Why Most Analysts’ Gold & Silver Price Forecasts Are Wrong

Precious metals investors are being misled by most analysts’ price forecasts because they do not understand the critical underlying fundamental value mechanism.  Furthermore, there seems to be a great deal of animosity from the short-term trading analysts who view many in the precious metals community as pandering hype and conspiracies.

One of these analysts is Avi Gilburt of the Elliottwavetrader site.  He criticizes the “Gold bugs” in a few of his more recent articles, Who Do You Allow Yourself To Be Manipulated, Did Your Mother Write An Article On Gold, and Damn Manipulators.

Feel free to check out these articles as Avi Gilburt condemns those precious metals analysts who continue to regurgitate the “manipulation” theme over and over.  On the other hand, Avi truly believes the value of the metals, and other commodities are based upon looking at the “tea leaves” or studying “goat entrails” as it pertains to the Elliott Wave theory.

Most certainly, he will defend the Elliott Wave theory to the death.  While I admire that sort of conviction, Avi Gilburt is just as guilty in his forecasting of the “value” of gold and silver just as much as the precious metals community that he constantly criticizes.

That being said, there is a difference between the two camps, in my opinion.  While I am frustrated with the precious metals community in their lack of understanding of the true value of gold and silver, the short-term trading analysts such as Avi Gilburt and Dan Norcini are quite vicious in their critiques.

This is also true for CPM Group’s Jeff Christian.  I heard from a source that when Jeff Christian was apart of a precious metals round table, when the question was posed to the group to the number of individuals who believed the metals were being manipulated, he blurted out, “Anyone in this group that follows my work, YOU BETTER NOT RAISE YOUR HAND.”  Now, that isn’t the exact remark… but close enough.

The subject of precious metals manipulation is quite complex, so I’d rather not get into it in this article.  However, I will show where the precious metals community and the short-term trading analysts are incorrect in their approach for forecasting the value of gold and silver.

What Has Been The Real Driver Of The Gold & Silver Price

Even though I have discussed this in prior articles, new information confirms my analysis.  While most economists, traders and the those in the precious metals community believe that “Supply & Demand” have been the leading factor in determining the value of gold or silver, it’s not, rather it has always been the “ENERGY FACTOR.”

Here is an updated chart showing the relationship between the price of silver and oil since 1900:

annual-silver-price-vs-oil-price-1900-2016

As you can see, the price of silver and oil remained flat (on the chart) until 1971.  Actually, the price of oil and silver stayed below $2.00 (except for a few years) from 1900-1970.  When President Nixon dropped the Gold-Dollar peg in 1971, this significantly changed the value of the precious metals and oil.

Even though the movement of the oil and silver price are not exactly related, we can definitely see a high degree of correlation.  Thus, as the price of oil skyrocketed in the 1970’s, so did the price of silver.  Moreover, the same thing took place in 2000-2016.

Does Avi Gilburt have a chart showing this to his members?  I doubt it.  Of course, the short-term price movements of silver and oil are not as precise as the longer term valuations shown in the chart above, but we can clearly see that the forces of “Supply & Demand” are less of factor than the changing value of oil.

This is also true for gold.  This chart shows the price of gold versus oil since 1940:

annual-gold-price-vs-oil-price-1940-2016

Again, we can clearly see that the price of gold and oil remained flat-lined until 1971.  As the oil price shot up in the 1970’s, so did the gold price.  When the oil price declined and stayed low in the 1980’s and 90’s, so did the value of gold.  However, as the price of oil surged to $112 in 2012 from $20 in 1999, so did the value of gold.  Gold jumped from $279 in 2000 to $1669 in 2012.

There’s no coincidence that the value of oil and gold jumped 500+% from 2000-2012.  While the silver price jumped seven times from $4.95 in 2000, to $35 in 2012, its current price is 3.5 times higher than 2000 and gold is 4.5 times higher.

Which means, there are more factors in determining the gold and silver price than just the metals relationship with the oil price.  That being said, supply and demand factors play a “ROLE” in impacting the price of gold and silver… BUT ONLY AS A MINOR PART compared to the overriding oil price dynamics.

What I am saying here is this… the value of gold and silver has been, and will continue to be tied to the oil price dynamics, however, supply and demand factors are contributor… BUT TO A MUCH LESSER DEGREE.

