Happy New Year! It’s going to be a doozy.
I’ll begin by saying that I’ve just gone through my usual year-end review of how I and the Peak Prosperity tribe did this year. Wow! What a year!
Aside from constantly parsing the signs of our times, we did deep investigative dives into The Great Taking and the Trump assassination attempt and explored the Big Theory of Everything, trying to make sense of it all, covering such foundational material as Rats In A Cage, 5th Gen Warfare, Totalitarianism, The Adjustment Reaction, and Demoralization, among many others. The goal, as always, was to explore the world with an open mind and to continue to hone our ability to see what’s true while discovering our blind spots.
In 2024 I started to re-do The Crash Course, thinking naively that putting the content into fewer long-form chapters would be a smart thing to do, but had to set that aside as events such as the Trump assassination attempts required my full attention to properly analyze and report.
In 2025 I will focus on three big areas unless some big event demands my attention:
- I’m going to completely re-do the crash course but this time as (drumroll, please!) a lot of very short videos! I know, I know, I’m a genius!
- Refocus my attention on all things financial/economic with a heavy emphasis on energy. Oil, natural gas, and uranium specifically.
- Do what I can to help create public support for any and all transformative policies that Trump, Elon, Vivek, and RFK Jr. propose.
This is the year of the Crash Course. Remember in 2008 when I first released the Crash Course, I said:
The next twenty years are going to be completely unlike the last twenty years.
I wasn’t being vague or wishy-washy. I knew that big complex systems take time to shift. I judged that ours is such a mega-bubble of fiscal, financial, and psychological delusions that it would take some serious time for reality to penetrate our culture’s thick skull.
It turns out I seriously underestimated my culture’s commitment to ignoring reality.
As I said in 2008, the longer we ignore reality, the fewer and poorer our remaining options will be. If, for example, we decide as a culture to ignore the fact that oil and gas are finite, and instead wait until it’s painfully obvious that we are past our final peak of production before we get serious about finding the next energy source we’ll be filled with regrets and disappointments.
“Oh why didn’t we reconfigure our cities and transportation and electrical distribution systems back when oil was $70 a barrel…things seem vastly more difficult here at $300/barrel.”
Those of you who know me and have been following me won’t be at all confused about why things become more difficult as net, or surplus, energy falls.
That image comes from The Crash Course, in the ultra-important chapter on Energy Economics (Chapter 19, located here if you wish to understand this better). Briefly, you and I and everything we know and love about the economy and high living standards we enjoy live in the green zone. The red zone is the energy required to get more energy and that is shrinking with every passing year.
It’s not a mystery – the easy stuff is gone. Now we’re going after the harder stuff. It’s deeper, in tighter less forgiving rock formations, and simply costs more energy to get out of the ground than in prior decades. It’s just a fact of life, or of geology and physics if you prefer.
Currently, one of the most preposterous delusions being paraded about in the media and across political stages is the idea that we can somehow run all this on solar and wind. It’s regularly presented as if shifting away from oil and toward wind & solar is simply a matter of political will, being blocked somehow by evil oil and gas companies.
The truth is, the more solar and wind you install, the more expensive your electricity becomes.
The y-axis in the above chart is “cents per kilowatt hour” and the x-axis is “percent solar and wind” in a nation’s electrical mix. I hand-drew that sloppy red line, but it’s a decent approximation of the slope of the situation. Conclusion: More solar and wind = more expensive electricity.
And that’s with extremely generous government incentives and subsidies. Once those are withdrawn that red line will grow a bit steeper.
In one small ray of light, the scriptwriters for the Paramount series titled “Landman” which centers on the life of an oil industry landman, sure understand the issues:
Well done, Landman scriptwriters!
My predictions for 2025 are that this is the year that:
- US oil production tops out, and smart investors quickly puzzle out the implications. Oil prices rise, defying all expectations.
- Alternative energy is revealed to be unfit for the leading role, lacking the ability to match the performance of fossil fuels leading to …
- A rapid resurgence in and appreciation for nuclear energy, especially 4th generation modular designs.
