US Economic Crisis Ahead: Major Failure Of Analysts To Spot Danger

The U.S. economy continues towards an epic crisis while the overwhelming majority of analysts are completely in the dark.  Even though some alternative media analysts understand that our highly leveraged fiat monetary system and markets will crash, they fail to understand the underlying reasons.  Thus, we are heading into a future we are not prepared because… the BLIND continues to lead the BLIND.

I don’t mean to be harsh on my fellow analysts, but the truth remains that the public is being misled due to the inability of market analysts unable to spot the real dangers.  So, we continue to move step-by-step closer to the edge of the cliff while “no one seems to notice or no one seems to care” (George Carlin-comedian).  I have to tell you; I miss ole George Carlin.  Yes, he had a filthy mouth, but the truth in his comedic material gave me hours of much-needed laughter.

To explain what I mean about the “Major failure of analysts to spot Danger,” I am going to provide two examples and some additional information.  It is crucial that the reader understand the FACTS and REAL DATA about our dire predicament and not become lost or confused in regards to lousy conspiracies or misinformation.

When I wrote the article, THE BLIND CONSPIRACY: The Gold Market Is Heading Towards A Big Fundamental Change; I thought for sure the individual and his analysis that I was calling into question would read the facts and data in my article and realize his error.  However, it seems as if it provided quite the opposite reaction.

Mr. Weir spent 50 minutes of his time putting together another video about the Massive Billion Ounces of Hidden Gold in the Grand Canyon:

Mr. Weir thought by reading the 1912 New York Times article in detail and by explaining some additional exploration and geological information about gold in the Grand Canyon to his followers, this would further prove his Road To Roota Theory.  Unfortunately, the rereading of an old article to prove a point does not change the fact that the gold in the Grand Canyon was uneconomical to mine in 1912 as it is today.  Nothing has changed in over 100 years.  Investors in 1912 were just as gullible and stupid as some investors are today.

To provide more detail to my readers and possibly those who are still questioning the 1 million tons of gold in the Grand Canyon, I came across some excellent historical information about the Lee Ferry Gold Mining Operation 1909-1912.  If you read the information below and you still believe the U.S. Government turned the Grand Canyon into a National Park to keep billions of ounces of gold off the market, then you probably also believe in the TOOTH FAIRY and SANTA CLAUS.

Again, I don’t mean to be blunt, but it is very important for individuals to be able to discern between FACT & FICTION because they need to be prepared for the future.  My motivation to SET THE RECORD STRAIGHT is only to get individuals to understand that you must move away from Grand Conspiracy Illusions to Critical thinking.  While some real conspiracies are taking place in this crazy world of ours, to the focus on them only and not to understand the Falling EROI is gutting everything in its path, then you will not be physically or mentally prepared for what lies ahead.

So, I have provided evidence in two examples why we are wasting our time on incorrect theories and technology when we have much bigger problems ahead.

EXAMPLE #1: Unlearning The False 1 Million Ton Grand Canyon Hidden Gold Theory & Understanding Why Gold Is Rare And Valuable

To be able to disprove an incorrect theory, we have to provide enough factual data and information to render it useless.  If an individual has an open mind and can think logically or critically, the facts once shown below should remove all doubts and concerns.

I came across an excellent historical document titled, Submerged Cultural Resources Site Report: Charles H Spencer Mining Operation And Paddle Wheel Steamboat.  The report is nearly 100 pages and is full of detail on the gold mining operation that was written about in the 1912 New York Times article that Mr. Weir bases his Road To Roota theory.

At the beginning of the report, it explained how Charles Spencer started mining gold in the Grand Canyon area in 1908:

By 1908 he had amassed enough investment capital to begin his own operation on the San Juan River. Spencer and his company hired a few trained mining specialists, many laborers, bullwhackers, and cooks. A small ore extraction plant consisting of crusher, drive motor, boiler, pumps, compressor, and amalgamators, was purchased and brought together along with wagons, oxen, and horses. Large samples of Wingate sandstone were dropped into the crusher, however tests and assays were run with negative results. The mining engineer hired by the Chicago-based investors declared that the operation had no commercial value and closed it down in 1909 (Jones 1960:1; Waller 1961:1).

