The Coming Breakdown Of U.S. & Global Markets Explained… What Most Analysts Miss

The U.S. and world are heading toward an accelerated breakdown of their economic and financial markets.Unfortunately, the overwhelming majority of analysts fail to understand the root cause of this impending calamity. This is also true for the majority of precious metals analysts.

The reason for this upcoming systemic collapse of the U.S. and Global markets is quite simple when you understand the information and are able to CONNECT THE DOTS. While it has taken me years of research to be able to finally put it all together, new information really put it all into perspective.

Yes… a HUGE LIGHT BULB went off, but unfortunately the realization is much worse than anything I imagined before.I briefly discussed this in my last article, The Coming Global Silver Production Collapse & Skyrocketing Silver Value.

The information discussed in this article makes it abundantly clear that the precious metals will be the GO TO ASSETS in the future. The standard financial practice of investing most of one’s assets in stocks, bonds and real estate will no longer be true. What little investment strategies are left in the future will turn to PROTECTING WEALTH, rather than building wealth. The days of acquiring wealth are coming to and end… and fast.

So, now I will try to lay out all the details in a way that will make this easy to understand. However, I have a word of warning. Those who are able to connect the dots… it’s like taking the RED PILL, you can’t unlearn what you now realize.

The Collapsing EROI Is Destroying Everything In Its Path & Quickly

Americans used to enjoy a much better standard of living when it only took one person in the family to provide the income. This was during the late 1940’s, 1950’s and early 1960’s.However, the situation started to change in the 1970’s.

Not only do both spouses have to earn a living to make it today, health care and college education are becoming unaffordable. I remember back in the 1980’s that most health plans had full coverage with little or no premium. Basically, your health care was free, and all you had to do was pay a small deductible when you went to the doctor. Now, more and more Americans can only afford catastrophic coverage, for an expensive monthly premium with a high deductible.

Many believe this is all due to the corrupt insurance, healthcare and pharmaceutical companies. While they are partly the blame, the majority of the reason is due to the rapidly falling EROI. Furthermore, the falling EROI is making higher degrees of education less affordable to the public.

Before I get into the details here, let me explain the EROI. The EROI stands for Energy Returned On InvestedBasically, its how much profitable energy you get in return from what amount of energy was invested (burned). The EROI has been a guiding principle for humans going back thousands of years when we were hunter gatherers.

Here are some simple EROI for human food production:

Hunter Gatherer = 10/1

Simple Human Farming = 5/1

Human & Animal Farming = 1-2/1

High Tech Modern Food System = 1/10

Data from Thomas Lough/ Energy Efficiencies (EROI) of food procurement strategies/ (page 4)

A typical hunter gatherer only burned 1 calorie of energy to acquire 10 calories of food.You will notice that a hunter gatherer was 100 times more efficient in food production (gathering) than our modern high-tech food system that devours 10 calories of energy to provide 1 calorie of food on the dinner plate.

Our modern food system can waste so much energy growing, harvesting, processing and delivering food because of the high EROI of oil we have enjoyed in the past.Unfortunately, the rapidly falling EROI of U.S. and Global oil will cause serious trouble for food production going forward.

Why the Falling EROI is Causing Havoc To Our Modern Way Of Life

In a recent three-part article by Louis Arnoux, Some Reflections On The Twilight Of The Oil Age, the following chart was posted about the importance of a high EROI for our modern society:


I am going to simply the chart above.

EROI 3/1 = Transportation System: Roads, Bridges & Trucks only.

EROI 10/1 = Transportation System, Agriculture, minimal Health Care & Education.

EROI 20/1 = Transportation System, Agriculture, Basic Living, Health Care & Education along with basic consumer goods

EROI 30/1 = Transportation System, Agriculture, Prosperous Living, Heath Care & Education with advanced consumer goods.

The important thing to understand from these EROI guidelines, is that a minimum value for a modern society is 20/1. For citizens of an advanced society to enjoy a prosperous living, the EROI of energy needs to be closer to the 30/1 ratio.

Well, if we look at the chart below, the U.S. oil and gas industry EROI fell below 30/1 46 years ago (after 1970):


You will notice two important trends in the chart above.When the U.S. EROI was higher than 30/1 prior to 1970, U.S. public debt did not increase all the much.However, this changed after 1970 as the EROI continued to decline, public debt increased in an exponential fashion.

We must remember, to sustain a transportation system with agriculture and minimal health care and education, we must have at least an EROI of 10/1. Well, with U.S. shale oil production that comes in at an EROI of 5/1 (or less), we can no longer afford the basic necessities. Of course, we still have other higher EROI forms of oil production as well as higher imported EROI oil from foreign countries, but these are rapidly falling as well.

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