...there’s another silent economic threat inching closer by the minute. But we may be the only one warning you about what scientists already know.
The threat breathes a stench of industry, sulfur and dirt. It speaks the sounds of clanking metal, overwhelming electric hums, and men who curse like sailors as they work.
But the scariest part comes when the awful stench and rackety noise are replaced by fresh air and silence. When the ruckus stops, the economy dives into a tailspin.
What is the threat?
The Silent Economic Growth Killer Is...
Peak energy; or more specifically, peak oil.
Peak oil is when the rate of oil being extracted from the earth maxes out.
It’s a disaster waiting to happen for economies that assume the energy needed for growth is simply unlimited.
This faulty assumption is made by economists all the time.
But as economist and scientist Chris Martenson puts it, “Classical economics tried to convince me that growth depended on such things as capital, production, labor...but never really accounted for resources. They just show up on time in the desired quantities. Actually, as a scientist I know that all growth and complexity depend on energy.”
And he’s right.
Just look at this chart showing how oil consumption flatlines or drops dramatically during recessions, but then reaches a new record level during periods of growth:
Source: United States Energy Information Administration
This chart illustrates for an economy to grow, their must be enough oil to fuel the expansion.
And once the oil stops flowing, the industries that depend on it - and that’s virtually all of them - will have to change drastically or close up shop.
Now, I know what some of you are thinking...
“Is Peak Oil Real? Or Just Another ‘Whacko’ Claim?”
Some people equate “peak oil” with “global warming,” and dismiss both as politically motivated agendas of environmental “whackos.”
But as Chris M. says, anyone who’s ever had a drink with a straw understands the basic concept behind peak oil. At some point, the source always runs dry.
And far from a conspiracy theory, it is now accepted fact that we are on the verge of peak oil... if we haven’t reached it already.
Even the International Energy Agency - who’s known for painting rosy pictures about oil - is admitting oil production might drop 25% before 2035.
And to make up the difference, we’d need to find new oil fields that produce twice as much as all the middle eastern countries combined produce now.
How Will This Affect EVG’s “Black Box”
Investment Secrets of the Ultra-Rich?
That’s a good question.
And a savvy EVG member recently wrote in with a similar question. He specifically asked how peak oil will affect the “Bank of You,” an EVG strategy that PAYS you to borrow money.
Here’s the question from Mike H, edited for brevity:
Is a "Bank of You" account still a good choice in a world of peak energy? Exponential economic growth depends on surplus energy. But, if we are in fact past peak energy, will it still be able to provide these strong rates of return?
-Mike H.
Pensacola, Florida
Good question, Mike.
We asked Paul Haarman, the EVG expert and certified financial advisor who brought us the “Bank of You” strategy. Here’s what he had to say...
Can the “Bank of You” Survive Peak Oil?
Paul Haarman: That's completely irrelevant. It's completely irrelevant. Because you need to look at the Bank of You’s intended use.
I'm using it as a foundational operational account.
When your parents first tell you about one of the basic, most foundational things you need just to function in society - it’s a checking account. The “Bank of You” is like a checking account.
But I call it an operating account. This is operating capital. And you're also going to be able to leverage the account.
So rather than settling for the 1% or 2% that a bank is willing to give you, you're able to take control of it.
The money is guaranteed against any loss of principal. It is liquid and you're getting a reasonable amount of return.
Woah, woah, woah. That’s a lot to cover, so let’s break it down.
Most EVG members first experience with a bank is a checking and savings account. The “Bank of You” is very much like a checking and savings account.
The money is easy to access - meaning it’s liquid - just like a checking account. But it also provides a much higher return than the 1%-2% of most savings accounts... as high as 10%, sometimes even more.
And one of the cool things about the “Bank of You” is that it’s also an asset. That means you can “leverage” your account by borrowing against it. And because of its special structure, you actually GET PAID interest TO BORROW.
The best part is, you can use that borrowed money to invest in other EVG investment strategies. So then, not only are you earning interest on the borrowed money, but you’re also getting an additional return from an additional EVG investment strategy.
That’s leverage, and that’s the secret to real wealth.
So what happens if peak oil causes the economy to stop growing and the previously hot investments do not work anymore? We asked Paul, and he said...
Paul Haarman: You go to the next big thing. There's always something. And if not, you throw your money back in the “Bank of You” and now you're earning whatever rate of return that's going to get.
When peak oil hits the economy like a wrecking ball, it’ll be because our transportation infrastructure is designed for oil. And businesses that depend on it will go under.
But at the same time, there will be opportunity. Because a new infrastructure will have to be built based on a new energy source. So even when disaster hits, the economy will need MONEY to reinvent itself.
And if you have money in the “Bank of You,” then you’ll be able to lend that money to growing industries and earn a return.
And besides...
Even Our “Peak Oil” Expert Agrees...
...that you should have a decent chunk of your wealth as cash in a bank.
Chris Martenson - economist, scientist and peak oil expert - is 20% in cash. And the “Bank of You” allows you to be almost as liquid as cash under a mattress - it’s that accessible.
So thanks for the question, Mike H. It was a good one.
All in all - the “Bank of You” strategy is another EVG investment that successfully navigates the the economic crises coming our way... including Peak Oil.
If you want to learn more ways to prosper in a time of Peak Oil, check out this EVG strategy session with Chris Martenson now:
How to Invest in a World of Peak Energy
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