In this video Chris Martenson, economic analyst at chrismartenson.com, and Alasdair Macleod of the GoldMoney Foundation talk about Martenson’s book The Crash Course, the US dollar and gold. Martenson explains how The Crash Course originally took the form of an online video presentation which can be found for free on his website. He started to work on this video in 2002 and finished uploading it right before the financial crisis of 2008 started to unfold. While digging deeper into the state of the economy he realised how despairing our financial and environmental condition really is. In Martenson’s view, it is a very good time to buy and hold gold, because all countries are trying to devalue their currencies.
Martenson explains that once spending programmes are implemented, it is very hard to cut them back again. We are now at a point in time where outstanding credit can’t be serviced leading to the need for monetisation by central banks and therefore inflation. Additionally, the depletion of resources will not allow “business as usual” when it comes to getting the economy back on track. Martenson foresees rising oil prices absent a sudden slow down in demand due to a recession. He also expects the world to fully recognise the implications of Peak Oil sometime between 2013 and 2014.
They wonder what effect it would have on pension portfolios when the predicted returns of 7-8% cannot be realised anymore because rising oil prices curtail economic growth. Martenson points out that the exponential increase in the consumption of our natural resources leaves us with the big question of how this is supposed to be sustained in the coming decades. Due to the ever-increasing cost of extracting more resources, he expects a big structural shift in the way we do business.
Lastly, they talk about the energy cost of goods – especially food. With rising fuel costs the embodied energy in our food system also gets more expensive, and could lead to dramatic changes in the way we will treat food. Martenson also believes that we have to rethink our use of metals such as copper or silver, because they are getting more and more scarce and more expansive to mine. In his mind precious metals are still very under-owned – especially at an institutional level.
This video was recorded on November 16 at the Gold & Silver Meeting 2011 in Madrid.