Submitted by Jeff Nielsen via BullionBullsCanada blog [12],
Regular readers are familiar with my narratives on the U.S. Greater Depression [13], and (in particular) some of the government’s own charts which depict this economic meltdown most vividly. The collapse in the “civilian participation rate” [14] (the number of people working in the economy) and the “velocity of money” [15] (the heartbeat of the economy) indicate an economy which is not merely in decline, but rather is being sucked downward in a terminal (and accelerating) death-spiral [16].
However, even that previously published data, and the grim analyses which accompanied it could not prepare me for the horror story contained in data passed along by an alert reader. U.S. “gasoline consumption” – as measured by [17] the U.S. Energy Information Administration (EIA) itself – has plummeted by nearly 75%, from its all-time peak in July of 1998. A near-75% collapse in U.S. gasoline consumption has occurred in little more than 15 years.
Before getting into an analysis of the repercussions of this data, however, it’s necessary to properly qualify the data. Obviously, even in the most-nightmarish economic Armageddon, a (relatively short-term) 75% collapse in gasoline consumption is simply not possible. Unless we were dealing with a nation whose economy had been suddenly ripped apart by civil war, or some small nation devastated by a massive earthquake or tsunami; it’s simply not possible for any economy to just disintegrate that rapidly, without there being some ultra-powerful exogenous force [18] also at work.
[19]
So how can this raw data, produced by the government itself, be explained? To begin with; the government chooses to measure U.S. gasoline consumption in a very odd manner: by measuring the amount of gasoline entering the domestic supply-chain rather than by measuring actual consumption at the other end of the supply-chain – i.e. “at the pump”.
Why does the U.S. government, which (among other things) leads the world in the manufacture of statistics not produce any simple/direct measurement of gasoline consumption? How can the St. Louis Fed produce [20] nearly 100 different charts on gasoline and diesel prices (for any/every price-category which can be imagined by these statistics geeks), but not a single chart on gasoline supply/demand?
There are several reasons for this unbalanced, anomalous, and simply absurd statistical methodology. First of all; the reason why the U.S. government produces a near-infinite number of charts on prices is because prices are what the Gamblers (i.e. bankers) use as the basis for their $100’s of trillions in gambling in the rigged casinos [21] which the bankers call “markets”.
While supply/demand data is of utmost importance in the real world; the banker-gamblers don’t dwell in the real world. As regular readers already know; their derivatives casino [22], alone, is roughly twenty times as large as the entire global economy. To the bankers; the “real world” is nothing but fodder for their insane gambling [23].
Why use this data, at all, since it is such an inferior/distorted means of measuring U.S. gasoline consumption? Because the EIA uses exactly the same data to publish its own “estimates” [24] of U.S. gasoline consumption:
Note: Product supplied measures the amount of gasoline that went into the supply chain and is used as a proxy for gasoline consumption. [emphasis mine]
The other half of this ridiculous statistical hodge-podge, where endless quantities of trivial/irrelevant price data are trumpeted, while any/all data which actually measures the (real) economy is suppressed (if not buried entirely) displays a government desperately trying to hide this massive economic collapse.
If you choose to measure the amount of gasoline leaving U.S. refineries and entering domestic inventories and call this “gasoline consumption”; you can hide the actual collapse in gasoline consumption – until those retail inventories are overflowing, and there is simply no more room in the storage tanks.
This is what we see today in the U.S.: a gasoline market which had been deliberately-and-dramatically over-supplied with gasoline at the wholesale end of the supply-chain (the refineries) has now practically ground to a halt. The same nation which previously amazed the world as it accumulated more automobiles and more miles of highways per capita than any nation on Earth (and by a huge margin) now has such an insane glut of gasoline that it’s massive chain of refineries have had to simply turn off the taps – until this pathetically anemic economy manages to burn-off some of that glut.
