL team, but don’t remember what an ‘element’ was, or how food is grown. Amazing that a top tier society with this sort of common thought, can stay on top…

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