Monday, February 20, 2012

proof of the u.s. greater depression

eftdailynews | It has become increasingly difficult to engage in credible economic analysis, especially with respect to the U.S. economy. The problem: ever more limited sources of uncorrupted data, while the farcical “official statistics” have long since been totally divorced from the real world.

Fortunately we have been presented with some raw, uncorrupted data which demonstrates in conclusive terms that the U.S. economy is literally shriveling before our eyes: a 21st century economy with plummeting energy consumption, and even a declining use of electricity.

As I was sifting through all of Bloomberg’s propaganda on the latest U.S. trade numbers (and trying to latch onto a few facts), I came across one very peculiar passage:

American companies also bought more consumer household items, automobiles and parts, and crude oil from overseas.

Exports increased 0.7 percent to $178.8 billion, boosted by record sales of petroleum to buyers overseas. That caused the trade gap excluding petroleum to widen even more than the deficit overall

The great U.S. economy, the largest oil-glutton in the history of humanity (by several multiples) is now a “net energy exporter”. How can this be possible? The U.S. economy has contracted so severely (already) that the only way that U.S. refineries can sell all the petroleum products they produce is to sell them to the growing economies of “emerging market” nations.

Reflecting the broad-based collapse of the U.S. economy, these refineries are now exporting all categories of petroleum products: diesel, jet fuel, and even gasoline are now being exported in large quantities, month-after-month by U.S. refineries. Recall that it was only four, short years ago that many American politicians were alarmed by the crisis of the “lack of U.S. refining capacity”. No new refineries have been constructed in the U.S. in more than 30 years, and at that time those refineries were straining to meet the demand of solely the U.S. domestic market. With that domestic market collapsing, these refineries are now straining to find enough foreign buyers to unload all of their inventories.

Given these facts alone, it is utterly absurd for the U.S. government to pretend that the U.S. economy is growing. Note that the government claims that most of this growth is occurring in agriculture and manufacturing – both very energy-intensive industries. There’s no doubt that the energy-intensive agriculture sector is thriving, a result of a growing global “appetite” and Wall Street-induced shortages in most commodities. So with the large U.S. agriculture sector gobbling up more energy than ever, what does that say about the rest of the (decaying) U.S. economy?

Let us not forget that the U.S. population continues to grow. More people using much, much, less energy; and this is called a “growing economy”? Absurd. Even more absurd, this steadily growing population has been using much less electricity, going back to around 2007.

Mark Lundeen provided a very detailed analysis of the consumption of U.S. electricity in a recent commentary. It shows U.S. electrical consumption peaking in approximately 2006, and then beginning a distinct decline starting in 2007. Yes, power demand has “bounced back” somewhat from the worst of the collapse – but at levels still more than 3% lower than in 2007. Put another way, the supposed "U.S. Economic Recovery" has only resulted in roughly half of that lost demand being restored.


Uglyblackjohn said...

But isn't this a GOOD thing?
Not EVERYONE should live like those they see on TV.
For most, the simple life is the better life.

CNu said...

12,000KwH per capita U.S. vs 5,000KwH per capita Switzerland

Switzerland has an aspirational aim to lower its consumption to 2000KwH per capita.

Getting more from less is of course a very good thing, however, that is not what these data reflect. Rather, they reflect an ongoing underlying collapse in energy utilization which maps to ongoing contraction in the real economy. Add this to the shriveling baltic dry index, the explosion of automated rather than human mediated trading in all the major markets, and so forth, and what you see is the truth of what is happening to the U.S. economy.

This real economic truth is radically at odds with the prevailing political and MSM narratives concerning our current and realistically achievable future state.

Temple3 said...

Nulan: Do you have links to other comparable aggregates over time? Could be energy...could be water consumption (if that's a valid indicator), could be anything. That's a seriously powerful image. Thanks. 

CNu said...

Not any others, not off-hand, but I keep my eye out for those real economy metrics and post up whatever comes through my filters and feeds pretty much as soon as I see it.

John Kurman said...

Copper has, for the longest time, been called "Dr. Copper" as a fairly good indicator. For example, from 12/2008 through 00/2009, the price collapsed to one third of its former value. It clawed back up, but then took a brief dive with the threat of the bursting, or rather, deflating of the China property bubble. Since then, it has moved up steadily, more due to hoarding.