Guest Post: The U.S. Economy Is Now Dangerously Detached From Reality

Tyler Durden's picture

Submitted by Brandon Smith from Alt-Market

The U.S. Economy Is Now Dangerously Detached From Reality

Recently I was asked to give a presentation on the current state of the global economy to a local group of concerned citizens here in Northwest Montana.  I was happy to oblige but when composing my bullet points I realized that, in truth, there were no legitimate economic numbers to examine anymore.  You see, financial analysts have traditionally used multiple indicators of employment, profit, savings, credit, supply, and demand in their efforts to divine the often obscured facts of our financial system.  The problem is, nearly every index we used in the past, every measure of capital flow and industry, is absolutely useless today. 

We now live in an entirely fabricated fiscal environment.  Every aspect of it is filtered, muddled, molded, and manipulated before our eyes ever get to study the stats.  The metaphor may be overused, but our economic system has become an absolute “matrix”.  All that we see and hear has been homogenized and all truth has been sterilized away.  There is nothing to investigate anymore.  It is like awaking in the middle of a vast and hallucinatory live action theater production, complete with performers, props, and sound effects, all designed to confuse us and do us harm.  In the end, trying to make sense of the illusion is a waste of time.  All we can do is look for the exits…

There is some tangible reality out there, but it is difficult to find, and there are few if any mainstream numbers to verify.  One has to remember always that the fundamental world of money and trade revolves around real people and real circumstances.  No matter how corrupt our economic system is, as long as there are human beings, there will always be supply and demand that cannot be hidden.  We have to look past the “official numbers” and look at the roots of trade.  Where has demand fallen?  Where has supply diminished?  Where are the tangible goods and needs and how have they changed?

Let’s first start with the mainstream version of our system, looking at each aspect of the economy that no longer represents the truth of our situation…

Employment, Savings, And Debt

Much of this information is old news to those of us in the Liberty Movement, who tracked the progress of the global collapse long before the general public even knew of its existence.  However, it is useful to take a step back and look at the basic picture every once in a while. 

According to numbers issued by the Department of Labor, weekly unemployment reports have dropped to a five year low, and the overall employment rate is holding at 7.9%.  This would seem to be a vast improvement over the dreadful bloodletting in the system only a few years ago.  Has the private Federal Reserve and the Obama Administration really done it?  Have they turned back the tide on the greatest fiscal crisis the U.S. has seen since the Depression?

No.  They haven’t. 

They have only changed how the data is disseminated to the public. In order to understand how the employment statistics con is being engineered, it is important to understand the difference between “Adjusted” and “Unadjusted” numbers.

Labor Department data is “seasonally adjusted”, using a series of statistical assumptions including something called “Trend Cycle Analysis”.  Trend Cycle Analysis is, basically, a sham, but a sham put together in a very complex and confusing manner.  If you ask a mainstream economist what it is, you’ll likely get a three hour long dissertation filled with financial babble and very little concrete explanation.  So let me break it down as simply as I can…

Imagine that you are going to estimate how much profit you plan to make in a particular month, but you don’t just consider your current pay rate and pop it into a calculator; you also throw in the possibility of a few pay raises, an inheritance from a grandma who might kick the bucket, and, your exaggerated expectations of the entire year’s profit on top of that.  You may also take into account future bad weather, a mugging, a nuclear war….whatever.  All hypothetical situations not based in reality.  Basically, you decide that a particular trend in your income is inevitable, then, mold your statistical analysis around that assumption.      

When your real profit numbers come in (the unadjusted numbers) and they do not meet your expectations, you simply change them according to what you believe SHOULD have happened.  If you insist that your profits are going to go up for the year, and they go down for a couple months instead, you change the variables you use to calculate the statistical average so that the results match your expectations, assuming that it will all balance out in the end.

Now, this sounds utterly insane for the common person out there trying to make a living.  If you ran your household this way, without accepting the cold hard unadjusted numbers in front of you, you’d find yourself broke and on the street in no time.  Unfortunately this is EXACTLY how our government handles most financial data; by coming to a final conclusion before hand, and then forcing the numbers to fit that conclusion.

