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The Great Western Economic Depression - Jeff Nielson

The Great Western Economic Depression - Jeff Nielson
By Jeff Nielson 9 days ago 8649 Views 8 comments

April 18, 2017

Western economies are “recovering”. How do we know this? We are told this, over and over and over again by our governments. Then this assertion is repeated thousands of times more by the dutiful parrots of the Corporate media.

The problem is that in the real world there is not a shred of evidence to support this assertion. In the U.S.; ridiculous official lies were created claiming the creation of 15 million new jobs . In reality, there are three million less Americans with jobs today than at the official end of the “recession”.

These imaginary jobs are invented by assorted statistical frauds, with the primary deceit being so-called “seasonal adjustments”. To be legitimate, all seasonal adjustments must to net to zero at the end of each year. Instead, in the U.S.A., the biggest job creator in the nation every year is the calendar.

Beyond the grandiose but absurd claims of new jobs in the U.S., there have been few signs of economic health across the Corrupt West. Despite this, these traitorous regimes continue the pretense that their horrific mismanagement of our economies is making things better rather than worse.

There are numerous subtle means of demonstrating that Western economies have never been in more calamitous ill health than they are today. Fortunately, there are also two very large and important indicators which provide absolute proof that all of the economies of the Corrupt West are in a Greater Depression : interest rates and energy demand.

Regular readers have often seen the observation in these commentaries that interest rates across the West have never been this low for this long in the entire history of these nations – not even close. Why not? Two reasons:

  1. Interest rates this low have always been perceived (by our governments and all legitimate economic commentators) as being so reckless that any short-term benefit from such rates would have been more than offset by long-term harm.
  2. The reason why our governments have always deemed interest rates this low to be reckless is that in remotely healthy economies such rates would cause these economies to “over-heat” so rapidly and extremely that they would reach unsustainable levels of production and demand.

Are our economies over-heating? No. Nothing could be further from the truth. We see nothing but over-capacity all around us: one hundred million permanently unemployed people across the West, relentless business closures , declining real wages, and near-empty shopping malls (in “consumer economies”).

Interest rates this low are supposed to cause such rapid business expansion that the economy suffers from a labour shortage. Why are there a hundred million people unemployed across the West instead of labour shortages?

Regular readers have seen this question answered in the past in the form of a metaphor. Consider 0% and near-zero interest rates to be the economic equivalent of a defibrillator: the most-extreme, last-resort attempt to “stimulate” the human body when it is near death.

Our economies have had this economic defibrillator attached to them for more than eight years – without the slightest glimmer of life. What would happen to a human body if it was defibrillated continuously for more than eight years? Charred meat. This is what Western economies have become: charred meat.

In the case of the Corrupt West, we see this charred meat in the form of asset bubbles. Why are extremely low interest rates deemed to be so incredibly reckless? Asset bubbles. Near-zero interest rates are literally rocket fuel for the acceleration of asset bubbles.

We’ve been fueling our housing markets and our equity markets with this bubble-producing rocket fuel for more than eight years. What has been the result? Surprise, surprise: we see the biggest asset bubbles in history – especially in real estate markets .

In the United States, both its stock market bubble and bond market bubble are at all-time highs, simultaneously. This is not even theoretically possible in legitimate markets. Stocks and bonds are counter-cyclical markets.

These insane, reckless bubbles have created a thin veneer of “health” in Western economies. The absurd bubble levels (and temporary prices) in equity markets create what crooked bankers like B.S. Bernanke call “a wealth effect”: bubble prices create the illusion of greater wealth. However, with more than 80% of all equities held by the top-10%, it’s a fairly narrow illusion.

Much broader is the “wealth effect” (illusion of wealth) seen in our real estate markets. Real estate is held across a larger segment of society than equities. Also, constructing millions of superfluous housing units across the West just to satisfy the demand from speculators has created significant amounts of temporary employment in the construction and real estate industries.

What happens when the bubbles are burst, all of this illusory “wealth” evaporates, and all of the temporary employment disappears? Don’t answer that question yet.

