WARNING: The Coming Collapse Of U.S Net Worth Will Wipe Out Millions Of Americans

As the Financial Circus continues today, pushing down the precious metals prices, millions of Americans are going to get wiped out when the collapse of U.S. net worth begins in earnest.  Anyone with a tad bit of common sense realizes these financial markets today are totally disconnected from reality.

With new stories of 40 million Russians to take part in “Nuclear Disaster” drill, the Philippine President telling President Obama “To Go To Hell”, he’s buying weapons from Russia, U.S. Suspends Diplomatic Relations With Russia on Syria, U.S. Ends Fiscal 2014 With $1.4 Trillion Debt Increase: Third Largest In History, Deutsche Bank Troubles Raise Fear of Global Shock, it’s completely hilarious that the gold and silver prices are selling off big time today.

With 90% of the U.S. media now in control by six large mega-corporations, Americans have no idea just how bad the U.S. financial system has become.  News stories today that would have caused a stock market crash and a spike in the precious metals years ago… no longer are a realistic barometer of the market today.  Instead, the broader Stock, Bond and Real Estate Markets where 99% of Americans are invested, continue to be propped up.

How propped up?  Well, let’s say by a staggering $31 trillion in the past six years.  According to the wonderful folks at the Federal Reserve, U.S. net worth increased from $57.9 trillion Q2 2010, to a stunning $89 trillion Q2 2016:

fred-us-net-worth

I would imagine a lot of wealthy Americans believe they are living life “High On The Hog” today.  However, that $31 trillion in additional wealth is a nothing more than a “Digital Mirage.”  For wealth to grow, more energy must be burned and positive economic activity must be generated.  This is the foundation of all economic principles.

Unfortunately, Americans did not burn more energy to create this additional $31 trillion in U.S. net worth.  Matter-a-fact, total U.S. energy consumption in 2016 will likely turn out to be less than it was in 2010:

us-net-worth-vs-total-energy-consumpiton

This chart is very simple to understand.  The left axis shows U.S. net worth in trillions of dollars while the right axis indicates total U.S. energy consumption in quadrillion Btu’s (that’s one hell of a lot of energy).  As we can see, total U.S. energy consumption has fluctuated a bit, but has been relatively flat for the past six years.

Moreover, total U.S. energy consumption will likely be lower in 2016 (96.5 quad Btu’s) compared to 2010 (97.4 quad Btu’s).  On the other hand, total U.S. net worth has climbed to $89 trillion versus $57.9 trillion in 2010.  So, the real question is… where did this extra $31 trillion in U.S. net worth come from if total energy consumption was flat?

In all likelihood, the increase in U.S. net worth came via the tens of trillions of dollars of Fed and Central Bank liquidity.  Basically, hot air and lots of smoke and mirror accounting.

We can clearly see the same type of financial insanity taking place in the growth of U.S. GDP – Gross Domestic Product:

us-gdp-vs-total-energy-consumption

How the U.S. GDP increased nearly 25% in six years while its energy consumption remained flat is one for the record books.  Now, this wasn’t always the case.  U.S. energy consumption nearly tripled from 34 quad Btu’s in 1950 to 98 quad Btu’s in 2000.  Thus, U.S. GDP increased as total energy consumption increased.

However, the magicians at the Federal Reserve and U.S. Treasury figured out a  NIFTY way to increase our Net Worth  and GDP for the past six years while energy consumption remained flat.  Unfortunately, most Americans don’t understand this “Ponzi Finance 101”… including most of the highly educated intellectuals.

This is what I call “Intelligent Stupidity.”  The country is full of really smart people who are completely stupid when it comes to basic financial and economic sense.  Instead, they have been infected by what James Kunstler calls, “Wishful Thinking.”

WARNING:  Most Analysis Out There Is Completely Useless

There’s quite a lot I can write about this topic.  Let me start off by saying, we can totally write-off the Mainstream media (MSM).  Once you understand that, you have 90-95% of the battle won.  Unfortunately, there is still a lot of incomplete, faulty and lousy analysis by the internet alternative media.

I am not trying to be harsh here, but the truth of the matter is that a significant percentage of the alternative media is full of companies and sites that promote lousy conspiracies, pump & dump stock scams and precious metals selling fraud or thievery.

