The Crash In US Economic Fundamentals Is Accelerating

Friday, May 3, 2019
By Paul Martin

Brandon Smith
Alt-Market.com
Thursday, 02 May 2019

When looking at the health of an economic system it is impossible to gauge growth or stability by only taking two or three indicators into account. The problem is, this is exactly what central banks and governments tend to do. In fact, governments and central banks wildly and deliberately promote certain indicators as the signals everyone should care about while ignoring a whole host of other fundamentals that do not fit their “recovery” narrative. When these few chosen indicators don’t read well either, they rig the numbers in their favor.

The most promoted and and by extension most rigged indicators include GDP, unemployment, and inflation. I would include stock markets to a point in this list, but as I’ve always said, stocks are a trailing indicator and never tell us accurately when an economic crash is taking place. If anything, stocks are and always have been a placebo for the masses, a psychological crutch meant to lull them to sleep while the crash begins. Other than that, they have no value in determining the health of the system. As a lagging indicator, we will cover stocks at the end of this analysis.

GDP rigging is mostly a government affair, as much of how GDP is calculated today includes government spending. So, even though the government has to steal your money through taxation in order to then spend money, government spending is still counted as “production”. This includes programs like Obamacare, which despite assumptions among some conservatives, continues to operate today. “Official” establishment estimates of government spending as a percentage of GDP stand at around 20%. More accurate estimates accounting for ALL expenditures show that US government spending accounts for around 35% of GDP. This is an enormous fraud.

Most of my regular readers know full well how unemployment numbers are rigged to show recovery, but to summarize, around 95 million working age Americans who are unemployed are not counted as unemployed by the Bureau of Labor Statistics because they have been jobless for long enough to be removed from welfare benefits roles. Now, to be clear, the BLS does keep track of this statistic, but, they DO NOT treat it as a measure of unemployment when reporting their stats to the public.

To clarify, 102 million WORKING AGE people (counted and not counted as unemployed) are jobless in the US. This is almost 50% of the total 206 million working age people in the country. Yet, the BLS reports the unemployment rate at an astonishing 4%. Recovery indeed…

Inflation rigging is a bit more complicated, but the primary method has been for the government and the Fed to simply change their methods of calculation over the past 4 decades, and to exclude inflation in certain goods like food and energy from the numbers. If you want to see real inflation numbers calculated the way they should be, visit John Williams over at Shadowstats.

Another issue that we must take into account is the Federal Reserve’s role as a creator of financial bubbles, and the destroyer of financial bubbles. The Fed can and does act with impunity to influence the system, but they also seek to exploit certain economic indicators as a rationale for their policy decisions. For example, the Fed’s QT policies have for the past couple of years relied on positive GDP, unemployment and inflation stats. In the meantime, the Fed has all but ignored the vast array of stagflationary and deflationary warning signs which run contrary to their interest rate hikes and balance sheet cuts.

The Rest…HERE

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