This is why in February of 2013, “adjusted” first week unemployment rate was reported at 366,000 – a 5000 person drop from the week before.  A seeming improvement in the trend.  But, unadjusted numbers came in at 386,176 – a 16,000 person spike from the week before.  When one examines real unemployment numbers, he finds that the divergence between the adjusted and unadjusted statistics is growing larger with each passing quarter.  That is to say, the contradiction is becoming so blatant between the hard numbers and the Labor Department’s fantasy numbers that one must question whether or not the government is lying to us outright about the state of the economy (hint – they are lying). 

These same methods are used by the government to calculate progress in the housing market, disposable income, etc. 

The claim of “recovery” in the jobs market simply doesn’t jive with other indicators, like 2012 Christmas retail, which had the worst showing since the crash in 2008 (and these are still mainstream numbers!):

Average household savings continue to scrape the bottom of the barrel, indicating that the public is not spending or withholding cash.  They are simply broke:

And the overall GDP of the U.S. contracted in the fourth quarter of 2012 for the first time in three years (again, according to official numbers, meaning the reality is much worse):

The downturn in consumption and industry also seems to be supported by the Baltic Dry Index, a measure of global shipping and rates.  The BDI has fallen to near historic lows THREE TIMES in the past year, which to my knowledge, has never happened before.  In the past, the BDI has been a strong prophetic indicator of future market volatility.  Usually, around a year after a severe decline in the index, a dangerous economic event takes place.  The BDI made its first sharp drop to all time lows at the end of January 2012, exactly a year ago. 

U.S. household debt was recently reported to have fallen to a 29 year low, but the ratio used by the Federal Reserve applies a statistic for disposable income that is derived from the Trend Cycle boondoggle method.  While markets cheer, the truth is, the only reason household debt obligations have fallen at all is because bank lending and credit issuance remains frozen.  Consumer debt falls when there is no money to borrow.  In fact, the Federal Reserve actually pays large banks NOT to lend to the public; an activity which was exposed by Dennis Kucinich in 2009 on the House Committee on Oversight and Government Reform.  An activity that continued through 2012:

Keep in mind, one of the primary arguments the Federal Reserve used when promoting the bailout concept was that it would “free up credit markets” so that lending could pick up again and fuel a recovery, and yet, at the same time, they were paying banks to NOT lend.

Meanwhile, the supposed job recovery has produced an astonishing increase in welfare recipients in the U.S., including a record 46 million Americans on foodstamps (approximately 15% of our population):

If we are to apply any “trend” to our calculations on overall economic health, then we should include the extreme level of government handouts, and poverty levels which are now at all time highs.  The facts are undeniable; the number of people who have much less than they did in 2008 has grown.  How then could the U.S. be considered “in recovery”?

National Debt And The Fiat Lie

With the Dow Index hovering near highs of 14,000 our system truly looks to be on a rocket ship to pre-2008 money market bliss.  In a mere five years we have returned to equity spikes that stagger the mind and the wallet.  At least, that’s how it all appears…

What needs to be taken into account, though, is the amount of fiat money being created by the Federal Reserve, and how much of that printed pixie dust currency is fueling our magical flight to Neverland.  Since 2008, our official national debt has increased from $10 trillion to $16.4 trillion, and some estimate $17 trillion to $18 trillion by the end of 2013 (unless, of course, a collapse occurs).  Which means our national debt, which took decades to reach the $10 trillion mark, will have nearly doubled in only six years! 

So, what has a doubling of our national debt in such a short span of time bought us?  Well, credit markets remain frozen, property markets remain stagnant, poverty is at historic levels, welfare recipients are at epic highs, and consumer activity and GDP is back at 2008 lows.  Where did all that printed money go?  Where was it spent?  To answer that question, we only need to find what area of the economy has seen the most positive (or fantastical) activity.  What sector is seeing a massive boost while the rest tumbles?

