Guest Post: How To Fake An Economic Recovery

Tyler Durden's picture

Submitted by Giordano Bruno of Neithercorp Press

How To Fake An Economic Recovery

This may be a highly distasteful proposition, but just for a moment, I
want you to sit back, and imagine that you are a member of the
corporate banking elite. You are a walking talking disease ridden power
mad pustule who naively believes himself intellectually superior to the
vast majority of humanity and above the inherent laws of conscience,
honor, and general good taste. You are a villain in the purest sense,
in that you not only do great harm to the world, you actually SEEK to do
great harm to the world, if only to benefit yourself and your exclusive
circle of “friends”; a clan of degenerate blood thirsty sociopaths with
delusions of omnipotence that stalk the night like Armani wearing
Chupacabra exsanguinating the joy from poor unsuspecting cultures. You
are capable of anything, and sadly, you take “pride” in this fact…

You aren’t “rich” in the traditional sense. You aren’t a “Bill
Gates” or a “Donald Trump” (I’m beginning to wonder if Donald Trump is
even solvent, or if his entire fortune is a special-effect courtesy of
NBC). No, you don’t “make” money, you MAKE the money. You are a global
financier. You are a central banker. You create the fiat that the rest
of the country uses to sustain its fantasy economy. You dominate trade
through monopoly and corporate fraud. You control the flow of currency
through an economic system using fractional reserve banking,
artificially pegged interest rates, and your ever trusty printing press.
You put your substantial monetary clout behind BOTH major political
parties, and groom presidential candidates to your globalist standards.
Any politician who desires to climb the ladder of power turns to you
for assistance, not the voting public. You have a tremendous financial
stake in every corporate news provider in the country, if not own them
outright. You invite their top reporters to posh banquets, give them
unlimited access to prominent social figures and high rollers, and fly
them to private alcohol addled orgies in the middle of the California
Redwoods (I wish this was all made up). Forget responsible journalism,
they love hanging out with you, and would probably write whatever you
tell them to.

Now that you have placed yourself in the tight fitting shoes of the
“enlightened few”, I want you to imagine that you have engineered an
implosion in national credit sectors using ultra-low interest rates to
fuel mortgage and derivatives bubbles that would contract at an
unprecedented pace once it is revealed to the wider investment world
that those equities which they prized only days before are now “toxic”,
essentially worthless, due to mass debt defaults on loans which never
should have been made in the first place. Yeah, you’re a real dirtbag.

Of course, you aren’t finished yet! Your ultimate goal is
centralization, and the key to centralization is to remove all options
available to the masses but one; the option which garners you the
greatest amount of dominance. A global economic system based on a
single world currency and a single unaccountable governing body would be
ideal. What would you call this world currency? I don’t know, how
about something innocuous sounding like….Special Drawing Rights (SDR’s),
which you can then label as a mere “basket of currencies” when it is
really a parasitic financial instrument meant to absorb currencies until
it replaces them completely:

http://money.cnn.com/2011/02/10/markets/dollar/index.htm

http://www.rte.ie/news/2011/0214/g20-business.html

In order to begin instituting this world currency, you would first
need to remove the standing world reserve currency from its exalted
position, that currency being the U.S. dollar. This seems rather
impossible to many mainstream analysts who cannot fathom the possibility
of a breakdown in the mighty Greenback, but you have already set the
stage. You have created a progressive debt singularity so immense that
no amount of fiat, no amount of taxation, no amount of austerity could
ever satiate its hunger. You now have the perfect excuse to print the
dollar with wild abandon until its withered, corpsified remains are six
feet underground, leaving the door wide open for the tap dancing
fast-talking SDR to take its place.

The issue is, how do you convince the general public that all is well
until you are ready to unleash hyperinflation and fiscal Armageddon?
How do you make them believe with all their hearts that they are not in
the midst of a debt meltdown and the end of their financial sovereignty,
but basking in a full-on economic recovery?!

