The Real Economic Picture

If you have any money and you want to understand the lies that “your” government tells you with statistics, subscribe to John Williams shadowstats.com.

John Williams is the best and utterly truthful statistician that we the people have.

The charts below come from John Williams Hyperinflation Report, January 25, 2012. The commentary is supplied by me.

Here is the chart of real average weekly earnings deflated by the US government’s own measure of inflation, which as I pointed out in my recent column, Economics Lesson 1, understates true inflation.

This chart (below) shows the behavior of inflation as measured by “our” government’s official measure, CPI-U (bottom line) and John Williams measure which uses the official methodology of when I was Assistant Secretary of the US Treasury. The gap between the top and bottom lines represents the amount of money that was due to Social Security recipients and others whose income was indexed to inflation that was diverted by the government to wars, police state, and bankers’ bailouts.

This next chart shows the gains that gold and the Swiss franc have made against the US dollar. The Swiss franc is the top line and gold is the bottom. When gold and the Swiss franc rise, the dollar is falling. Notice that during President Reagan’s first term, when I was in the Treasury, gold and the Swiss franc dropped, that is, the dollar rose in purchasing power. Obviously, the supply-side policy that Reagan implemented strengthened the US dollar. It was only with the advent of the Bush policy of endless trillion dollar wars, reaffirmed by Obama, that the US dollar and economy collapsed relative to gold and hard currencies.

The recent drop in the Swiss franc is due to the Swiss government announcing that the country’s exports could not tolerate any further run up in the franc’s value, and that the Swiss central bank would print new francs to accommodate future inflows of dollars and euros. In other words, Switzerland was forced to import US inflation in order to protect its exports.

Here is nonfarm payroll employment. As you can see, the US economy has been in recession for four years despite the easiest monetary policy and largest government deficits in US history.

Here is consumer confidence. Do you see a recovery despite all the recovery hype from politicians and the financial media?

Here is housing starts. Do you see a recovery?

Here is real GDP deflated according to the methodology used when I was in the US Treasury.

Here is real retail sales deflated by the traditional, as contrasted with the current, substitution-based, measure of inflation.

These graphs courtesy of John Williams make it completely clear that there is no economic recovery. In place of recovery, we have hype from politicians, Wall Street, and the presstitute media. The “recovery” is no more real than Iraqi “weapons of mass destruction” or Iranian “nukes” or the Obama regime’s phony story of assassinating last year an undefended Osama bin Laden, allegedly the mastermind of Islamic terrorism, left by al Qaeda to the mercy of a US Seal team, a man who was widely reported to have died from renal failure in December 2001, a man who denied any responsibility for 9/11.

A government and media that will deceive you about simple things such as inflation, unemployment, and GDP growth, will lie to you about everything.

About Dr. Paul Craig Roberts

Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following.

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  1. avatar

    Thank you for reporting the truth as the truth is hard to find in our current environment. I believe most people (sheeple) don’t want to hear the truth, and don’t read daily trying to seek the truth.
    I intend to vote in November and will ask myself the following question as I enter the voting booth:
    “Am I better off today than I was 4 years ago?”
    If I answer “yes” I will vote to keep the current politicians (aka thieves) in office. If I answer “no” I will vote 100% for all new politicans so they can start working on becoming a thief.
    It is a real simple process. No need to spend 100 of hours watching political debates, speeches, and other lies.
    As my father-in-law (now deceased) use to say – “Oh well, what the hell”.

    By: F M . February 5, 2012 . 1:19 am | Flag this comment

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    • avatar

      “The men the American people admire most extravagantly are the most daring liars; the men they detest most violently are those who try to tell them the truth.” – H.L. Mencken

      By: Vic Anderson . February 6, 2012 . 12:21 pm | Flag this comment

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  2. avatar

    Friends,

    Employment Situation Frequently Asked Questions

    http://www.bls.gov/news.release/empsit.faq.htm

    You can adjust font size.

    Cheers!

    Jer

    By: Jerry Aspar . February 5, 2012 . 1:04 pm | Flag this comment

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    • avatar

      Here’s a good analysis of the REAL unemployment situation (vs BLS BS):
      http://globaleconomicanalysis.blogspot.com/2012/02/nonfarm-payroll-243000-unemployment.html
      It reminds one of Stalin’s comments about elections: “I’m gonna count the votes”
      The BLS just doesn’t wanna count all those million+ unemployed who magically dropped out of the labor force – and are therefore not counted!

      By: GodSend . February 5, 2012 . 2:01 pm | Flag this comment

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  3. avatar

    “Blanket condemnations of entire races……will be removed”

    What about condemnations of the ALIEN race, running the Gaza Gulag, Gulag Amerika and Gulag Earth through their AGENTS in Zionist Israel?
    THEY LIVE (John Carpenter KNEW) – right here, among us, and some of THEM look just like us! Philip Schneider and William Pawelec KNEW, too! 911, the DOUBLE-DIP GRAND DEPRESSION, the USS Liberty attack, the JFK assassination, the Lavon “affair”, etc. etc. etc. are just SOME of the Zionist CRIMES against America. Humanity’s #1 ENEMY is WITHIN THE GATES – and has been for eons. The GRAND DEPRESSION, now in DIP#2, has been conjured up by the Demonic Duo of Zionists Greenspan & Bernanke, with a little help from their friends – like Zionist Lloyd Blankfein, et al.

    Gotta look a lot deeper than Federal Gov’t DECEPTION, Paul! Gotta look for the ROOT OF EVIL.

    By: GodSend . February 5, 2012 . 1:10 pm | Flag this comment

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  4. avatar

    Lies, Lies (we must have) LIES, from the serial Lying DEM Reneger!