- Natural Gas production will be surprised by too much demand from a bevy of LNG and gas electrical power plants being slapped up without anybody having done the macro math on it all. Prices in the US will end 2025 a LOT higher, and as they approach actual world prices for LNG, the Trump administration will keep those exports at home. This means Europe gets stiffed.
- The bond markets finally figure out that, in terms of respectability, believing in infinite exponential economic growth on a finite planet ranks barely above believing in Santa as a 30-year-old. This means interest rates go up in 2025, not down, surprising 103% of the financial media (because some of them will be surprised twice).
- Because it’s been kept propped up with fake pre-election statistics and all-too-real government deficit spending that D.O.G.E. will cut, the tired economy will tip over into a pretty sizable recession.
For most people, it’s going to be a rough ride. Mainly because they aren’t paying attention and will be blindsided by the consequences of ignoring reality (and living in a delusional world).
CNN and MSNBC and CNBC and the WSJ and NYTimes are a quick way to slowly become ignorant. They mainly provide air cover for government and corporate policies and programs. As such, their relentless adherence to propaganda misinforms people, explaining their obsessive hatred of ‘misinformation.’ In psychological terms, “if you spot it you got it.” What typically drives people nuts the most are the things they most hate about themselves on a subconscious level.
This is the media. They are the largest purveyors of complete nonsense and lies, and so they put up a big show about wanting to protect feeble minds from misinformation coming from the alt-news constellation. Deep down, they know they are true culprits spreading dangerous misinformation.
The really sad part? Most of those corporate and government “programs” are grifts, scams, and outright corruption. None will be more damaging than the energy delusions and misinformation.
Over the long term, access to abundant and cheap energy is THE determinant of the vitality of any country’s economy. The connection between energy and the economy is both intuitively obvious and intellectually clear. You need energy to extract, make, and move things. No energy, no things!
Charts like this one from Art Berman tell the tale.
A “statistically perfect correlation” is a fancy way of saying “these things are inseparable.” It would be like saying “money deposited in my bank account is statistically perfectly correlated with the amount of money I have.” Duh. Of course it is.
The ‘green energy’ delusion comes with a steady stream of corporate and government misinformation dutifully relayed by the MSM as if it were capital T Truth itself. Nearly every day there’s another blathering announcement from some politician about pouring tens of billions into things such as the state of Massachusetts dedicating $10 billion to grid-scale batteries, or the UK hoping to pour 240 billion pounds into their national green energy goals.
Peel back the happy talk and you will immediately discover a vast swarm of corruption and enrichment of lobbyists, relatives, and political donors. What you won’t find is a coherent plan that will provide cheap, reliable energy to the populace.
I focus on this particular delusion, the energy delusion, because it’s the one that will absolutely crush future prosperity if we get it wrong. And we’re not only getting it wrong, we’re burning up our dwindling supplies of energy in the process.
As I said, the longer we wait, the fewer and more unpalatable our options become. Wait long enough and there won’t be anything that can be done. Except cry about what could have been (and should have been, if only we’d have let thoughtful engineers make the decisions).
It’s Not All Bad
People who aren’t prepared or aren’t willing to become prepared tend to bounce off of my messages like an unrepentant alcoholic at a surprise intervention.
For the astute, however, there are plenty of opportunities to become more resilient, mentally/spiritually prepared, and even financially wealthier. At a minimum, there’s no need for the resulting hardships to translate into literal starvation, broken spirits, and poverty. For far too many, these outcomes are already a reality, evidenced by the 18% rise in US homelessness in 2024.
At Peak Prosperity we preach the benefits of becoming more resilient. The four core areas we focus on are Home, Health, Wealth, and Community. Each of those is an entire subject all on its own, with subsets and plenty of actions to take and things to learn.
Build up your capital in each of those areas and you will weather the storms far better than those who don’t. Naturally, Peak Prosperity has a large body of resources to help anyone and everyone become more resilient.
Becoming resilient is a process. It takes time and it doesn’t have a goal line. There’s no destination on the resilience map labeled “done.” You decide how resilient you want to be and give yourself permission to adjust those levels over time given the news and other circumstances in your life.
“Predicting” The Future
It’s painfully easy to predict what comes next. You won’t need a magic crystal ball. All you need to be able to do is extrapolate the trend that’s already traveling in a specific direction.