You can’t stop wealth destruction now that the avalanche has been set
in motion. You can’t stop inflation and dollar devaluation (nor would
you want to. Hey, you’re evil incarnate, remember?). The effects on
mainstreet are beyond your ability to hide, but, what you CAN
manipulate, are the statistics and indices that Americans rely on for
psychological comfort. You give everyone a blindfold and a cigarette
and you do what you do best; lie!

Here is a step by step guide to fabricating an economic recovery out of thin air….

Don’t Count The Unemployed, Discount Them: Jobless
people are a real downer and a pesky nuisance because they represent
living breathing proof that a recovery is not taking place. By most
standards, a recovery in jobs markets can be claimed if meaningful
evidence shows a return to unemployment standards (normal unemployment)
set before the recession / depression was triggered. If you are a
global banker today, however, this will not due. Instead, you simply
change the definition of “normal unemployment”. Thus, the debilitating
jobless rate which was originally thought of as “bad”, is now thought of
as “natural”. You must then publish long-winded white papers using
more subjective statistics devoid of common sense while feigning a
logical pretense:

http://www.frbsf.org/publications/economics/letter/2011/el2011-05.html

This only satisfies a small portion of the populace, though. Next,
you must rig the manner in which unemployment is calculated to always
overlook certain subsections of jobless. Never count those people who
have been unemployed so long that they no longer receive benefits.
Always count people who are underemployed as fully employed, even if
they are only able to scrape together ten hours a week through part time
McSlavery. After this, change the manner in which raw data on
unemployment is actually collected.

First, the Labor Department derives most of its raw data on
unemployment not through any traditional mathematical means, but through
two separate surveys which are open to wide interpretation; an
establishment survey, and a household survey. The establishment survey
is what we hear about at the beginning of every month, while the
household survey tends to float under the mainstream radar. In 2009 and
2010, the Labor Department deemed the household survey data (a phone
driven survey of 60,000 households) “more reliable” for indicating job
growth, because it was accurate in counting small business hiring and
self-employment. So, you have two separate surveys (unscientific
indicators of employment) combined together to produce a job growth rate
number, and an unemployment percentage, both of which represent, at the
most, a GUESS on the current state of jobs in this country.

While the establishment survey showed only 36,000 jobs created, the
household survey somehow showed around 600,000 new jobs created!?:

http://www.bls.gov/news.release/pdf/empsit.pdf

Basically, the BLS is asking you to believe that over 600,000 people
either started their own businesses, or were hired by home based
businesses in the month of January alone. I’m curious as to where all
the capital inflows are coming from to launch such a revolution in home
entrepreneurship in the middle of the greatest credit crisis in history.
Oh well, if the Labor Department says it’s true, it must be…

The juxtaposition of odd data collection methods is the reason why
the government was able to claim a drop from 9.4% to 9% in the jobless
rate while announcing only 36,000 jobs created! The household survey
has become an incredibly useful tool for generating arbitrary employment
data which can be molded to say whatever government officials and
central bankers want it to say. Anyone who controls the source data for
a calculation controls the outcome of that calculation. It’s that
simple.

What I wouldn’t want, if I was the Labor Department, is for some
outside independent citizens group to monitor my survey methods while in
progress. That would make life for a statistical huckster very
difficult indeed.

As Long As Stocks Are Green, The World Is Golden:
Near zero interest rates can be very useful if a central bank wishes to
throw a tidal wave of fiat into a particular index in order to make it
appear healthy. Certainly, the Fed has avoided admitting to any
manipulation of the stock market. QE measures are all “above the
board”, and all is well in Bernanke’s Mayberry. A question arises here
though that desperately begs to be answered; if the stock market’s
meteoric rise from near destruction to the 12,000 point mark is “real”,
and completely in tune with a legitimate recovery, then why is the Fed
still keeping interest rates at near zero after almost three years, and
why are they continuing quantitative easing measures? Could it be that
without constant liquidity injections from the Fed, the stock market
would once again collapse like a wet paper sack? We know that in 2009,
it was revealed that bailout funds which were supposed to go towards
muting the effects of toxic bank assets were actually being pumped into
the equities of healthy banks instead, meaning,the money has not been
allocated to the areas promised:

http://www.associatedcontent.com/article/1436061/more_shocking_news_on_2009_bailout.html