Some readers may still refuse to believe that Western economies are mired in a permanent depression, despite the fact that eight years of defibrillation-by-interest-rate has produced no discernible reaction in these Corpse Economies. Eight years of hard-core “recovery” propaganda can be very convincing.

However, as stated at the beginning, there is a second means of proving that Western economies are mired in a Greater Depression: energy demand – meaning the lack of energy demand in the West.

It’s a simple equation. Economies use energy. Growing economies use more energy. There is no exception to this economic tautology. Even very efficient economies will require some incremental amounts of energy to grow. And our economies are not “very efficient” from an energy standpoint – the Right Wing has fought very hard for decades to prevent this.

For our economies to grow, they must consume more energy. Western economies are not consuming more energy.

Over the past eight years, all increases in global energy demand have come from the Rest of the World. According to the Western media, growth rates in the Rest of the World over the past eight years have been dismal, and those economies are using more energy.

Observe this July 2015 headline from the World Economic Forum:

The surprising decline in US petroleum consumption

The only reason this declining consumption is a “surprise” is because the corrupt liars in the U.S. government continue to pretend that this train-wreck economy is growing. If the U.S. government was honest and acknowledged the U.S. Greater Depression, this is the headline we would have seen at the WEF:

The decline in U.S. petroleum consumption is expected

Growing economies use more energy; shrinking economies use less energy. And if the Corrupt West wasn’t using its energy-intensive war machine so regularly, the collapse in energy demand in the Western world would have been even more pronounced. No economy with flat energy demand can pretend to be growing. No economy with its interest rates set permanently at near-zero levels can pretend to be growing. Both of those preceding statements are economic tautologies. Absolute proof. Western economies are not growing because two absolutely unequivocal economic fundamentals indicate such growth to be impossible. Here is a quote from the WEF article:

Petroleum consumption in the US was lower in 2014 than it was in 1997, despite the fact that the economy grew almost 50% over this period.

Here is the correction to that quote:

Petroleum consumption in the US was lower in 2014 than it was in 1997, despite the fact that the U.S. government pretended that the economy grew almost 50% over this period. The convenient thing about imaginary economic growth is that it requires no energy to fuel it. There has been some small degree of divergence in the U.S. from petroleum consumption into alternative energy sources. Putting the statement above into context, since 1997, there has been very little real growth in the U.S. economy – and none in the last ten years.

Note one of the implications of two decades of imaginary U.S. GDP. The U.S. government claims the U.S. economy generates total GDP of $16.77. But in 1997; official U.S. GDP was below $10 trillion – and now we can see that most of the “GDP” since then is just more statistical smoke-and-mirrors.

The U.S. national debt might have already hit $20 TRILLION by the time this article is read. And that number excludes countless $trillions of debt which previous regimes have hidden with assorted accounting frauds. This is how/why U.S. “unfunded liabilities” exceed $200 TRILLION – because significant amounts of actual debt have been transformed into mere “liabilities” via accounting fraud.

Real U.S. debt is well above $20 trillion. Real U.S. GDP is down around $10 trillion. Without this extreme, permanent accounting fraud and years and years of falsifying GDP, it would be impossible for the U.S. government to pretend that the United States wasn’t already bankrupt. Other Western economies are only in marginally better condition – while their Traitor Governments run these economies into the ground as quickly as possible.

Look at the extreme, reckless (criminal) interest rates across the Western world. Understand what those rates mean. Look at the anemic energy demand across the Western world. Understand what it means.

The Western world is mired in a Greater Depression. To people who are paying attention, it couldn’t be more obvious.

Jeff Nielson is co-founder and managing partner of Bullion Bulls Canada; a website which provides precious metals commentary, economic analysis, and mining information to readers and investors. Jeff originally came to the precious metals sector as an investor around the middle of last decade, but with a background in economics and law, he soon decided this was where he wanted to make the focus of his career. His website is www.bullionbullscanada.com.

The views and opinions expressed in this material are those of the author as of the publication date, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.

