February
13, 2015
For
the past quarter century; the most effective “stimulus” for the
U.S. economy has been a fall in gasoline prices. This is no great
surprise, given that the United States had been the most gas-guzzling
nation on the planet – and by a wide margin. But times have
changed!
After
Barack Obama publicly admitted that the U.S. government had
ruthlessly manipulated oil prices lower, as “part of its strategy”
of economic terrorism against Russia; global oil prices have been cut
in half. The only other time that oil prices have fallen so far or so
fast in the last quarter century was the brief/temporary collapse in
prices which accompanied the Crash of ’08.
Has
this enormous economic stimulus kick-started the U.S.’s zombie
economy? Not at all. Indeed, the collapse in the U.S. retail sector
has accelerated throughout this plunge in oil/gasoline prices. This
should not be possible. Economic stimulus from lower prices (in any
sector) is supposed to be automatic.
What
does it mean when an economy not only fails to respond to “automatic”
stimulus, but continues to rapidly decompose? It means we are dealing
with a deceased economy. This is a “surprise” to the irredeemable
charlatans who have the audacity to call themselves economists, but
it shouldn’t have been. Not if any of them were paying attention.
Not if any of them lived in the real world.
Back
in the real world; evidence of the U.S.’s zombie economy is both
overwhelming and abundant. It begins with 0% interest rates. As has
frequently been noted in the past; 0% interest rates are the economic
equivalent of a defibrillator. As with a defibrillator; it is the
most-extreme form of stimulus known to us. As with a defibrillator;
it is a “therapy” option which is so radical/reckless that it is
only ever intended to be used as a last resort, to resuscitate a
patient on Death’s door.
Equally,
as with a defibrillator; if it doesn’t “work” right away, it
will never work (has anyone ever heard of a nation called “Japan”?).
When a doctor attempts to resuscitate a patient with a defibrillator,
and fails after a couple of minutes; does he continue to jolt the
patient, again and again and again and again – year after year? Of
course not. He quickly gives up, because it has become evident that
he is no longer “treating a patient”, but merely charring a
corpse.
This
is what the U.S. government (and other Western governments) has been
doing for the past 6+ years with its 0% interest rate: charring a
corpse. Further proof that the U.S. economy is already dead comes
from a chart of the heartbeat of the U.S. economy (and any capitalist
economy) – it’s “velocity of money”.
As we
see; the U.S. “heartbeat” (i.e. the flow of money) has nearly
stopped, having fallen further/lower than at any time in recorded
history. What does it mean when money stops moving, in a “capitalist
economy”? What does it mean when the money (i.e. blood) stops
moving in the heart of the greatest Capitalist Empire the world has
ever seen? R.I.P.
But
there is even further, equally overwhelming proof that this
gas-guzzling, consumer economy is dead, and it comes from the
gasoline consumption numbers, themselves. “Official” U.S.
gasoline consumption hasplummeted by nearly 75% from its absolute
peak in July of 1998. More pertinently; the gasoline consumption
numbers have plummeted by roughly 66% since the start of the U.S.’s
(imaginary)“recovery”.
What
does it mean when the gas-pumps stop being used in a gas-guzzling
economy? It means the same thing as when the money stops moving in a
capitalist economy, or when a “patient” fails to respond to a
defibrillator. R.I.P.
This
brings us to the ghastly train-wreck known as “the U.S. retail
sector”, the cornerstone of thisconsumer economy. Regular readers
are already familiar with the “Black Friday Shopping Massacre” in
the 2014 U.S. holiday shopping season. Yet despite that horrific 20+%
(year-over-year) collapse in U.S. holiday shopping; the “news”
from the U.S. retail sector has gotten much, much worse since that
initial plunge.
It
began with an equally large/ugly collapse in December retail sales.
When adjusted for inflation, and expressed as an annualized number;
the “0.9%” drop reported by the statistical liars of the U.S.
government translates into a 25% plunge in December retail sales –
even worse than the Black Friday collapse.
Equally
important, and as noted in a recent commentary; these horrific
plunges in U.S. retail sales arecumulative. After retail sales
collapsed at the end of November, it collapsed by an additional
(annualized) 25% in December. And now, as we move to January and a
new year; we see yet another, sickening plunge in U.S. retail sales –
even as gasoline prices continue falling.
The
“advance estimate” of U.S. January retail sales reports another,
enormous, cumulative drop. The “-0.8%” fantasy-number reported by
the U.S. government translates into another, additional (annualized)
collapse in excess of 20%.
Poverty_is_the_worst_form_of_violence_gandhi
With
U.S. gasoline prices now hovering just above $2/gallon; this
represents roughly a $1.50/gallon plunge from average prices through
most of 2014. In other words; (for the first time) Big Oil has chosen
to pass along to consumers nearly the entire plunge in crude oil
prices, in the form of lower gas prices. Yet despite this massive
stimulus to the U.S. economy; the U.S.’s pauper consumers haven’t
even been able to maintain their level of spending.
Supposedly,
their wallets are all full of the dollars they have been saving from
dramatically lower gasoline prices. Yet outside of gasoline
purchases; Americans continue to buy less of everything else.
So-called “core retail sales”, which excludes (among other
things) gasoline consumption, fell in January by nearly 10% when
adjusted for inflation and annualized.
The
near-bankrupt consumers (in this near-bankrupt economy) don’t have
“more dollars” in their wallets thanks to the huge plunge in
gasoline prices, they have simply been going further into debt at a
slower rate. The only “benefit” the U.S. economy has received
from (much) lower gas prices is that this corpse is decomposing at a
slower rate than it would have, if the U.S. government had not
manipulated oil prices lower.
Yet
note what the liars/charlatans expect us to believe (inside and
outside the U.S. government). In theirfantasy-world; despite the
horrific and unprecedented collapse in U.S. retail sales in November
and December, we’re supposed to believe that “consumer spending”
for the fourth quarter (as a whole) rose by 4.3%.
In
the Wonderland Matrix fabricated by these liars; the faster U.S.
“retail sales” fell each month, the faster U.S. “consumer
spending” rose for the whole quarter. It’s exactly the same as
someone claiming to have traveled downhill in order to get to the
peak of a mountain. It’s not simply a lie, it’s a ridiculous lie.
It is
precisely these sorts of perverse, utterly absurd lies which will
inevitably shatter the brainwashing which the One Bank (puppet-master
of the U.S. government) has laboured so diligently to perfect over
the past several decades. Yet what choice does it (and its
media/government puppets) have?
Ultimately
any lie one uses to attempt to cover-up a corpse is quickly perceived
to be ridiculous and/or perverse, for one, simple reason. Corpses
tend to smell very bad, very soon. Soon the stench emanating from the
U.S. zombie economy will be so overpowering that it will be
perceptible even to the deadened senses of its zombie population.
Jeff Nielson for Sprott Money
Jeff Nielson for Sprott Money
