As long as the fraud-saturated U.S. economy remains the focal point of the global (corporate) media, the bogus “statistics” produced by this government will remain primary drivers of short-term moves in markets. Thus in the immediate term the market is being influenced by the U.S. GDP number just released on Friday, and another absurd jobs-report from the Bureau of Labor Statistics coming next Friday.
With respect to U.S. GDP numbers, it’s now becoming difficult for the propaganda machine to even pretend the U.S. economy is still “growing”. As my own prior writing has illustrated; U.S. manufacturing has collapsed, U.S. retail sales has collapsed, and the U.S. housing sector remains mired in the worst depression in history.
The only sliver of “strength” in the U.S. economy is its (heavily-subsidized) agricultural products. The U.S. has effectively transformed itself into a “banana republic”, except because it requires such huge subsidies simply to steal market share from other agricultural producers, and because agriculture is one of the lowest-wage occupations; it could never be the basis for prosperity.
So while the Wall Street banksters continue to plunder this ecoonomy at will, the U.S. government continues to dismantle it, through the most ineffective (if not outright suicidal) economic policies in modern economic history. According to the number released on Friday, U.S. GDP “growth” has shrunk to an annual rate of 1.5%.
However, that ridiculous number is based upon a fantasy-world where supposedly U.S. inflation is only slightly above 2%. Meanwhile, in the real world inflation is a double-digit plague for most Americans. As I have explained previously, when governments (deliberately) understate inflation, they can then take that unreported inflation and use it to pad the GDP number – since all GDP estimates must be “deflated” by the full inflation rate.
Use real numbers as its deflator, and suddenly the anemic figure reported Friday would be instantly transformed into a U.S. GDP-reading of somewhere around -6%. However, this was merely the first estimate. The U.S. produces three of these fraud-numbers with each quarterly report, meaning the terrible number released on Friday will be revised (lower) two more times. Thus in the real world, the actual number the U.S. government should have reported on Friday is a GDP reading in the neighbourhood of -8% to -10% -- worse than the worst lows of the Great Depression.
It is through absurd lying of this nature by the media that we can be “surprised” by U.S. economic crashes – as the entire propaganda machine (and their “experts”) claimed to be in 2008. We see the same scenario approaching here: the media pretending that the U.S. economy is still “growing”, while it’s economy is already shrinking at a Great Depression-rate. Then when the time is ripe to whipsaw investors, the propaganda machine will start to report (relatively) accurate numbers – and then claim we have all been “surprised” by this collapse.
The only element of uncertainty at the moment is the lie which the BLS will report with next Friday’s U.S. jobs-numbers. It’s impossible to plausibly pretend the economy is still generating jobs. Thus the question is will the propaganda-machine report a negative number next Friday (i.e. the U.S. economy losing jobs) in order to retain some credibility; or is the situation so desperate that it no longer cares if its fantasy-numbers are even remotely believable?
The secondary question (for precious metals investors) is how will the market react next Friday – despite the best efforts of the banking cabal to depict next Friday’s news (whatever it is) as being “gold bearish”. Recently we have seen the propaganda machine forced to acknolwledge that bad news implies more money-printing. This is a very bullish signal for gold and silver, and so it is what we will hope to see the media forced to acknowledge next week yet again.