Chris Martenson
by
Chris Martenson
Executive Summary
- Petroleum is bumping along its global maximum plateau
- Global demand (led by Asia) will soon far outstrip supply
- Why oil is getting scarcer, but cheap oil is already non-existent
- How insufficient net energy will be the mortal pin that pops our unsustainable financial system
If you have not yet read The Really, Really Big Picture, available free to all readers, please click here to read it first.
Global Supply
Where the U.S. shale plays have been getting an undue allotment of press compared to their current and projected flow rates, the major story remains that oil companies are spending more and more as oil becomes more difficult to find and challenging to produce.
What's interesting is that so many people hold the opposite view, perhaps shaped by the breathless manner in which new finds are announced, but rarely with an appropriate level of context or caution so that we can judge how significant or likely these finds actually are.
Here's a relatively recent example that captures this dynamic rather well. Back in 2010, a very exciting discovery was splashed all across the news with some very heady claims:
McMoRan Exploration announced a potentially major natural gas discovery in its operated Davy Jones ultra-deep prospect drilled in the shallow waters of the Gulf of Mexico (commonly referred to as the "shelf"), just 10 miles off the Louisiana coast.
Positive drilling results could be a huge boom for the company. McMoRan Exploration had proved oil and gas reserves at year-end 2009 totaling 271.9 Bcfe (billion cubic feet of natural gas equivalents), compared with 344.8 Bcfe in 2008.
Estimates of the size of the discovery range from 2 trillion to 6 trillion cubic feet of natural gas, rivaling the largest gas finds ever made in the Gulf.
(Source)
This is the nature of such press releases, as I now think of them. Yes, it's exciting that billions of barrels could be discovered and that these finds might produce as much as 15 billion barrels of oil. Unfortunately, a short euphoric sound bite like that is all of the story that every really gets transmitted to the casual reader. I combat these perceptions constantly in my live Q&A sessions after speeches.
The full reality is contained within the context-free but vitally important statement that tapping this field requires drilling down to more than 28,000 feet (!).
Fast forward to 2012 and here's the reality of that find…
How Energy Woes Will Trigger Financial Crisis
PREVIEW by Chris MartensonExecutive Summary
- Petroleum is bumping along its global maximum plateau
- Global demand (led by Asia) will soon far outstrip supply
- Why oil is getting scarcer, but cheap oil is already non-existent
- How insufficient net energy will be the mortal pin that pops our unsustainable financial system
If you have not yet read The Really, Really Big Picture, available free to all readers, please click here to read it first.
Global Supply
Where the U.S. shale plays have been getting an undue allotment of press compared to their current and projected flow rates, the major story remains that oil companies are spending more and more as oil becomes more difficult to find and challenging to produce.
What's interesting is that so many people hold the opposite view, perhaps shaped by the breathless manner in which new finds are announced, but rarely with an appropriate level of context or caution so that we can judge how significant or likely these finds actually are.
Here's a relatively recent example that captures this dynamic rather well. Back in 2010, a very exciting discovery was splashed all across the news with some very heady claims:
McMoRan Exploration announced a potentially major natural gas discovery in its operated Davy Jones ultra-deep prospect drilled in the shallow waters of the Gulf of Mexico (commonly referred to as the "shelf"), just 10 miles off the Louisiana coast.
Positive drilling results could be a huge boom for the company. McMoRan Exploration had proved oil and gas reserves at year-end 2009 totaling 271.9 Bcfe (billion cubic feet of natural gas equivalents), compared with 344.8 Bcfe in 2008.
Estimates of the size of the discovery range from 2 trillion to 6 trillion cubic feet of natural gas, rivaling the largest gas finds ever made in the Gulf.
(Source)
This is the nature of such press releases, as I now think of them. Yes, it's exciting that billions of barrels could be discovered and that these finds might produce as much as 15 billion barrels of oil. Unfortunately, a short euphoric sound bite like that is all of the story that every really gets transmitted to the casual reader. I combat these perceptions constantly in my live Q&A sessions after speeches.