We also know that top hedge fund managers have openly stated that
stocks will remain bullish because QE funds are propping up the market:

http://www.marketwatch.com/story/tepper-tells-cnbc-fed-will-prop-up-market-2010-09-24

And, frankly, if you are a global banking cartel intent on keeping
the American people in the dark, it makes perfect sense to prop up
stocks. A Dow in the green is like a mass dose of fiscal lithium; it
calms investors into a stupor. Even people who are otherwise
unconcerned about economics will keep track of the Dow as if it is a
solid indicator of their personal financial safety. A great test would
be to observe market reactions to a Federal Reserve interest rate hike
and a freezing of QE in order to counter inflation. Will the Dow stand
on its own two feet then? I seriously doubt it, but then again, I don’t
know that the Fed will ever raise interest rates again…

Inflation? What Inflation?: Unmitigated inflation
spells doom for any society. It’s like some monetary based animal
instinct deep down in our collective unconscious. The moment we hear
the word “inflation” or see prices rise dramatically, we revert to
survival mode and begin honing our mammoth bone battle mallets.
Governments and central banks throughout history have made it their top
priority to hide the effects of inflation from the citizenry at all
costs.

To mask inflation is nearly impossible, especially where commodities
and base goods are concerned. That’s why our government and private
central bank calculate the Consumer Price Index (CPI) without counting
food or energy. Most grains and crude oil have doubled in price over
the past year alone, and this does not reflect well on the safety of the
dollar, or the effectiveness of liquidity measures by the Fed. China,
whose inflation is but a prequel to our own, is also distancing food and
energy price surges from its CPI numbers, giving the false impression
of leveling markets:

http://www.zerohedge.com/article/china-lowers-weighting-surging-food-prices-cpi

Corporate retail chains have a tendency to absorb rising prices of
base goods to avoid alienating their customer foundation, hoping that
the increases are temporary. When retailers realize that prices are not
going to drop back down, they eventually relent, and shelf costs
skyrocket. The bottom line is clear; overall worldwide food averages
were up over 28% in 2010:

http://www.fao.org/worldfoodsituation/FoodPricesIndex/en/

Crude oil prices continue to hover near the $90 mark even though inventories are at a 20 year high:

http://www.zerohedge.com/article/gasoline-inventories-jump-20-year-high-gas-price-surges

The World Bank is now warning of possible disasters (which they helped create) in the wake of “dangerous price levels”:

http://www.reuters.com/article/2011/02/15/us-worldbank-food-idUSTRE71E5H720110215

Our government’s response? Complete denial that there is any
significant threat of inflation. Denial that overprinting of the dollar
and its subsequent devaluation has anything to do with rising prices.
Scapegoating everything from weather, to speculators, to the fake
“recovery” itself for price spikes. The longer they keep the
terminology of inflation out of the mainstream, the less Americans are
likely to prepare for an onslaught of the dollar.

Create Debt To Pay Off Debt: This is pretty self
explanatory. If foreign investors want nothing to do with you, your
explosive national debt, or your depreciating currency, where is your
government going to get the money to continue spending like a drunken
trophy wife at Macy’s? If you default, the jig is up, and no one will
buy your recovery yarns. Instead, print even more fiat and use it to
purchase your own Treasury bonds! This serves two purposes; first, it
props up the federal bureaucracy which gives the impression of stability
(at least for a time), and, it furthers your goal of squeezing the
dollar like a grape.

