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PeakProsperity.com

Energy Is The Non-Negotiable Element Defining Our Future

As goes energy, so goes wealth
Friday, April 20, 2018, 8:05 PM

Executive Summary

  • What the Laws of Thermodynamics tell us about Energy
  • How those same Laws then apply to the Economy
  • Why the science convinces us a "forced economic contraction" is in our future
  • What we can choose to do about it

If you have not yet read Part 1: The Economy Is Cooked, available free to all readers, please click here to read it first.

One of my bigger 'learnings' from writing The Crash Course in book form was the deepening of my appreciation for the utter importance of energy to our way of life and to the process of creating (and maintaining) wealth. 

I spent time reacquainting myself with the laws of thermodynamics and came away with a far more focused view of the predicament in which we find ourselves.

I know that 'using the term thermodynamics' may sound awfully bookish or geeky, but it's by far the most important concept if one wants to understand the role of energy in our economy and why our economy will almost certainly fail to operate well in a world of declining net energy.

The laws of thermodynamics have never been violated by humans, not even for a millisecond.  Just like the law of gravity, they just exist as something we can either pay attention to, or not.  Our choice.  But they cannot be violated. At least, they haven't yet; so betting on a future where such laws have been repealed by human ingenuity would not be, shall we say, a sound wager.

A problem with the laws of thermodynamics is that they require a little bit of study to understand and they are loaded with wacky jargon which masks some very simple ideas.  Gravity is easy - all one has to do to appreciate it is get a few feet off the ground - the farther the better - in order for the reptilian portions of the brain to kick in and take over and make you very, very aware of gravity's potential consequences. Unfortunately, the laws of thermodynamics are less obvious, and we don't have a hard-wired evolutionary pathway that will force awareness upon us.  We have to come by an appreciation of the laws intellectually.

The first law simply states that.. » Read more

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© Albund | Dreamstime.com

The Economy Is Cooked

The growth cycle has peaked
Friday, April 20, 2018, 8:04 PM

Hours ago, European Central Bank chief Mario Dragho conceded: "The growth cycle may have peaked"

Of course, those paying attention to the data already knew this. Our politicians and central planers have been peddling to us the fantasy that the global economy is strengthening, finally ready to fire on all cylinders after nearly ten years of dependence on monetary stimulus.

That just ain't so. » Read more

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Off The Cuff: Silver Set To Soar?

An epic short squeeze looks to be in the making
Friday, April 20, 2018, 1:24 AM

In this week's Off The Cuff podcast, Chris and Davefairtex discuss:

  • Crazy Like A Fox?
    • Evaluating Trump's colorful record so far
  • Silver Set To Soar?
    • An epic short squeeze looks in the making
  • Commodity Complex Break-Out?
    • Rising oil prices are leading the way
  • Beware The Bitcoin?
    • Reasons to proeed with caution before re-entering the crypto space

PeakProsperity.com's gold & silver analyst joins Off The Cuff this week to discuss his tingling spider-sense, which is predicting a price breakout in silver.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today.
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6 Essential Strategies For Prospering Through The Next Crisis

Be one of the few positioned to prosper when crisis hits
Friday, April 6, 2018, 11:32 PM

Executive Summary

  • The trends that have driven the past 10 years are now ending/over. Ride their reversal wisely.
  • Crisis can destroy or magnify your prospects. Your decisions today will control which outcome you experience.
  • In many cases, you need to do the opposite of what the 'herd' is doing
  • The 6 essential strategies for prospering through the next crisis

If you have not yet read Part 1: This Is The Turning Point, available free to all readers, please click here to read it first.

Strategies For Prospering Through The Next Crisis

Those with the open-mindedness, courage and optimism to adapt in time will be far less impacted -- and indeed, will have much better odds of coming through this transition the better for it. Amazing opportunities will arise during this time to increase all aspects of your wealth (yes, money -- but also in all the other important Forms Of Capital, too).

Don’t count on currency “money” retaining its purchasing power. 

States (governments) always follow the same pathway: when financial promises can’t be kept, states debauch/devalue their currencies as a politically expedient short-term solution.

But alas, just like central bank stimulus, the short-term expediency becomes the permanent policy, and the unintended consequences start piling up, for example, a loss of trust in the state’s currency.

I see Venezuela’s destruction of its currency as the canary in the coalmine. The first canaries to drop lifeless from their perch will be non-reserve currencies.  Then the weakest of the reserve currencies will be over-issued (via credit rather than actual money-printing) and then even the mightiest will collapse.

Many people reckon the US dollar (USD) is the weakest, and perhaps they’ll be right, but I think the Chinese yuan (RMB), Japanese yen and EU euro will lose purchasing power first.

The RMB isn’t actually a “real currency,” it’s simply a derivative of the USD via the official peg. As for becoming gold-backed, please examine any chart of Chinese debt issuance (all of which is currency) and then compare that to... » Read more

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PeakProsperity.com

Dr. Charles Hall: The Laws Of Nature Trump Economics

It's all about Energy Return On Energy Invested (EROEI)
Monday, March 5, 2018, 1:59 PM

Dr. Charles Hall may not be a name you instantly recognize, but it should be.

Now a Professor Emeritus of the College of Environmental Science and Forestry, Dr. Hall is a rigorous researcher of energy, oil, biophysical economics -- and was a critical early pioneer in developing the key resource metric of Energy Returned On Energy Invested (EROEI).

After a life's career of looking at the world through the lens of EROEI, Hall is very concerned that, as a global society, we are hurtling towards an energy crisis that will forcefully (and likely painfully) downshift our standard of living within the lifetime of the current generation. » Read more

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Dreamstime

Is This It?

