Lies, Damned Lies, and Statistics, or the US Economy is Dead

Those reading alternative news sources, such as Zero Hedge among others, may already know that the US government produces a prodigious amount of lies, but a recent article in that publication by Jeff Nielsen underscores the extent of the deceit in economic matters.

 

We have maintained that the US economy never recovered from the Depression of 2008, an engineered disaster by America's leading plutocrats, politicians, and academicians to impoverish the nation so that a mass of working poor could serve their infantile control freak wants.

 

John Williams' Shadow Stats has been one of the vanguard companies exposing the lies of the US government, showing that the US economy has been contracting almost non-stop since 2000. The reason the liars in Washington can report growth is because they lie about the extent of inflation. Since inflation is subtracted from nominal figures to provide "real" values, its determination is critical to assessing economic growth.

 

As an example, and to vastly over simplify the "intellectual" acrobatics to generate the falsified data, suppose that nominal economic growth is 5%, but inflation is 8%. The "real" growth would be negative 3%. However, if the liars report that inflation is actually 2%, then they can claim economic growth as positive 3%. These are the lies which the establishment media promote ad infinitum, ad nauseum, world without end.

 

We have all heard the old saying that one must compare apples with apples to do a valid comparison. However, the definition and measurement of inflation has been changed so many times over the years by the US government that it is impossible to consider the US inflation time series, and consequently GDP figures, as anything but a little boys' delusional flight of fancy.

 

Williams attempts to correct this problem by using a standard definition of inflation across all time periods, and it shows a dramatic contraction of the US economy, a fact reconfirmed by the decline in labor force participation which now as low as it was in 1978. This decline helps the liars in the government and the deceitful news corps maintain that unemployment has been declining. It is the old shrink the denominator trick and hope that the math deficient American does not notice.

 

Another fact confirming the disintegration of the US economy is the complete collapse of gasoline consumption as reported by the US government. Should we believe the liars? We can use their data as an indicator of direction because it appears that the liars have not taken the time to obfuscate it as well as other data.

 

According to Nielsen, and the US government, gasoline consumption has declined 75% since its peak in 1998, and about 65% since the Great Depression started in 2007. He also explains how the liars cover up the decline. Rather than measuring gasoline consumption at the pump, the government measures it at the refinery. So when gasoline leaves the refineries and is placed into storage by the buyer - ie the distributor or wholesaler - it is considered retail consumption. But the storage facilities are filled to the gills, and they have no capacity for more, meaning that the demand has collapsed as the government's figures indicate. The loss of demand is so severe that refineries have begun slowing down and shuttering.

 

One could say that some of the evaporation of gasoline demand is due to more efficient cars, which might explain about 10% of the decline, but does anyone really think that aging cars are really that fuel efficient? The lengthening terms of car loans and aging of the automobile fleet is additional evidence that the US economy is in severe contraction. (We know the argument about buying more expensive luxury cars and it is a crock.)

 

One could also say that an aging population drives less, but demographics are not yet that bad, and certainly cannot explain a 75% decline in consumption in 15 years.

 

We know that many of dear readers live in a bubble, and can assert that the economy is booming. We have a friend, who lives in Atlanta's wealthy Buckhead community, who swears that the economy is improving because prices of 1 million dollar homes in her neighborhood are zooming, with one recent sale of 1.7 million USD confirming the housing recovery. Unfortunately such people do not have any credible explanation for the fact that 49% of all Americans receive some form of government financial assistance, or that general real estate numbers produced by the industry's pom pom team show a different picture.

 

But for those who step outside of the hermetically sealed confines of wealthy neighborhoods and suburbs, the economic destruction is horrific - and there is more on the way as the vast tracts of commercial real estate go begging for tenants at the same time that their loans come up for renewal. All is not well - we stand by our prediction of Financial Armageddon.

Reference
Jeff Nielsen, Guest Post: U.S. Gasoline Consumption Plummets By Nearly 75%, Zero Hedge, May 31, 2014, accessed 5/31/2014.

Copyright 2014 Tony Bonn. All rights reserved.

The Case for Gold Has Never Been Stronger

Although 2013 marked a pause in the previous 12 year bull run of the price of gold, we believe that 2014 will reverse the losses and break new ground in dollar denominated pricing.