This conclusion becomes even more visible/obvious when we view the gasoline data just from the start of the mythical [25] “U.S. economic recovery” to the present. At the start of the “U.S. recovery”; U.S. gasoline consumption was at a rate of 52 million gallons per day (already more than 20% below the 1998 all-time peak). In the five years since the start of this pretend-recovery; U.S. gasoline consumption has fallen all the way to 18 million gallons per day.
Since the beginning of “the U.S. economic recovery”; U.S. gasoline consumption has plummeted by nearly 2/3. As the pseudo-recovery began, and supposedly “strengthened”; U.S. refineries were ordered to fill up the inventories of their dealer network, in anticipation of the increased gasoline consumption which would have occurred in any real “recovery”.
But there never was an increase in U.S. gasoline consumption, because there never was a U.S. economic recovery. Rather, the Greater Depression has simply (and relentlessly) continued to pulverize the U.S. economy like a meat-grinder. To hide this devastation (as well as is possible), the government produces a wide array of its pseudo-statistics [26], that all contain myriad “adjustments” – which make it possible for these liars-with-numbers to distort the statistical picture of the U.S. economy beyond recognition.
Meanwhile, any/all statistics which measure raw data (and thus cannot be perverted with “adjustments”) are either suppressed (like the civilian participation rate), or not even measured, at all – as is the case with U.S. gasoline consumption. At the retail end; none of the “sales” statistics are adjusted for inflation, not even with the absurdly-fraudulent “CPI” numbers.
By not deflating sales data (at all) the collapse in U.S. gasoline consumption “at the pump” is hidden within all this unreported inflation [27]. As explained in previous commentaries; it is this same, unreported inflation which allows the U.S. to convert its large, negative, GDP readings (which would otherwise reveal the Greater Depression) into “economic growth” [28]. It is this same, unreported inflation which allows the government (and employers) to hide the fact that U.S. wages have collapsed by more than 50% [29].
But what the liars-with-numbers cannot hide (any longer) is the collapse in U.S. gasoline consumption which has accompanied the continued, downward spiral of the Greater Depression. The storage tanks are now all full. The only way to (temporarily) hide the collapse in U.S. gasoline consumption any further would be to construct even more storage facilities. However, there is no possible economic justification for increasing storage capacity in a market of steadily/relentlessly declining demand.
Indeed, the exact opposite is true. The U.S. economy of the 21st century (a mere hollowed-out husk [30] of what it was only 20 years earlier) will require less and less gasoline storage facilities over time, reflecting a supply network for a steadily shrinking market. As the One Bank [31] completes its plundering of the U.S. economy, and completes its transformation of the U.S. Middle Class into the Working Poor [32], it is also simply using up more and more of its economic lies.
The Great Inflation Lie [33] will continue to allow the U.S. government (and other Western governments) to crank-out absurd/imaginary positive numbers for GDP. It will continue to allow the U.S. government to crank-out absurd/imaginary numbers for retail sales (and hide the ongoing collapse [34] of the entire U.S. retail sector).
But it can’t hide the fact that U.S. refineries have nearly stopped producing gasoline for the most-motorized society/economy the world has ever seen. It can’t hide the fact that there haven’t been so few people working in the U.S. economy (on a percentage basis) in 35 years.
Readers who are stubbornly faithful to the plethora of pseudo-statistics which the U.S. government uses to hide this collapse may have been skeptical of my original denunciation [35] of the “U.S. economic recovery”. They may have been more skeptical with assertions that this Wonderland Matrix [36] of lies is being used to hide a Greater Depression.
However, there is no further room for skepticism when official, government numbers indicate a near-75% collapse in U.S. gasoline consumption over a mere 15 years, and a 65% collapse in consumption since the start of the (supposed) Recovery. Numbers such as this can only be encapsulated with acronyms like “DOA”.
When we look at the EIA’s “gasoline consumption” numbers, and when we see the St. Louis Fed’s chart of the U.S. velocity of money (heartbeat of the U.S. economy); we don’t see an economy which is dying. We see an economy which is already dead.