Core Thesis: Exponential economic growth is constrained by finite fossil fuels, tightly linking GDP to energy consumption and challenging the sustainability of current financial systems.
Hard Assets: Strong advocacy for holding hard assets—especially physical gold and silver—as true wealth versus financial claims susceptible to debasement.
Precious Metals: Gold and silver are emphasized as core holdings, with physical ownership preferred over ETFs or miners for foundational protection.
Macro Drivers: Central bank QE and the rise of negative yields create powerful tailwinds for gold as a zero-yield alternative to guaranteed losses in sovereign debt.
Energy Constraints: Extensive discussion of fossil fuel depletion and potential peak oil underscores risks to perpetual growth assumptions and justifies allocating to real assets.
Risks & Transfers: History suggests currency debasement leads to wealth transfers from holders of paper claims to holders of tangible assets.
Portfolio Guidance: Beyond core metals, complementary hard assets like productive land, oil wells, and select equities (including miners) can add resilience, with active risk-aware management advised.
Transcript
[Music] welcome to straight-up brought to you by Peak prosperity which values context curiosity and learning that leads to action reading from his latest works and expanding on current events in the economy energy and environment it is my pleasure to introduce your host dr. Chris Martenson welcome everyone to this straight up I'm so pleased to have you here with me today I'm gonna be going through the piece that was posted on Friday August 9th 2019 this one titled the hard truth why hard assets are so important given the current state of global markets well it's actually more than that what we're gonna be discussing here is how the entire system that everybody is depending on for their hopes and dreams and retirements and what their kids and grandkids are gonna have in terms of opportunities the whole shebang is completely unsustainable because it's based on exponential growth I know it's a big idea but we're gonna have to go through it and I know look it's very easy these days to get sucked into the mini-dramas playing out across our digital screens this happens to me all the time right Trump tweeted this while the stock market did that uh-oh somebody's experiencing something awful over there or wait hey they're having a stroke a great fortune over there oh look kittens you know what watching CNN to me it often feels like the inept product of a university committee that sought to create a program of sensitivity training for adult sufferers of acute ADHD you know after just five minutes you know what it's like to be trapped in a brain that's distracted partway through every thought pattern and cannot maintain enough attention to form a coherent sequitur you know congratulations CNN or that the sensitivity training committee because I know what it's like now to experience adult acute ADHD however if we set all of these entirely useless distractions aside it's quite apparent that something big is going on and it's not positive you can feel it in your bones people are worried we're nervous there's violence there's anxiety what is causing it that's what we need to talk about today because if none of the things that are being presented in the mainstream media and it's a complex story with a lot of moving pieces and it takes a little bit of effort to puzzle it all out but more and more people are arriving at the same conclusion something is going to break to resolve the dots into a coherent picture we need to take two giant steps back and take in the whole canvas the Cliff Notes version is this the numbers just don't add up hey if you get that you can click off here wander on your merry day because you already get it the numbers they just don't add up big changes they're actually already underway specifically the unsustainable cogs in the global economy are slowly grinding to a halt remember collapse is a process not an event so to understand what's really happening here and why these big changes are happening we're gonna take giant step number one growth we have to talk about growth the age of unrestricted and maybe unexamined growth it's over it was a good run but now we've got to live within certain ecological and resource budgets which means we've also got to live within some fiscal and economic budgets virtually nobody in power wants to do either of those things of course not that may be a few here and there most of them retired recently or close to it the remainder of all the people in power do you want they all want business as usual to continue especially those that just hooked a finger around the brass ring a success right oh my god I just I just became a vice president a president of a corporation I just got into Congress I've just become a tenured university professor so yeah keeping business as usual continuing that's that's the most important thing for these people now the big problem the big problem with business as usual said it's a broken model without a future economic growth was the solution to every problem Hey now it is the problem worst of all it's not just growth that we've become addicted to but exponential growth for a quick and powerful review of this vital concept I'm going to direct you back to my website at peak prosperity comm check out the crash course please watch this video as Chapter four it's called compounding is the problem it's less than five minutes fair warning you might not be the same afterwards lots of people are reported that this chapter in particular these five minutes actually change their lives and how they think about things now look there are a hundred exponential charts we could discuss today they're all important in their own right but there's one that stands out far above them all it's so prevalent in your life that you probably take it for granted might not even appreciate all that it provides you are the fish in this story this chart points to the water and here it is the chart that's being shown at my website is called cumulative global fossil fuel use since 1750 and you know what this chart looks like a big long flat line it's flat from 1750 to 1800 1850 zero percent 1900 it's lifting a little nineteen fifty lifting a little more and then shoe shoots right up into the air and we find on this chart that almost all of the fossil fuel consumptions happened most recently right in the past few decades fossil fuel energy that's what's responsible for providing every creature comfort material abundance in your life and it has been growing exponentially for your entire life and here's the brain buster if you squint at this chart carefully you know what you're gonna see you're gonna see that fully half of all the fossil fuels ever burned throughout all history have been burned since 1990 wait did you get that it means that if you're 29 years old you have been alive when half of all the fossil fuels ever burned throughout all of human history had been burned half in just 29 years right people look at this sometimes I go oh you know Chris you know fossil fuels we've been using them for a long time steam engines came out what in the 1800s and they don't understand that because we've been consuming fossil fuels exponentially that were shortening the doubling times around this right so in 29 years half of all the fossil fuels ever birth in human history have been burned now if that doesn't shock you then I need you to reread this I need you to go off and meditate on I and you think about it some more because it's really a very profound insight especially once I connected to the second giant step next but that's coming hang on a second now here's another idea what if we converted the fossil fuel energy that we consume into human slaves that is the amount of work that a human being could provide if they were digging ditches or crushing stones or hauling a cart you know doing things like that maybe pedaling a bicycle furiously to connect it to an alternator so that you can have lights on in your house if we did that except it's the you know it's the fossil fuels providing that work energy what happens if we convert all that fossil fuel energy into human slaves by this method we discovered that each year's fossil fuel use is equivalent to 500 billion with a be billion human energy slaves working to keep our houses cooled food on the table moving ourselves and all our enumerable goods about the face of the planet now with only