Recently, there has been a dust up over the definition of recession. The Joe Biden Administration team were out in full force denying the US economy is in recession in spite of real GDP declining now for one-half of a year.
Never mind the 2022 recession. Americans have been living through an economic depression since 2009, , which followed the 2007-08 economy crash. I have named the long depression, the Super Depression
Elsewhere on the True Dollar Journal, I have shown you this truth with these works:
- Super Depression, 2008-2022. More Proof Courtesy of the Federal Reserve. We're Now Living in the Inflationary Stage.
- Quantitative Easing and the USA Super Depression (2009 to 2022 and Beyond!). Taking Away QE Exposes the Depression Already Here.
- You are Living During the Super Depression. Did You Know It Started in 2007? It is About to Get Much Worse.
- Wake Up People. You are Living in an Economic Depression and Have Been Since 2008.
- Biden, Pelosi, Schumer and the Federal Reserve / Davos Crowd Built Back Worse in 2022. Super Depression, 2008-2022.
- Booming Biden Economy? Oh Really? Likely the USA Has Remained in Economic Depression Since 2008.
- How Many Dollars Should Exist? Do You Know? More Proof of the Super Depression!
- World Steel Output Says You Have Been Living in the Great Global Super Depression Since 2008
- USA Nickel Production Says the USA Has Been in Depression Since 2008
- Accelerating Average of Cars and Light Trucks Since 2001 Reveals the Hidden Super Depression
- What Stocks and ETFs are Telling You in 2022 About the Ongoing Super Depression
- Amazon Versus Dollar Tree, A Tale of Two Stocks, or Indicators of the USA Economy
- Amazon Speculators Now Say Future Business Conditions Will Be Worse
- Super Inflation Takes Hold in 2022 in the Midst of the Super Depression
- What Has Caused the 2021-2022 Inflation in the USA? A Shocking $8.5 trillion of US Treasuries and Mortgage-Backed Securities on the Federal Reserve Balance Sheet. Will Quantitative Tightening Ever Happen?
Now, though, I wish you to focus on this chart first. The chart plots the data of the Bloomberg Commodity Index.
The BCOM tracks prices of futures contracts on physical commodities on the commodity markets. The index is designed to minimize concentration in any one commodity or sector. It currently has 23 commodity futures in six sectors. No one commodity can compose more than 15% of the index, no one commodity and its derived commodities can compose more than 25% of the index, and no sector can represent more than 33% of the index (as of the annual weightings of the components).
During economic expansions, commodity prices ought to rise and rise faster toward the top of an expansion. In the quest for profits, firm operators become willing to pay most any price asked to acquire the commodities needed to produce their products as commodities supplies become squeezed. Firm operators will take out loans to do so.
Yet, since market prices always are quoted in then-current dollar quotation, the total of currency in circulation matters.
From 2004 to 2013, or nine years, currency doubled. From 2013 to 2020, or seven years, Federal Reserve bankers doubled currency again. In only two years, from 2020 to 2022, Federal Reserve bankers managed to increase currency by one-and-one third times.
In times before, it took longer for Federal Reserve bankers to double the currency. It took 11 years for the doubling between 1970 to 1981. After the Paul Volker-Federal Reserve reset against inflation, it took 15 years for doubling to happen between 1981 and 1995.
So if there is a long decline in commodity prices as we see between 2011 to 2020, we can be sure the economy has been contracting. While it is true that commodity prices rose between 2009 and 2011 and again between 2020 and 2020, those blips happened not because the economy was near prosperity tops both times. Rather, a sudden dump of dollars in circulation along with checking account credits, i.e., rapid inflation, led to rapid commodity price rises.
In spite of increasing the currency between 2011 and 2020, Federal Reserve bankers could not halt the decline in commodity prices. The decline came owing to a contracting economy over a long stretch.
For a brief on the Powell Stimulus Inflation, see my work, Central Bankers Credit Scores Are Falling Fast Hence the Major Rotation into Commodities by the Prudent.
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