Gold & Silver Are Beginning To Disconnect To The Value Of Oil

Something interesting has happened recently in the price movement of gold and silver… they seem to be now disconnecting from the value of oil.  If we take a look at the two gold and silver charts below, we can see that as the price of oil has remained flat in 2015-2016, the gold and silver price has turned higher, especially the gold price:

annual-silver-price-vs-oil-price-2000-2016

annual-gold-price-vs-oil-price-2000-2016

While the gold price has jumped up higher than the silver price (in relative terms), they are both moving up as the oil price remains flat.  To understand why this is happening, I have to explain two KEY FUNCTIONS;

  1. Market Sentiment
  2. The Coming Oil Price Crash

Short-term trading analysts suggest that “Market Sentiment” plays a role in determining the price of a commodity, stock or bond.  While I would agree with them to a small degree, they are correct for the wrong reason.

Let me explain this as it pertains to the value of gold and silver.  At the beginning of the year, the stock market crashed 2,000 points quickly, so investors moved into gold and silver in a big way, especially the institutional investors who bought the Gold ETFs.  So, the “Knee-Jerk” reaction by most traders and investors is that market sentiment turned around and the movement of funds into gold and silver pushed up their price.

Again, I agree with that on principle, but for a very different reason.  “Market Sentiment”, as it is used as a tool for determining the price of gold and silver, is only working to the extent that it is “WAKING UP INVESTORS TO THE TRUE FUNDAMENTAL VALUE”, but just for a brief period of time.

You have to think of precious metals market sentiment similar to when a spouse believes their partner might be having an affair.  When something very suspicions happens, the spouse gets very angry and the partner tries to calm them down by giving a reason (excuse) why is not true.  So, in a few days, the spouse believes the partner and everything calms down.

This type of “UP & DOWN” sentiment continues in the relationship causing a great deal of volatility in the marriage.  However, one day, the spouse finally catches the partner in the act and the TRUTH finally comes out.  Then there is no more lies, deceit, excuses or manipulation of the facts to keep the spouse believing that everything is fine.  The spouse has now taken the RED PILL, so to speak, and cannot unlearn what they now know.

This is a perfect example of what is taking place as it pertains to “MARKET SENTIMENT” in the precious metals market.  When investors start to get fearful or extremely worried about the Stock & Bond markets, they rush into the precious metals… for a brief period of time.

When the Fed and Central Banks pump Trillions of Dollars of liquidity into the financial system, they bring calm back into the markets easing investors fear and worry.  Thus, gold and silver demand declines.

Unfortunately, this is a game that is hiding the truth.  So, when investors finally realize the Stock and Bond Market are the biggest Ponzi Schemes in history, the MAD RUSH into the metals will begin.

Now, the reason the Stock and Bond Market are nothing more than HOT AIR and the typical Ponzi Scheme, can be seen in this chart by Louis Arnoux:

slide-4

The value of U.S. GDP per head, in Oil & Gold all went up together until 1970.  While U.S. GDP has continued higher and higher, we can clearly see that the gold and oil (red & blue color) trend lines behaved much different;y.  I would advise watching my Thermodynamic Collapse Interview with Dr. Louis Arnoux to explain the details:

However, the only way for real wealth to be generated, it has to coincide with the value of gold and oil.  Unfortunately, the value of gold and oil in GDP per head for each American crashed (2012), while stated GDP continued to record territory.

Thus, the real GDP value reported by the U.S. Government is highly inflated.  This is based on understanding the “Thermodynamic Oil Collapse” and its impact on the entire global economy.  According to Louis Arnoux and the Hills Group work, the price of oil will continue to crash to a MAXIMUM PRICE of $12 by 2020.

This is due to their calculation of the “Remaining Value” of oil in a barrel.  You have to think about it like an automobile.  When the car is brand new, the value is say, $30,000.  However, after 15 years, the car is only worth $5,000.  The economic value of that car has been “DEPLETED.”  While it still works, the 15 year-old car does not contain the same “embedded” energy as a brand new car…. so the value is much less.

The Hills Group ETP oil model has calculated that the value of a barrel of oil is behaving similar to a used car.  The costs of producing a barrel of oil is so high now, when we consider the entire Oil Industry & Support Systems”,  there won’t be much value left to the Globalized Industrial World in five years.