Remove All Checks And Balances: If you plan on
decimating an economy, you can’t very well have people pointing fingers
at you while you do it. That would be inconvenient. It’s funny, but
for years, ratings agencies like Moodys helped global banks facilitate
the mortgage and derivatives crisis by categorizing worthless assets as
AAA securities. Without them, no one would have invested in such
garbage in the first place, and the banking fraud would have been
immediately exposed. Now that ratings agencies are finally doing their
job and downgrading the creditworthiness of banks and countries that
possess extreme liabilities, the SEC is moving to marginalize them:

http://www.reuters.com/article/2011/02/09/us-financial-regulation-creditraters-idUSTRE7180OD20110209

Interesting that as the U.S. nears a possible credit downgrade, we suddenly no longer care what ratings agencies have to say.

The SEC in itself is one enormous joke, and in no way a practical
overseer of banking activity. The organization has shown itself to be
either fantastically incompetent, or deliberately indifferent to ongoing
financial fraud. I never thought I would find myself agreeing with a
cretin like Bernie Madoff, but according to the middle-weight Ponzi
artist, global banks he dealt with, like JP Morgan and HSBC, had to be
perfectly aware of the scam he was undertaking, otherwise, it could not
have been possible:

http://www.reuters.com/article/2011/02/16/us-madoff-interview-idUSTRE71F0QD20110216

Likewise, the SEC’s complete lack of proper investigation into such
activities turned Wall Street into a globalist playground where much
bigger conmen than Madoff have nested and bred like fleas. It’s not
that the system needs more regulation, or more legal wrangling; this
would accomplish nothing, because the system is regulated by the
criminals! Therefore, new laws can be enacted in concert, and the
government can deem the system reformed and recovered, all while the
underlying corruption remains untouched. If the poison that instigated
the fall of the markets is not uprooted, treachery will continue to
reign supreme, and healthy markets a childish illusion.

The Creeping Terror

Two years ago I was in my local Borders bookstore and noticed that
they had downsized their stock selection by what looked to be nearly a
third. I made a point to ask if this was a chain wide phenomenon. Most
employees I talked with said yes. I then asked if they had begun
cutting employee hours by significant margins and specifically laying
off longtime workers that had built up substantial pay increases.
Again, the consensus was yes. Finally, and most importantly, did
Borders discuss these changes with their staff in a manner that was
informative and open, or, was there a lot of confusion amongst employees
as to what exactly was going on? The response was that they were
overwhelmingly bewildered by Borders’ lack of clear communication as to
the direction of the corporation.

My suggestion to them was to start looking for another job, because
their company was about to declare bankruptcy. They, of course, denied
this was remotely likely:

http://online.wsj.com/article/SB10001424052748704329104576138353865644420.html

It may sound like a stretch, but the reason I bring up Borders’
impending chapter 11 is because, to me, it represents a microcosm of the
creeping nature of economic collapse, especially when that collapse is
being wielded and delegated. [TD: Borders filed for Chapter 11 this morning]

Borders has been on the verge of default for quite a while. Did they
refuse to relay this information openly to their employees because they
selfishly wanted to maintain profit margins just a little longer until
they were ready to pull the plug? Of course! Do global bankers with
aspirations of a centralized currency keep the true destabilization of
the market spectrum and the coming international dollar dump to
themselves because in the end they will benefit from our shock and awe?
Of course!

Whether a person loses everything all at once, or a piece at a time,
the end result is the same, however, there is something especially cruel
in the idea of fiscal theater; the act of inspiring false hope that a
financial environment is sound when it has, in truth, already
suffocated. Why would our modern day robber barons put so much energy
into constructing a fake recovery? There are many reasons, but first
and foremost, to create apathy. To lure us towards inaction. To
swindle us into assuming the storm will blow over, and all will return
as it was. Unfortunately, recovery without intense restructuring of our
economic system is impossible. The fundamentals do not support the
suggestion in the slightest. The question is, who will be at the helm
when the dust settles and this restructuring does eventually occur?
Will the American people take the lead, as they should, and commit to a
concrete free market rejuvenation of our financial environment? Or,
will we sit back yet again, and let the banksters set us up for the next
grand disaster?