Okay, here we can see that Charles Spencer failed in his first attempt to mine gold in the Grand Canyon… STRIKE ONE

Spencer had to travel back to Chicago to beg and plea for more investor money because he thought his next go-around would be widely successful, but unfortunately, he ran into trouble once again:

Spencer traveled to Chicago in an effort to convince his former investors to allow him to try again. Undaunted by their refusal, he found new investors, put together another group of men and made ready to try again. In December 1909, the whole outfit left Mancos, Colorado, for a bone-chilling trip through Monument Valley and on to the San Juan River. The crusher and amalgamator were set up at Paria Creek, 125 miles above Lee’s Ferry.

They tried their luck on the Wingate sandstone, the thick, reddish, broken rock that occurs widely throughout the canyon country. Once again, they met failure. During the testing, one of the mining engineers assayed a sample of the Chinle shale and found that it contained as much, if not more, gold than the Wingate.

As the report states, Spencer and his small crew tried to mine gold from Wingate sandstone but once again failed.  However, a mining engineer found that there was more gold in Chinle shale, so they decided to move operations to Lee Ferry… STRIKE TWO

Without further debate, the decision was made to move the operation to Lee’s Ferry. Spencer and his first crew arrived in May, 1910, and immediately began assembling additional men and the mechanical equipment needed to sluice the Chinle shale from the cliffside about 250 yards north of the Colorado River, behind the old Lee’s Fort.

Okay, so far so good.  Spencer had listened to the mining engineer and decided he would have a better chance mining gold closer to Lee’s Ferry.  However, Spencer ran into even more trouble as the fine gold was not being collected by the amalgamator as it was becoming clogged:

Spencer went ahead with his plan to recover gold from the Chinle by sluicing. A large boiler and pumps were set up near the river and water was pumped through hoses to big pressure nozzles aimed at the shale (Figure 2.3). The dissolved Chinle was carried down a long flume back toward the river where an amalgamator was set up. Spencer’s first “runs” at the mine were made in the spring of 1911. While everything worked fine at first, it soon became apparent that the mercury in the amalgamator was becoming clogged. The gold was passing on out with the tailings, instead of being absorbed by the mercury. Numerous efforts and tests were made to solve the problem with no success. Samples were even sent to outside experts who could not identify the “foreign” element present. It wasn’t until many years later that the element was identified as rhenium.

Unfortunately, for Spencer, the ability to extract the ultra-fine gold in from the shale and silt in the Grand Canyon was extremely problematic.  However, this did not stop him from moving forward.  There is something quite amusing about the human intellect to continue doing something that isn’t working or is fundamentally flawed.  Even in the face of insurmountable problems, we humans have no problem throwing good money after bad.

Before I get to explaining the factors for STRIKE THREE of Spencer’s gold mining operation, let’s take a look at some of the interesting photos taken during and after operations ended.  All photos courtesy of the report linked above:

Charles H Spencer 1911

Spencer’s Crew – front of Lee Ferry’s Fort, July 1910

Boiler used to operate water pump for gold sluicing operations – Aug 1910

Panoramic view Spencer Mining Area, taken 1915

Spencer gold mining area view from downstream, taken 1914

Layout of Spencer gold mining operations 

If you look at the layout of Spencer’s gold mining operations, you will see the steamboat on the bottom right-hand side of the map.  To see a larger and better quality image of the map above, click on the report link above and go to page 29.

Okay, let’s find out what happened to Spencer’s gold mining operation in 1912.  While the mining engineers were trying to figure out how to solve the problem with the clogging of amalgamator, Spencer needed more money as the operation wasn’t producing gold, but burning cash like crazy:

While the chemists and mining engineers attempted to resolve the problems at the mine, Spencer continued to promote his enterprise. On at least one occasion, he used trail construction to impress a group of investors from Chicago. His men were instructed to put on a good, noisy show, by setting off sticks of dynamite. The investors left satisfied that Spencer’s men were earning their money.

As the report explains, Spencer instructed his men to make a lot of noise and set off sticks of dynamite to give the illusion to the visiting investors that they were doing something constructive.  I imagine the investors visiting Spencer’s gold mining operation weren’t all that smart if just the mere evidence of only dynamite going off made them think the operation was successful.

You see, this is the sort of shady activity that is done to give investors a false sense of security.  However, the problems for Spencer were just beginning.  Not only was the amalgamator not working to extract the gold correctly, but the boilers that ran water pumps still needed a reliable energy source if operations were to continue:

In the meantime, the question of an adequate supply of fuel for the boilers was still unresolved. After examining several rugged canyons, eventually a sizeable vein of coal on a distant branch of Warm Creek was located, 28 miles upstream in Glen Canyon.