seven point eight billion people on the planet today that's as if there were 64 human energy slaves per person that would make you any average person on the planet have more slaves at their disposal then Cleopatra did I should queen of course queen of a very large Empire at the time the average person has more energy slaves than Cleopatra but we're not aware of them because of those slaves that Cleopatra had you know you still had to feed them you had to house them they had to clean themselves they needed clothing of the slaves that we have you're not even aware they're there right your lights just turn on the dishwasher just runs it's just it's beautiful but it's also hidden from us now given that those slaves that I just talked about the five hundred billion slaves they're not evenly distributed of course since so there's an average doesn't apply here and it's more like people in rich countries have several hundred energy slaves each and maybe people in poor countries just have a couple well listen that having hundreds of slaves at your disposal it makes life really very easy very sweet and if for when your energy slaves go away life will become a lot more difficult but you know what not in any ways that would be remarkable to your great-grandparents when it comes to oil the date is even more surprising to have been alive when half of all the oil ever used throughout all of human history has been used you only need to be twenty-two years old twenty-two that's it in just the past 22 years as much oil energy as used throughout all of human history has been used in just the past 22 years it's moved your personal vehicles about massive container ships and airplanes it's oil energy hasn't you've been used to dig up vast mineral or deposits it's installed wind towers as well as spread plastic throughout the oceans it's trawled and cut and scraped and ploughed dwindling natural habitats it's very difficult to overstate just how much material abundance that oil energy has brought to the world all of it would be closest to the truth this is water to a fish we're surrounded by it most people are completely unaware of just how much abundance the surplus energy from fossil fuels has brought to us it's like we were born on third base but we think we hit a triple you know we're just clever we're clever humans we'll figure something out well now let's ask a different question ask yourself how long will it be before another volume equal to all of that ever burned out throughout human history up to this point how long before another volume equal to this moment in all a history in the past will be consumed that is I'm asking the question how long before the next doubling another half equal to the last half how long well the current rates that's just gonna be another 21 years weird huh but that's how it works it's the miracle of compounding each doubling consumes as much as all the prior one before it now this is awesome when it works for you in a portfolio sneaking and treacherous though it's very sneaky and treacherous when it's working against you as it has for the actuary lead efficient pension plans they are experiencing negative compounding and that's just utterly destructive right Einstein called compounding the eighth wonder of the world and he said that he who understands it earns it he who doesn't pays it look I know energy extraction it's a complex arena I'm not asking you to become a world-class petroleum or coal geologist or anything like that but merely just use your intuition how many more doublings a fossil fuel consumption do you think we've got do we have one more can we manage to find and burn another amount of coal oil and natural gas equal to all that has come before even if your intuition says we've got one more doubling or possibly two you know there's a hard limit in there somewhere right sooner or later there's a limit to the exponential extraction in use of fossil fuels some days it just becomes too difficult to extract the remaining dregs and dribbles at a faster pace that's when the peak occurs then everything we take for granted changes the water drains from our tank we rather suddenly become acutely aware of the waters absence it's all fun and games when you're adding more energy slaves to the mix you start subtracting them and it's less comfortable right that day though that day of that peak is not as far off as you might imagine especially if you read the mainstream news hey this is like this is the most surprisingly important hidden information that exists today how long do you think that day is I I personally I think it's maybe a decade maybe two right maybe maybe maybe the the Arctic melts and we discover there's just vast pools of oil under there but it's out there and it's not that far away by just by taking that one giant step back and looking at the energy situation the exponential use of fossil fuel energies so much becomes we're about the future in what it can and what it cannot offer one thing we cannot assume any longer is an endless horizon of exponential growth in energy extraction you can't assume that any longer with that one insight literally everything about investments in economic growth suddenly changes if you have money invested in the markets and you care about the future the next step we're going to take really matters to you a lot and that's giant step number two we call this one the economy and energy economic growth depends on energy Wow there it is it's this concept more than any other that serves cast a light on the future right a very bright light out of all the economic charts and data I have and I got a lot of them I got quite a bit this next one is really it's the most robust it's the rock-solid most rocks all of them all it shows that economic growth GDP and that's how its measured and growth in energy consumption over the past 50 years have been tightly coupled now there's a chart here at the site it's actually titled GDP and energy are tightly coupled this comes from Google Bardis work and it's just graphing two things on the y-axis heading up and down world GDP in trillions of dollars on the x-axis world energy consumption expressed in millions of tons of oil equivalent right so if because we got a lot of different you know we get fossil fuels our coal oil natural gas we've got Oh nuclear we've got you know hydro some wind and solar but if you convert it all each one of those into its oil equivalence it makes it easy to express just a single thing so it's total energy consumption expressed in oil and world GDP and you know what you see you get a nice straight line for the past 50 years from 1965 to 2016 a nice straight line and the data points all fall really very neatly either right on that straight red line or very close to it and what that tells us because it's a straight line is that there's a very tight relationship between global economic activity and global energy consumption the units can be defined if you want if you expect require are counting on demand X units of economic growth then this chart tells us you're going to need Y units of additional energy consumption it's very simple it's dead linear there's nothing complicated about it more economic growth is gonna require more energy use that's been true for the past 50 years and there is nothing yet anywhere in the data to suggest that this has or will change now this is a profoundly important concept it matters to every investor every saver citizen parent grandparent who cares about preserving their wealth and leaving behind a world worth inheriting which is our mission at peak prosperity and here's why the economy and it's an abler at the financial system are 100 percent built around the idea a perpetual exponential growth well as we pointed out above that or before I should say you're on a recording that exponential economic growth is based on energy growth well and that energy growth cannot continue forever or maybe even for very much longer in this story so now the operative question becomes what happens to the linked economic and financial systems when they cannot grow exponentially anymore it's a good question do they just level out do they you know peacefully sort of turn into a stable sort of a system what happens well nobody really knows but perhaps we got a taste of that back in 2008 when the financial system almost blew to smithereens do you remember her right the entire banking system almost seized up and ceased to function they were desperate times well why what happened simply all of that almost broke