I will be writing more on this going forward as gold and silver investors will benefit the most as the Thermodynamic Oil Collapse goes over the cliff.

Why Will The Value Of Gold & Silver Surge When Most Everything Else Implodes

While the oil price has been the leading driver in the value of Gold & Silver for more than a century, it is beginning to disconnect.  Why?  Because the gold and silver price have been valued as “commodities”, rather than as “high-quality stores of value.”  

I will be writing an article showing this more in detail, however total Global Assets are estimated to be $373 trillion, according to a report by Savills World Research.  The majority of those assets are real estate…. mostly residential real estate.

As the price of oil continues lower and lower, it will destroy the value of most Stocks, Bonds and Real Estate.  These assets only derive their value from burning more energy each year.  However, the cost to produce a barrel of oil has become so high now, there isn’t much value left over to support the $373 trillion in global assets.

Which means, the collapse in the price of oil, will be the FACTOR that finally wakes up the world that they have been investing in the wrong assets.  It will be the MOTHER OF ALL MARKET SENTIMENT moves.

I gather Avi Gilburt will discard this article as just another complete waste of time, but he is undoubtedly blind to the oil-energy dynamics.  So, I would bet my bottom Silver Dollar that Avi will continue to read the tea leaves and goat entrails of the Elliott Wave Theory right up until the point the system disintegrates.  And maybe he should, because when the PHAT LADY SINGS, he will have to find some other occupation.

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39 Comments on "Why Most Analysts’ Gold & Silver Price Forecasts Are Wrong"

  1. So, what happens, down the line, when we don’t NEED OIL? Coal, so readily available, will someday, with technology, be made clean enough to let us be rid of addiction to Oil, the way I see it.
    I’m sure the “Oil Companies”, those with partnership with the Coal Miners, are more than willing to put millions into R & D on this, as it would be a tectonic shift in how we use fossil fuels.
    For now, I don’t argue with your charting. I might be able to make similar charts with utilizing other materials. Many like to match stock market prices with the price of bullion, or, the Dollar, or, other Currency nomenclature.
    Complicated, yes. At the end of the day, my hunch is futures and paper bullion would need to dissapear completely, to really get a grip on true pricing for bullion, which is why, I believe, China is on the right track, doing this with their small gold exchange.
    Futures invites easy money and speculation…and, greed. Gold and Silver bring out enough of the greed factor, all by themselves, without the lucrative possibility of making millions in a short period of time(or, losing it, too).
    So..Bullish BOTh Gold, AND COAL, as, our scientists have every incentive in the world to create clean-burning systems that invite a complete paradigm shift in our thinking, and use of fuel.

    • Call g. I am looking to buy some coal stocks. Would you mind telling me your favorite ones.

    • Yes both Avi and Norcini have been very wrong – also Polny. I dropped Norcine
      ten years ago. Avi I did a trial subscription and it was sooo bad
      and mostly erroneous as he is only micro analyzing GDX and SP.
      You need correlate everything everywhere as much as you can
      digest and then not rely just on charts but what events are coming.
      That is why it is so hard to predict along with the “manipulation”.
      Best to do what you can and buy within 10% of the big bottoms and sell
      within 10% of the big tops and you will do well.
      Thank you for speaking up so others will not waste subscriptions.
      My faves are strong names only in North America – CDE and AG.
      If you want outside NA then Jim Sinclair’s TRX is going to move up fast.

      • Ms Oracle,

        Thank you for your comment and I agree with you as it pertains to “predicting along with the manipulation.” It is really impossible. That being said, the true fundamental value of gold and silver are just beginning to catch on.

        steve

    • I am always going to need petrol and oil etc. if fuel gets too cheap i guess I could ensure future supplies by buying up oil refining facilities and wells that should cost next to nothing.
      How likely is that? I could contol the worlds oil at near zero cost.
      But this is the future you envisage and if this is the case then using the same logic, gold and silver requiring vast quantities of energy to minethem will cease to be mined and by the same logic they too will become worthless. So i should be able to buy up all of gold and silver in the world for next to nothing also.