Company backers were convinced that the only economical way to move coal from Warm Creek to the mining location just below Lee’s Ferry was by boat.   A paddle wheel steamboat (discussed in detail elsewhere in this report) was ordered from San Francisco, constru·cted at the mouth of Warm Creek, and launched in late February 1912.

Even though investors provided Spencer with a steamboat to deliver some coal for his mining operations, the realization after many attempts that quality of gold was uneconomical to produce, all mining operations ceased:

The fouling of the mercury plates in the amalgamator was an insurmountable problem, further, the value of the mercury required exceeded the value of the gold that was recovered (Jones 1961 :8). About the same time, the financial backers of the company… became greatly displeased with the management; account books were reported lost; many of the men were not paid; lawsuits were brought; the bank account Spencer used for operating expenses and payroll was attached; etc. …the proof that the silts were not a commercial enterprise definitely eliminated the group interested in that development.. .. (Jones 1961 :8).

Finally, in the Spring or Summer of 1912, the entire mining operation was shut down and the hired hands departed the area.

So, there we have it.  Because of the failure to solve the fouling of the amalgamator and the value of the mercury required exceeded the value of the gold recovered, Spencer’s gold mining operation was shut down for good… STRIKE THREE.

Can you imagine investors finding out that the value of the mercury used to recover the gold cost more than the gold that was recovered??  LOL… fer Pete sakes, that doesn’t even include all the other expenses.  The Spencer gold mining operation was doomed even before it started.  However, the ability to get stupid and gullible investors to part with their money never ceases to amaze me.

Now, if we understand that the Spencer gold mining operations were shut down spring or early summer 1912, we can assume the motivation behind the June 19, 1912, New York Times article:

Anyone who understood what was going on at the Spencer gold mining operations in the Grand Canyon in June 1912, knew it was KAPUT and a FINANCIAL DISASTER.  However, for those in the Eastern part of the country, where most of the investment money came from, and who were oblivious to the situation, were RIPE TARGETS to swindle more money.  So, this news article was put out by the Chicago based investment firm to HOODWINK investors out of money so they could recover some of their losses.  The oldest investing trick in the book.

If we can read the information above and digest it correctly, the facts and data suggest that gold mining in the Grand Canyon was simply, too technically difficult to extract and uneconomical to produce.  I spent some additional time researching that report and found data showing that large gold dredging operations in the Grand Canyon were also unsuccessful:

HOSKANINNI Gold Dredge Grand Canyon, June 1900

Gold dredges were also tried on the upper Colorado River. Robert Stanton’s interest in placer mining in Glen Canyon was the impetus behind the organization of the Hoskaninni Company and his dream of a fleet of gold dredges. Stanton eventually located a suitable claim and, with backing from Eastern investors, obtained materials for the construction of the dredge HOSKANINNI in June 1900 {Figure 5.5). The dredge was 105 feet long, 36 feet in beam, had 46 buckets, and was powered by 5 gasoline engines that generated 168 horsepower (Crampton and Smith 1961:121-140). Like its predecessors ADVANCE and NORTH DAKOTA, the results were disappointing. In nearly two months work the dredge only recovered $30.15 worth of gold; a second location resulted in recovery of $36.80 (Crampton and Smith 1961:139, 143). Finally, in September 1901, the company went into receivership, and the dredge and other related company property were sold for $200 {Crampton and Smith 1961:148).

Robert Stanton had a dream to have a fleet of gold dredges working in the Colorado River in the Grand Canyon.  Unfortunately, as the report findings state, in two months of work in 1900, the dredge only recovered $30.15 worth of gold (1.5 oz) and in a second location, $36.50 (1.8 oz).  The failure of Robert Stanton’s gold mining operation went into receivership and the dredge and all other property were sold for a paltry $200.

One more thing.  Some individuals who read the facts presented above will still believe that the U.S. Government is hiding this gold from the public.  Folks, there are these people called INDEPENDENT GEOLOGISTS in the country.  They can look at geological surveys all across the country and understand where the real high-grade economic gold deposits are found.  If the Grand Canyon held a lot of high-grade gold worth the picking, then geologists and mining companies would have already extracted it.

I have provided clear factual examples that gold mining in the Grand Canyon failed miserably.  While there might be billions of ounces of gold in the Grand Canyon, ONLY A FOOL is going to spend more money to extract it than it’s worth.  Also, you would probably have to destroy the Grand Canyon in order to get the gold.  Not only is the attempt to extract gold, FINANCIAL SUICIDE, its complete madness to destroy such a beautiful part of nature for the almighty Dollar.  When are we going to wake up here??