I suggest that a large portion of QE1 through QE3 has gone to prop up the stock market, and nothing else.  I suggest that American taxpayers are fronting the bill for the equities bonanza we see today.  I suggest that the Dow is being used as a Red Herring to distract the populous for as long as possible while real assets are being snapped up and hoarded by international banks and foreign entities.  I suggest that we are being leached dry and that the parasites are almost ready to move on…

When will it all end?  Perhaps sooner than many people think.  The decision by D.C. to delay talks on the so-called “Fiscal Cliff” until March may not be coincidence.  Extensive cuts in federal spending are absolutely necessary and cannot be dismissed forever, but, because the last vestiges of our system that still operate do so through government money, such cuts will cause immediate damage to the economy, including possible default and dollar devaluation.  Refusal to make cuts will result in credit downgrades, currency inflation, and a loss of the greenback’s world reserve status.  There is no “right” way out of this quandary. 

When this collapse is initiated, it would certainly behoove all parties involved, including central banks, international banks, and criminal politicians, to have a scapegoat handy for the citizenry to direct their rage at.

Event Horizon Economics

An “Event Horizon” in physics is a moment or singularity in spacetime at which a gravitational pull becomes so great that there is no way to escape it.  It is a point of no return.  I believe America’s economy has reached its own Event Horizon.  Our system is now entirely fiat driven, with very little or no true economy left.  Without constant injections from the Fed, and perpetually low interest rates, the country would implode tomorrow.  This is not recovery.  Actually, I’m not sure what to call it. 

Today, independent economic analysts cannot look to the numbers to determine future trends.  Most are fake, and the rest are ugly, and I’m not sure much else can be said in their regard.  Instead, we must now look to events, rather than statistics, because our country has been maneuvered into a position of utmost frailty.  Like an avalanche shelf waiting for that perfectly timed disturbance to trigger its roaring collapse.  All that is needed is a macro-crisis, and it is no great feat for such a thing to be created in our tension filled global environment.

War in Syria and Iran leading to a tripling of energy prices.  Sanctions and strife with North Korea leading to Chinese economic retribution.  Conflict between China and Japan, again leading to Chinese economic warfare and perhaps real warfare.  An opportune “cyber attack” which could be used as an excuse for a market crash and even an internet shutdown.  A “political impasse” between Reps and Dems which leads to a default of U.S. credit.  Any one of these catastrophes could easily occur (with a little nudge from some well placed people) and feed a wider global tragedy.  The important thing to remember is that while this event will be blamed for the breakdown, it was international banks, the Federal Reserve, and elements of our own government that made the domino effect possible.  They put the pieces in place.  The act that knocks them over is secondary.

I have spent the past seven years writing about “potential” threats to our overall system, but these dangers were always just beyond our sight.  Just around the corner.  Today, it is as if the journey is over, and all those threats have materialized right before my eyes as real, and imminent.  I am watching that which I warned of come to fruition, and this is certainly not a pleasant thing.  What is valuable, though, is what we have all done in the Liberty Movement with the time that we had.  From when I began writing for the movement until now, I have seen an overwhelming increase in public awareness.  It may not be obvious to newer activists, but it is there all the same.  While we still face disparaging odds, and millions upon millions of oblivious bystanders, there is, amidst these darker moments, a steadfast community of free men and women forming.  I have full faith in the future.  Much more so than I ever did before.  Our economy may be detached from reality, but our endeavors as individuals will not be.  Our resolve will be the great game changer.  Not fiscal calamity.

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dick cheneys ghost's picture

Wrong you are. Very important to know what happened and what/who caused it. Thru out history the joos have rewritten the history books to blame their actions on someone else. We cant and wont let the jooz get away with it this time. DEBTMONEY will be blamed on the joos, 12 yr long trillion dollar wars will be blamed on the joos and hollywood propaganda will be blamed on the jews.

SeattleBruce's picture

dick cheney's ghost: "Thru out history the joos have rewritten the history books to blame their actions on someone else."

Wow, really?  Please elaborate 'ghost'.  I'm sure it's only the Jews who are evil and dishonest and no other people from any other race and religion - ever.  Do we really have to explain how crazy, juvenile and assanine that sounds?

"12 yr long trillion dollar wars will be blamed on the joos and hollywood propaganda will be blamed on the jews."

Uh huh, and no one else, no other power, was trying to secure oil channels, and certainly no muslims have anything to do with any of the violence either?  Things are just slightly more complicated than 'joo this, joo that...'

kito's picture

gotcha adolf sawyer.....

