The primary assumption of the private-jet crowd is that the developed world will continue to have a free pass to strip developing-world nations of their mineral wealth at the low, low cost of a bribe to the current kleptocrats in power and low, low wages paid to local workers. The profits will naturally flow to the private-jet crowd--it's the Divine Right of Capital.

Knowledgeable readers assure me that the technologies of extracting resources have reached such heights that resources will continue to be low-cost. I have no doubt that technological advances have lowered the costs of extraction and opened access to deeper deposits, but I also have no doubt that the biosphere, physics, chemistry and geopolitics continue to set limits that no technological advancement can circumvent.

In the technocratic fantasy mindset, all that matters is the electricity that recharges the electric vehicle is "carbon-free." The sources and quantities of energy required to fabricate the electric vehicle, pave the roads the vehicle travels on, etc. are conveniently ignored because the metals, plastics, glass, semiconductors, batteries, etc. needed to manufacture the vehicle require vast quantities of diesel fuel to power the mining equipment, transport the ore to be processed, then transported to the mills, then on to the factory, etc., vast quantities of coal to fire the smelting, vast quantities of fresh water for all these processes, vast quantities of electricity, very little of which is derived from nuclear or so-called renewable sources (all of which have to be replaced every 15 to 20 years), and so on.

In the technocratic fantasy mindset, any deposit anywhere on the planet is accessible to high tech processes. In the real world, deposits might be far from paved highways, far from major river or bluewater ports, far from processing plants, and far from sources of the millions of liters of diesel fuel that will be needed onsite to extract the ores.

The entire infrastructure to reach the site must be built and maintained, and millions of liters of diesel fuel delivered to power the massive equipment needed to extract the resources. Then the ore must be transported hundreds of kilometers to a port capable of handling this tremendous bulk commodity. There is no way all this will be low-cost and low-risk.

Here's a list of eight potential sources of scarcities of essential materials. This list not exhaustive, it is merely suggestive of the many real-world limits on the technocratic fantasy.

1. Resources have been depleted globally so there is no longer enough supply to meet rising global demand at affordable prices. Sure, there's always more somewhere--but at what cost?

2. Exporting nations restrict exports to meet their own rising domestic demand. Yes, it's irritating that our oil, cobalt, lithium, etc. is under their sand and they decide to use it for their own people.

3. The low-hanging fruit has been consumed and remaining deposits are in difficult-to-access regions of extreme conditions or political disorder. The developed-world exploiters might end up getting an AK-47 round as a dividend.

4. Exporting nations cut off exports to the U.S. as a form of leverage. Nice high-tech economy of gamers and traders you got there; too bad we're experiencing problems in delivering the cobalt, rare earth minerals, etc. you need to keep your gamers and traders happy. We're sure you'll see the wisdom of complying with the new arrangement we propose.

5. Remaining deposits are under the control of geopolitical rivals. See above.

6. There is no longer sufficient diesel fuel to power the global supply chain of mining and transport of essential minerals: the limiting factor is not the availability of deposits but of the fuel needed to extract and transport ores.

7. Supplies are available but at prices that are unaffordable to American households with stagnant purchasing power, i.e., the bottom 90%.

8. Having tired of neocolonial exploitation of their national resources, revolutionary governments expropriate developed-world resource extraction assets and take control of extraction, limiting exports and sharply raising prices.

There's always more techno-fantastic headlines promising infinite abundance of everything. This is my favorite today: Scientists Perfect Renewable Power from Urine While Cleaning Wastewater in South Korea. Who knew it would be so easy? All we have to do is collect urine and we'll be flying our electric air taxi tomorrow! 

There's always more until the real world intrudes.

Author

Charles Hugh Smith is a contributing editor to PeakProsperity.com and the proprietor of the popular blog OfTwoMinds.com. He is the author of numerous books, including Why Everything Is Falling Apart: An Unconventional Guide To Investing In Troubled Times.

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