because credit stopped growing exponentially for the first time since the 1950s I'm showing here now chart which shows total debt in the system because we have a debt based monetary system and this is data from the Federal Reserve it comes from the fr EE D the phred website and I'm showing here that there's from 1950 to 2019 we see here that there is this red line that's rising exponentially except there's a little wiggle a little wiggle there right there around 2008 and 9 and at that little wiggle shows that credit actually went backwards that dynein tiny little bit for about a year credit was actually going in Reverse and the whole system almost exploded the whole system almost broke I mean really we've built for ourselves a system of credit and money that's either happily growing but exponentially growing or it's collapsing those are its two states if you're like me you find that a little bit troubling so let's connect the dots here then I'm leaving aside all sorts of profoundly worrying signals from the natural world which I normally connect in the environment or ecological peace right the missing insects we've got melting ice we've got a hundred 100 other signs that the age of growth is well and truly over which is a whole other dot to connect here but we're gonna have to set that aside because for our purposes today I think it's sufficient to just connect these two dots one the financial system requires exponential growth two fossil fuels are finite you get that point one is dependent on this thing called infinite growth fossil fuels which provide the growth in a very straight line linear fashion are finite so we have financial system that wants infinity and we got fossil fuels that are finite dot one dot two there's tension that's the tension that's starting to show up most people aren't aware of this they feel it in other ways and so we have these divisive increasingly fractured political debates and we have increasing suicides and we have people numbing themselves out with eating too much and playing video games and even suicide whenever those markers of stress are the real stress in the system is our common narrative the thing everything's been hooked to is this idea of how our economy is going to provide for us but the economy doesn't provide anything actually for us really it's the energy that provides those things for us the economy is the way we parse that energy out the energy in this story is beginning to dwindle and wind down all right one other point to weave in here to connect those two dots so maybe it's three dots I have to connect dot one was financial system Criers exponential growth - the source of that growth is fossil fuels and those are finite the third dot here is that currency money debt things like that they're not actually wealth although we confuse them with wealth in the popular press all the time to the point that most people actually are confused and think of money and debts as wealth but they're not their claims on wealth and so it's a very common thing to mistake money and debt as wealth so and what do you mean dead as well well if you own a billion dollars of US Treasury notes well that's the debt of the US government but if you own that billion dollars of that and maybe a billion dollars of corporate bonds right your said to be very wealthy but what do you really own well you own a billion dollars plus interests of course of claims on the future cash flows of the issuers of those bonds but the bonds themselves they're not real wealth in the sense you know you can't eat them you can't live in them you can't do anything with them except maybe admire them in your portfolio we own claims on well things like cash currency you know bonds stocks we own those claims on wealth so we can some day consumer possession possess actual wealth to do anything useful with bonds in this example you'd have to first convert them to dollars which are themselves liabilities of the Federal Reserve and it's only once you've done this conversion that you can then exchange those dollars for the real goods and services that you actually consume like houses and oil wells and land and gold food things like that and that's the point everything we popularly call wealth today currency stocks and bonds they're actually merely claims on the final items containing real value that we wish to own or consume which means there always needs to be a balance between the claims on the one hand and the things on the other hand too few claims we call that deflation too many that's inflation well in this story the Fed and other central banks they've been fostering the exponential accumulation of claims at roughly twice the rate of real GDP growth that's the things in this story and without any indication of concern for the fact that the earth is you know finite so I've got a chart here oh it's the same charges before but I want you to take another look at it the blue line on the bottom of this chart shows GDP and it's kind of flat and trundling along and it represents the real stuff and then we've got the red line on top which is exponentially shooting away from the blue line below when you see these two lines diverge on this chart is it not completely totally utterly obvious that the claims are increasing faster than the stuff asked what those two diverging lines mean the data shows that debts have been compounding at twice the rate of GDP growth and have been since 1971 now is that sustainable nope how could it possibly work out well one way there is a way and that way is only if GDP growth comes roaring back and is twice the pace of debt growth for many decades into the future now how likely is that well let me tell you a story about how energy and the economy are linked stop me if you've heard this story before right the only way this story resolves itself in the ways that everybody's hoping dreaming scheming or just denying and failing to look at is if and only if rapid economic growth comes roaring out of the gate that economic growth requires energy full stop nothing else needs to be said about that except where's that energy gonna come from all you have to do is look into the energy date and you say it's not there it's out there the easy stuff is gone we worked through it it's gone wow this is such a simple story and it's so hard for most people to get their minds around so I'm really glad we're going through it today because it's really important it's really important now constantly increasing debts those are an implicit bet that the future is going to be larger than the present exponentially larger given the interest involved right because we don't just have the debt itself you know the government doesn't owe you a billion dollars if you have a billion in Treasury notes they were you the billion plus interest right so the interest involved is what drives the exponential behavior in this system the real wealth to justify those claims is going to show up that's that's the implicit bet here magically well it always has Chris unfortunately peak all sorts of things militates against that view I've talked about a peak in energy coming out there but we could be talking about a peak in mine output for copper for lithium silver peak amount of fish that can come out of the ocean peak soil as we degrade it and it goes into the oceans Peak extraction of water from ancient aquifers Peak all sorts of things right we're running out of stuff all over the place but our entire economy and financial system is geared for the idea that we're never gonna run out of anything in fact we'll always be able to get more more lumber more fish more soil more soybeans more everything and I guess what I'm saying here is that the commonly held conventional for you of the world and the future has got it all wrong dangerously and very badly wrong just because they've had a wrong doesn't mean you have to get it wrong this is where the education comes in this is where having the appropriate context and awareness and education around these things is really really important and that's why I do the work I do and that's why you're listening today is to get that understanding I want to talk to you about the vital role of hard assets in this story because okay you might be asking all right well Chris what's to be done here what should I do the solution is to understand that human nature has not changed at all in the past 5,000 years hasn't done um nope no lucien has occurred which means that when confronted with such a major development as the one I've laid out in