  2. Steve,

    I greatly admire your work but I think you are missing a couple of things;

    Avi Gilbert is great at what he does, It has nothing to do with the true “value” of gold or silver. It only has to do with the market sentiment that moves the market one way or the other and he doesn’t give two hoots about what it all means. That is undoubtedly true for his subscribers, but because they aren’t concerned for the underlying reasons, most will be holding the bag (paper) when the time comes. Pity them don’t revile them.,

    The collapse that is coming is the world credit collapse and the destruction of all fiat currencies virtually simultaneously. This will result in the collapse of oil. And, you are right that there will nothing the FED or central banks can do about it.,

    Arnoux and Hill project that “the price of oil will continue to crash to a MAXIMUM PRICE of $12 by 2020. This is due to what they calculate as the “Remaining Value” of oil in a barrel.”

    They are confusing price with value. The value may very well be $12.00, in what ever dollars they are using, because of the low ERO(E)I, but you can be assured that the price of oil, like that of gold and silver, will be off the charts. This price action will be compounded by the fact that only minuscule amounts of oil, gold or silver will be coming out of the ground or be being processed. The world will be faced with an effectively fixed supply and an inexhaustible demand.

    Thanks for all of your hard work.

    SteveW

    ps: What did Gilbert say or do to piss you off so bad?

    • DisappearingCulture | October 27, 2016 at 6:16 pm |

      “They are confusing price with value. The value may very well be $12.00, in what ever dollars they are using, because of the low ERO(E)I, but you can be assured that the price of oil, like that of gold and silver, will be off the charts. This price action will be compounded by the fact that only minuscule amounts of oil, gold or silver will be coming out of the ground or be being processed. The world will be faced with an effectively fixed supply and an inexhaustible demand.”

      I agree with this assessment/prediction.

      In an area in 2025… if there are 1,000 cars or light trucks in running condition [arbitrary number], and those owners are not destitute, and there is 1/4 or 1/6th the available gasoline as in 2016 [also arbitrary], those vehicles owners will compete for the available gasoline if they also have anywhere to drive. I can’t see the seller of that gasoline selling to the lowest bidder.

      Now if there is only 1/4 the gasoline, and there are government price controls such that sellers can’t make a profit, then only the elites will be supplied with gasoline.

    • SteveW,

      Avi Gilburt didn’t piss me off, as you say. However, Avi Gilburt has no problem writing articles criticizing many in the precious metals community on a continual basis. When I write an article, I state facts. I am not doing so because someone irritated me or pissed me off.

      SteveW, I don’t go out of my way to criticize others, however Avi does. So, it gets a bit immature when you realize he should be acting more like an adult. However, this is probably a good tactic to get people to subscribe to his service.

      I am not he to debate whether his analysis works or not, rather I am making the point his Elliott Wave Theory is useless in determining the real value of gold and silver.

      steve

  3. I think it would be very interesting to see the chart of Total Debt per Head in the US imposed on the Chart of the “Chaotic Thermodynamic Decline: The US Case”. I think that it would show how debt is effectively subsidizing ERO(E)I.

    What no one seems to talk about or attempt to quantify is how big oil companies, world governments and, apparently, many mining companies are using increased debt to subsidize ERO(E)I. Borrowing from alleged future earnings, aka energy returns, to continue today’s operations.

    The other issue that begs consideration and discussion is the differences in the terms cost, price, worth and value. There seems to be an evolution and significant diversion, especially in precious metals, of the terms price and value.

    To me, the Cost of silver is what it costs mining companies, on average, to bring it to market, Its Price is established by this so called “market” that tells everyone what it can buy/sell it for and has borne little relationship to it’s actual costs. Its Worth, to me is what I believe is the real total cost of production, including lost opportunity costs, which for the last 10 years has been significantly less than the price. Lastly, Value, which to me is far and above all of the others because of it’s ability to be a store of energy value unlike anything except gold and silver is a better deal.

    Every PM analyst I have read or followed for any period of time, except for our vaunted leader Steve St. Angelo, is totally consumed by the price action, both past and forecast based on market “fundamentals” or “sentiment” and totally ignorant of the underlying inherent nature of the energy store of value in gold and silver.

    They may end up with the right price direction but it will not be for the right reasons, and, as a result, their future predictions will be worthless.

    Assuming you have made other needed and appropriate preparations, we should be content to continue to buy, for cash, to hold in hand until it is no longer possible.

    That time is rapidly approaching.