D. Rogers 9 days ago at 7:48 PM
I am a truck driver. My main economic indicators are how many trucks are in front of me to get loaded and how many days does it take for a trucker to get a load. I've known for some time that the economy wasn't that great because where I used to have to wait behind four or more trucks to get loaded, now there might be one truck in front of me. Although I drive a company truck I hear independent truckers saying that they're waiting at the truck stops for three and four days before they can get a load. The economy just isn't getting better despite what the government hacks want us to believe.
Jeff Nielson 4 days ago at 5:09 PM
Indeed D. Rogers, a common theme in the mainstream media is to "not trust" our own empirical observations concerning the economy. The fascists in charge know that if people ever start looking CLOSELY around them that all of their economic mythology will lose its power to deceive.
Dr. Georgi Stankov 9 days ago at 8:38 PM
Dear Jeff,

I am so glad that you finally addressed this issue which should be in the centre of all economic and political discussions but is treated like the proverbial elephant in the room - with total neglect - by all critical experts after the MSM have drowned in fake news and lies and the alt-media have lost themselves in the current information maze:

The Greatest Depression of All Time

It is so important to name the things by their true name and not to succumb to euphemisms and outright lies. The Greatest and Longest Depression of all Times is definitely there, in the USA, Canada and many EU countries (with the notable exception of Germany where we have a modest recession) since 2008. According to my estimate it actually happened with the bursting of the dot.com bubble in 2003 but this is debatable from a formal point of view as to how depression is defined in the literature. However, the Greatest Depression has a long prehistory and can be traced back to the first oil shock in 1972 when its foundations were laid with the abolition of the gold standard one year earlier. Worthless fiat currencies and gargantuan state and private debt are the cornerstones of the current Greatest and Longest Depression of all Time.

It is even more insidious than the Great Depression as it lasts longer and has not yet penetrated the collective mindset. The misery of millions of unemployed people has been totally neglected in the west.

That is why it is so important that you address it now on the cusp of the shutdown of the US government due to reaching the debt ceiling and subsequent collapse of the US petro-dollar as world currency. All the military escapades which Trump has undertaken in the last two weeks in 180 degree reversal of his election campaign promises are a futile attempt to bomb the USA out of its impending financial bankruptcy. It is so obvious as he is attacking both the greatest producer of oil and gas Russia in Syria and the greatest consumer of fossil energy China in North Korea. Both countries have left the petro-dollar and trade in their local currencies, China also increasingly so with the Arab oil countries who are in a big financial crisis due to the oil price slump and now accept renminbi (yuan).

Thank you for addressing this issue at this auspicious time

Dr. Georgi Stankov, MD
Vancouver, Canada
Jeff Nielson 4 days ago at 5:13 PM
Hello again Georgi!

Yes, another way of talking about the Great Western Depression is as a PERMANENT depression. Grinding our economies lower and lower as a way of life. It is almost as if the oligarchs at the top WANTED to destroy their own empire.

Unfortunately, despotic regimes on their way down almost always seek to drag their neighbours down with them -- by creating massive wars. This relates to both your comment and the next one...
jon-arne jørstad 8 days ago at 2:39 AM
So what is more `logic` than `creating` for WAR to speed up the economy?
Jeff Nielson 4 days ago at 5:26 PM
The problem with the oligarchs trying to solve their (our) problems with war is that it requires enormous financial resources to fight a war. Our governments have none.

Secondly, modern warfare is an enormous consumer of petroleum products. The only reason oil is relatively plentiful (temporarily) is because of the drop in consumption I referenced in my article.

Start a big war, and very quickly oil prices are back in triple digits -- causing all sorts of additional economic problems for Western nations.
Willy 8 days ago at 2:09 PM
Thanks Jeff,
If one subtracts understated inflation from over stated GDP, then real growth is negative. My early 80's economics text by Lipstick, Sparks and Steiner, indicated a depression as 3 or more quarters of zero or negative economic growth. We hit that pothole years ago.
Jeff Nielson 4 days ago at 5:29 PM
Yes Willy, this is precisely the point I seek to communicate. Our inflation numbers are absurd. GDP = raw economic activity minus inflation. Plug in any realistic inflation number into the GDP calculation of any of these Western economies and all you get are negative numbers -- year after year.

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