This is really a horrible situation.  When some poor American finally wakes up to the Greatest Financial Ponzi Scheme in history and starts to read the alternative media, chances are high that they are misled or taken advantage of financially.

TO ALL THE COMPANIES & WEBSITES OUT THERE TAKING ADVANTAGE OF PEOPLE, you should be fricken ashamed of yourselves.

For example, one of the websites that I used to read several times a week was just bought out by one of the largest financial newsletter organizations.  This gentleman is on CNBC often and puts out some pretty good stuff that Zerohedge posted all the time.  I gather many of you will figure this out.

More and more BIG NAMES are selling their souls for the very DOLLAR that they say they despise.  How fricken despicable.

While I don’t have a problem with someone charging for original content, I do have a problem when the analysis is faulty, lousy or misleads the public.  I would imagine a small handful of folks who read my work may say the same about me.  However, you can’t please everyone.

This is the reason why I offer donations rather than a paid subscription service.  If someone finds merit in the work, then they are more than welcome to contribute.  I believe the information I publish is really important for all the public to understand.

The problem with much of the alternative media analysis, is that it fails to include the key factor… ENERGY.   Today, I see that SilverDoctors has published one of Keith Weiner’s articles titled, Deutsche Fuels Silver, To The DOWNSIDE.  In the article, Weiner makes the following claim on silver:

One thing’s for sure, silver is a lousy bet at this price with these fundamentals. Buying silver right now—at least if you’re buying it on speculation of a price gain—is almost the textbook definition of a Ponzi scheme.

Keith’s work is based on the “gold and silver basis”, which refers to the current abundance or scarcity of metal in the market.  This is based on short-term trading activity, not long-term fundamentals.

I would kindly like to remind my readers that right before the 1929 Stock Market Crash and Great Depression, American Economist Irving Fisher made his infamous statement, “Stock prices have reached what looks like a permanently high plateau.”  Unfortunately, nothing has changed with economic or financial wisdom in 87 years.  Americans are just as gullible as ever…. even worse.

Keith Weiner forecasts the paper gold and silver price much the same way the musicians on the Titanic continued to play their instruments as the ship sank.  Thus, Weiner is acting just like the musicians on the Titanic who were trying to calm the passengers.  Instead, Weiner’s analysis is focusing on the short-term noise (music) while the entire U.S. economy will sink down the toilet.

The Coming Thermodynamic Oil Collapse Is Worse Than I Realized

Last week, I spoke with Bedford Hill of the Hills Group about their “Thermodynamic Oil Collapse” model.  What an interesting conversation it was.  Bedford Hill was the project manager of a group of engineers that put over 10,000 hours in designing their Thermodynamic Oil Collapse model. 

Bedford told me that after they ran the model, the results were so shocking, they sat on the damn thing for two years before publishing.  I asked him did any of the engineers that worked on the model disagree with the results?  His answer was, “Not a single one disagreed.”

It has taken me some time to digest this new energy information as well understand the details by talking with Bedford Hill and Louis Arnoux of nGeni.  Again, I will be interviewing these gentlemen on this Thermodynamic Oil Collapse model and the implications shortly.

Falliing-EROI-Levels

Anyone interested in reading the Hills Group work, you can go to their website, thehillsgroup.org, or check out their detailed report.

The rapidly falling EROI – Energy Returned On Invested is gutting the entire U.S. oil industry and economy.  Instead of the United States enjoying real fundamental growth based on increased energy consumption, we have turned to inflating electronic digits as an indication of our wealth.

As I explained in the beginning of the article, U.S. energy consumption has been flat for the past six years, while U.S. GDP has increased nearly 25%, as our supposed net worth has jumped 54%.  Again, this goes against any sound fundamental economic theory.  We have totally removed ourselves from reality.

While the Fed and Central Banks will continue to prop up the markets by printing money and buying bonds and stocks, they can’t print barrels of oil or energy BTU’s.

There lies the Rub…

Check back for new articles and updates at the SRSrocco Report.  You can also follow us at Twitter, Facebook and Youtube below:

Enter your email address to receive updates each time we publish new content.

