Written by Jeff Nielson Sunday, 19 May 2013 15:07
In the 21st century Corporate Media, where “black is white” and “up is down”; perverse reporting of economic data is par for the course. However, nowhere will one find a larger mass of hyperbole and deception than with respect to the epic myth of supposedly emerging U.S. “energy independence.”
First let’s outline this simplistic fantasy. Some intrepid talking-head in the mainstream media points out that U.S. oil production has been “steadily rising” and U.S. oil demand has been “steadily falling”. The data is then plotted on a chart, the lines are extrapolated into the future, and then the talking-head points to the projected intersection-point, and exclaims “Look, soon the U.S. will be energy independent.”
It’s a delightful tale for small children, and would likely make a fine “Disney movie.” Unfortunately it’s a fantasy which cannot be rationally incorporated into the real world. Debunking the myth requires breaking it down into its components.
The starting-point is to explain something scrupulously avoided by all the talking-heads clucking about “energy independence”: why U.S. oil demand is falling. The dynamic is very simple: when economies grow, oil-demand grows. There has never been an exception to this principle since our economies became dependent upon oil…until the “U.S. recovery” of 2009-13.
Since U.S. oil demand peaked in the middle of last decade at more than 20.5 million barrels per day; it has plummeted by roughly 10% to approximately 18.5 mbpd currently. This collapse in U.S. oil demand has only been equaled once previously since the Second World War: during the Great Stagflation of the 1970’s.
What is important to note, however, is that severe recession also marked the one sustained effort by the U.S. government and U.S. auto industry to radically improve “energy efficiency”. While the U.S. has talked about greater efficiency in the decades which followed, in all the decades of (actual) economic growth which occurred since then, U.S. oil demand has steadily risen until 2007.
Since that point, U.S. oil demand has plummeted to a 16-year low. It plummeted all through the (official) Great Recession, and has kept falling throughout this (supposed) Recovery. Has there been some great “energy efficiency revolution” which the U.S. government forgot to tell everyone about?
Apparently not. In fact, President Obama recently announced a new plan to attempt to “double U.S. energy efficiency” over the next two decades. This follows his “new plan” to increase energy efficiency in 2011, and his “new plan” to increase energy efficiency in 2009. One presumes the Obama regime would not find it necessary to announce new “energy efficiency” initiatives (like some solar-powered cuckoo-clock) if the old plans were actually accomplishing anything.
Thus the equation is simple: shrinking oil demand = shrinking economy. This was pointed out in a previous commentary from March of last year, and recently echoed by noted energy expert, Chris Martenson. After studying global economic data, Martenson was unequivocal: “without growth in oil consumption, GDP doesn’t advance.”
This is reinforced by data from the U.S. government showing less and less people working every month – in a chart now familiar to all regular readers. It’s reinforced by data showing U.S. retailers selling less and less goods every month (in this consumer economy).
Industrialized economies do not grow without increased oil demand. Consumer economies do not grow without selling more goods. And no economy of any kind can grow when there are less and less people working.
Written by Jeff Nielson Thursday, 16 May 2013 11:29
Once upon a time, an entity called the “World Gold Council” was created. It was supposed to be an industry trade-group, which (like all industry trade-groups) promotes the health and growth of their industry. But that’s not how it turned out.
To understand the World Gold Council, one need do little more than examine its history. It was created in 1987. Was this the beginning of some new, Golden Age for the gold mining industry? Hardly. In fact, it marked the early stages of the most successful era of gold price-suppression in history, and the complete destruction of the global gold-mining industry – with more than 90% of the world’s gold mines being bankrupted.
If the World Gold Council is really an “industry trade-group”, then it was/is the most incompetent/inefficient such entity ever created. But, of course, the World Gold Council doesn’t serve “gold” or even gold-mining. It serves paper – banker-paper, to be precise.
Like all (supposed) industry trade-groups, the WGC is officially comprised of a collection of the world’s largest gold-miners; who themselves are nothing but a herd of banker-sycophants. Lest anyone suffer from the delusion that the world’s gold miners (and the WGC) were merely “innocent bystanders” in the destruction of the global gold-mining industry, more facts are in order.
At around the time the WGC was formed; these same large, gold-miners were in the process of enslaving themselves to the bankers by forward-selling 100’s of tons of gold which hadn’t even been dug out of the ground yet – in order to further depress prices in the sector by creating a glut of supply.
This policy of self-destruction became institutionalized. As quickly as the sycophant-miners identified new reserves in the ground, they would forward-sell that ore to the bankers, permanently discounting their own commodity. Those readers who don’t fully comprehend this intentional suicide-spiral need to be reminded of another industry trade-group, with which we are all familiar: OPEC.
When OPEC was created, did it immediately result in a long-term depression in the price of oil? Did it result in 90% of the world’s oil companies being bankrupted? Did OPEC members forward-sell their oil in massive quantities? No. Precisely the opposite, in every respect.
OPEC didn’t forward-sell their oil to depress the price; they restricted supply to maximize total revenues for their industry. Their industry did not go into a long-term depression where more than 90% of all companies were bankrupted. Instead, this industry trade-group is directly responsible for the robust/health profits of the world’s oil companies.
But don’t take my word for it. Feel free to check with Rex Tillerson, CEO of Exxon. The $400 billion market-cap for Exxon is larger than the combined market-caps for the entire, global gold-mining industry. Indeed, Mr. Tillerson’s personal, annual compensation is larger than the individual market-caps of most of the world’s gold-mining companies.
Clearly the World Gold Council is nothing but a slave-collective, in bondage to the bankers; and which serves not the interests of gold (or gold-mining) but rather the promotion of the bankers’ paper monetary system. Need more convincing? Simply look around their website.
Try finding information about gold (i.e. supply/demand data). What one will discover is that such data goes back no more than two years. This is despite the fact that gold mining is one of humanity's oldest industries, where we have been mining/refining gold for nearly 5,000 years. Conversely there are a plethora of essays going back more than 15 years; letting us know about all the ways in which the bankers want to use our gold to make their paper system “better.”
The World Paper Council is, in reality nothing but a banking industry sub trade-group; composed of some of the bankers most-loyal servants, paying homage to their Masters. More proof that the WGC serves paper rather than gold came out today, with its utterly astonishing reporting on Q1 for the gold market.