this story the normal human tendency will be to ignore it as long as possible and then do some really dumb things to try and prevent reality from intruding on the fantasy what if humans done hundreds of times throughout history when their dreams were economically unworkable well they printed or debase their money can't afford a war clip the coins and fire to large go into debt and then print your way out of that later global economy no longer growing debts too large and the claims are too many quantitative easing or QE really there's nothing new Under the Sun here same old same old right to what you're living through today has happened hundreds of times in history and it's happened because humans are humans that's it has that's the that's the primary defect in the story if you want one in every case when the solution air quotes around that I guess solution was printing or its equivalent fortunes were made and lost but mostly lost claims on wealth were mistaken for actual wealth and people climb to those claims and when the claims evaporated in various panics the holders were financially ruined now that's gonna happen again for the same human reasons as before only this time it's a global phenomenon there are no borders to scurry across and hide out while things blow over more importantly there are no new continents to go to with fresh tasty untapped natural resources to exploit now seen from a comfortable distance what actually happens during those times is a wealth transfer from those who don't see it coming to those who do broadly speaking from those clinging onto the claims on wealth towards those who actually hold the real wealth now this is where hard assets come in the real wealth again they're the real things that are either the sources of real wealth right that primary sources real wealth this is farmland oil wells mines timberlands etc or are the tangible things that come from those assets that's the refined gold or silver or lithium copper's lumber it's cash flowing real estate things like that by far the simplest and easiest thing you can do as a starting point is to have a portion a diversified portion of your wealth safely tucked into gold and silver and I'm bringing this up because it's it's simple it's easy like a couple of mouse clicks and you're done right by the way the big smart money has already started this process which means you'd better get movin if you want to join that parade there may well come a day when the big money floods in that direction and then hey good luck finding any right here's why here's some data for you for a variety of reasons too numerous to go into here it's a whole other podcast at some point the world central banks are now too far down the QE rabbit hole to do anything but print and then print and then print some more that's they're locked in that dynamic nothing they can do till this blows up this is resulted in over 15 trillion dollars of negative yielding debt across the world now this is a concept that I go into much more deeply in the next companion piece to this which is for subscribers now that 15 trillion dollar number it's exploding and sure to go even higher in the future you know it was only six trillion less than a year ago it's just exploding it looks vertical right now and if you if you personally were forced to choose between the certain losses of negative yields and by the way negative yell so that's why I had to spend a whole piece exploring this it's such a weird concept I can't even believe we're here it's ridiculous negative yield means that you pay an entity to lend that entity money right so if you had to choose between paying the swiss government for the right to lend it money for a while if you had to choose between that and holding gold which at least offers what a0 yield at least it's zero it's not negative which is more attractive well the answer screams own gold to many investors which explains this next chart which compares the it's a chart of the total amount of negative you which is going up and down and up and down and you know spiking all over the place and now foof finally off to over 16 15 trillion and heading towards 16 trillion uh and the price of gold you see that those two charts line up really really well that is the more negative yielding data is out there the higher the price of gold goes and when it goes down vice versa because it that's one thing that gold does is it offers you the chance to protect yourself from negative yielding debt so that that makes sense gold has another function which we'll get to in a minute now look I have three adult children who am I love very much and while I don't have any grandchildren yet hey I already love them too and because I do I own lots of gold and silver I've taken the time to study history clear my head of the common narrative that has so many things so desperately wrong and I actively reject this is an active mental process I actively reject the usual antique gold propaganda that infects the US financial press it's a weird position I don't know why they do it it's not reflected or repeated anywhere else in the world and I don't have a good explanation for it but you can detect it in wall street journal articles which have all these negative nouns and adjectives sort of like you know sprinkled all around their articles when they talk about gold and you can practically see the journalists sneering as they write the word gold and they use pejorative terms like gold bugs bugs right anyway I actively reject that stuff because it's not useful information for me to absorb that anti gold propaganda and I take it as my role to provide my as yet unborn grandchildren with a solid a start as I can I take that role seriously the same as many other families do a core positioning gold and silver physical gold and silver not ETFs not minors not anything like that those have a different role but core position in physical gold and silver is an essential part of that strategy for me it's the durable insurance fund that a financial fire cannot destroy if you love your family you take the role of providing and protecting seriously gold and silver or silver they're critical must-haves in your holdings after that the next layers involve putting my assets my financial assets into productive real estate such as farmland my resilient homestead excellent equities including miners if that's your thing and other hard assets what makes sense for you of course is a complex equation involves your age your financial status geographical function and location and family circumstances all that we strongly advise that any money that you do have in the financial markets or markets as we like to call them due to their excessively deform nature we advise that you have that money be managed by people who understand these many risks and actively manage for you the future for the future that you think is coming our endorsed financial advisors that you Harbor financial they'll be glad to provide you with a free no obligation consultation as they have for many very satisfied hundreds of our readers they will help you develop a plan determine which assets make the most sense to explore and invest in literally nothing's off the table you could talk to them about anything finally be sure to discuss these powerful important ideas with those you love and care about the world is changing in a really profound and powerful way and people will either be prepared for those changes or they all be caught unawares this isn't doom and gloom it's just reality it's data however as has been historically true reality data things like that aren't very popular with the masses and that's why so much opportunity exists and to see all of this you just have to take two giant steps back to understand the larger picture one is to look at the exponential use of fossil fuels and the second is to understand the relationship of how the economy and our financial system depend on energy that brings us to the end of part 1 in part to defending against the global currency crisis we take an in-depth look at the the brewing global currency crisis it's all in the charts right there I've got a lot of data in this next part and how the really just how panicked the world central bank's how the panic central banks they're gonna make it worse they just will futile desperate rescue attempts they painted themselves into a really difficult corner and they're just get ass lot more paint around and it could get ugly the sudden changes in global capital flows that are going to occur this is what's going to throw the world into chaos so we explore what that global financial system looks like understanding that is really critical and the wealth destruction that's going to ensue is going to be much larger than most analysts and investors can even comprehend an absolutely essential requirement for preserving wealth during this period we'll be holding it in forms that cannot be inflated away by a runaway printing press that brings us to the end this podcast thank you so much for listening and I hope you prosper and enjoy the future [Music] you [Music]
