This page has been archived and commenting is disabled.

Economic Metrics Are Now Used As Political Tools

Phoenix Capital Research's picture




 

 

It’s now clear that the spate of positive economic data coming out of Europe prior to the German Federal Election in September 2013 was just political gaming to get Angela Merkel back into office.

 

The reasoning here is obvious: Merkel has walked a tightrope act between appearing to play “hardball” with bankrupt EU nations while effectively writing every check needed to keep the EU project together.

 

Consider that the alternative to Merkel was a completely anti-Euro party that wanted Germany out of the Euro, it’s fairly obvious who EU-leaders would be supporting during this election.

 

Germany's exceptionalism is obvious. Whereas electorates across the European Union have punished their governments for the Great Recession and the euro crisis, Germans re-elected Chancellor Angela Merkel and displayed strong support for her party, the Christian Democratic Union (CDU), in the recent election

 

Elsewhere, populist anti-European parties of the right have been gaining ground with campaigns directed against immigrants and minorities, especially Muslims….   Germany, by contrast, has no anti-European party with any serious support. Even the newly formed Alternative for Germany – which did unexpectedly well in the recent election, finishing just short of the 5% threshold needed to enter the Bundestag – insists that its anti-euro agenda is not anti-Europe. They want to end the common currency, because, in their view, it is undermining the European ideal. 

 

http://www.europeanvoice.com/article/2013/november/falling-for-germany/78619.aspx

 

Merkel’s Germany is effectively the glue holding the whole EU mess together. And it is not surprising that those EU-political leaders (PMs in Spain, Greece, Portugal, etc) in danger of being ousted by anti-Euro parties in their home countries are exceedingly “pro-Merkel.” No Merkel= no Euro = no more political career for most of this crowd.

 

Note in the below article how the improvement in unemployment for August was revised down after Germany’s elections.

 

The unemployment rate across the 17-country eurozone hit a record 12.2 percent in September, with about 19.5 million people classed as jobless by EU data agency Eurostat.

 

Thursday's figures showed the August rate had been revised up from 12.0 percent to 12.2 percent…

 

Analysts said the "revising away" in August of previous falls dented hopes of the labour market having bottomed out.

 

http://www.france24.com/en/20131031-eurozone-unemployment-hit-record-122-september

 

Economic data can be and is commonly used as a political tool. The EU is just the latest example of this. In the US we’ve seen this same game played out using GDP numbers.

 

The reason for this is that all “adjusted” GDP data involves a “deflator” metric that is meant to adjust for inflation. The Feds often use an inflation adjustment that is even lower than their official Consumer Price Index metric (which is already massaged to downplay inflation) in order to make GDP growth look greater.

 

Consider this simple example. Let’s say that the US GDP grew by 10% last year. Now let’s say that inflation also grew by 10%. In this scenario, real inflation adjusted GDP growth was ZERO.

 

However, announcing ZERO GDP growth is a major problem politically. So what do the Feds do? They claim that inflation was just 8%, and BOOM you’ve got 2% GDP growth announced for a year in which real GDP growth was actually zero.

 

Using nominal GDP, it’s clear the US is back in recession as the year over year change has brought us to a reading of sub-4. Every time this has happened in the last thirty years the US economy has been in recession.

 

 

Economic metrics have become effective tools for political propaganda. Don’t fall for them.

 

For a FREE Special Report outlining how to protect your portfolio a market collapse, swing by: http://phoenixcapitalmarketing.com/special-reports.html

 

Best Regards,

 

Phoenix Capital Research

 

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sun, 11/17/2013 - 13:36 | 4162616 Peter Pan
Peter Pan's picture

My favourite quote is as folows:

Say you were standing with one foot in the oven and one foot in an ice bucket.  According to the percentage people, you should be perfectly comfortable.  ~Bobby Bragan, 1963

Sun, 11/17/2013 - 10:22 | 4162211 Stuck on Zero
Stuck on Zero's picture

May I be permitted to enlarge on this title:

Economic Metrics Are Now Used As Political Tools

Absolutely Everything has Become a Political Tool.

 

Sun, 11/17/2013 - 01:33 | 4161890 TNTARG
TNTARG's picture

They send the kids to the universities to teach them how to keep the show going on and on and on and on and on...

Funny thing is so many start to worry about putting their children into the "right path" since kindergarden...

I'm wondering how TPTB are gonna figure it out with the Fukushima mess.

 

Sat, 11/16/2013 - 23:17 | 4161712 steveo77
steveo77's picture

 eff the effen effers

Sat, 11/16/2013 - 20:17 | 4161368 no more banksters
no more banksters's picture

The self-reproducing language of economic cynicism

http://failedevolution.blogspot.gr/2013/09/the-self-reproducing-language...