 

The economic situation of the United States is dire, but its vulnerability is compounded by the deplorable economic conditions abroad, especially in Europe.

 

None of the financial problems stemming from the engineered take down of Lehman Brothers has been solved, with the insolvency of the big US banks as acute as it was in 2008.

 

During the time since the onset of the Great Depression 2.0, Eastern powers have been sucking gold out of the West at a rate which hasn't been seen since the fall of Rome. The trade of industrial plant for cheaper prices has not been a good deal for Americans as they are no longer employed sufficiently to pay the cheap prices.

The latest government reports on the fastest growing job segments are all low pay hospitality and retail positions.

 

Barry Soetoro has produced the most profligate spending since Nero burned Rome. Not even a ship of drunken sailors could steal and spend money with so much abandon and criminality as the budgetless president.
 

David Stockman recently described the overvaluation of stocks due to accounting gimmicks which eliminate so-called non-recurring expenses from earnings reports and thus deflates P/E ratios, a quick test for evaluating the value of stocks. Rather than being 18 times earnings, the reality is that they are 23 times earnings, clearly in overbought territory. The key point is that these non-recurring charges are quite recurrent and will soon show up in stock prices.

 

Thus the stock market really has no place to go but down in 2014 since its values are artificially maintained by the criminal Federal Reserve Board and the President's Working Committee on Markets Stability. However, their abilities to manipulate markets is tapering as they lose control of the world's reserve currency, the price of oil, and the price of gold.

 

With total debt levels still at 330% of GDP, deficits soaring out of control, and the US having last year entered another dip in its ongoing depression since 2008, the economic prospects of the US will force settlement of past due accounts which have been kicked down the road for the past 5 years.

 

Germany requested a portion of its 3300 metric tons of gold last year, and so far has seen 37 tons delivered. The LBMA and COMEX have ceased or stalled delivery of gold. Andrew Maguire has reported that London gold vaults are empty due to a massive exit of gold East to make good on the sea of bad US debt held by the Chinese, and to help repatriate the gold it stole from China in exchange for granting the brutal regime Most Favored Nation status.

 

Taper Talk is a charade anyone can safely ignore - the Fed will not taper. Michael Pento told King World News today that the amount of debt on the Fed's balance sheet is closer to 10 trillion USD rather than the publicly reported 4 trillion. Thus not only does the Fed have no "tools" for fighting another recession - and it creates all recessions - but it is completely insolvent, a point we have made for several years.

 

With scarce gold and the Fed and US government on the verge of unleashing trillions more of debased currency into the teetering US economy, we are certain that gold's price will head distinctly higher.

Another factor contributing to the scarcity of gold, one which rarely gets any public play, is the multiple claims of ownership on each ounce of gold, currently running around 80 claims per ounce. This very fraudulent ownership chain on gold practically guarantees its higher price.

 

The trigger for the economic collapse will emanate somewhere near the vicinity of Deutsche Bank or JPMorgan Chase, whose London Whale Trade is still toxic as ever. It didn't sell Chase Center at bargain basement prices to the Chinese because it was feeling charitable.

 

Demographic and economic factors are working hard to destroy the US. The labor force participation rate is the lowest since 1978, unemployment is at all time highs even as the Bureau of Labor Statistics lies its back end off proclaiming otherwise. This means that tax revenue will not recover, making debt the only recourse for America's leaders to maintain the illusion of prosperity.

 

The Chinese have written down trillions of dollars of US debt - mostly treasuries, meaning that they will be out for blood over the coming years. This has given them the leverage to demand gold as settlement, with somewhere between 10-30,000 tons of gold having shipped East in the last 18-24 months. Bankster lives depended upon this settlement, some of whom will wind up in an oil drum next to Jimmy Hoffa.

 

With the collapse of the US Treasuries market and consequently higher interest rates, the plummeting price of stocks, and the vaporization of gold from the West, we are certain that gold prices will escape the manipulation of America's banksters to seek a price this year in the 2000s. But as a cautionary note, William Kaye, Vice Chairman of Pacific Alliance Group of Companies, warned Eric King of King World News of a drop in price to the 1050 - 1100 range before heading higher. While the price may continue to gyrate, we don't see the price going that low given the factors we have discussed. 

Copyright 2014 Tony Bonn. All rights reserved.