    • DisappearingCulture | October 28, 2016 at 7:49 am |

      “What no one seems to talk about or attempt to quantify is how big oil companies, world governments and, apparently, many mining companies are using increased debt to subsidize [DECLINING…my emphasis] ERO(E)I. Borrowing from alleged future earnings, aka energy returns, to continue today’s operations.”

      This is the heart of the issue. Most don’t understand or care about EROI, if they have even heard of it.They don’t care about debt either, until it directly affrects them.

      I’m sure Steve has that understanding, and in some future post could further explain the connection between the debt you mention and decreasing EROEI. He has explained some in the past, but my mind could stand more clarity on this critical point.

  4. There is one thing I don’t understand about the low oil price theory based on an expensive barrel. On that basis you would think a barrel would be expensive or not available at all rather than cheap. In other words if a barrel costs $80 to produce how could it be sold for $12 without the producer going broke and thus making oil unavailable? If a pen costs $10 to make and sells at $5 it won’t be long before you can’t buy that pen anymore.

    • Barry,

      You bring up the point that is the hardest to get ones mind around. According to the Hills Group work and my conversation with Bedford Hill, the oil industry will self-destruct within the next 10 years. As the price continues to fall, more oil companies will go bankrupt.

      In time, the oil that will be produced is those wells that have very low lifting costs and can still be producing at $12. However, there isn’t much oil out there that can be produced by $12.

      steve

      • DisappearingCulture | October 28, 2016 at 8:00 am |

        I believe there will be another type of oil produced when that time comes. It will be Elites’ oil.

        It may have to be produced by the Big Government [Or Elites’ or The Privedlged] Oil Company, subsidized becasue it loses money, but the wealthiest/most powerful will have the lion’s share of the energy.

      • Juergen Heil | October 28, 2016 at 8:23 am |

        That is a deflationary collapse but we don’t know how fast central banks can increase the number of zeros in their money printing. Nevertheless priced in Gold or Silver, oil will fall dramatically.

    • Barry , look at it this way: Let’s say a company pumps 100 barrels per day. Let’s assume the company also processes it’s own oil into gasoline , so it can use the fuel to drill and pump. Out of 100 barrels that was drilled and pumped, the company consumed ( to do drilling, pumping, refining, etc) 80 barrels of oil. Now, 80 barrels of oil is GONE, not sold to anyone. So, only 20 barrels can be sold to the open market, let’s say at current price of $50 per barrel. The company received 20 * 50$ =1000 $ for its sold product. BUT, BUT … the company produced 100 barrels! and received ONLY $1000 cash 🙂 That translates into a $1000 / 100 barrels = $10 ( AVERAGE price the company received for its PRODUCED oil, remember 100 barrels?) Do you see the MATH now? Yes, the AVERAGE price ( the company’s) is $10, but it does not translates in to a cheap gasoline, because the precious FINAL product ( GAS) is going to be in a short supply ( remember the company HAD TO consume 80 barrels, but to deliver to the market 20 barrels only? ) , and a gallon of gas will go to a highest bidder. YES, we still had 100 barrels pumped, but the GDP only received for growth 20 barrels of energy. That means SHORTAGE of final product ( gasoline/ Energy ) and , NO, the world cannot pump out those additional ( 80) barrels. Remember every country has it’s own max limit on amount of barrels they can pump? That’s why according the Hill research 75 % of gas station will close. We don’t need them any more, no more cheap fuel to sell. This is a simplified approach , but that’s how I understood the topic.

      • CFO point of view | October 29, 2016 at 4:18 am |

        Yeah and MARGINAL (!!!) EROI of this company is 1,25! So after including initial investments, it makes EROI of this company at about 0,5 I guess – great example LOL!

      • CFO point of view | October 29, 2016 at 4:23 am |

        Maybe another way arround at EROI 10:1 – as Steve says it’s impossible to carry our current way of living we have 5 barells out of 100 of marginal cost and the other 5 on initial investments – now do the math – and keep $100 price per barell and then $200, and if needed $400.
        People will adjust their behavior to the affortability of scarce and expensive resource and they will bid highly if the alternative is riding a horse to work…

  5. @MudGod..I don’t own any, not now…a bit early, IMHO…google this, and, see what comes up. Suplly companies may be of interest also, those that sell the needed equipment and new parts to comply with greener regulations.
    Beaten down hard, this may be THE best time to slowly start a plan of attack.
    Best of luck!
    Cal G.

