The Recovery – Reality or Fallacy
By: Greg Hunter
The way the latest unemployment numbers were reported by the mainstream media (MSM), you would think the Great Recession was over and the United States was solidly on the road to recovery. The Associated Press reported the numbers by the Bureau of Labor Statistics (BLS) with a story that said, “The United States added 227,000 jobs in February, the latest display of the breadth and strength of the economic recovery.
However, Forbes.com reported, just a few weeks ago, millions have stopped looking for work, and the government has stopped counting them. The report said, “In the latest, much celebrated, unemployment report, the labor force participation rate had plummeted to 63.7%, the most rapid decline in U.S. history. That means that under President Obama nearly 5 million Americans have fled the workforce in hopeless despair.
In addition, the number of people on food stamps jumped to more than 46.5 million in December 2011! It is a new all-time record.
According to economist John Williams of Shadowstats.com, the latest good news about job creation is distorted. If unemployment were calculated the way BLS (Bureau of Labor Statistics) did it in 1994 or earlier, the true unemployment rate would top 22%.
It is more likely financial collapse is coming—not recovery. Maybe that’s why the Federal Reserve recently announced it is going to start another round of money printing because the economy is teetering on an abyss. Marketwatch.com reported just last week, “Federal Reserve officials are considering a new type of quantitative easing that will attempt to boost the economy without accelerating inflation, according to a report published Wednesday.”
If the economy was in a real “recovery,” why would the Fed want to “boost the economy”? The Fed also announced at the end of January it would hold a key interest rate at 0% through 2014. If the “breadth and strength of the economic recovery” was so powerful, wouldn’t the Fed be hiking interest rates? Of course it would. The fact that it is keeping them at zero for years and starting a new round of money printing is signaling the economy is in trouble, not in a so-called “recovery.”
Even near record low interest rates are not helping the morbid housing market to recover. According to the latest Case-Shiller report, home prices were down nearly 4% at the end of 2011. What kind of a recovery features near record low interest rates and falling home prices? Also, millions of empty houses are sitting on the books of the banks, and millions more are headed for foreclosure. Shouldn’t home inventory be shrinking in a real “recovery”? It is not, and that’s a fact!
Finally, if there really was a recovery, the government would not be hitting record deficits month after month. The deficit would shrink as the economy got better wouldn’t it? Instead, the Federal deficit is exploding! The Washington Times reported, just last week, “The federal government recorded its worst monthly deficit in history in February. The Congressional Budget Office said the deficit in fiscal year 2012 is already more than half a trillion dollars.” That means the government spent nearly $8 billion more than it took in each and every day of last month (29 days). This is not a sign of economic “strength” but of tremendous weakness.
You cannot print your way to prosperity, but it can pave the way to an economic collapse.
All Things Considered – John’s Commentary:
Although we are witnessing near record highs in the broad markets, significant systemic problems not only remain, but worsen. Do not doubt for a moment that the piper will eventually have to be paid. Expect the red herring of purported tranquility to exist through the election, as bureaucrats continue to prop up the charade. Make sure that you already have, or have at least started to accumulate your position in physical metals.
Quote of the day: “Beware the frog in the pot of water.” – 2006 movie An Inconvenient Truth starring Al Gore, former Vice President