Nostradalus's picture

     can I make an objective comment re: "da jooz"? it is NOT "da jooz" per se. that would be like condemning the american people for the crimes of its "leaders". no sirree bob. the distinction is that it is the "israeli gummint" that commit all these atrocities in the names of their people. the jew on the street is just as propagandized as the typical american on the street. and the iz .gov beats the shit out of jews that protest policy. i believe there isn't an "honest, caring, beneficial" .gov on the entire planet. any thinking person would already understand that tho...

hope this helped someone here to understand the difference.

PS oh yes, we have a grand list of all the traitors to humanity that should be "acted upon" at the appropriate time. and we will...

SeattleBruce's picture

francis_sawyer: "You're SERIOUSLY going to question whether or not MSM is controlled by joos?"

Four suggestions Francis:

1) Don't listen to/promote/support the MSM, nor the banking/financial system, as legitimate, - whoever controls them (is it controlled by liberals, Jews, women, men, Kalifornians, New Yorkers, Kenyans, globalists, bankstas, silver spoonsters, skull & bonesters...)??  Whatever the case, these 'institutions' are messed up and support the idiotic political/economy status quo.

2) Failing that, employ somone of your race (what is it?) - I bet your NOT advocate like Jesse Jackson and Al Sharpton do for blacks in the sports leagues and in other scenarios - but within the MSM and the financial system for more ownership, control, event representation in it by people of your 'holier' tribe (clearly you're holier and more pure than Jews) - say for Polish or Welsh, or Italians, or Norwegians, or Ukrainians - or whatever the hell you are.

3)  Get ready for the implosion and reset. You know stack phys gold and silver, buy/work farmland, et al.

4)  Quit going on ad naseum about who controls what based on race/religion.  There are thousands of races and religions in the world.  There are an estimated 25,000 people groups (think tribes) in the world.  We know the world's screwed up, or we wouldn't be here examining the economies of all races and peoples on the earth here, everyday.  If the Jews have disproportionate representation, power, ownership to their numbers, maybe a lot of them worked really hard or had advantages based on their upbringings, or perhaps they do a great job of hanging together as a community, and maybe you and your tribe should get off your asses to make more of a difference for your 'holier' tribe.  Oh, and did I mention there's an economic/monetary reset coming?  Here's your opportunity - and perhaps in 100 years, we'll be moaning about those evil Francis Sawyer-ans...

Just sayin'...

tango's picture

Kito, No sane person obsesses constantly about ethnic or religious hatred.   It's collectivism 101, medieval and silly.  But it had to be taught and almost surely it came from a religious perspective. Hindus or Buddhists or Shintoists don't give a rat's ass if someone is Jewish. As an atheist I have never understood the Christian hatred for Jews when their supposed god was a Jew and they use Jewish scripture in their Bible.  I try to avoid such folks because almost certainly hear will be spouting illuminait,  aliens, the Vatican plot or pyramid power. 

willwork4food's picture

I have never experience modern Christian hatred for Jews. From what era are you referring? Most Christians these days not only support Jews, but financially support a Hagge type spiritual movement.


tango's picture

Chances are (1) you are not a Jew and (2) you don't associate with many.  Until very recently, Jews were banned from colleges and sports teams in the US.  They are still banned at some of the unenlightened country clubs.   The idea of Jewish integration withing "Christian" society is a recent phenomenon and as Europe shows, very tenuous.   Those "evil Jews" ideas taught to kids seem to emerge at the slightest opportunity (look at the wet dream excitement of those who strive to include Jewish condemnation in every post regardless of its idiocy).  Ingrained ideas - religion, sex, work habits, entertainment - are the most powerful.  