  6. Steve – Great article once again. However, there is a clear element to the discussion on oil prices that many people are missing and has been missed by many for some time. I know you have addressed in previous posts, but want to make sure other readers are aware.

    If you look at the production curves of the United States pre-fracking and then compare to the advent of horizontal drilling and the opening up of the bakken with other permian/marcellus plays where the real material production increases occurred over the past decade, there is definite moment of a ‘supply shock’ to US based liquids production.

    Second, there has been, but no longer exists, a major move in the US to distribute this liquid production to the global market. For a long time, people were talking about the WTI vs. Brent spread because of the extreme pressure North American crude was putting on the global market. This spread has narrowed while prices have remained relatively low.

    Now, if you believe what I just said, we are living in a world of extreme over-supply of crude while economies around the globe are still languishing from the depression (yes, not a recession from 2008 but an ongoing recession since then) in economies, and still, a depression in the consumption of petroleum products.

    Wouldn’t you think there would be disconnect between ‘assets’ that are meant to retain their value (outside of supply/demand) and other assets, like crude, which has just gone through one of the biggest growth events in our lifetimes at the same time that consumption had stopped?

    These curves become irrelevant in my mind when you have 1) strong growth in product (supply) of crude, 2) strong growth in US dollars (supply) and 3) stagnating or a decline in the production of other assets (gold/silver)

    The day where this reverts will come, and it will go quick imo.

    Thanks

  7. Steve,
    Another great article
    I have another what if question.
    Up until now the world has not experienced actual physical shortages thanks mainly due to unconventional oil coming on stream resulting in the supposed ‘glut’. Conventional has been relatively flat since 2005. What if the various government agencies ÍEA and EIA have either not been truthful or have been lied to by oil producing countries about stated reserves( by the way you can call me paranoid but I have never trusted anything governments or their agencies say) and actual physical shortages start to occur, then your low price prediction surely will not materialise.

    Just a thought.

    Keep up the good work.

  8. IN THE HEADLINES TODAY –

    ” RIOT POLICE FROM 20 AGENCIES ARE INVADING SACRED LAND TO ARREST AMERICAN CITIZENS ON PRIVATE PROPERTY , ALL TO HELP FOREIGN COMPANIES BUILD OIL PIPELINES ,
    THUS WREACKING HAVOC WITH ENVIROMENTAL ORDER.”

    If this isn’t an arrow of direction describing where the depleting supplies of oil are headed , who knows
    a better example.

    Thanks Steve for your in depth research and enlightening abilities.

  9. Curt Swanson | October 28, 2016 at 8:32 am |

    I second Barry’s not understanding the low oil price / expensive barrel…even after reading your response. I’ll admit I’m not the brightest bulb, but to me your response seemed to support the question not the theory? I do appreciate all your work and research.

    • Curt , please see my reply to Barry’s post. Another way to look at it : let’s say you need to buy and process 30 tons of gold ore ( one ton contains 1.0 gram of gold) to get 1 ounce of gold. That’s actually the real average number. Let’s assume you pay ( again , simplified approach ) 40$ per ton. If another miner offers you LOW grade ore , that contains 0.5 grams of gold, you will you pay less money , $20 per ton. What matters here is not the intermediate carrier ( “gold ore” here or “barrel of oil” ) but a FINAL PRODUCT ( pure gold here or pure energy/gasoline (available for GDP) )
      This graph shows that less and less FINAL PRODUCT (energy) available for economic activity comes to the market:
      http://www.thehillsgroup.org/pasted1165.jpg

  10. “While the oil price has been the leading driver in the value of Gold & Silver for more than a century, it is beginning to disconnect. Why?”

    because people think gold is going to be money again, and that they’ll just transition from spending federal reserve fiat debt notes to spending gold, all while the markets just carry on without interruption.

    gold can be money. but that’s all it can be. it’s worthless outside of a market.

  11. Heres the thing: if people need a car, but its not worth producing the fuel because the customers cannot afford it, then with diminishing supplies of gold and gold consequently costing more, why would anyone buy gold? You need a car, you dont need gold, so firstly people will sell their precious metals and buy oil until they cannot buy any oil for gold and at that point gold and silver will become worthless.
    The central banks can make the value of the dollar whatever they want, so using financial engineering and by withdrawing from circulation, currency in circulation, they can increase the boying power of dollars.. So if they started to contract the monetary base people far from needing to find an alternative store of value, would rush into dollars and dollar investments.

