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Precious Metals: The Calculated Gamble

The User's Profile John Michael Greer March 27, 2013
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Executive Summary

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If you have not yet read Part I: Precious Metals: The Unseen Risks, available free to all readers, please click here to read it first.

As I discussed in last month’s subscribers-only article, “Face First into the Limits to Growth,” the crisis faced by the global economy in the years immediately ahead of us is not primarily economic in nature. The explosive economic growth that reshaped the world over the last three centuries or so was made possible by the discovery of a few simple gateway technologies that gave humanity access to vast amounts of cheap, highly concentrated energy in the form of fossil fuels. 

That’s bad news for anyone who fancies the sort of bright future that we’ve all grown up expecting, because at this point, the industrial world’s energy future can only be described as bleak.  World conventional crude oil production peaked most of a decade ago and is declining. Substitutes for conventional petroleum – tar sands, natural gas liquids, biofuels, and the like – are approaching their own hard limits.  The temporary surplus of natural gas created by the much-ballyhooed “fracking” phenomenon faces an early death in the next few years at the hands of brutally fast production-decline rates from hydrofractured wells, not to mention the inevitable market backlash as companies with substantial exposure to shale gas fail to live up to inflated expectations. 

Coal, which has been mined longer and more heavily than any other fossil fuel, is not exempt from the same rule.  Recent analyses argue that it faces its own production peak and decline before the middle of the present century.  Green energy?  That’s a subject complex enough to deserve an essay of its own.  The short version is that renewables are essential if we’re going to have any energy at all in the future, but hard thermodynamic limits mean that the amounts, concentrations, and kinds of energy we’ll be able to extract from renewable sources are not going to be able to keep industrial civilization running.

Meanwhile, hundreds of other raw materials necessary to industry, agriculture, and the ordinary lifestyles of the modern world are running short. In theory, it’s possible to keep an industrial society running indefinitely by extracting metals and minerals from poorer and poorer sources, until eventually you’re scraping individual atoms out of tons of rock and sea water.

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