SeattleBruce's picture

Tango, I think most of what you're referring to - 'Christian hatred of Jews', pogroms against Jews, et al, were power struggles by power players that aligned with Christians and used circumstances to fan flames against Jews.  That said, there is no Christian tenet ever taught that would support pogroms against differing races or religion.  In fact, quite the opposite.  People have misapplied the Chronicles and histories of the Old Testament in attempts to justify violence and slavery and such.  But there are many examples in fact in the OT, of 'gentiles' being grafted into the Jewish community (e.g. Rahab).  One of the bad marks against Luther was his anti-semitic references, which may have been used by some to justify violence against Jewish minorities.  But this is no different than any tribe justifying violence against other tribes or minorities, and such has also been done in support of the 'atheist' tribe - if you look at what the secular atheists did to religious folk in Russia and China, for instance.

Such power players attempt to justify such actions in pursuit of raw power in the name of religion (or say in the name of Christianity) - but this is no tenet of Christianity, I'll say that, and those 'christians' are horrible examples of Christians, if they ever were Christians at all.  As were those atheists poor example of caring atheists, if they knew what such were.

tango's picture

Seattle, most Christians (like my friends) are good. But I am struck at how often posters engage in this religious/ethnic ranting.  It's actually a long continuum in Christian culture and rises during times of problems ("let's blame somebody for our mistakes"). My point: the root of this irrationality is religious teachings.  People don't naturally hate others unless they are taught to do so.  Marxists did not slaughter tens of millions due to atheism. They did so because they were sickos who put ideology over peoplel  Take care. 

SeattleBruce's picture

My response was not a ranting, but a response to your comment: "As an atheist I have never understood the Christian hatred for Jews".  What you say, is a broad generalization - 'the Christian hatred for Jews' - implying it's part of the philosophy of Christianity.  My response is a bid to say, it's not.  I also took pains to say that the massive killing by atheist movements in Russia and China do not represent all atheists.  That's my point about both philosophies.  Just suggesting we back off the generalizations.  And here's another one of yours: "My point: the root of this irrationality is religious teachings."  How is that not a complete generalization?  Are saying the golden rule doesn't have applicability to atheists...or that efforts toward selflessness don't have a place there?!

Raymond Reason's picture

Hindus, Buddhists adn Shintoists have not been a Jewish target...yet.  Christians are public enemy #1 to the Jews, and always have been, for one obvious reason.  The Christian religion specifically condemns Jews (but you wouldn't know that because you're not a Christian).  Of course that teaching has been modified in recent history in American churches. 

tango's picture

Well, I guess Christian condemnation of Jews is exactly what Jesus would have liked since he was...a Jew.   The fact that Christianity "specifically condemns Jews" is only one more reason I'm glad I am not a believer in such nonsense. 

Raymond Reason's picture

The condemnation and vilification of Jews come exactly from Jesus. 

tango's picture

Yeah, that's what Jesus taught - hatred of others.  

SeattleBruce's picture

"The condemnation and vilification of Jews come exactly from Jesus. "

Jesus condemned washing the outside of the cup, without cleansing the inside.  He condemned Jewish leaders, and others (sinners of all stripes) that were hypocrites ("You brood of vipers!")  He did not condemn and vilify Jews.  You're wrong there.

MedTechEntrepreneur's picture

Sawyer et al are just goyim who dont realize that their Joo conspiracies just make them look stupid.  I mean arent they smart enough to prevent the Jooo from obtaining this secret power?  I guess not!  We cant outsmart the Joo so we will HATE him...fkin losers.

dick cheneys ghost's picture

nothing to do with knowledge, the joos have no morals/ethics. thanks to the internet, we know what their crimes are. they cant rewrite the history books anymore.

CH1's picture

the joos have no morals/ethics.

Translation: Pay attention to me!!!!!!!!

tango's picture

You win the Dumbass of the Year award.  First, it's "Jew" not "Joo" (learned first grade).  Second, assigning group values ("all blacks are lazy", "all Indians are poor at sports", "all Hispanics are stupid") is the argument of those unable to make a rational arguement.  And third, "thanks to the internet" you know their "Crimes".  Fortunately, You Tube videos or web comments by those living in Mom's basement do not qualify as "proof" of anything except the gullibility and ignorance of those who prefer outlandish nonsense to critical thinking.  Have a nice day 

CH1's picture

poor francis----hes got JOO fever.........

I've got 50 bucks that says he works for Sunstein.

tango's picture

I'd bet he had some of that tainted blood because everyone knows that over the past million years all blood lines have remained pure as snow.  LOLOL

Squid Vicious's picture

I would wait for a clear break-out above $280 to confirm the uptrend...

