The U.S. Greater Depression Exposed (Part I)

February 19, 2014

Since the beginning of 2014; we have been subjected to two constant themes in the propaganda of the mainstream media. One of these themes is that after “recovering” year after year after year; the U.S. economy is finally strong enough to begin the Exit Strategy which former Fed Chairman B. S. Bernanke (originally) promised us would begin early in 2009.

The other, closely related theme is the (supposed) collapse of “Emerging Market currencies”. In fact; what we have seen is the collapse of most of the world’s currencies versus the U.S. dollar. In no way can these two events be considered mere coincidence.

As explained in my last commentary; the contrived collapse of these currencies -- by financial criminals currently being investigated globally for serially rigging these same markets – is nothing more than a Reverse Beauty Contest. It is an effort to make the world’s least-attractive/most-worthless currency appear to be the world’s “strongest” currency.

With the perversion of statistics and the manipulation of our markets reaching new, absurd extremes; it becomes necessary to remind readers (and alert newer readers) of what is actually transpiring in the real world. This two-part series will establish three obvious points:

  • The U.S. economy is currently in the midst of a Greater Depression; the worst, sustained economic collapse in the history of this nation.
  • Given this collapse; the U.S. does not have one of the world’s stronger economies, but rather it has the weakest economy of any/all major nations.
  • The downward spiral in this Greater Depression is, in fact a terminal collapse. The final result of this economic devolution can only mean the transformation of the United States into essentially a “Third World nation”.

We start with the fundamental lie regarding the U.S. economy, the mythical “recovery” itself. By now; regular readers should understand that GDP (growth) is arguably the easiest of all statistics to falsify. All that is required is to first understate “inflation”, and then GDP can be exaggerated commensurately.

A simple example will explain this, for the benefit of newer readers. If (price) inflation is (hypothetically) 10% per year; then when our governments collect the raw data on economic growth, they must, roughly speaking, subtract 10% from their data. This is called the “GDP deflator”. If our governments did not subtract inflation out of the equation when they attempted to measure GDP, then they would not get a statistic which measured “economic growth”, but rather a statistic which measured economic growth plus the increase in prices.

Continuing with the hypothetical example; let’s suppose our governments now pretend that inflation is only 2%, rather than 10%. Thus when they measure GDP; they only “deflate” the data by 2% instead of 10%. And so the statistic they release which they call “GDP growth” is actually GDP growth + 8%. In fact; this hypothetical example very closely mirrors what we currently see in the U.S. economy.

Real inflation is around 10%. The government pretends it is around 2% (or less). All of its “GDP estimates” are thus biased by (roughly) 8%. If the government claims the economy is “growing” at a rate of 3%, it’s really shrinking at a rate of 5%. If it pretends “growth” is 4%, the economy is shrinking at a 4% rate.

For those who stubbornly cling to the delusion that actual inflation is anywhere close to the farcical “consumer price index” (CPI), simply visit any supermarket. What one will have witnessed over the past four years (and which continues relentlessly) is the down-sizing of packaging.

Here readers need to understand that no food manufacturer (or product manufacturer of any kind) ever willingly reduces the size of their packaging. Rather, it is merely/always a desperation tactic to hide soaring prices.

  • It costs money to re-configure the production process to a new (smaller) size.
  • It is always less-efficient to increase packaging relative to the quantity of goods being sold. This is why manufacturers reward consumers who buy larger quantities (with a lower ratio of packaging) by giving them lower prices.

We can prove this point empirically. For any reader of middle-age or older; the only other time in their entire lives when they would have witnessed a wave of product down-sizing similar to today was in the high-inflation era of the 1970’s, the only (official) period of “high inflation” through which any of us have ever lived. Every time one of our governments tries to tell us that inflation is low – or even “too low” – the behavior of our food manufacturers says they are lying.

Fortunately; it isn’t necessary for readers to be satisfied with even this level of proof. There are many other statistical lies which have been appended to the mythical “U.S. recovery”, and these other lies can be illustrated vividly through using the government’s own numbers.

We have been told that during this supposed “recovery” that the economy has been “creating new jobs” (on a net basis) every month for nearly four years, as reflected in the chart below.

However; this report – the only employment report which the Corporate media ever presents to us – contains numerous “statistical adjustments”. Any statistic which is “adjusted” can be faked, simply by intentionally making flawed adjustments. The employment chart below, also from the Federal Reserve simply measures the (employable) percentage of the population who have jobs. It contains no adjustments, and so it cannot be falsified.

Jeff Nielson

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/investors. Jeff originally came to the precious metals sector as an investor around the middle of last decade, but soon decided this was where he wanted to make the focus of his career. His website is

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