On these blogs, I try to listen to hours and hours of interviews and bring you the Sports Center highlights, if you will. I spent a good 5 hours this weekend cleaning my basement that I’m finishing and outdoors trying to get the jungle to look at least semi-respectful. I have this dude next to me with the absolute most perfect lawn, and well…I’d rather be writing this stuff for you guys than be snipping every blade of grass, so here we are.
Steve St. Angelo was on SBTV and discusses his take on an upcoming energy cliff coming. He discusses the fact that while there’s so much interest in crypto currency and the blockchain and electrification – that people don’t realize the energy to run all of it is about to hit a cliff. He talks about peak petroleum and is correct that you just cannot spin up nuclear plants in a few months.
The big thing he primarily focuses on is oil. He makes a valid point that you just can’t replace all of the oil with solar and wind.
But I listened to a guest on Palisades from last month. When mowing the lawn, I finally got to it. Mike Beck discusses everything battery related. He discusses that nickel may be needed to make battery storage more dense, and with this, I believe he mentioned that there was a new way to address some of the nickel deposits out there to make it battery friendly. Big picture is this…
He states that by 2030, 25% of all new cars are going to be EVs and by 2035, 50% of them will be. Additionally, he mentioned that batteries need to be $100 per KwH and it is “game over”. He mentions that Tesla is there now, and many others are 1-2 years out. Big picture is that this helps the overall cost of the car to be less than an ICE vehicle.
Additionally, you have to understand that the more EV cars built, the less oil consumption there is. When checking out this site, it shows that your car on average uses 12 barrels of oil per year. The site ALSO shows that ” in truth, petroleum is not a very efficient fuel and accounts for just 1 percent of electricity generation in the US”.
This site shows there are only 1.4 billion cars in the world out of a population of 7.6 billion, for an 18% “saturation” rate.
This suggests that ICE cars use about 16.8 billion barrels of oil per year. This site shows world crude oil production is somewhere between 75-80b barrels per year. This would indicate ICE vehicles then are responsible for 21-22% of all oil production per year. This would tell me that IF what Mike Beck says IS true, then you could be reducing your oil consumption by 10-20% in the next 10-15 years.
At the SAME TIME, you have all kinds of renewed interest in uranium as a “green” energy source due to not producing any greenhouse gases. From what I am understanding, Cameco and Kazatomprom are both now buying uranium off of the spot market to satisfy contracts – leaving their mines to hold the resources. According to Rick Rule, this excess could be left overs from the Japanese stockpile not used after Fukishima as well as material that was enriched to make bombs that has been re-purposed.
What Mike Beck underscores in this is more dense battery storage is coming, perhaps soon to be $50 per KwH, and that will blow the doors off of cost of ownership of an ICE vehicle.
In the interview, they also touch on a battery being built for a town, and then the electrical grid. I wrote a MASSIVE piece about this sort of thing awhile back. I had worked for a hydro electric company for over 4 years (in IT) and we had produced giant turbines for dams. It was a Siemens company, so it was well known in the industry. From what I had recalled with my conversations with the engineers, and please quote me if I’m wrong, but this is a demand-driven type of electricity. Meaning – water is constantly engaging the turbines, but if night time comes and everyone goes to sleep and turns off the lights, the power demand goes down and they disengage creating power at that time.
What I think many get wrong about an energy cliff of sorts is that other sources of power may be soon utilizing batteries to store power off hours. Think about massive batteries attached to hydro dams everywhere in 10-20 years from now. Think about not having to “turn off” the dam at off hours.
This then takes me to the next thought on this. What if you have companies that are then able to make trucks with these better batteries? What if mills are connected to hydro dams and can draw from their batteries?
I want you to look at a mine from First Majestic – San Dimas. What if they were to add a massive battery to this dam? What if these batteries charged overnight and were then able to power a fleet of electric trucks?
I want you to consider the concept of mining raw materials like silver, gold, copper, uranium, and even drilling oil – using trucks and equipment that gets their energy from batteries that are stored as a result of excess power generation. I know this feeds into the energy cliff concept, but again – how much electricity, worldwide, simply goes right past the hydro dam and is not stored because there’s no demand?
What about houses 10-20 years from now that potentially all have solar panels and localized batteries in the house which can feed back excesses into the power grid?
While it is apparent from Steve’s research that there is danger of cliff with petroleum, apparently only 1% of the power grid is powered from oil. So if we are to increase our needs on the electric grid, it’s possible that batteries capturing excess hydro energy can actually meet those demands.
To conclude here – the ultimate question is timing. Will Steve St. Angelo be correct and we hit a cliff in perhaps 2028 prior to all of this EV adoption?? Or, could battery breakthroughs in density and scalability help hasten the move to EVs and capture Hydro energy to help power the grid more? You then have to wonder about the electrification of Africa – all of the copper and raw materials needed there, where does the power come from? Could they be building a lot of nuclear plants in Africa? Hydro dams? Solar farms? Where are they getting the coal used a lot in the US for electric grid power?
