[ElJefe]

Paul Craig Roberts:

Quote:

February Jobs: Staring Armageddon In The Face But Hiding It With Official Lies

According to the Bureau of Labor Statistics, the US economy created 236,000 new jobs in February. If you believe that, I have a bridge in Brooklyn that I’ll let you have at a good price.

Where are these alleged jobs? The BLS says 48,000 were created in construction. That is possible, considering that revenue-starved real estate developers are misreading the housing situation.

Then there are 23,700 new jobs in retail trade, which is hard to believe considering the absence of consumer income growth and the empty parking lots at shopping malls.

The real puzzle is 20,800 jobs in motion picture and sound recording industries. This is the first time in the years that I have been following the jobs reports that there has been enough employment for me to even notice this category.

The BLS lists 10,900 jobs in accounting and bookkeeping, which, as it is approaching income tax time, is probably correct; 21,000 jobs in temporary help and business support services; 39,000 jobs in health care and social assistance; and 18,800 jobs in the old standby—waitresses and bartenders.

That leaves about 50,000 jobs sprinkled around the various categories, but not in numbers large enough to notice.

The presstitute media attributed the drop in the headline unemployment rate (U3) to 7.7% from 7.9% to the happy jobs report. But Rex Nutting at Market Watch says that the unemployment rate fell because 130,000 unemployed people who have been unable to find a job and became discouraged were dropped out of the U3 measure of unemployment. The official U6 measure which counts some discouraged workers shows an unemployment rate of 14.3%. Statistician John Williams’ measure, which counts all discouraged workers (people who have ceased looking for a job), is 23%.

In other words, the real rate of unemployment is 2 to 3 times the reported rate.

Nutting believes that the U3 unemployment rate has become too politicized to have any meaning. He suggests using instead the work force participation rate. This rate is falling substantially, reflecting the discouragement that occurs from inability to find jobs.

John Williams (shadowstats.com) says that distortions in seasonal factor adjustments overstate monthly payroll employment by about 100,000 jobs. The jobs data that is not seasonally adjusted shows about 1.5 million fewer jobs in the economy.

In a recent communication, statistician John Williams (shadowstats.com) reports that the rigged official annual rate of consumer inflation (CPI) of 1.6% is in fact, as measured by the official US government methodology of 1990, 9.2%. In other words, the rate of inflation is 5.75 times greater than the reported rate. If Williams is correct, the interest rate on bonds is extremely negative.

Over the years the measure of inflation has been altered in two ways. One is the introduction of substitution for what formerly was a constant weighted basket of goods. In the former measure, if a price of an item in the basket (index) rose, the CPI rose by the weight of that item in the basket.

In the substitution-based measure, if a price of an item in the basket goes up, the item is removed from the basket, and a cheaper item is put in its place. For example, if the price of New York strip steak rises, the new CPI will substitute the price of a cheaper cut.

In this new measure, inflation is held down by measuring not a fixed standard of living but a declining standard of living.

The other adjustment used to restrain the measure of inflation is to re-classify many price rises as “quality improvements.” Price rises declared to be quality improvements do not translate into a higher measure of inflation. In other words, if a product rises in price, the price increase or some portion of it can be assigned to improved quality, not to a rise in component or energy costs. As the incentive is to hold down the inflation measure in order to save money for the government on Social Security cost-of-living-adjustments, quality improvements are over-estimated.

Consumers have to pay the higher prices, and as incomes, except for the 1 percent, are not growing, higher product prices, regardless of whether they are or are not quality improvements, mean a lower standard of living for the 99 percent.

The understated new measure of inflation allows the government to show real GDP growth and thus the end of the December 2007 recession, and it allows the government to show in the latest report real retail sales again matching the pre-recession level. However, when measured correctly, as by statistician John Williams, the true picture of retail sales shows a steep decline from 2007 through 2009 and bottom bouncing since.

The reason real retail sales cannot recover is that real average weekly earnings continues its downward path. Earlier in this new century, the lack of income growth for the bulk of the US population was masked by a rise in consumer debt. Americans borrowed to spend, and this kept the economy going until the point was reached that consumers had more debt than they could service.

John Williams report of real average weekly earnings shows that Americans are taking home less purchasing power than they did in the 1960s and 1970s.

Reflecting the dollar’s loss of purchasing power, the price of gold and silver in dollars has risen dramatically during the Bush and Obama regimes.

For the last year or two the Federal Reserve and its dependent banks have operated to cap the price of gold at around $1,750. They do this by selling naked shorts in the paper speculative gold market.

There are two gold markets. One is a market for physical possession by individuals and central banks. The rising demand in the physical bullion market points to a rising price for gold.

The other market is the speculative paper market in which financial institutions bet on the future gold price. By placing large amounts of shorts, this market can be used to suppress price rises in the physical market. The Federal Reserve, which can print money without limit, can cover any losses on its agents’ paper contracts.