Straight Up #8 – The Hard Truth
Summary
Transcript
[Music] welcome to straight-up brought to you by Peak prosperity which values context curiosity and learning that leads to action reading from his latest works and expanding on current events in the economy energy and environment it is my pleasure to introduce your host dr. Chris Martenson welcome everyone to this straight up I'm so pleased to have you here with me today I'm gonna be going through the piece that was posted on Friday August 9th 2019 this one titled the hard truth why hard assets are so important given the current state of global markets well it's actually more than that what we're gonna be discussing here is how the entire system that everybody is depending on for their hopes and dreams and retirements and what their kids and grandkids are gonna have in terms of opportunities the whole shebang is completely unsustainable because it's based on exponential growth I know it's a big idea but we're gonna have to go through it and I know look it's very easy these days to get sucked into the mini-dramas playing out across our digital screens this happens to me all the time right Trump tweeted this while the stock market did that uh-oh somebody's experiencing something awful over there or wait hey they're having a stroke a great fortune over there oh look kittens you know what watching CNN to me it often feels like the inept product of a university committee that sought to create a program of sensitivity training for adult sufferers of acute ADHD you know after just five minutes you know what it's like to be trapped in a brain that's distracted partway through every thought pattern and cannot maintain enough attention to form a coherent sequitur you know congratulations CNN or that the sensitivity training committee because I know what it's like now to experience adult acute ADHD however if we set all of these entirely useless distractions aside it's quite apparent that something big is going on and it's not positive you can feel it in your bones people are worried we're nervous there's violence there's anxiety what is causing it that's what we need to talk about today because if none of the things that are being presented in the mainstream media and it's a complex story with a lot of moving pieces and it takes a little bit of effort to puzzle it all out but more and more people are arriving at the same conclusion something is going to break to resolve the dots into a coherent picture we need to take two giant steps back and take in the whole canvas the Cliff Notes version is this the numbers just don't add up hey if you get that you can click off here wander on your merry day because you already get it the numbers they just don't add up big changes they're actually already underway specifically the unsustainable cogs in the global economy are slowly grinding to a halt remember collapse is a process not an event so to understand what's really happening here and why these big changes are happening we're gonna take giant step number one growth we have to talk about growth the age of unrestricted and maybe unexamined growth it's over it was a good run but now we've got to live within certain ecological and resource budgets which means we've also got to live within some fiscal and economic budgets virtually nobody in power wants to do either of those things of course not that may be a few here and there most of them retired recently or close to it the remainder of all the people in power do you want they all want business as usual to continue especially those that just hooked a finger around the brass ring a success right oh my god I just I just became a vice president a president of a corporation I just got into Congress I've just become a tenured university professor so yeah keeping business as usual continuing that's that's the most important thing for these people now the big problem the big problem with business as usual said it's a broken model without a future economic growth was the solution to every problem Hey now it is the problem worst of all it's not just growth that we've become addicted to but exponential growth for a quick and powerful review of this vital concept I'm going to direct you back to my website at peak prosperity comm check out the crash course please watch this video as Chapter four it's called compounding is the problem it's less than five minutes fair warning you might not be the same afterwards lots of people are reported that this chapter in particular these five minutes actually change their lives and how they think about things now look there are a hundred exponential charts we could discuss today they're all important in their own right but there's one that stands out far above them all it's so prevalent in your life that you probably take it for granted might not even appreciate all that it provides you are the fish in this story this chart points to the water and here it is the chart that's being shown at my website is called cumulative global fossil fuel use since 1750 and you know what this chart looks like a big long flat line it's flat from 1750 to 1800 1850 zero percent 1900 it's lifting a little nineteen fifty lifting a little more and then shoe shoots right up into the air and we find on this chart that almost all of the fossil fuel consumptions happened most recently right in the past few decades fossil fuel energy that's what's responsible for providing every creature comfort material abundance in your life and it has been growing exponentially for your entire life and here's the brain buster if you squint at this chart carefully you know what you're gonna see you're gonna see that fully half of all the fossil fuels ever burned throughout all history have been burned since 1990 wait did you get that it means that if you're 29 years old you have been alive when half of all the fossil fuels ever burned throughout all of human history had been burned half in just 29 years right people look at this sometimes I go oh you know Chris you know fossil fuels we've been using them for a long time steam engines came out what in the 1800s and they don't understand that because we've been consuming fossil fuels exponentially that were shortening the doubling times around this right so in 29 years half of all the fossil fuels ever birth in human history have been burned now if that doesn't shock you then I need you to reread this I need you to go off and meditate on I and you think about it some more because it's really a very profound insight especially once I connected to the second giant step next but that's coming hang on a second now here's another idea what if we converted the fossil fuel energy that we consume into human slaves that is the amount of work that a human being could provide if they were digging ditches or crushing stones or hauling a cart you know doing things like that maybe pedaling a bicycle furiously to connect it to an alternator so that you can have lights on in your house if we did that except it's the you know it's the fossil fuels providing that work energy what happens if we convert all that fossil fuel energy into human slaves by this method we discovered that each year's fossil fuel use is equivalent to 500 billion with a be billion human energy slaves working to keep our houses cooled food on the table moving ourselves and all our enumerable goods about the face of the planet now with only seven point eight billion people on the planet today that's as if there were 64 human energy slaves per person that would make you any average person on the planet have more slaves at their disposal then Cleopatra did I should queen of course queen of a very large Empire at the time the average person has more energy slaves than Cleopatra but we're not aware of them because of those slaves that Cleopatra had you know you still had to feed them you had to house them they had to clean themselves they needed clothing of the slaves that we have you're not even aware