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The One Chart That Negates EVERY Fed Speech or FOMC Minutes
By basing the whole “recovery” argument on fraudulent data, the Fed and Federal Government have backed themselves into a corner.
After all, anyone with a functioning brain knows that the unemployment data, and, GDP growth data are massaged at best and totally bogus at worst. The Fed printed $4 trillion and the US Government spent another $11+ trillion over the last six years. And we've still got the weakest recovery in 80+ years, assuming it's a recovery. At all.
All this does is confirm one of two things:
1) None of the people in charge of steering the economy have a clue what they’re doing …
Or…
2) The whole thing was in fact a giant lie used to cover up the fact that none of the money was spent to try and generate economic growth.
How do we know the US is not in recovery? It’s really quite simple. If it were, the Fed wouldn’t have any issue with raising rates. Take a look at the below chart. Every other recession going back to 1954 saw rates begin to rise a few years into the recovery.
Here’s our latest “recovery.” We are now five to six years into it and rates are effectively at zero. The old adage says “actions speak louder than words.” You could literally skip all of the Fed FOMC minutes, speeches, and Q&A sessions. The below chart is exponentially louder than anything Yellen or the other Fed leaders could say.
The Fed and Feds can talk about recovery all they want. But it’s just talk. If the US was truly in recovery, interest rates would be rising.
So… if the money wasn’t spent on creating growth, why was it spent?
To stop the bond bubble from blowing up.
The bond bubble was $80 trillion going into 2008. Today it’s over $100 trillion. The US had $5 trillion in public debt going into 2008. Today it has over $18 trillion.
Part of this money went towards expanding the already bloated government with endless programs and social spending. But a significant portion of it went towards rolling over old debt. The US never had an extra $5 trillion lying around to pay off its old debts to begin with. And so it has been issuing new debt to cover for old debt that was coming due.
Indeed, between October and November of last year, the Federal Government issued $1 trillion in new debt… because it didn’t have the money to pay back old debt that was coming due. That’s just $1 trillion. Total US debt is above $18 trillion.
There is no recovery. There is only the bond bubble. And everything has been done to prop it up because when it bursts (as all bubbles do), entire countries (including the US) will go bust.
Then and only then we will have a true recovery.
If you’ve yet to take action to prepare for the second round of the financial crisis, we offer a FREE investment report Financial Crisis "Round Two" Survival Guide that outlines easy, simple to follow strategies you can use to not only protect your portfolio from a market downturn, but actually produce profits.
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Best Regards
Phoenix Capital Research
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No Pension,
I too, suffer from "impending collapse fatigue". There is a whole industry built around it.....Phoenix has been posting re: the end of the world for four or five years but the system just keeps chugging along. What practical steps can we take without having it scare the pants off of us?
Here is Dog's plan;
Not knowing which way the cat is going to jump I am keeping a fair amount of fiat lying around here and abroad to take advantage of deflation. Indiana farmland at $1,000/acre at the auction would seem to be a good investment, so would multi-family rental dwellings.
(I have trailing stops on all of my stocks that I move up weekly, some have been hit, some not, but I have been able to take advantage of the equities rally. Zimbabwe?)
I treat my PM's as insurance against inflation and add regularly. I strive not to get my panties in a wad about the price. Ideally the price of gold will go to $250 and silver to $4.00. This would indicate that somehow we have righted the ship and all is well.
I have no debt and have laid in enough supplies to weather a period of slim pickings. You don't have to defeat the zombies, you just have to be less attractive than the other target(s).
I always keep in mind that if the system collapses it isn't something that has never happened before. The world won't suddenly turn into a black and white old photo of the Depression, all the stuff around us will still be there in the morning and the sun will come up!
OR, They'll just shoot me the first day! PFttttt.....shit happens.
Your friend,
Dog
Phoenix offers more information and probably financial planning services as part of their article contributions to this site.
They are quite right in what they are saying, though. Far too many well-schooled professionals (Stockman, Williams, and PCR to name a few) are and have been saying the same things for some time. These people are experienced enough to know what they are talking about.
If we want to speed things along, start getting real loud about the lack of recovery in your own lives, despite reports to the contrary. When the American people rise, authority listens.
It's all your/our money.