It is important to the Federal Reserve’s low interest rate policy to suppress the bullion price. If the prices of gold and silver continue to rise relative to the US dollar, the Fed cannot keep the prices of bonds high and interest rates low. If the dollar is widely perceived to be declining in value in relation to gold, the price of dollar-denominated assets will also decline, including bonds. If the dollar loses value, the Fed loses control over interest rates, and the US financial bubble pops, with hell to pay.

To forestall armageddon, the Fed and its dependent banks cap the price of gold.

The Fed’s fix is temporary, and as the Fed continues to create ever more dollars, the price of gold will eventually escape the Fed’s control as will interest rates and inflation.

The Fed has produced a perfect storm that could consume the US and perhaps the entire Western world.

[ElJefe]

In other words, the Fed is apparently shorting big-time in the gold (paper) market.

Can anyone confirm this?

[ElJefe]

http://www.321gold.com/editorials/groene...12913.html

Quote:

Conclusion: The repatriation of gold reserves shows the vulnerability of the US dollar and the financial system and more specific the credibility of the paper money system.

In simple terms, the repatriation could be explained as that Germany doesn’t trust the US Fed.

2020 is when they will transport back the gold to Germany! Why then? Only one reason in my point of view, the fed doesn't have all the gold. What is there against taking delivery now? Especially in the context of the Weimar Republic experience with the Germans very wary of inflation so repatriation by 2020 doesn't make sense! That is seven year from today and as already mentioned a lot can happen in seven years.

Considering the demonetization of gold that has been going on for many years leasing/shorting the gold, it can’t be excluded that the Fed NY is short other country’s gold. This would mean that the NY Fed or US Treasury would have to buy gold which would support and/or drive up the price of gold.

Though theoretically the fed can't buy any gold because it would mean it abolishes the trust, the credibility it has in the reserve currency, the US dollar. If the Treasury or NY Fed would buy gold and if this gets into the open it would mean a major break of confidence in the US dollar! As I said I don't believe the fed/treasury can buy gold for this reason. That is different for other central banks because they are anchored through the US dollar, “the spill of the financial system” and need to exchange their currency into the US dollar before they can buy gold. In other words either the fed buys gold secretly through other central banks or does it secretly in a different way!!!!

Remember, the only thing holding the financial system together is belief in the Central Banks. If the Central Banks stop trusting one another or grow openly antagonistic, then things could turn ugly very quickly. This could force the monetary authorities to confiscate gold! Therefore physical silver, a precious metal and a proxy of gold and “the penicillin of the future” because bacteria can’t build up resilience against silver, is my preferred choice

[ElJefe]

http://collapsereport.com/2013/02/25/des...n-stop-it/

[Rutting Elephant]

LOL at these links

[j r]

There is certainly a case to be made for alternative statistical methodologies, but the idea that there is some active political manipulation of numbers doesn't have much merit. Most of the people who work for these agencies are civil servants and not political staff. Even if the politicals wanted to manipulate numbers (and I wouldn't put that past them), there is no reason for the civil servants to cooperate.

Why would a professional economist at the BLS or the Fed break the law, risk his job and his professional reputation just to make the administration look good?

[EisenBarde]

Those jobs WERE created, I'm holding down 3 of them.

[Ovid]

@ j r: Because he was ordered by his boss to employ a different methodology when calculating his figures?

[j r]

(03-13-2013 10:05 AM)Ovid Wrote:  

@ j r: Because he was ordered by his boss to employ a different methodology when calculating his figures?

That is simply not the way the government, or any large bureaucracy for that matter, works.

[Ovid]

Bush, Obama, Bernanke, & Co.: "Oh shit, the economy's going into the toilet, what do we do? We can't fix misguided policies much because they make some people really rich and they'd be ticked, so let's print money, and let's wage a long-term media campaign to convince the buying public that the crisis is over so they start spending money again, giving some fuel to our economy."

Flunkie: "But boss, the economy's not getting better, we can't have the media tell outright lies!"

Obama to Secretary of Labor: "What good news can you give me?"

BLS chief: "Uhh... well, actually, we were counting jobs in a really antiquated way before, but with our new statistical analysis, it looks like unemployment is down boss!"

[j r]

(03-13-2013 10:44 AM)Ovid Wrote:  

Bush, Obama, Bernanke, & Co.: "Oh shit, the economy's going into the toilet, what do we do? We can't fix misguided policies much because they make some people really rich and they'd be ticked, so let's print money, and let's wage a long-term media campaign to convince the buying public that the crisis is over so they start spending money again, giving some fuel to our economy."

Flunkie: "But boss, the economy's not getting better, we can't have the media tell outright lies!"

Obama to Secretary of Labor: "What good news can you give me?"

BLS chief: "Uhh... well, actually, we were counting jobs in a really antiquated way before, but with our new statistical analysis, it looks like unemployment is down boss!"

Again, that's fiction. That is not the way it works.

I'll write more later, but right now I'm at work, in one of those buildings where you imagine one of these conversations happening.

