Excerpt:

"Money is nothing more than the right to command energy to do what you want it to do."

The WSJ had an interesting article yesterday about what is basically a global savings glut. Reading the article, it occurred to me that capital and energy are going in opposite directions--capital going up and energy resources depleting.  Of course, energy resources have been depleting since we first started mining for coal and drilling for oil.  The key point, as we know, is that we are looking at the peaking of our ability to grow the daily oil supply.

If we looked at the ratio of total world capital in dollars equivalent divided by total remaining BTU's, that ratio is increasing at an extraordinary rate--because the numerator (dollars) is rising while the denominator (BTU's) is falling.  

Another way to look at it would be total capital divided by total world BTU consumption (from nuclear + fossil fuel sources) per day.  In terms of oil equivalent, the world consumes the equivalent of about 200 mbpd from nuclear + fossil fuel sources--the equivalent of a billion barrels of oil every five days.  

We are now looking at the probability that the actual daily supply of nuclear + fossil fuel sources is about to enter a long term decline.   So, what this means is that even on a daily supply basis, the ratio of dollars to BTU supply will start skyrocketing because the numerator is rising while the denominator is falling, at least until the world economy starts contracting.