LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeek.com to Launch New Website
By: GoldSeek.com

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA

 
Search

GoldSeek Web

 
Why U.S. GDP Hasn’t Really Increased Since 2000


 -- Published: Thursday, 1 March 2018 | Print  | Disqus 

By Steve St. Angelo

While official sources forecast U.S. Gross Domestic Product (GDP) to surpass $20 trillion this year, the real figure is probably much less.  So how much less is real U.S. GDP?  Well, that depends on how it is measured.  If we factor in energy consumption and the increase in total public debt, U.S. GDP is likely less than half of the current figure.

Yes, it sounds insane to say that the current U.S. GDP is likely overstated by at least 50%, but if we go by fundamental data, it isn’t that crazy at all.  Unfortunately, Americans have been conditioned to believe that money grows on trees and energy comes from the Wizard of Oz.  Thus, if we need more money, then the U.S. Treasury can print more Federal Reserve Notes, or we can swipe the credit card.  And, if we need electricity, we just switch on the light.  Easy… Peasy.

Due to the highly complex nature of the world in which we live in today, the individual is clueless as to the tremendous amount of energy and work that it takes to produce the foods we eat and the goods, energy, and materials we consume.  So, it should be no surprise that U.S. GDP can be overstated by 50%+.

If we go by the data that shows the growth of Global GDP is related to the growth of Global Oil Supply, then it is very quite easy to spot inflated GDP figures.  However, you have to be able to understand this essential ENERGY=GDP relationship.  Of course, this is not taught in business or economic classes in high school or college. Instead, the economic teachers focus on the insane theory of SUPPLY vs. DEMAND.  If individuals are taught GARBAGE, then their thinking and reasoning is GARBAGE.  So, we really can’t blame them.

In looking at the following chart by Gail Tverberg, the increase in Global GDP corresponds to the rise in Global Oil Supply:

As the annual growth percentage of World Oil Supply declined in the periods shown in the chart above, the same trend took place in World GDP.  If we can understand the OIL-GDP relationship figures in the chart, then it is impossible for a country to grow its GDP if it does not increase its energy consumption.

A perfect example of a country that increased both its energy consumption and GDP, is China.  We can clearly see that as China’s total energy consumption increased from 2000 to 2011, so did its GDP:

Furthermore, as China experienced double-digit annual increases in energy consumption between 2000-2008, its GDP also enjoyed double-digit growth.  However, the same thing can’t be said for the United States as its GDP nearly doubled since 2000 while total domestic energy consumption remained flat:

In 2000, the U.S. consumed a total of 98.8 Quadrillion BTU’s (Quad BTU’s) of energy to produce $10.6 trillion in GDP.  Amazingly, in 2017, the U.S. only burned 97.9 Quad BTU’s to generate $19.4 trillion in GDP.  It seems as if the U.S. economy has figured out some magical way to consume less energy to produce nearly double the GDP.

Now, if we look at U.S. energy consumption from 1960 to 2000, we can clearly see that it increased along with the GDP.  However, something changed after 2000 as U.S. GDP continued to grow while energy production remained flat or even declined.  So, it seems as if the Energy Wizard of Oz stepped in and did his magic to produce GDP out of thin air.

It’s really quite hilarious to watch supposedly intelligent economists on CNBC and Bloomberg discuss rising U.S. GDP without factoring in energy consumption.  Now, some individuals are going to claim that the U.S. economy has become more efficient with its energy consumption, so it was able to double its GDP.  While this sounds like a plausible explanation, unfortunately, the EROI – Energy Returned On Investment of U.S. energy supply has been falling considerably since 2000.  Which means, U.S. energy efficiency is going in the opposite direction… getting worse, not better.

Now that we understand that a country needs to consume more energy to grow its GDP, that’s only part of the story.  It’s one thing to bamboozle individuals into believing GDP can increase while energy consumption remains flat, but another thing entirely to do so as public debt explodes.

Since 2000, U.S. GDP has increased from $10.6 trillion to $19.3 trillion while total public debt skyrocketed by a staggering $15 trillion:

To put it another way, U.S. GDP increased by $9 trillion over the past seventeen years by adding $15 trillion worth of debt.  Not a bad deal.. ah?  So, not only has the Energy Wizard of Oz allowed U.S. GDP to grow while energy consumption remained flat but we must have had some help with the massive increase in debt by the Tooth Fairy.

As Americans continue to move blindly towards the coming ENERGY SENECA CLIFF, there’s going to be a real surprise when ILLUSIONS are replaced by REALITY.  

Lastly, for all the professionals, individuals and bloggers who think they are really smart by claiming “This time in the stock market is different” or “Peak oil or the EROI don’t matter,” it’s time that you expand your knowledge and wisdom.  If society has any chance of transitioning from the coming Energy and Economic Collapse, it will only do so if adults stop acting like children and grow up.

Check back for new articles and updates at the SRSrocco Report.

 


| Digg This Article
 -- Published: Thursday, 1 March 2018 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.