Sat, 11/16/2013 - 19:15 | 4161236 4 wheel drift
4 wheel drift's picture

oh my dog....  please report something that is news....  

 

ekonomists.....   modern day voodoo priests to cover for the liars that politicians are....    make things appear complicated when they are not....  at least not THAT complicated.....

 

i hope the entire system collapses so the entire pack of hyennas are sent to the salt mines to pay for their lyinf sins....

 

btw.....  fuck obama the liar of the young century

Sat, 11/16/2013 - 18:55 | 4161188 logicalman
logicalman's picture

Economic metrics have always been used politically.

One line of bullshit I remember is Margaret (witch) Thatcher closing coal mines that were being subsidized, because 'subsidies are bad'

She then bought coal from Poland (much larger subsidies)

This is not a comment either way on subsidies (not a good thing IMHO) but on hypocricy and metrics.

Her goal was the destruction of communities where people helped each other in times of need and weren't dependent enough on government, and thererfore controllable.

In Sheffield, in the 80's there was a joke.

She did more damage to the city than Hitler did (He tried to bomb it off the map)

Sun, 11/17/2013 - 03:38 | 4161990 PT
PT's picture

Who hires the economists?  Who promotes the economists (to the detriment of other economists)?  Who chooses which economists to publicize on MSM?  Economics is propaganda.

(Apologies to Steve Keen et al.  Maybe I should say that MSM Economics is propaganda.) 

Sat, 11/16/2013 - 23:07 | 4161697 0b1knob
0b1knob's picture

The whole global warming scam dates to Thatcher's coal dispute.   

Sat, 11/16/2013 - 17:11 | 4160976 0b1knob
0b1knob's picture

In Soviet America Statistic mean "State is TIC"  wher TIC is acronym for "tongue in cheek".

Sat, 11/16/2013 - 19:16 | 4161241 4 wheel drift
4 wheel drift's picture

poli - ticks

 

poli = many

ticks = flesh eating insects

 

fuck them all

Sun, 11/17/2013 - 01:02 | 4161845 bonin006
bonin006's picture

They don't eat your flesh. They just suck your blood and give you nasty diseases.

Sat, 11/16/2013 - 21:07 | 4161489 ThirdCoastSurfer
ThirdCoastSurfer's picture

Stacks of actors, stacked to the rafters, line up all the bastards all I want is the truth -Foo Fighters

Sat, 11/16/2013 - 17:12 | 4160965 lasvegaspersona
lasvegaspersona's picture

One should consider why the Euro was created.

Some believe that it was made to act as a medium of exchange should (when) the dollar fails.

From this point of view the euro seems to be fulfilling it's role well. It survives, without all the debt burden that the dollar has AND, in the entire EZ there are 10,800 tons of gold, all of which is on the balance sheet of the ECB. This gold is marked to market and so as the dollar goes to zero the value of this asset (gold) goes to infinity in dollar terms. This gives the euro enormous structural strength in a dollar failure scenario.

All the EZ has to do is wait and behave just a little (ie they can't print madly). At the end of the day they come out with a strong currency and the world is not forced to use gold as a medium of exchange.

This is all from a freegold perspective. It is different that the one  you usually see here at ZH but I believe it is a superior perspective.

Sat, 11/16/2013 - 17:04 | 4160952 Boris Alatovkrap
Boris Alatovkrap's picture

AmeriKa is report inflation in 1990s, oops, house is expensive (is happen when artificial create of housing bubble for securitization of mortgage REMIC) so remove from CPI. 2000s, fuel is expensive (is happen when wage war in many oil production country), so remove from CPI. In 2009, food is get expensive (is happen when Federal Reservation is dilute dollar 4 to 1 to bail out addictive gambling exotic derivative criminal class), so remove from CPI.

What hell is CPI in Amerika now, cost of Nike running footwear and iPhone!?

Sat, 11/16/2013 - 19:01 | 4161205 logicalman
logicalman's picture

It's whatever number will keep the masses from getting upset.

They don't actually calculate it, in any other sense.

If you don't eat or drive, then inflation is low, but at that point you must be dead, so inflation is not all that important to you.

There's Alotovkrap out there, good that you do your bit to point it out.

Sat, 11/16/2013 - 23:04 | 4161691 Boris Alatovkrap
Boris Alatovkrap's picture

Boy, is lot of krap, for sure.

Sat, 11/16/2013 - 23:20 | 4161717 TheFourthStooge-ing
TheFourthStooge-ing's picture

I am see what you are do there. Is clever.

Do NOT follow this link or you will be banned from the site!