What are we really getting for it...beside deeper in debt?
m
the fed is the guy in the poker game who doesnt know who the sucker is, when they are the sucker. the banks have all the advantage. so far the fed hasnt done anything to make the banks uncomfortable
Sounds like they are highly successful in achieving their REAL goals as opposed to their stated goals.
Dude, the TV just said we have 5.5% unemployment and my EBT was loaded up without incident. If that ain't recovery, I don't know what is.
AUDIT THE FED! Mark to market the assets of the big banks!
I find it at the least maddening - and beyond that to angering - when a 'researcher' carelessly and/or ineptly totally misrepresents key numbers.
Towit: " The US had $5 trillion in public debt going into 2008. Today it has over $18 trillion"
The debt held by the public was indeed $5.049T at the end of FY2007. But the debt held by the public as of the end of February, 2015 is $13.074T.
The total public debt outstanding (which includes both debt held by the public AND intragovernmental holdings) was $9.008T at the end of FY2007 and was $18.156T at the end of February 2015.
Geesh. Avocados and Kumquats.
I saw that glaring error as well and you saved me from having to fire the first salvo.
Here are the Treasury's REAL NUMBERS: Historical Debt Outstanding - Annual 2000 - 2014 http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.h... Two other prominent links from Treasury's site: Interest Expense and Average Interest Rate Graph http://www.treasurydirect.gov/govt/charts/charts_expense.htmInterest Expense on the Debt Outstanding
http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm
The longer the FED keeps that interest rate at ZERO, the lower the average interest rate drops on all outstanding & new US debt. The average interest rate on all OUTSTANDING US DEBT today is at 2.384% while it was north of 4.5% 6 years ago. This means that the federal government pays less and less interest payments on debt and also explains why the government has gone on a massive spending binge at the expense of current and future generations of Americans. In the end, our government treats the debt as an INTEREST-ONLY LOAN and NEVER pays a dime toward principle.
Also, in the past 30 years, the federal government has wasted well over $10 trillion dollars in interest on the national debt which is enough in TODAY's dollars to suspend the federal income tax on ALL individuals for about TEN(10) YEARS. The last fiscal year, which ended 30 SEP 2014, the government literally flushed $430 billion dollars in tax dollars down the toilet just to pay interest on the debt.
Your government couldn't care less about anyone but themselves. If these charts don't show it, then I don't know what will.
Indeed. What very few people are aware of (or just haven't bothered to think about) is just how short the average maturity date is for the US debt. It is only about 4 years for new/rollover debt instruments and not much over that for all currently outstanding debt.
The draconian significance of this is that if/when interest rates return to some semblance of 'normal', in just a bare few years, the interest payment drain on the federal budget will balloon. If interest rates actually become punitively higher than 5%, the country will face a total budget crisis. Let me repeat that - the budget will be out of control and THIS country will literally be in a bankrupt operating state (not as if in terms of reality it already isn't - just not in a desperation state yet). Most people just do NOT understand the danger. Ah well.
* Why wouldn't fundamental sanity suggest that the Treasury take advantage of these low interest rates and lock them in for decades to prevent possible disaster? Because the symbiosis of the Treasury and the financial community has the Treasury issuing the short term paper that the financial industry depends on for the liquidity machinations of the shadow banking world. No real mysteries - just the foundations of ultimate disaster.
If the flat line charts were an EKG, the patient would be declared dead. Stick a fork in the economy, it's dead.
e CON no m ore...
I an no economist.
But someone explain how, when our system demands growth to function, how this will go forward without growth.
I am just getting real tired of trying to be ready as I can for the " obvious " and the obvious doesn't occur.
Some days I just wish I was ignorant of all this.
The ignorant I meet on a daily basis certainly seem to be enjoying life more!
It is as easy as one party prints cash, and another is willing to take it as payment for real goods and services? And this is the new normal? WTF?
You said you are not an economist. Good for you. Being an economist is like being a snake oil salesman. Only worse.
Amen its the same shit over and over and I feel as though ai am missing out by trying to be practicle and prepared a real shmuck I feel but hey waited this long
What are you babbling about now? If monetary actions could ever create growth we would have been doing it already for the last thousand years. Bad monetary actions may kill growth, but that does not mean that good monetary actions create growth, any more than shooting the cow may kill growth but not killing the cow does not make it grow.
His babble is so you need to buy his gold common now