The key to understanding is to understand the relationship between the executive branch and congress and, within the executive branch, understanding the relationship between the political appointees and the career civil servants. The administration has the power to set broad policy, but it is extremely constrained in how it goes about carrying out those policies. The administration can't even fire a civil servant without well-documented cause and months, if not years, of effort.

[vinman]

This is a link for Andrew Maguire, a whistle blower for market manipulation by banks.

http://www.gata.org/node/8477

[scorpion]

j r, nothing he's talking about requires some kind of vast conspiracy involving the executive and legislative branch. The President and 95% of Congress are essentially illiterate with complex financial and economic matters, which is why they basically just go along with whatever their people at Treasury, the Fed and various Wall Street and banking executives advise them to do.

It's a fact that the CPI formula was changed years ago to underreport inflation. The excuse at the time was that the old formula was overreporting inflation, and that the adjustment downward was needed. You can read the details of that here: http://www.investopedia.com/articles/07/...z2NRBbtspj

The government unquestionably benefits from a reduced CPI in numerous ways. It saves them billions of dollars on Social Security and pension obligations that are indexed to the CPI number. It keeps up confidence in the U.S. dollar and the markets. It allows the Fed to keeps interest rates extremely low, which has become a practical necessity due to our explosion of debt, which we literally cannot afford to service at historical average interest rates (4-5% vs. < 1% today). So the official CPI number is kept artificially low through the use of (intentionally) shoddy statistical modeling. But meanwhile, prices for goods and services in the real world keep increasing. Since the price of gold serves as an indicator of the objective value of the U.S. dollar (since an ounce of gold is always the same, and has no substitute good) the Fed has an interest in suppressing its price to enhance the perceived value of the dollar.

All government financial policy (and foreign policy, for that matter) revolves around maintaining the hegemony of the U.S. dollar as the world reserve currency. That is the major source of U.S. power in the world and the reason the U.S. has been able to live so far beyond its means for the past several decades since Nixon closed the gold window in 1971. Without the "dollar privilege" we enjoy by being able to sell our paper money to everyone else in the world, we couldn't come close to funding our bloated welfare/warfare state.

[j r]

(03-13-2013 11:38 AM)scorpion Wrote:  

j r, nothing he's talking about requires some kind of vast conspiracy involving the executive and legislative branch. The President and 95% of Congress are essentially illiterate with complex financial and economic matters, which is why they basically just go along with whatever their people at Treasury, the Fed and various Wall Street and banking executives advise them to do.

It's a fact that the CPI formula was changed years ago to underreport inflation. The excuse at the time was that the old formula was overreporting inflation, and that the adjustment downward was needed. You can read the details of that here: http://www.investopedia.com/articles/07/...z2NRBbtspj

The government unquestionably benefits from a reduced CPI in numerous ways. It saves them billions of dollars on Social Security and pension obligations that are indexed to the CPI number. It keeps up confidence in the U.S. dollar and the markets. It allows the Fed to keeps interest rates extremely low, which has become a practical necessity due to our explosion of debt, which we literally cannot afford to service at historical average interest rates (4-5% vs. < 1% today). So the official CPI number is kept artificially low through the use of (intentionally) shoddy statistical modeling. But meanwhile, prices for goods and services in the real world keep increasing. Since the price of gold serves as an indicator of the objective value of the U.S. dollar (since an ounce of gold is always the same, and has no substitute good) the Fed has an interest in suppressing its price to enhance the perceived value of the dollar.

All government financial policy (and foreign policy, for that matter) revolves around maintaining the hegemony of the U.S. dollar as the world reserve currency. That is the major source of U.S. power in the world and the reason the U.S. has been able to live so far beyond its means for the past several decades since Nixon closed the gold window in 1971. Without the "dollar privilege" we enjoy by being able to sell our paper money to everyone else in the world, we couldn't come close to funding our bloated welfare/warfare state.

Like I said, there is plenty of room to debate appropriate methodologies, but this thread is called "Official Lies." These are not lies. CPI computation was changed, because economists believe that the new method is superior to the old method. There are economist who think that the current method understates inflation and those who think it understates.

As for the idea that all policy is about maintaining the hegemony of the dollar, that's not true. There is no one guiding principle behind U.S. policy. And there plenty of people who are agnostic about the role of the dollar as the world's reserve currency.

[Grit]

The problem isn't lies per se. It is dishonesty and self centeredness.

http://en.m.wikipedia.org/wiki/Conflict_...#section_2

A person who has conflict of interest is favoring their personal interest above the interest of their job ( which acts as an extension of constructive society)

Everyone, especially women, has a reason for why they need to secure more resources. "It's for the children!" "I'm going to lose the house!" Etc.

The 'too big to fail' mentality is a direct extension of conflict of interest. You don't want it to fail because it will fuck up your job (as an employee) or make you look really bad (as a politician) or will make you lose your favorite politician (as a gimmedat voter)

There is nothing bad with these mindsets, but CoI is the first step toward corruption.