A clear warning from Steve StAngelo in SRSrocco Report: this mountain of debt will cause a crash …it is not a question of if, but when. Debt began to soar in 1970: from there, US conventional oil production & energy return on investment (EROI) fell, contributing to rising cost of production across many sectors of the US economy.
Simply stated, Steve’s warning for the US national economy is rooted in the same logic he applies to the US shale oil ponzi scheme. The core of Steve’s critique is that mainstream economists essentially ignore energy in their discussions of supply and demand:
“Unfortunately, even the more enlightened pupils of the Austrian School of Economics fail to understand the Thermodynamics of value. Instead, we are only taught about supply and demand to impact price. While supply and demand forces impact price, they only do so over a short period of time. However, the primary factor that determines price (for most goods, services, commodities, metals & energy) is the cost of production. Supply and demand only pull price above or push it below the cost of production trendline.”
In the next posting, based on the same article, I precis how he applies this type of analysis to the global economy.
Image: from article