If we understand that the world can only have mined approximately 180,000-200,000 metric tons of gold in human history, the notion that we have 1+ million tons in the Grand Canyon or in hidden Nazi vaults or Yamashita’s hoard loses all credibility.

It takes a heck of a lot of energy and capital to mine and produce gold.  Individuals who claim there are 5-10 times more gold in the world than humans were physically able to mine, fail to grasp the fundamentals of “Economic resource extraction.”  Basically, it means there are limits to what we can do.  However, those who focus mainly on sensationalized conspiracy theories, seem to be unable to separate FACT from FICTION.

This is quite a shame because individuals need good factual information to be able to make better decisions for their future.  If they are receiving disinformation or incorrect data from either the mainstream or alternative media, then they will be making bad decisions.

Investors need to understand that the world has a limited amount of gold and the value of it should be much higher than what it is currently.  The funneling of the public’s funds into STOCKS, BONDS, and REAL ESTATE have given them an illusion of wealth.  This illusionary wealth will evaporate when the global oil industry starts to disintegrate.

EXAMPLE #2:  Advanced Technology Won’t Save Us, But It Will Take Us Down Quicker

The notion that advanced technology will save us is just as erroneous as the belief that the world has 1 million tons of gold hidden.  Both are based on believing in fantasy over fact.  For example, many people believe that solar-wind power and electric vehicles are our answers to our coming energy crisis.  Unfortunately, renewable energy sources really aren’t renewable.  Furthermore, without the burning of oil, natural gas, and coal, the manufacture of solar-wind power plants and electric vehicles would be impossible.

However, this doesn’t stop the High-Tech leaders of our day from promoting electric vehicles as a viable solution.  The example I am going to focus on is Elon Musk’s notion that an electric semi-tractor truck will be a solution for our future commercial transportation needs.

While this is most certainly a neat futuristic looking truck, if we dive into the details of its projected performance, we’ll find out that is was better just to keep it on the drawing board.

According to the article, Given The Laws of Physics, Can The Tesla Semi Really Go 500 Miles, and What Will Be The Price?:

The maximum weight of a truck allowed on the road is 80,000 pounds, so if the body weight of a diesel truck is the minimum 33,000 pounds, then the maximum amount of cargo that can be carried by a diesel truck is 47,000 pounds.

… the authors found that the weight of the battery pack needed for a truck to go 900 miles is 54,000 pounds. There goes the payload: 54,000 + 29,000 truck weight is 83,000 pounds, over the 80,000 pound road limit. And this truck that can not haul cargo will set you back $500,000 to $650,000 dollars for the battery alone.

The article is quoting a study by two scientists about the next-generation battery technology to make a practical electric semi-truck.  The scientists calculated that for an electric truck to go 900 miles, it would need a battery pack that weighed 54,000 pounds.  This is quite amusing because the normal weight limit of the cargo a diesel semi-truck can transport is 47,000 pounds.  This is because the empty truck and trailer weigh approximately 33,000 pounds.  The total weight limit for a typical semi-truck-trailer and load on U.S. roads and highways is 80,000 pounds.

Alice Friedemann, who runs the EnergySkeptic site where I found the article, using data from the two scientists, put together the following table on the different battery weights needed for various trucking miles:

As we can see, for an electric semi-truck to go 900 miles, it would require a battery pack that weighed 27 metric tons or 54,000 pounds.  Now if they decided to drop the distance to 600 miles than the battery would only need to weigh 18 metric tons or 36,000 pounds.  This is still bad news because the company with the nice new electric semi-truck could only haul cargo that weighed 11,000 pounds.  How economical is that when the diesel semi-truck can haul more than four times that amount at 47,000 pounds??/p>

Now, let’s just say the company decided to buy electric semi-trucks to go 600 miles for a trip and then recharge them to go back 600 miles the next day.  However, the cost of the battery to power the electric truck for 600 miles ranges from $320,000-$420,000.  That’s a lot of money being spent on batteries when a company could take the same amount and purchase approximately 110,000 gallons of diesel fuel, which would allow the truck to haul freight for 700,000 miles.  Most trucks in commercial fleets drive approximately 150,000 miles per year and are traded in after 500-600,000 miles.

Smaller transportation companies may hold onto their trucks for more than 1 million miles.  Even so, the cost of a battery pack to power an electric truck for 600 miles can pay for the lifetime fuel costs of one truck.  Furthermore, the cost of the battery pack for the semi-truck does not include the electricity cost to charge the battery.  According to an article on Zerohedge, it would require the energy of 4,000 homes to recharge Tesla’s semi-truck.  Well… that could get quite expensive.

