There’s been a hidden decline in the global gold mining industry unrecognized by most investors. It’s an insidious and mysterious decay that has plagued the industry for many years. Unfortunately, investors can’t see what’s taking place in the gold mining industry because they are unable to notice the subtle changes taking place over decades as the market is focused on quarterly results.
Thus, the adage…. the frogs are slowly cooked to death, fits here perfectly.
However, we really can’t blame investors as they have been trained to look at short-term results rather than the longer-term fundamental trends. Furthermore, the overwhelming majority of investors don’t read the gold companies’ financial reports, and I would bet that only a small handful actually go back more than a few years.
I am probably one of the few crazy people out there who enjoy reading over gold company annual reports that were published 20-30+ years ago. While most individuals may find this type of detailed research boring as hell, I am quite fascinated. And the information in this article will reveal an industry that is being devasted by the slow and agonizing impacts of the Falling EROI – Energy Returned On Investment.
For those new to reading my work, simply put, the Falling EROI is nothing more than the decline in vital net energy for the global economy. The United States was producing oil in the 1930s at a staggering 100/1 EROI. Thus, the oil industry delivered 100 barrels of oil to the market for the energy cost of one barrel. By 1970, this fell to 30/1 and today; the U.S. Shale Oil Ponzi Scheme is producing oil at less than 5/1 EROI.
Please don’t confuse oil profits with falling net energy. While declining net...