The full reality is contained within the context-free but vitally important statement that tapping this field requires drilling down to more than 28,000 feet (!).
Fast forward to 2012 and here's the reality of that find…
by
Chris Martenson
[Many longtime followers of the Crash Course have asked Chris to update his forecasts for Peak Oil in light of the production increases in shale oil and gas over recent years. What started out as a modest effort at clarification morphed into a much more massive 3-report treatise as Chris sifted through mountains of new data that ultimately left him more convinced than ever we are facing a global net energy crisis – despite misguided media efforts intended to convince us otherwise. His reports are being released in series over the next several weeks; the first installment is below.]
There has been a very strong and concerted public-relations effort to spin the recent shale energy plays of the U.S. as complete game-changers for the world energy outlook. These efforts do not square up well with the data and are creating a vast misperception about the current risks and future opportunities among the general populace and energy organizations alike. The world remains quite hopelessly addicted to petroleum, and the future will be shaped by scarcity – not abundance, as some have claimed.
This series of reports will assemble the relevant data into a simple and easy-to-understand story that has the appropriate context to provide a meaningful place to begin a conversation and make decisions.
The Really, Really Big Picture
by Chris Martenson[Many longtime followers of the Crash Course have asked Chris to update his forecasts for Peak Oil in light of the production increases in shale oil and gas over recent years. What started out as a modest effort at clarification morphed into a much more massive 3-report treatise as Chris sifted through mountains of new data that ultimately left him more convinced than ever we are facing a global net energy crisis – despite misguided media efforts intended to convince us otherwise. His reports are being released in series over the next several weeks; the first installment is below.]
There has been a very strong and concerted public-relations effort to spin the recent shale energy plays of the U.S. as complete game-changers for the world energy outlook. These efforts do not square up well with the data and are creating a vast misperception about the current risks and future opportunities among the general populace and energy organizations alike. The world remains quite hopelessly addicted to petroleum, and the future will be shaped by scarcity – not abundance, as some have claimed.
This series of reports will assemble the relevant data into a simple and easy-to-understand story that has the appropriate context to provide a meaningful place to begin a conversation and make decisions.
by
Chris Martenson
The title of this piece is The Price of Everything and the Value of Nothing. The subtitle is Why Your Bread Is Going to Cost More. I connect these two in reflecting on my recent podcast with David Collum, in which he stated that our money has no value and that this fact is distorting everything.
What he meant was, if you take your money to the bank to deposit it, the bank offers no interest on that money, implying that money has no value to them. If they valued it or had a legitimate use for it, they would offer you something for its use. Obviously, money doesn't have zero value to the banks; they can place it on deposit with the Fed for 0.25% yearly interest. But by any historical measure, money has no value right now.
That's just what happens when any commodity – which money happens to be – becomes too abundant. It drops in price. What 0% rates on money tell us is that there's just an enormous amount of it sloshing around – and that, my dear friends, distorts everything else.
As I have said many times, when you misprice money itself, everything else becomes mispriced, too.
The Price of Everything and the Value of Nothing
PREVIEW by Chris MartensonThe title of this piece is The Price of Everything and the Value of Nothing. The subtitle is Why Your Bread Is Going to Cost More. I connect these two in reflecting on my recent podcast with David Collum, in which he stated that our money has no value and that this fact is distorting everything.
What he meant was, if you take your money to the bank to deposit it, the bank offers no interest on that money, implying that money has no value to them. If they valued it or had a legitimate use for it, they would offer you something for its use. Obviously, money doesn't have zero value to the banks; they can place it on deposit with the Fed for 0.25% yearly interest. But by any historical measure, money has no value right now.
That's just what happens when any commodity – which money happens to be – becomes too abundant. It drops in price. What 0% rates on money tell us is that there's just an enormous amount of it sloshing around – and that, my dear friends, distorts everything else.