The two scientists concluded about the economics of electric semi-truck capabilities:

The bottom line according to the authors, is that a 600 to 900-mile range truck will use most or all of their battery power to move the battery itself, not the cargo.

With all our advancements in technology, we still come up with economic limits.   Here the scientists found that for an electric truck to go 600-900 miles, it would use most or all of their battery power to move the battery pack itself, not the cargo.

Where have we heard that one before???

I will refresh your memory.  In my previous article, I stated that the Charles H Spencer steamboat was burning most of the coal that it was transporting to power the boilers for the gold mining operations.  However, this turns out to be more FICTION than FACT.  The report linked above uses testimony back in 1929, to clear up that misnomer:

IIf the vessel carried the maximum amount reported on its first trip, that is 5 tons of coal, and if even 1 or 2 tons were unloaded at Lee’s Ferry, that would mean the paddle wheel boat used 3 to 4 tons to make the round trip between Warm Creek and Lee’s Ferry. The carrying capacity of SPENCER is estimated to have been 50 to 60 tons. A consumption rate of 3 to 4 tons, from a maximum capacity of 50 to 60 tons, figures out to be a use rate of 5% to 8%.

CHARLES H. SPENCER Steamboat, 1912

Herman W. Freeze testified that on a later trip the boat carried 15 to 20 tons of coal (U.S. vs. Utah, 1929, Abstract of Testimony 1 :686-689). Using the rate of 3 to 4 tons of coal to make that round trip, the result is 15% to 25% consumption. In either scenario, the rate of coal use is well below all that could be, or was reported to have been, carried by the boat.

The notion that the Charles H. Spencer steamboat burned all the coal during its round trip in delivering its coal load, in fact, was a fabrication to take the blame away from incompetent management and operators of the gold mine.  In conclusion, the testimony and findings in 1929 of Spencer’s gold mining operation stated the following:

CHARLES H. SPENCER steamboat abandoned, 1915/em>

The steamboat was and has been characterized as a failure by association rather than by a careful examination of the facts. CHARLES H. SPENCER became a scapegoat and was used as an excuse to help explain the collapse of a poorly-conceived mining operation. Charlie Spencer’s steamboat was not abandoned because it was a technological failure, the steamboat was abandoned because the men and the mine were an economic failure.

So, there we have the rest of the story.  The real fact of the matter was the Charles H. Spencer steamboat actually did what it was designed to do.. and that was, to transport coal up the Colorado River.  However, the abandoning of the steamboat at Lee’s Ferry was not due to the U.S. Government hiding the fact that there were billions of ounces of gold hidden in the Grand Canyon, but rather because the Spencer gold mining operation was a complete economic failure.

Which brings us to a final point…. while investors were still stupid and gullible 100 years ago, at least they used steamboats that made economic sense.  Unfortunately, today… we are wasting a lot of time, effort, money, and resources to manufacture highly advanced electric semi-trucks that will use the majority of its battery power to transport cargo 600-900 miles.

U.S. Economy Heading Towards A Serious Crisis

If we are wasting our time on renewable energy technology that doesn’t work or solve our energy problem, we must be in serious trouble.  The world has developed an economic system based on liquid fuel consumption.  Our highly complex retail markets are based on a just-in-time-inventory-system.  We need to continue producing liquid fuels at the current rate; our economic activity will decline.

Unfortunately, the cheap to produce oil is mostly gone and we are now being forced to produce low-quality-low-EROI oil (EROI – Energy Returned On Investment).  The Venezuelan economy has gone into the crapper because it holds mostly heavy oil.  The Statoil CEO stated recently that they would no longer go after heavy oil or oil sands resources.  Thus, 70% of the world’s oil reserves are heavy oil and oil sands.

Furthermore, the ConocoPhillips CEO also remarked that they weren’t going to invest in projects that need $50 or more to break even.  This is terrible news.  There just aren’t many sub $50 oil projects available anymore.

The coming collapse of U.S. and global oil production will be a shock to the public.  Virtually no one is prepared.  If we continue to waste our time on lousy conspiracies or advanced technology that doesn’t work, we will be heading over the cliff… BLIND AS A BAT.

While we can’t solve the dire energy predicament we are facing, we can at least know what we are up against and make changes as best we can.  However, only a fraction of people will GET IT.  Most will continue doing what they are doing…. chasing FANTASY over FACT.

Courtesy of SRSrocco Report.