I hope that you find SRSroccoReport.com useful. Please, consider contributing to help the site remain public. All donations are processed 100% securely by PayPal. Thank you, Steve

49 Comments on "WARNING: The Coming Collapse Of U.S Net Worth Will Wipe Out Millions Of Americans"

  1. Great stuff Steve, but let me push you a little on the “they can’t print oil” comment because I was thinking about that this morning lying in bed. It is absolutely true they can’t, but they can provide lots of money to oil companies to explore and drill for oil. Or they can just buy the debt of these companies as the companies issue it. In theory, oil companies could have an endless supply of financing to produce oil. It sounds absurd, but who would have ever thought central banks would be doing what they are. Eventually, you do hit a wall, but it could get really crazy before that moment.

    • Mark,

      Yes, the Fed could print money and bail out the oil companies, but that doesn’t stop the rapidly falling EROI – Energy Returned On Investment.

      There’s less and less net energy for the U.S. and global economy every year. However, now it’s getting very NASTY. So, while the Fed can PRINT, PRINT and PRINT… the Thermodynamic Oil Collapse will destroy the system from underneath.

      steve

      • Yes, the central banksters will keep on doing the same insanity that hasn’t been working. They want absolute control. A free market can’t be allowed to operate, they think. However, they’re being too smart, and have forgotten that the Soviets tried it and it didn’t work.

    • Mark, I see your point, but honk of it this way….

      Suppose you had a water well that required you to physically pump the water, but after you physically pumped one glass of water, you were so thirsty, you drank it all….

      It would matter little how much paper cash you had, you would never be able to take a bath.

  2. Steve , The feeling of what it would have been like to be standing on watch with some 1000 + riding in ease , all the while relying on you to call out should you see an iceberg a float in the water gives new meaning when following your calls of warn.

    Oh those who sleep , God help us all !!!

  3. If this is actually true (assuming there are no huge, unknown or hidden, oil reserves) then the entire world will grind to a halt. In that event, we’d all be best to start living like the Cartwrights on the Ponderosa. Maybe I’ll trade my truck in for a horse (except my feed bill would be more than I spend on gasoline).

    • “Maybe I’ll trade my truck in for a horse (except my feed bill would be more than I spend on gasoline).”

      pay more than that. horses get old, they get sick, they need shoeing, they step on you, they need pastures, the pastures get anthrax, you need to breed them (or pay someone who does), they don’t have heaters or air conditioners or windshields, etc. big learning curve, might want to start soon.

    • “(assuming there are no huge, unknown or hidden, oil reserves)”

      there’s an awful lot of oil everywhere. the problem is the cost of getting it out of the ground. don’t worry, no matter how much it costs the “global elite” “international financiers” “deep state” will tell their government quislings to tax you to pay for their oil.

      • Quite right. It’s no coincidence that the Canadian feds are forcing the provinces (states) to impose a kind of “carbon tax,” ostensibly to offset the negative impact of human activity according to the authorized “global warming” narrative, but in reality to address the symptoms of plunging EROI. Basically, whatever consumption remains will get taxed to fund Big Government. The same lie is manifesting across the entire western world.

  4. howdy! off-topic but in this column …

    https://srsroccoreport.com/future-money-trends-silver-will-break-50-in-2016/

    … you said Silver Will Break $50 In 2016, I said no it wouldn’t, you said keep in touch. so, here I am keeping in touch. as I write this silver is now [$17.80], up from $13.89 at the time of your column. it’s up ’bout 4 dollars, 32 more to go.

    I’ll check back again at the end of the year.

    • That is a fair criticism of Steve and predictions in price should never be given especially in system that is managed by central banks and the shadowy groups that run them.. I respect and also agree what he posts on his site..I started stacking years ago bc a co-worker and me saw this coming a long time ago the only question was the speed at which the net energy decline would occur at and how they would mask it.. if you ever saw the big short think of pm’s as credit default swaps and the MBS’s as the net energy decline you’re just taking the opposite end of the trade dollar price is irrelevant

      • “dollar price is irrelevant”

        it is. the problem is the economic systems are hostage to the existing financial systems and the fiat debt dollar – when the dollar fails then 99% of the economy will fail with it, and virtually no-one is prepared for that – especially those that have obtained large hordes of g/s. “I’m ready!” no they’re not.

        the “federal reserve” fiat debt dollar is the ultimate parasite. “you can’t live without me”, they’ve made sure of that.

    • no pain no gain…..lol

    • Jim Rogers has said that the lemmings will rush to the USD before it collapses. Harry Dent has said that there deflation drags gold, silver etc down before inflation takes off.