they're there right your lights just turn on the dishwasher just runs it's just it's beautiful but it's also hidden from us now given that those slaves that I just talked about the five hundred billion slaves they're not evenly distributed of course since so there's an average doesn't apply here and it's more like people in rich countries have several hundred energy slaves each and maybe people in poor countries just have a couple well listen that having hundreds of slaves at your disposal it makes life really very easy very sweet and if for when your energy slaves go away life will become a lot more difficult but you know what not in any ways that would be remarkable to your great-grandparents when it comes to oil the date is even more surprising to have been alive when half of all the oil ever used throughout all of human history has been used you only need to be twenty-two years old twenty-two that's it in just the past 22 years as much oil energy as used throughout all of human history has been used in just the past 22 years it's moved your personal vehicles about massive container ships and airplanes it's oil energy hasn't you've been used to dig up vast mineral or deposits it's installed wind towers as well as spread plastic throughout the oceans it's trawled and cut and scraped and ploughed dwindling natural habitats it's very difficult to overstate just how much material abundance that oil energy has brought to the world all of it would be closest to the truth this is water to a fish we're surrounded by it most people are completely unaware of just how much abundance the surplus energy from fossil fuels has brought to us it's like we were born on third base but we think we hit a triple you know we're just clever we're clever humans we'll figure something out well now let's ask a different question ask yourself how long will it be before another volume equal to all of that ever burned out throughout human history up to this point how long before another volume equal to this moment in all a history in the past will be consumed that is I'm asking the question how long before the next doubling another half equal to the last half how long well the current rates that's just gonna be another 21 years weird huh but that's how it works it's the miracle of compounding each doubling consumes as much as all the prior one before it now this is awesome when it works for you in a portfolio sneaking and treacherous though it's very sneaky and treacherous when it's working against you as it has for the actuary lead efficient pension plans they are experiencing negative compounding and that's just utterly destructive right Einstein called compounding the eighth wonder of the world and he said that he who understands it earns it he who doesn't pays it look I know energy extraction it's a complex arena I'm not asking you to become a world-class petroleum or coal geologist or anything like that but merely just use your intuition how many more doublings a fossil fuel consumption do you think we've got do we have one more can we manage to find and burn another amount of coal oil and natural gas equal to all that has come before even if your intuition says we've got one more doubling or possibly two you know there's a hard limit in there somewhere right sooner or later there's a limit to the exponential extraction in use of fossil fuels some days it just becomes too difficult to extract the remaining dregs and dribbles at a faster pace that's when the peak occurs then everything we take for granted changes the water drains from our tank we rather suddenly become acutely aware of the waters absence it's all fun and games when you're adding more energy slaves to the mix you start subtracting them and it's less comfortable right that day though that day of that peak is not as far off as you might imagine especially if you read the mainstream news hey this is like this is the most surprisingly important hidden information that exists today how long do you think that day is I I personally I think it's maybe a decade maybe two right maybe maybe maybe the the Arctic melts and we discover there's just vast pools of oil under there but it's out there and it's not that far away by just by taking that one giant step back and looking at the energy situation the exponential use of fossil fuel energies so much becomes we're about the future in what it can and what it cannot offer one thing we cannot assume any longer is an endless horizon of exponential growth in energy extraction you can't assume that any longer with that one insight literally everything about investments in economic growth suddenly changes if you have money invested in the markets and you care about the future the next step we're going to take really matters to you a lot and that's giant step number two we call this one the economy and energy economic growth depends on energy Wow there it is it's this concept more than any other that serves cast a light on the future right a very bright light out of all the economic charts and data I have and I got a lot of them I got quite a bit this next one is really it's the most robust it's the rock-solid most rocks all of them all it shows that economic growth GDP and that's how its measured and growth in energy consumption over the past 50 years have been tightly coupled now there's a chart here at the site it's actually titled GDP and energy are tightly coupled this comes from Google Bardis work and it's just graphing two things on the y-axis heading up and down world GDP in trillions of dollars on the x-axis world energy consumption expressed in millions of tons of oil equivalent right so if because we got a lot of different you know we get fossil fuels our coal oil natural gas we've got Oh nuclear we've got you know hydro some wind and solar but if you convert it all each one of those into its oil equivalence it makes it easy to express just a single thing so it's total energy consumption expressed in oil and world GDP and you know what you see you get a nice straight line for the past 50 years from 1965 to 2016 a nice straight line and the data points all fall really very neatly either right on that straight red line or very close to it and what that tells us because it's a straight line is that there's a very tight relationship between global economic activity and global energy consumption the units can be defined if you want if you expect require are counting on demand X units of economic growth then this chart tells us you're going to need Y units of additional energy consumption it's very simple it's dead linear there's nothing complicated about it more economic growth is gonna require more energy use that's been true for the past 50 years and there is nothing yet anywhere in the data to suggest that this has or will change now this is a profoundly important concept it matters to every investor every saver citizen parent grandparent who cares about preserving their wealth and leaving behind a world worth inheriting which is our mission at peak prosperity and here's why the economy and it's an abler at the financial system are 100 percent built around the idea a perpetual exponential growth well as we pointed out above that or before I should say you're on a recording that exponential economic growth is based on energy growth well and that energy growth cannot continue forever or maybe even for very much longer in this story so now the operative question becomes what happens to the linked economic and financial systems when they cannot grow exponentially anymore it's a good question do they just level out do they you know peacefully sort of turn into a stable sort of a system what happens well nobody really knows but perhaps we got a taste of that back in 2008 when the financial system almost blew to smithereens do you remember her right the entire banking system almost seized up and ceased to function they were desperate times well why what happened simply all of that almost broke because credit stopped growing exponentially for the first time since the 1950s I'm showing here now chart which shows total debt in the system because we have a debt based monetary system and this is data from the Federal Reserve it comes from the fr EE D the phred website and I'm showing here that there's from 1950 to 2019 we see here that there is this red line that's rising exponentially except there's a little wiggle a little wiggle there right there around 2008 and 9 and at that little wiggle shows that credit actually went backwards that dynein tiny little