The Government Will Not Survive The Falling EROI
Interview with SRSRocco posted 22nd March
HSBC Report Silver Shortages
The demand and supply balance for silver is likely to swing from a three million ounce surplus in 2014 to an 11 million ounce deficit in 2015, said HSBC in a report focusing on the outlook of silver.
(Note: 2013 was reported as a 113 million ounce deficit. Actual supply demand deficits are becoming an ongoing problem.)
The deficit comes mainly from a reduction in mine production, lower scrap supplies as well as a halt to government sales. Consequently, the small but persistent deficit should limit further price declines.
Despite the deficit forecast, the bank is keeping its average price for silver outlook at $17.65 for 2015 and expects the precious metals to trade in the price range between $15 to $21 per ounce.
For the year ahead, the bank expects three factors to drive prices. The tighter supply outlook will help to maintain a floor for silver prices but investment demand could continue to be soft and cap rallies. In terms of physical demand, a lower silver price will help to support price in downswings.
“Should prices trade below all-in costs (as they do now) for a prolonged period, then producers could decide to shelve or delay future projects, which could limit long-term output. We believe this has already trimmed potential output in 2015. Should prices fall much below $15 per ounce producers could implement further plans to moderate production at higher cost mines,” said analyst James Steel.
While the MSM believes business as usual will continue for quite some time, the U.S. and world are about to face a collapse of epic proportions. Also, many of the precious metal analysts have this notion that if we just allow the Big Banks to fail and get back on “Sound Money”, then after a recovery, we will experience profound economic growth.
Unfortunately, sound money cannot prevent the coming financial and economic devastation due to the falling EROI – Energy Returned On Invested. I sat down with the folks at SilverShield to discuss why the U.S. Government, just like the Roman Empire will fail due to the falling EROI.
That being said, owning physical gold and silver will be some of the best assets to own in the future to protect your wealth.
NOTE: This is not Anti-Government rhetoric on my part (even though there is a great deal that could change for the better in the Federal Govt), but rather a common sense conclusion that all large governments will not survive the coming EROI collapse.
Please check back for new articles and updates at the SRSrocco Report.