Has the next Great Financial Crisis just started?
Friday, February 2, 2018, 9:58 PM

Executive Summary

  • The significance of the recent spike in interest rates
  • Is the US dollar weakness a sign of other countries walking away from the US?
  • Are rising oil prices serving to pop the market bubble (as predicted)? Where are they headed from here?
  • Is this it? Is the top in? And if so, what should concerned investors do right now?

If you have not yet read Part 1: The Central Bank’s Reign of Error, available free to all readers, please click here to read it first.

Is this it then?  Is the top in?  The last few days have been extremely turbulent in the markets with the Dow Jones declining nearly 1,000 points in just this week.

Given the smoke swirling around the global rise in interest rates, I’m certain there’s something afoot.  The real question is whether or not the central banks are going to step in here to rescue everything again.

Alas, I don’t have access to that information but a betting person would say “yes.”  Everything they’ve done over the past 10 years has communicated quite clearly that the central banks are terrified of the Franken-Markets they’ve created.  Specifically, they are terrified of them going down and revealing the extent of the fraud.

However, we have to remain alert to the idea that the markets are indeed larger than the central banks, at least when they begin to move in earnest, and that the central banks have not been able to alter the laws of reality.  Resources matter.  Debt levels matter.  Leverage matters.  Well, eventually they do, and maybe that time has come?

If so, we all need to be ready for a very rocky ride ahead because... » Read more

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Vladimir Yudin | Dreamstime.com

Art Berman: Like It Or Not, The Future Remains All About Oil

And competition for it is heating up
Tuesday, January 23, 2018, 1:19 PM

Art Berman, 40-year veteran in the petroleum production industry and respected geological consultant, returns to the podcast this week to talk about oil.

After the price of oil fell from its previous $100+/bbl highs to under $30/bbl in 2015, many declared dead the concerns raised by peak oil theorists. Headlines selling the "shale miracle" have sought to convince us that the US will one day eclipse Saudi Arabia in oil production. In short: cheap, plentiful oil is here to stay.

How likely is this?

Not at all, warns Berman. World demand for oil shows no signs of abating while the outlook for future production looks increasingly scant. And the competition among nations for this "master resource" will be much more intense in future decades than we've been used to. » Read more

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Gail Tverberg: The Coming Energy Depression

The math is straightforward, but cruel
Sunday, January 7, 2018, 4:52 PM

Energy analyst and professional actuary Gail Tverberg returns to the podcast this week to revisit the global energy outlook. And fair warning, Gail warns it's quite grim.

To her, it's a simple math problem. We have too many people placing too much demand on the world's depleting energy resources. The cost of energy is rising, which we are compensating for in the short term by using financial gimmicks to make "affordable" -- when all we're really doing is creating future promises that cannot possibly be repaid.

The increasing cost of energy is manifesting in higher prices (for everything, not just fuels) and lower real wages, a divergence she sees only worsening from here. This path leads to another Great Depression-style crisis from which she does not see a clear path out of. » Read more

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The Massive Coming Oil Shock

$10 per gallon gas within two years? Quite possible.
Friday, December 15, 2017, 7:41 PM

Executive Summary

  • Why America Will NOT Soon Become A Net Exporter Of Oil
  • The Gross Global Mis-Pricing Of Risk
  • The New Fed Looks Even Worse Than The Old
  • What You Should Do To Prepare

If you have not yet read Part 1: The Great Oil Swindle, available free to all readers, please click here to read it first.

The "America Will Soon Be A Net Exporter Of Oil" Big Fat Lie

This brings us to the part where the oil myth has gone entirely off the rails.  Using the fraudulent oil recovery (EUR) estimates in play, the International Energy Agency (IEA) has built that into an outlook that might not only be wrong, but decisively and destructively wrong.

The IEA came out with a bombshell report recently that dramatically claims the US will not only become a net oil exporter in 2025 and remain as such for decades afterward, but that it will be able to increase its production by another incremental 8 million barrels per day above current levels:

US will become a net oil exporter within 10 years, says IEA

Nov 13, 2017

The shale revolution in north America means the US is destined to become a net oil exporter within 10 years, for the first time since the 1950s.

The International Energy Agency said it expected that American oil production between 2010 and 2025 would grow at a rate unparalleled by any country in history, with far-reaching consequences for the US and the world.

The last time the US exported more oil than it imported was 1953, and a ban on oil exports was lifted only in 2015.

Technological developments in drilling and fracking since the turn of this century have unlocked huge reserves of gas and oil trapped in shale rock, and redrawn the energy landscape.

(Source)

Well, I can assure you that if the IEA is using EUR’s that are off by 100%, then its projections are not only laughably wrong, but extremely dangerous.

Based on this sort of deeply-flawed analysis, anybody making plans off of this, which might include politicians, regulators, companies, or individuals deciding on whether or not to buy that F350 truck with a 15+ year lifespan, is relying on some very bad information.

And more than that, it's critical for us to understand how oil is about to violently... » Read more

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silentera.com

The Great Oil Swindle

Is leading us to destruction
Friday, December 15, 2017, 7:41 PM

When it comes to the story we're being told about America's rosy oil prospects, we're being swindled. And the swindle is not just limited to the US.

At its core, the swindle is this: The shale industry's oil production forecasts are vastly overstated.

The false conclusions the world is drawing as a result of the deception and outright lies we're being told is putting our future prosperity in major jeopardy. Policy makers and ordinary citizens alike have been misled, and everyone -- everyone -- is unprepared for the inevitable and massive coming oil price shock. » Read more