bit for about a year credit was actually going in Reverse and the whole system almost exploded the whole system almost broke I mean really we've built for ourselves a system of credit and money that's either happily growing but exponentially growing or it's collapsing those are its two states if you're like me you find that a little bit troubling so let's connect the dots here then I'm leaving aside all sorts of profoundly worrying signals from the natural world which I normally connect in the environment or ecological peace right the missing insects we've got melting ice we've got a hundred 100 other signs that the age of growth is well and truly over which is a whole other dot to connect here but we're gonna have to set that aside because for our purposes today I think it's sufficient to just connect these two dots one the financial system requires exponential growth two fossil fuels are finite you get that point one is dependent on this thing called infinite growth fossil fuels which provide the growth in a very straight line linear fashion are finite so we have financial system that wants infinity and we got fossil fuels that are finite dot one dot two there's tension that's the tension that's starting to show up most people aren't aware of this they feel it in other ways and so we have these divisive increasingly fractured political debates and we have increasing suicides and we have people numbing themselves out with eating too much and playing video games and even suicide whenever those markers of stress are the real stress in the system is our common narrative the thing everything's been hooked to is this idea of how our economy is going to provide for us but the economy doesn't provide anything actually for us really it's the energy that provides those things for us the economy is the way we parse that energy out the energy in this story is beginning to dwindle and wind down all right one other point to weave in here to connect those two dots so maybe it's three dots I have to connect dot one was financial system Criers exponential growth - the source of that growth is fossil fuels and those are finite the third dot here is that currency money debt things like that they're not actually wealth although we confuse them with wealth in the popular press all the time to the point that most people actually are confused and think of money and debts as wealth but they're not their claims on wealth and so it's a very common thing to mistake money and debt as wealth so and what do you mean dead as well well if you own a billion dollars of US Treasury notes well that's the debt of the US government but if you own that billion dollars of that and maybe a billion dollars of corporate bonds right your said to be very wealthy but what do you really own well you own a billion dollars plus interests of course of claims on the future cash flows of the issuers of those bonds but the bonds themselves they're not real wealth in the sense you know you can't eat them you can't live in them you can't do anything with them except maybe admire them in your portfolio we own claims on well things like cash currency you know bonds stocks we own those claims on wealth so we can some day consumer possession possess actual wealth to do anything useful with bonds in this example you'd have to first convert them to dollars which are themselves liabilities of the Federal Reserve and it's only once you've done this conversion that you can then exchange those dollars for the real goods and services that you actually consume like houses and oil wells and land and gold food things like that and that's the point everything we popularly call wealth today currency stocks and bonds they're actually merely claims on the final items containing real value that we wish to own or consume which means there always needs to be a balance between the claims on the one hand and the things on the other hand too few claims we call that deflation too many that's inflation well in this story the Fed and other central banks they've been fostering the exponential accumulation of claims at roughly twice the rate of real GDP growth that's the things in this story and without any indication of concern for the fact that the earth is you know finite so I've got a chart here oh it's the same charges before but I want you to take another look at it the blue line on the bottom of this chart shows GDP and it's kind of flat and trundling along and it represents the real stuff and then we've got the red line on top which is exponentially shooting away from the blue line below when you see these two lines diverge on this chart is it not completely totally utterly obvious that the claims are increasing faster than the stuff asked what those two diverging lines mean the data shows that debts have been compounding at twice the rate of GDP growth and have been since 1971 now is that sustainable nope how could it possibly work out well one way there is a way and that way is only if GDP growth comes roaring back and is twice the pace of debt growth for many decades into the future now how likely is that well let me tell you a story about how energy and the economy are linked stop me if you've heard this story before right the only way this story resolves itself in the ways that everybody's hoping dreaming scheming or just denying and failing to look at is if and only if rapid economic growth comes roaring out of the gate that economic growth requires energy full stop nothing else needs to be said about that except where's that energy gonna come from all you have to do is look into the energy date and you say it's not there it's out there the easy stuff is gone we worked through it it's gone wow this is such a simple story and it's so hard for most people to get their minds around so I'm really glad we're going through it today because it's really important it's really important now constantly increasing debts those are an implicit bet that the future is going to be larger than the present exponentially larger given the interest involved right because we don't just have the debt itself you know the government doesn't owe you a billion dollars if you have a billion in Treasury notes they were you the billion plus interest right so the interest involved is what drives the exponential behavior in this system the real wealth to justify those claims is going to show up that's that's the implicit bet here magically well it always has Chris unfortunately peak all sorts of things militates against that view I've talked about a peak in energy coming out there but we could be talking about a peak in mine output for copper for lithium silver peak amount of fish that can come out of the ocean peak soil as we degrade it and it goes into the oceans Peak extraction of water from ancient aquifers Peak all sorts of things right we're running out of stuff all over the place but our entire economy and financial system is geared for the idea that we're never gonna run out of anything in fact we'll always be able to get more more lumber more fish more soil more soybeans more everything and I guess what I'm saying here is that the commonly held conventional for you of the world and the future has got it all wrong dangerously and very badly wrong just because they've had a wrong doesn't mean you have to get it wrong this is where the education comes in this is where having the appropriate context and awareness and education around these things is really really important and that's why I do the work I do and that's why you're listening today is to get that understanding I want to talk to you about the vital role of hard assets in this story because okay you might be asking all right well Chris what's to be done here what should I do the solution is to understand that human nature has not changed at all in the past 5,000 years hasn't done um nope no lucien has occurred which means that when confronted with such a major development as the one I've laid out in this story the normal human tendency will be to ignore it as long as possible and then do some really dumb things to try and prevent reality from intruding on the fantasy what if humans done hundreds of times throughout history when their dreams were economically unworkable well they printed or debase their money can't afford a war clip the coins and fire to large go into debt and then print your way out of that later global economy no longer growing debts too large and the claims are too many quantitative easing or QE really there's nothing new Under the Sun here