As I have said many times, when you misprice money itself, everything else becomes mispriced, too.
by
Chris Martenson
Executive Summary
- Don't bet against gold, especially right now
- Collective thinking and shifting baselines are putting us in great danger of a surprise we're not prepared for
- When the next disruptive event happens, it will happen faster than the system can react
- Where I recommend allocating capital right now
If you have not yet read QE 4: Folks This Ain't Normal, available free to all readers, please click here to read it first.
My Thoughts on Gold
Bluntly, anybody selling their gold here does not understand what is happening. These are the most extraordinary and unique times that anybody has witnessed because the entire world is engaged in an attempt to print our way to prosperity.
Maybe that will come to pass, but the odds very much do not favor that outcome. It's never worked before, and I really have not yet seen any articulate description of why it might work this time. From a betting perspective, it's like facing a roulette wheel where every slot is black except for that solitary green bin. People selling gold here are placing their chips on green.
But I don't really think that gold's current market price or recent behaviors have anything useful to do with gold's value here. As I noted in a recent Insider, in the run up to the QE4 announcement and then in the days right after, some entity has been selling literally thousands and thousands of gold contracts into the thinly traded overnight markets so rapidly that we have to use millisecond charting to see it for what it is. Again, there is no other legitimate explanation for this activity of which I am aware besides having an intent of pushing the price down.
Whether there is some motivation for this activity besides 'making money,' I remain convinced that the gold market, like many others, is no longer sending useful price signals. Instead it is telling us that some entity has found it useful to sell thousands of gold contracts all at once.
The interesting part of this story is that this has been the most sustained, intensive, and yet ineffective gold-selling that I have yet seen. In the past, such bear raids, as they are called, would have resulted in a sharply lower gold price. Right now, that has not yet really happened.
I am wondering if a big up move is not right around the corner for gold. I can tell you that if even one fourth of the recent QE effort was announced five years ago, markets would have exploded and gold would have absolutely launched…
It’s Better to Be a Year Early Than a Day Late
PREVIEW by Chris MartensonExecutive Summary
- Don't bet against gold, especially right now
- Collective thinking and shifting baselines are putting us in great danger of a surprise we're not prepared for
- When the next disruptive event happens, it will happen faster than the system can react
- Where I recommend allocating capital right now
If you have not yet read QE 4: Folks This Ain't Normal, available free to all readers, please click here to read it first.
My Thoughts on Gold
Bluntly, anybody selling their gold here does not understand what is happening. These are the most extraordinary and unique times that anybody has witnessed because the entire world is engaged in an attempt to print our way to prosperity.
Maybe that will come to pass, but the odds very much do not favor that outcome. It's never worked before, and I really have not yet seen any articulate description of why it might work this time. From a betting perspective, it's like facing a roulette wheel where every slot is black except for that solitary green bin. People selling gold here are placing their chips on green.
But I don't really think that gold's current market price or recent behaviors have anything useful to do with gold's value here. As I noted in a recent Insider, in the run up to the QE4 announcement and then in the days right after, some entity has been selling literally thousands and thousands of gold contracts into the thinly traded overnight markets so rapidly that we have to use millisecond charting to see it for what it is. Again, there is no other legitimate explanation for this activity of which I am aware besides having an intent of pushing the price down.
Whether there is some motivation for this activity besides 'making money,' I remain convinced that the gold market, like many others, is no longer sending useful price signals. Instead it is telling us that some entity has found it useful to sell thousands of gold contracts all at once.
The interesting part of this story is that this has been the most sustained, intensive, and yet ineffective gold-selling that I have yet seen. In the past, such bear raids, as they are called, would have resulted in a sharply lower gold price. Right now, that has not yet really happened.
I am wondering if a big up move is not right around the corner for gold. I can tell you that if even one fourth of the recent QE effort was announced five years ago, markets would have exploded and gold would have absolutely launched…
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Fauci's Private Diary Exposes Stark Contradictions on Lab Leak, Lethality, Lockdowns & Vaccines
by sand_puppy 
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