In the below video, George found that YCC is already happening – he says it is in “stealth mode”. Buying long end to reduce curve
What this tells anyone invested in PMs is that it’s game on for sustained low real yields.
I quoted Rick Rule above, and it was from the interview below.
Rick Rule says most things right now are overpriced. Kazataprom can make uranium cheap, but buying off of spot now. Mid tier juniors might be good space for gold. He shies away from US uranium because he feels US power plants might just buy cheaper uranium elsewhere.
One thing I’m going to note here, is I think a lot of things in copper and uranium have moved too early, anticipating higher prices. Step back, and take a look – I listened to Rick Rule conversations going back 18 months and no one can forget him telling the story about the 5 uranium juniors he had, the worst one was a 22x. I believe THIS resonated with everyone and when gold and silver shot up last summer, everyone skipped the line and crowded into the juniors early. What we have seen is some explode, but in the 8 month pull back, it has been unusually cruel to some. How this normally works is big money hits the majors, then rolls to the mid tiers, then the juniors.
The risk of hitting juniors too early is what we have seen – you put money in and it goes sideways or down for 8 months. Right now, the Newmont options I bought last summer right before the correction have now come to life. WATCH for institutional money into NEM and GOLD first here.
I feel a strong correction is coming. No one knows when, but just about every sign of a top is in, and with this, lots of downside risk for anyone holding options. On the OTHER SIDE of this correction, I’ll be adding strong positions to the likes of Rio Tinto, Kazatomprom, and Cameco, along with battery metals companies. Right now, I feel my best play is to stay in gold and silver, capture up moves here, and if there is a strong correction – I feel there will eventually be flight from the dollar to gold. Profits here can then seed my bets on those just mentioned.
Andrew Maguire on Wallstreetsilver here. Talks about Basel 3 and 60:1 G:S could have silver at $100-$200. Discusses more on Kinesis as a competitor to COMEX and backed by ABX. Discusses audits. I feel that IF the deadlines of June 28th or the like are actually true, Andrew Maguire may have his time in the sun with skyrocketing gold and silver prices. Recently, we are seeing a LOT of weakness in tether – with articles claiming that it is not backed 1:1 with USD, but only 3% of tether is USD. The rest is “paper”. Whether this is US treasuries, corporate bonds, junk bonds, municipal bonds, or even other cryptos, no one really knows. Andrew reported $4 billion in usage on Kinesis last month, which really starts an uptick in usage. Where unbacked cryptos may have seen an apex recently, there may be a flight from a lot of these cryptos to safety in USD, gold/silver, or perhaps another crypto backed by gold and silver.
Every time I post something about Kinesis, and how much I love them and am a fanboy, I get the usual hate mail. If anyone from Kinesis is reading this, I did try and follow up with you to get some answers to their questions. I’ll try and pass along a few here:
- Who is your lead with crypto? They are concerned you do not have a C-level person with a background in crypto. I think it’s a fair point to make.
- Regulation. Most see your page and you have locations everywhere. If you are selling bullion, you do not need regulation. However, you are selling cryptos and have an exchange. What regulatory bodies are of any concern, if any? Some felt Australia may try and shut you down. I also see there’s a move to Lichtenstein in the works. Does this have to do with a jurisdiction that is more friendly to regulations?
- Backing. I’m very satisfied with the answers I have received on audits, and Andrew in his discussion mentioned that audits have been ongoing for 10 years. He makes a mention how there’s essentially title to the metal to the people, and NOT to Kinesis.
- If SHTF, what happens? The one other concern is what happens if Kinesis goes bankrupt, how would people get their metals or money out of Kinesis? The big dig here appears to be from Bitcoin people who say there’s no counterparty risk with Bitcoin, but with Kinesis, you have problems if the company goes under. If that is the case, how does the metal get divvied up? what happens to KAG and KAU? KVTs?
- Exchanges – one complaint I see is that you cannot buy KAG/KAU/KVT on exchanges. I recall in a recent interview that they are trying to get KAG/KAU on 7 or 8 exchanges. Can we know which ones and what the progress/timeline is?
- Question from me. I have the debit card now. I have to convert my KAG to cash, then put on my debit card to use. I recall that Kinesis is trying to get KAG/KAU as a form of payment directly? Wondering where this is and what kind of progress/milestones you are looking at?
To anyone from Kinesis who sees this, I now have a YouTube channel and WANT to do an in depth review of your product and site, but wanted to get these answers in order to proceed. I have emailed a few times with no response so I’m trying to see if we can get some more influential people to get some eyes on this to assist. In February, I had a blog post that had over 65,000 reads and routinely get 3000-5000 reads on regular blogs.
My plan is to do about a 30 minute video on Kinesis and a massive blog write up. The hope is to reach perhaps 50,000-100,000 people to provide those fleeing unbacked crypto a place to land. It’s a $2T market now and feel you have a strong concept to capture a lot of this business. Even if you are able to capture 5% of it, you are looking at $100 billion. I’d like to assist, but need more information to proceed.