      • the fiat debt dollar is a tool of theft. originally meant to steal from the united states, on becoming the world reserve currency it has been used to steal from the entire world. with united states industry gone and its productive citizens at an average age of 58 and its parasite ghetto/mestizo/jihadi welfare tribes on the rise, the only thing holding up the united states is the fiat debt dollar draining the wealth of the world into the united states (as it passes through on its way to its owners). so yeah, as everything productive gets sucked dry I can see everyone running to the fiat debt dollar, trying to get closer to the fiat debt money spigot before the last productive enterprise is consumed.

        but that is not how we’ll experience it. what we will experience is 1) millions of foreigners importing their dollars and buying up everything they can, 2) while u.s. citizens can afford nothing at all – not gasoline, not food, not silver, not gold, not anything. that is what will happen.

        what we are seeing is neither inflation nor deflation. what we are seeing is wealth transfer. “first by inflation (of the amount of money they hold) then by deflation (of the amount of money we hold).”

  5. “Anyone with a tad bit of common sense realizes these financial markets today are totally disconnected from reality.”

    as long as people trade their labor and product for fiat debt paper, THEY are the ones disconnected from reality. the financial markets are in no way disconnected from obtaining that labor and product, they are connected directly to it, both present and future labor and product.

    “here, have a loan. (print print print, stealing from everyone in the world who owns a dollar). you now owe us 30 years of labor. get to it.”

    what a deal.

  6. Brilliant comparison, energy expended versus dollar net worth, aka real versus fake. Thanks for sharing.

    I look forward to learning more about the Thermodynamic Oil Collapse. I think it’s interesting how the middle east nations keep pumping even in the face of lower prices, like they can’t stop or their economies will collapse. Kind of like how we can’t stop printing money or our economies will collapse.

    Wile E Coyote off the edge of the cliff…

  7. The dollar is really kicking butt. World wide confidence in the U.S. treasuries market is a sign that the American economy is perceived as being resilient compared to her peers. U.S. innovation is fueling a strengthening intellectual property portfolio and that has not gone unnoticed in global markets. A collapse of any kind is a long way from here.

    • Actually, we are squarely in the collapse window today. DB is a “gonner” and the derivatives daisy chain implosion is looking ominous. The largest bank in Europe is obviously insolvent, Italian banks have large amounts of non performing loans and the ECB and BOJ are combining each to print 200 billion A MONTH in a desperate attempt to keep the charade from imploding.

      To say the collapse is way off is willfully ignoring the unpleasant facts.

    • All that you’ve proven is that you’re a kool-aid drinker. Try instead to look at the disaster that’s started to happen worldwide.

    • Are you real? I think not

    • Very good JTM. All these fears i.e. EROI, peak oil, thermodynamic oil collapse and on and on are
      not correlated to time. These could be 20 years down the road. The best time to begin buying silver is when demand exceeds supply. You can start seeing this my noticing “lead times.” When shipments are 6 to 8 weeks out start stacking. The silver gurus make their income selling silver so
      they have been hyping it since I came aboard in 2010. They have yet to be correct on any forecasts,
      As Trump says, ” Follow the money.” And I don’t see many people busting their butts to buy silver.
      That is the dynamic that must change i.e. demand truly exceeding supply.

      • As evidenced by the responses in this thread, people are expecting worst case scenario but it hasn’t played out like that. America is resilient and is a magnet for foreign and domestic investment. There is no sign of a slowdown in the harvesting of energy or in innovation in America, and therefore there is no imminent collapse.

        I think many are frustrated with the price of precious metals since the 2011 spike and it tends to cloud their reasoning.

        • JTM, it’s all paper. The BoJ buying APPL stock is nit a good sign. Your America is already going down the sewer. Social tensions are growing and foreign central banks are buying your FANG stocks, or the PPT buys it up.

          Collapse happens, first slowly, than suddenly. Start buying physical metals, better one year early than one day too late.

      • DisappearingCulture | October 5, 2016 at 7:22 am |

        “There’s no doubt that the recent take-down of gold and silver – especially today’s – is inextricably connected to some sort of financial system disaster brewing”

        http://investmentresearchdynamics.com/does-the-attack-on-gold-signal-an-imminent-bank-collapse/

  8. Bhavesh Modi | October 4, 2016 at 7:45 pm |

    good work Steve, thanks.