    • PS the dollar investments would change because fuel no longer be available to do the work, so the work have to change to methods employed prior to oil being readily available. You can do a lot of work with man power and willpower. Have a look at this video.https://youtu.be/11iPrDv8aBE

  12. Emil again (second ever comment). I truly enjoy your unique analysis. I’m a certifiable gold bug, so highly invested in relevant info. My previous comment was a negative one on the TD oil collapse. As I mentioned, I work in finance and live in oil country, Alberta. With crude at $49 (and we have to sell at approx $20 discount, as the US is our only export “partner”), companies are ramping up production (Suncor & Imperial oil posted profits last quarter), and IPO’s are on the horizon. If they turn a profit below $30/barrel (after the bitumen discount) in the most expensive place to extract (oil sands), Dr Arnoux’s theory can’t possibly work.
    Time will tell, I suppose, but it’s the end of 2017. If the oil price will be at $12 in just over 2 years, the process should start soon…

  13. No one seems to look far enough into the future to see the none issue of oil as other forms of energy come online. Electric vehicles are coming as is hydrogen fuel(invest in water). The faster oil production, usage and cost become problematic the better to drive us into the direction of alternatives. Even zero-point energy is not a pie-in-the-sky idea. I am in the position to see people now buying electric vehicles because they have electricity to spare at home because they have installed solar power. They are getting cash/tax incentives to install the solar and also to buy the vehicles.

    • jonesy,

      Seems like you have it all figured out. Good deal. Now, I can stop writing about oil because electric cars and hydrogen fuel will be the answer. Well done.

      steve

      • Nobody has it figured out, Steve, including you.
        Just making a comment about where the “future” appears to be headed.
        No need to get huffy.
        Doesn’t mean I don’t appreciated your work. But, if you are that “touchy”, I will try to withhold my thoughts and comments in the future.

  14. Albertarocks | October 29, 2016 at 6:48 pm |

    Avi Gilbert wrote a reply to this article… another “hey everybody, look at me” essay.
    http://news.goldseek.com/GoldSeek/1477836600.php
    But this one came with a bonus… a record number of uses of the words “I”, “me” and “my”.

    Mr. Gilbert’s articles are all about Mr. Gilbert and to be honest, they are so full of hot air that these days I only open them so I can entertain myself by doing the Control-F search and see how many times he refers to himself. This one is a new record as far as I know… 48 freaking times. Wow, is he an important man or what?

    • Albertarocks,

      It seems as if someone by the screen name of “HM” shares your opinion of Avi’s article. He has left a few comments at the article you linked. Furthermore, he has been quite fortunate to enjoy a few replies from the author himself.

      steve

      • Albertarocks | October 30, 2016 at 6:14 am |

        Take a deep breath Steve. You’re too classy and valuable to be caught up in this sort of thing. We have more important things to consider, like how best to survive what’s coming. Your work is so unique that it’s fascinating. Mr. Gilbert’s work is based on EWI, which I discovered 30 years ago is basically nonsense insofar as that it offers exactly zero reliability for the purposes of taking action. It makes for minimally entertaining stories in retrospect, but that’s it.

        I do my own TA and have been able to survive based on my own conclusions. But I no longer write articles about it.

        Keep up the great work. All the best.

    • He is an absolute con man full of sound and fury signifying nothing. Read his articles on Seeking Alpha and tell me that all the love comments aren’t generated by himself.

  15. Bhavesh Modi | October 30, 2016 at 2:57 am |

    Good one Steve, as always. Thanks

  16. Thanks for taking the emotion out of article. Others may see it differently. Avi’s BS amounts to nothing more than antagonizing others to gain stature. I was a member of his “club” and the analysis was so convoluted it was totaly useless. I’m glad I was member though. It tought me EW is hind-sight analyses that in NO way can accurately predict future price. It amount to nothing more than a re-packaged crystal ball.

  17. Steve can you do a log version of that historical silver/oil price? Thanks.

  18. Gilbert is a fundamentalist end of days jew con man. Everything he manages to get posted somewhere is designed to drive idiots to his pay to play website “trading room”.

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