The Relevance of Energy to Silver as a Monetary Metal And The Driver of Value into The Next Century
The ‘three principles, one consequence’ of economic reality.
1. The first principle is that the economy is an energy system, because nothing that has any economic value whatsoever can be produced without it.
2. The second is that, whenever energy is accessed for our use, some of that energy is always consumed in the access process. This ‘consumed in access’ component is known here as the Energy Cost of Energy, or ECoE.
3. Third, money has no intrinsic worth, but commands value only as a ‘claim’ on the output of the material economy.These three principles lead inexorably to a logical consequence, which is that we need to think conceptually in terms of two economies – an energy-determined ‘real’ economy of goods and services, and a proxy ‘financial economy’, consisting of money and credit, which incorporates claims on material economic prosperity.
The economy can’t be understood effectively unless this conceptual distinction is recognized.These principles not well known, or if they are even remotely acknowledged by economists, they are ignored as irrelevant. Akin to ignoring air, even though with every breath we take, oxygen is required, as we burn energy to stay alive. So it is with the economy.
Conventional economic models can’t possibly act as reliable guides to our predicament. Their foundation assumptions are fallacious. The economy isn’t entirely a monetary system; resources are not some kind of substitutable adjunct to the economy; there are material and environmental limits to economic activity; and the promise of infinite growth on a finite planet is a delusion arrived at by reasoning from false premises.
The critical issue is the relentless rise in the ECoEs of oil, natural gas and coal. These account for more than *four-fifths* of global energy use, so this process has driven overall ECoEs to ever-higher levels. ( see 2. above ) This process has killed off the scope for expansion in material prosperity, and has now put prior growth into reverse.( ECoEs: the energy it takes to find, produce, extract, mine, transport, build infrastructure to transport, energy to transport energy, ad infinitum ).
Rising ECoEs affect us, first, by making energy less prosperity-productive, because increasing costs reduce the surplus (ex-ECoE) value of each unit supplied. They are also starting to undermine quantitative supply itself, by making it ever harder to establish prices which both cover producer costs and are affordable for consumers.
What we are witnessing now ( September 2022 ) is absolute proof that the economy is an energy system, not a financial one.
This article does not mention monetary metals however, without energy the available *stored value* in the *existing* above ground stock will *increase over time* because of scarcity. And this also applies to that metal able to be extracted below ground in the near term, until the ^cost ( ^energy cost not monetary cost, see note 2. above ) of energy is more than the universally accepted, or intrinsic value of the metal itself, makes future extraction unviable, likewise will have exponential value as mine supply becomes unavailable. The hypothesis therefore, is that SVL and the Company Silver Mines Ltd., will perform as a store of value in the assets held both below ground and mined over the next decade at least, until the cost of extraction in terms of energy required is more than the value of the metal. Potentially the rewards for holding a share of Silver Mines Ltd., are infinitely greater than the currency in which the share price is denominated, meaning the value of each share is held in the *tangible assets* of the Company, which is *physical silver* ( and gold ) not the currency which is likely going to zero in due course. I expect to win on this speculative venture. I am not a trader.
Full article here. https://surplusenergyeconomics.wordpress.com/2022/08/08/237-asking-for-the-moon/
SVL Price at posting:
18.5¢ Sentiment: Buy Disclosure: Held
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