  9. Thank you for the free and open venue.

    Referencing the world silver index, Friday saw a spike low of $ 16.12 just as Shanghai was closed for vacation. This allowed underwater paper shorts an exit on Sept. 30 with minimum disruption to the world silver price. The fact that this event occurred as the sdr was re balanced is significant.

    The SGE is fully cognizant of the risk, and the Yen drop is being used for cover. I would therefore anticipate a silver market recovery to within a few percent of $ 19.62 by Oct. 10th. This will be interesting to watch.

    Notification on Market Risk Control during the National Holiday 2016-

    http://www.en.sge.com.cn/news-announcement/announcement/540899.shtml

  10. Thanks Steve,
    i think that this is your most informative and intuitive post, that i can remember.

  11. The medium of exchange (money) has been corrupted for decades now. It doesn’t follow the underlying truth anymore.

    But their promises are solid as a rock. /s

  12. Matt Blocksom | October 5, 2016 at 9:21 am |

    Steve, you said “by printing MONEY and buying bonds and stocks, they can’t print barrels of oil or energy BTU’s”

    I’m sure you meant they can print CURRENCY 🙂 since money can’t be printed either 😉

    • Matt Blocksom,

      Yes, that is correct. They can only print FIAT MONETARY NOTES and INCREASE ELECTRONIC DIGITS.

      steve

  13. Michael Ponzani | October 5, 2016 at 12:48 pm |

    I wish I knew who got taken over. This implies the information will be stifled, or, at least tailored to the large organization. There’s only a couple of giant publishers that fit this criteris.

  14. I really like your reports and read them regularly, but I do not enjoy the expletives, especially the most recent one, “fricken”. Surely you can express your quite intelligent thoughts and research without resorting to this?
    Thank you for all you are doing and, please, keep up the good work.

    • jones,

      While you bring up a legitimate gripe, I enjoy adding a bit of FLAVOR to the article from time to time. I did not think the word “fricken” as such a bad word. However, I will consider using it less.

      I would kindly like to remind you this. While many other MSM or alternative sites use more professional and say, appropriate language, they either LIE THROUGH THEIR TEETH or put out complete rubbish.

      While I do get a bit colorful from time to time, the work is still much more HONEST and FACTUAL than most of the stuff being published today.

      steve

      • Thank you for the response. Surely you know the derivation for the word “fricken”?

        Urban Dictionary
        (adv.)A diluted alternative for the word “fucking” or “fucken”. (See “fucking”, pg. 68). 1) “Dude, that is fricken awesome!” 2)”My fricken math teacher is the biggest …

        As a child, I knew of no one who was allowed to use the base word and rarely did anyone attempt such a thing. The degradation of culture and civilization has continued at break-neck speed during my lifetime. Television today is a prime example.

        Being much older than you and having studied the economic problems of the US and the world for decades, I feel quite confident I am capable of sorting through the chaff.

        Thanks again.

  15. RS and JTM,
    The USD is strong now, but that mat change very soon…

  16. timothy price | October 6, 2016 at 6:49 am |

    The conclusion of this article is honeyed poison to the ear. The relationship between carbon fuels and prosperity is entirely false. You will not take this remark seriously, nor believe it, but here is a seed that will sprout in your mind for the next several months until it grows into a powerful truth that will transform you from your very foundation.
    Here is the actual story of carbon life, as it evolves on any planet at any time. Mankind was warned.
    Prince of Darkness:
    https://www.youtube.com/watch?v=eOZ-_wynBTw

  17. Jones, ueber-PC US standards aren’t a way to progress in understanding among people. Every time you choose to misunderstand, you’re hindering, not helping.

  18. Did this OP actually state ..

    $31,100,000,000,000

    ???

    I’m sorry ..

    This is just too much of a coincidence for me ..

    https://youtu.be/29bkCJ81TOU?list=PL1yWdjkeR-5KSR11kvFZwmZBYf4wYf0Kh

    A billion dollars in the context of a trillion is ..

    trivial ..

    In the context of 30+ T?

    You just don’t conjure up this kind of money ..

    Out of THIN AIR!

    You ……………………………..

    You STEAL IT!

    http://www.goldcore.com/us/gold-blog/deutsche-bank-probably-insolvent/

Comments are closed.