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The Coming Breakdown of U.S. & Global Markets Explained… What Most Analysts Miss

August 16, 2016

THE COMING BREAKDOWN OF U.S. & GLOBAL MARKETS EXPLAINED… What Most Analysts Miss

The U.S. and world are heading toward an accelerated breakdown of their economic and financial markets.  Unfortunately, the overwhelming majority of analysts fail to understand the root cause of this impending calamity.  This is also true for the majority of precious metals analysts.

The reason for this upcoming systemic collapse of the U.S. and Global markets is quite simple when you understand the information and are able to CONNECT THE DOTS.  While it has taken me years of research to be able to finally put it all together, new information really put it all into perspective.

Yes… a HUGE LIGHT BULB went off, but unfortunately the realization is much worse than anything I imagined before.  I briefly discussed this in my last article, The Coming Global Silver Production Collapse & Skyrocketing Silver Value.

The information discussed in this article makes it abundantly clear that the precious metals will be the GO TO ASSETS in the future.  The standard financial practice of investing most of one’s assets in stocks, bonds and real estate will no longer be true.  What little investment strategies are left in the future will turn to PROTECTING WEALTH, rather than building wealth.  The days of acquiring wealth are coming to and end… and fast.

So, now I will try to lay out all the details in a way that will make this easy to understand.  However, I have a word of warning.  Those who are able to connect the dots… it’s like taking the RED PILL, you can’t unlearn what you now realize.

The Collapsing EROI Is Destroying Everything In Its Path & Quickly

Americans used to enjoy a much better standard of living when it only took one person in the family to provide the income.  This was during the late 1940’s, 1950’s and early 1960’s.  However, the situation started to change in the 1970’s.

…click on the above link to read the rest of the article…

Energy limits: Why we see rising wealth disparity and low prices

July 10, 2016

Energy limits: Why we see rising wealth disparity and low prices

Last week, I gave a fairly wide-ranging presentation at the 2016 Biophysical Economics Conference called Complexity: The Connection Between Fossil Fuel EROI, Human Energy EROI, and Debt (pdf). In this post, I discuss the portion of the talk that explains several key issues:

  1. Why we are right now seeing so many problems with respect to wealth disparity and low commodity prices (Answer: World per capita energy consumption is already falling, and the energy/economy system needs to reflect this problem somehow.)
  2. Why the quest for growing technology leads to growing wealth disparity (Answer: The economy must be configured in more of a hierarchical pattern to support growing “complexity.” Growing complexity is the precursor to growing technology.)
  3. Why rising debt is an integral part of the energy/economy system (Answer: We could not pay workers for making long-lasting goods and services without using debt to “pull forward” the hoped-for benefit of these goods and services to the present, using debt and other equivalent approaches.)
  4. Why commodity prices can suddenly fall below the cost of production for a wide range of products (Answer: Prices of commodities depend to a significant extent on debt levels. A major problem is that when commodity prices rise, wages do not rise in a corresponding manner. Rising debt levels can mask the growing lack of affordability for a while, but eventually, debt levels cannot be raised sufficiently, and commodity prices fall too low.)
  5. The Brexit vote may be related to falling energy per capita in the UK. Given that this problem occurs in many countries, it may be increasingly difficult to keep the Eurozone and other similar international organizations together.
  6. My talk also touches on the topic of why a steady state economy is not possible, unless we can live like chimpanzees.

…click on the above link to read the rest of the article…

Hall and Lambert: EROI of different fuels and the implications for society

May 29, 2016

Hall and Lambert: EROI of different fuels and the implications for society

[ Excerpts from the Hall, Lambert, and Balogh EROI paper. You may want to read the original paper here since I’ve left out charts, figures, and text.  In my opinion, EROI is important because it is  due diligence – society ought to find out if there is any energy resource that can replace oil for transportation, since without transportation you can not build electricity-producing contraptions and you’re wasting rare earth minerals, steel, fossil fuels, and other finite materials making them.  It is unlikely transportation can be electrified for reasons explained in my book When Trucks Stop Running: Energy and the future of transportation.  