same old same old right to what you're living through today has happened hundreds of times in history and it's happened because humans are humans that's it has that's the that's the primary defect in the story if you want one in every case when the solution air quotes around that I guess solution was printing or its equivalent fortunes were made and lost but mostly lost claims on wealth were mistaken for actual wealth and people climb to those claims and when the claims evaporated in various panics the holders were financially ruined now that's gonna happen again for the same human reasons as before only this time it's a global phenomenon there are no borders to scurry across and hide out while things blow over more importantly there are no new continents to go to with fresh tasty untapped natural resources to exploit now seen from a comfortable distance what actually happens during those times is a wealth transfer from those who don't see it coming to those who do broadly speaking from those clinging onto the claims on wealth towards those who actually hold the real wealth now this is where hard assets come in the real wealth again they're the real things that are either the sources of real wealth right that primary sources real wealth this is farmland oil wells mines timberlands etc or are the tangible things that come from those assets that's the refined gold or silver or lithium copper's lumber it's cash flowing real estate things like that by far the simplest and easiest thing you can do as a starting point is to have a portion a diversified portion of your wealth safely tucked into gold and silver and I'm bringing this up because it's it's simple it's easy like a couple of mouse clicks and you're done right by the way the big smart money has already started this process which means you'd better get movin if you want to join that parade there may well come a day when the big money floods in that direction and then hey good luck finding any right here's why here's some data for you for a variety of reasons too numerous to go into here it's a whole other podcast at some point the world central banks are now too far down the QE rabbit hole to do anything but print and then print and then print some more that's they're locked in that dynamic nothing they can do till this blows up this is resulted in over 15 trillion dollars of negative yielding debt across the world now this is a concept that I go into much more deeply in the next companion piece to this which is for subscribers now that 15 trillion dollar number it's exploding and sure to go even higher in the future you know it was only six trillion less than a year ago it's just exploding it looks vertical right now and if you if you personally were forced to choose between the certain losses of negative yields and by the way negative yell so that's why I had to spend a whole piece exploring this it's such a weird concept I can't even believe we're here it's ridiculous negative yield means that you pay an entity to lend that entity money right so if you had to choose between paying the swiss government for the right to lend it money for a while if you had to choose between that and holding gold which at least offers what a0 yield at least it's zero it's not negative which is more attractive well the answer screams own gold to many investors which explains this next chart which compares the it's a chart of the total amount of negative you which is going up and down and up and down and you know spiking all over the place and now foof finally off to over 16 15 trillion and heading towards 16 trillion uh and the price of gold you see that those two charts line up really really well that is the more negative yielding data is out there the higher the price of gold goes and when it goes down vice versa because it that's one thing that gold does is it offers you the chance to protect yourself from negative yielding debt so that that makes sense gold has another function which we'll get to in a minute now look I have three adult children who am I love very much and while I don't have any grandchildren yet hey I already love them too and because I do I own lots of gold and silver I've taken the time to study history clear my head of the common narrative that has so many things so desperately wrong and I actively reject this is an active mental process I actively reject the usual antique gold propaganda that infects the US financial press it's a weird position I don't know why they do it it's not reflected or repeated anywhere else in the world and I don't have a good explanation for it but you can detect it in wall street journal articles which have all these negative nouns and adjectives sort of like you know sprinkled all around their articles when they talk about gold and you can practically see the journalists sneering as they write the word gold and they use pejorative terms like gold bugs bugs right anyway I actively reject that stuff because it's not useful information for me to absorb that anti gold propaganda and I take it as my role to provide my as yet unborn grandchildren with a solid a start as I can I take that role seriously the same as many other families do a core positioning gold and silver physical gold and silver not ETFs not minors not anything like that those have a different role but core position in physical gold and silver is an essential part of that strategy for me it's the durable insurance fund that a financial fire cannot destroy if you love your family you take the role of providing and protecting seriously gold and silver or silver they're critical must-haves in your holdings after that the next layers involve putting my assets my financial assets into productive real estate such as farmland my resilient homestead excellent equities including miners if that's your thing and other hard assets what makes sense for you of course is a complex equation involves your age your financial status geographical function and location and family circumstances all that we strongly advise that any money that you do have in the financial markets or markets as we like to call them due to their excessively deform nature we advise that you have that money be managed by people who understand these many risks and actively manage for you the future for the future that you think is coming our endorsed financial advisors that you Harbor financial they'll be glad to provide you with a free no obligation consultation as they have for many very satisfied hundreds of our readers they will help you develop a plan determine which assets make the most sense to explore and invest in literally nothing's off the table you could talk to them about anything finally be sure to discuss these powerful important ideas with those you love and care about the world is changing in a really profound and powerful way and people will either be prepared for those changes or they all be caught unawares this isn't doom and gloom it's just reality it's data however as has been historically true reality data things like that aren't very popular with the masses and that's why so much opportunity exists and to see all of this you just have to take two giant steps back to understand the larger picture one is to look at the exponential use of fossil fuels and the second is to understand the relationship of how the economy and our financial system depend on energy that brings us to the end of part 1 in part to defending against the global currency crisis we take an in-depth look at the the brewing global currency crisis it's all in the charts right there I've got a lot of data in this next part and how the really just how panicked the world central bank's how the panic central banks they're gonna make it worse they just will futile desperate rescue attempts they painted themselves into a really difficult corner and they're just get ass lot more paint around and it could get ugly the sudden changes in global capital flows that are going to occur this is what's going to throw the world into chaos so we explore what that global financial system looks like understanding that is really critical and the wealth destruction that's going to ensue is going to be much larger than most analysts and investors can even comprehend an absolutely essential requirement for preserving wealth during this period we'll be holding it in forms that cannot be inflated away by a runaway printing press that brings us to the end this podcast thank you so much for listening and I hope you prosper and enjoy the future [Music] you [Music]