Politicians and MSM, being energy ignorant, will not only overlook the importance of cheap abundant energy, but they will continue to do the wrong things in service to a carefully developed green energy delusion. The fact that more of their citizens are slipping into poverty with every new generation of alt-energy projects will not register in their minds as connected events.
For its part, the Federal Reserve and other central banks will find yet more excuses to try and paper over the misery with more and more money printing.
To the central banksters, financial assets M.U.S.T. always be growing exponentially up and to the right. The chart of the Nasdaq 100 is a good visual of their handiwork.
See how that chart takes off right after the 2008 Great Financial Crisis? Now take a look at this log(!) chart of central bank “assets” which is a clever word that means “stuff we bought with money printed out of thin air.”
(Source)
Want to know why groceries cost more? Look at the chart above. Want to know why financial assets have exploded higher? Look at the chart above. Want to know why the future is going to suck? Look at the chart above.
Either the central banks reel back in all that printing and cause a massive deflationary depression, or they continue the practice of printing more (more! MOAR!) at every “emergency.”
This is an easy call to make; central banks will print.
It’s what they do, and after an entire generation of doing only that, it’s ALL they know. So that’s what they’ll do. Only it’s becoming less and less effective and creating larger and larger negative effects like politically toxic levels of inflation, concentrated wealth in the hands of activist, homicidal billionaires such as Bill Gates, and a political class that no longer has any clue what a balanced budget is or how to go about negotiating to achieve one.
For those who know what is coming, steps can be taken to avoid the resulting inflation and economic dysfunctions. For those simply playing the game without paying attention to the rules and keeping their heads down and 401k drip contributions on autopilot, well, I’m not sure there will be enough future Walmart greeting jobs to go around.
Having a true risk-managed approach to portfolio management is one of the things that everybody with wealth most need to get through the eye of the needle. Most people have the exact opposite with passive exposure to financial markets. Retirement portfolios can be self-managed and exposure to gold and silver is a must, as well as other hard assets such as oil and natural gas, farmland, woodland, and mining. We cover all of these options here.
It’s Never Different This Time
You know why I am 100% confident that money printing cannot, does not, and will not lead to prosperity? Because money is not actual wealth. Real wealth consists of real things and those only ever arise from energy.
Money printing is not the same thing as oil coming out of the ground.
Money is a claim on things, not real things. Again, this is a longer conversation had in The Crash Course, but once you know, you know. It’s definitely worth your time because once you get this concept, you’ll be able to more clearly identify the true sources of actual wealth in your life and in your portfolio.
To believe that the central banks have magically unlocked the capability to print up real wealth out of thin air you have to believe in the most enduring investing delusion of them all: It’s different this time.
You know what? It’s not different this time. It never is.
Fundamentals matter. Currency units created out of literal nothingness and ‘backed’ by the same debts they enable in the first place is no way to go through life, son. If it were, we’d all be speaking Latin because the Romans were exceedingly clever people and they tried the currency debasement route over and over again, failing every time until they collapsed.
If could have been done, the Romans would have gotten it done, right after perfecting cement that cures even while submerged in salt water and building roads that would be used 2,000 years later. Figuring out currency debasement should have been child’s play compared to those feats.
You know why it didn’t work then and it won’t work now? Because it rests on the delusion that money is the real thing in the equation, not the stuff that the money can buy. It’s a completely upside-down delusion. It’s got it exactly backwards. And we’re about to relearn the lesson.
Conclusion
So, it’s going to be an exciting 2025! Let’s join forces and become healthier, wealthier, more well-connected to each other, and live in resilient homes.
My commitment is to continue to be your information scout – it’s what I am uniquely built to do – and together we’ll puzzle this all out.
But let’s not pretend that a white knight is going to appear, grab the reins, and steer the chariot of fate in a better direction.
I’ve been at this for nearly 20 years(!). We’re still just as far from the most basic of energy and money understandings among those in power as we’ve ever been. The fantasies and delusions are as powerful and pervasive as ever.
2025 is the year that the chickens come home to roost. Get ready.
by andys61