If decreasing numbers of trucks, rail, and ships will be running if oil can’t be replaced or heavy-duty vehicles electrified, our remaining energy should be used to clean up nuclear waste, superfund sites, the half million leaking mines, and other messes since future generations won’t have the energy to do so, lower our population ASAP to get within the carrying capacity of a non-fossil-fueled civilization (Plan B is bullets and disease), change our culture from one of consumption to one of sharing, teach different skills in schools to prepare the youngest generation, and prepare for going back to the age of wood (i.e. more insulation, gravity based water and sewage infrastructure that doesn’t require electric pumps where possible, and so on).    Alice Friedemann   www.energyskeptic.com ]

Charles A.S. Hall, Jessica G. Lambert, Stephen B. Balogh. 2014. EROI of different fuels and the implications for society. Energy Policy 64 (2014) 141–152

In the nations examined, the EROI for oil and gas has declined during recent decades. Lower EROI for oil may be masked by natural gas extracted/used in oil production. The EROI trend for US coal is ambiguous; the EROI for Chinese coal is declining.

…click on the above link to read the rest of the article…

The real EROI of photovoltaic systems: professor Hall weighs in.

May 29, 2016

The real EROI of photovoltaic systems: professor Hall weighs in.

The EROI of our various energy options, and its associated issues, may be the most important issues that will face future civilizations.  The present discussion tends to vacillate between people who accept (or advocate) very high EROIs for solar vs people who accept (or advocate) very low such EROIs.   I trust only one study, the one I did with Pedro Prieto, who has a great deal of real world experience and data. This study attempted to (conservatively) estimate all the energy used to generate PV electricity in Spain by following all the money spent (per GW) and using physical analysis where possible, and energy intensity of money where necessary. We found that the panels and inverters, which are the only parts measured in most studies, were only about a third of the energy cost of the system.  As noted in the responses to Ugo’s last post we estimated an EROI of 2.45:1 in 2008 assuming a lifetime of 25 years and at the juncture with the distribution system.   Studies that we think used more or less appropriate boundaries (Palmer, Weissbach) got similar results.

We recognize that subsequent studies to ours would probably have generated higher EROIs because of using panels of lower energy costs or higher efficiency.  But there are many ways that it might be lower too.  For example Ferroni and Hopkirk, who (despite, perhaps, some issues) have done us a good service by attempting to get actual lifetimes for modules, which were much closer to 18 years than infinity.  This agrees with what happened in Spain when, due to post-2008 financial turmoil, manufacturers did not honor their guarantees and legally “disappeared”, leaving broken systems unfixed.   (And what happened to all those “surplus” Chinese panels that were never used?
…click on the above link to read the rest of the article…

The hidden reasons behind slow economic growth: Declining EROI, constrained net energy

April 6, 2015

The hidden reasons behind slow economic growth: Declining EROI, constrained net energy

It should seem obvious that it takes energy to get energy. And, when it takes more energy to get the energy we want, this usually spells higher prices since the energy inputs used cost more. Under such circumstances there is less energy left over for the rest of society to use, that is, for the non-energy gathering parts–the industrial, commercial and residential consumers of energy–than would otherwise be the case.

It shouldn’t be surprising then that as fossil fuels, which provide more than 80 percent of the power modern society uses, become more energy intensive to extract and refine, there is a growing drag on economic activity as more and more of the economy’s resources are devoted simply to getting the energy we want.

A more formal way of talking about this is Energy Return on Investment or EROI. The “energy return” is the energy we get for a particular “investment” of a unit of energy. The higher the EROI of an energy source, the cheaper it will be in both energy and financial terms–and the more energy that will be left over for the rest of society to use.

But we’ve seen a persistent decline in the EROI of U.S. oil and natural gas in the past century, a trend that is likely to be reflected elsewhere in the world as well. Here’s a summary from the abstract of a 2011 study:

 

…click on the above link to read the rest of the article…

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