The Cannibalization Of The Financial System Will Force Investors Into Silver

Day in and day out, the global financial system continues to cannibalize itself. Clear evidence of this points to the massive “Artificial” liquidity and asset purchase policy instituted by the Federal Reserve. While financial analysts provided several theories why the Fed was forced to inject liquidity via the Repo Market and also purchase $60 billion a month in U.S. Treasuries, the real reason has to do with the falling quality of oil and its impact on the value of assets and collateral.

It’s really that simple. However, there is no mention of it (energy) by any of the leading financial or precious metals analysts. For example, in Alasdair Macleod’s recent article titled, How To Return To Sound Money, he states the following:

This article provides a template for an enduring sound money solution that will deliver economic progress while eliminating destructive credit cycles. It posits that a properly constructed gold and gold substitute monetary system, which also includes the removal of bank credit inflation as a means of providing investment capital, is the only way that lasting stability and prosperity can be achieved.

Alasdair Macleod, who I have a great deal of respect, doesn’t mention “Energy” once in his entire article suggesting that returning to sound money, through gold, is the only way for lasting stability and prosperity can be achieved. The majority of economic prosperity has come from the burning of oil, natural gas, and coal, not from gold or silver. The precious metals act as money, a store of value, or economic energy, but are not the ENERGY SOURCES themselves. While this is self-evident, it is very important to understand.

The overwhelming majority of analysts do not understand that ENERGY is the driver of the global economy, not finance. Here is a perfect example.

If you want to drive your brand new car to a restaurant, what is NECESSARY to have in that car?  Correct… you need the fuel. That $35,000 car is worthless without the fuel.  If you had no fuel and I walked up to your house and gave you a ticket for 20 gallons of gasoline, would that get you to the restaurant??  NO… it would not. A Ticket representing gasoline is not the gasoline. This is what people do not understand today.

The money in the bank is not the FUEL; it’s the ticket for the FUEL. Without the burning of billions of barrels of oil and natural gas equivalents, along with coal, the MONETARY SYSTEM would not work. The energy comes first, the money second.  It’s always been that way.

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