Rusty Shorts's picture

...and I'm 80% horse.

ISEEIT's picture

The odds are against us in the near term...But inevitably in our favor in the long term. That or the entire planet goes North Korea style ( what they hope for).

knukles's picture

Take a look at the latest cover of the Economist
Headlining a brand new better living conditions, more freedom, better food, etc., North Korea.  Aka, the Leviathan, the NWO works.  All's changing for the better.

lakecity55's picture

I'm waiting for articles to appear in pravda that the Norks have it really good, and we should be like them.

Kitler's picture

I'll place 50 bucks on fiscal calamity.

TheMerryPrankster's picture

I'll take fraud for 500, alex.

Motorhead's picture

Wait till they start blaming more shit on the current winter storm.

Debeachesand Jerseyshores's picture

Why did you think they gave this Winter Storm a name (Nemo)? So they can inprint that name (Nemo) in every dingyberry's brain to justife every piece of shit economic news coming from the BLS etc.

They blame everything possible in the 4th Quarter on Superstorm Sandy including the miserable GDP number for the 4th Quarter.

And don't get me started with another blast of BullShit coming from Climate Change demented AssHoles about Winter Storm Nemo.

knukles's picture

North Eastern Meteorological Omen


Come on boys and girls, it's subliminal messaging time!
Omen, as in bad shit befalls those who do not believe and support the Leviathan and it's Perceptions Managed Upon You.

I love Big Brother.
Good Bye.

lakecity55's picture

I for one welcome our new storm overlords.

Motorhead's picture

Yep, it's no longer "global warming"'s "CLIMATE CHANGE".

In a minute, I'm gonna go affect the climate here at the house by taking a massive dump.  How's that for climate change, al-Gore?

ebworthen's picture

CNBC ran a story friday:

"Economists predict buying ahead of storm Nemo could offset loss of sales because of Nemo."

What next geniuses?

"Economists predict sales this Saturday may offset sales on Sunday."


"Summer's increased sales of air conditioners and fans to offset sales in the dead of Winter."


knukles's picture

The best shopping day to come will be the day before yesterday.

TheMerryPrankster's picture

Must use precison economic term when referencing data "unexpectedly" or "surprizingly"

"Suprizingly, the best shopping day to come will unexpectedly be the day before yesterday."

More after this break.

Lies, damned lies, and government statistics, - Bernanke's 3 point, economic recovery plan.


NidStyles's picture

Gah, I really wish they would quit references economists with this nonsense. It's bad enough the talking heads pretend to have a clue, but when they attribute nonsense to economists it's even worse.

NidStyles's picture

What is this "NOW" stuff? You have 310 Million people running around chasing slips of paper FFS.

disabledvet's picture

it all starts...and ends...with prices. the goal seems simple enough. according to the Lords of Economic Elixir "as long as prices do nothing but go up" all is well. Once "the Price is Wrong" however...then "it's time to get to work and kill this thing." it's not easy to be "commanding the heights of the economy" you know. what if what you're doing is all wrong?

palmereldritch's picture

Had they only hooked up the Titanic's passengers in steerage to the same two-bit grifter hologram. Things would have been less messy

willwork4food's picture

True dat...s'why I always take the blue pill. With some good beer.

ziggy59's picture

The worst part is that the sheeple will bleat even after being fleeced another ( x+1) time AGAIN, and the very same basTURDS and corrupt will claim, ignorance and couldnt see it coming.

PAWNMAN's picture

What even scarier is the rush to disarm the public at the same time the fuse has been lit on the global economy. Coincidence? I think not!

Clowns on Acid's picture

This article is way soon as Obama won his 2nd term... the US "en todo" was completely detached from reality.


falak pema's picture

the USA was detached from reality from 1991 onwards; when NWO began and they started to park all their industry in China; all the while pulling on the fiat debt pump and going into deregulated oligarchy construct bigtime. 

The rest is cause and effect...

prains's picture

because  what his face from the GOP was gonna change the whole plan for the better..........riiiiiiiight??????