    By: Vic Anderson . February 6, 2012 . 12:19 pm | Flag this comment

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  5. avatar

    I feel like it is more of a matter of stopping the crashing economy. No doubt the media is sugar coating it, but if nothing were done, those graphs would have continued to plummet as opposed to them bottoming out as shown. Confidence is also key. The economy relies substantially on the peoples’ confidence. Would you rather go out and buy an iPhone if you heard the market was improving as opposaed to it not doing much? Its not right to lie, but sometimes it is necessary to stretch the truth to make people feel better and give them reason to look for a job/buy something/ invest etc.

    By: Dave . February 7, 2012 . 8:23 am | Flag this comment

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    • avatar

      Dave,
      What you are describing is known in politics as “noble lies” or “pious fictions”. Both work for awhile but eventually fail once the reality of situations become the deciding factor. http://en.wikipedia.org/wiki/Pious_fiction

      By: carroll price . February 7, 2012 . 9:29 am | Flag this comment

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      • avatar

        Do you know how close we were to a full blown depression in 2009? The banks and mortgage firms were literally hanging by strings. Those strings were only strong as long as people did not believe the whole economy was going to go belly up. The Obama Administration was debating whether or not to take over Citi bank and stabilize it but believed that would cause people to lose confidence, pull their money out and cause a domino affect for all the other financial firms. If the government was truthful and open with everything at that time, we would have see everything fall apart. Be very thankful for that.

        By: Dave . February 7, 2012 . 4:21 pm | Flag this comment

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        • avatar

          In the long run, it would have been better if the present financial system had been allowed to collapse rather than propping it up with TARP and bailouts. If a collapse had been allowed to happen and a government issue money system put into place (to replace the credit based money system we have) we could by now be well on the way to a genuine recovery, which under the present system and circumstances is virtually impossible.

          By: carroll price . February 7, 2012 . 4:50 pm | Flag this comment

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          • avatar

            A recovery is not “virtually impossible” – it IS IMPOSSIBLE (by design – “Death by 1000 Cuts”). We have the Zionist Sorcerer Sir Alan Greenspan and his Zionist Apprentice Ben Bernanke to ‘Thank’! And we have the Rogue State of Zionist Israel to ‘Thank’ for 911 (Dr. Alan Sabrosky) – a key component of the DEBT BOMB built by Ben Bernanke (QEI, QEII and QEIII). Noiw doesn’t all of that make you feel all warm and fuzzy about our WH OCCUPANT and his Zionist ‘best friends of America’ in Tel Aviv?!

            By: GodSend . February 7, 2012 . 6:17 pm | Flag this comment

          • avatar

            If Obama had let the economy collapse, we woulb be back in 1930. Millions would lose their jobs. Millions would lose their houses. People would have starved to death. The banks, auto industries and many other companies would have crumbled. The stock market would be in free fall. What you see now is a recession and it is good compared to a depression. Yes, the money system needs to be changed, but to let everything implode and start over is never a good idea.

            By: Dave . February 7, 2012 . 10:27 pm | Flag this comment

        • avatar

          What Bush and Obama did was the worst thing possible. They rewarded incompetence and fraud. Most of the fraud was illegal and could be prosecuted if we funded the SEC, FDIC and other regulatory agencies and staffed them with honest people instead of allowing a revolving door between them and the corporations they’re supposed to regulate. Look up William Black and read some of what he’s written about it.

          The Federal Government should have forced Citi and several other insolvent banks into bankruptcy, temporarily nationalized them and fired their boards and execs. It’s been done in other capitalist economies and does not necessarily bring about a socialist system. The legitimate shareholders who sold at a loss would have lost no more than they did anyway, and many of those who bought in at the bottom did so because they knew the government bailout was going to happen. You and I can never be entirely sure what’s going to happen, but you can bet those with political connections do, and profit by it.

          By: Bill Rood . February 7, 2012 . 11:48 pm | Flag this comment

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          • avatar

            Firstly, the TARP bailout was passed under Bush so Obama had little to do with it. Secondly, the whole point of forcing some companies into bankruptcy was the possibility of instilling fear. During the collapse, all the banks were tied together and if one fell the Obama Administration, as well as many economists, believed that would cause bank runs similar to those in 1929 and the banks would fall one by one. I do know that successful government takeovers occured in other countries but Obama chose Geithner’s plan of using stress tests instead which worked pretty well. I also think it was necessary that Obama put off prosecuting the banks. If he were to deal with fixing the crisis AND going against the banks that would have just been a huge mess. Thats why you saw him finally say something about going after those responsible for the collapse in his most recent State of the Union Address. He has at least stabalized the economy and now he can move towards punishing those responsible.

            By: Dave . February 8, 2012 . 11:11 pm | Flag this comment

          • avatar

            Dave, citing the Obama Administration as an authority on whether or not there would have been bank runs is circular reasoning par excellence, and “many economists” were totally out to lunch and caught completely by surprise by the crisis. There were many other economists that argued for government takeover.

            As far as bank runs a la 1929 are concerned, I highly doubt it. In 1929 there was no FDIC. Today, the vast majority of commercial bank deposits are fully insured. Even if there had been runs, only very wealthy people would have lost any money whatsoever. Roosevelt’s bank holiday was a government takeover of ALL banks, not just the insolvent ones. When the solvent ones were allowed to reopen, there were no more runs, because people could have confidence that an honest government had inspected them and found them sound. By contrast, the stress tests were widely believed to be a sham. Many banks are STILL insolvent if their assets are marked to market instead of carried on their books at full face value. They are delaying foreclosure on many homes that are months behind in payment because as soon as they foreclose, they must take a capital write-off.

            As to fixing the crisis before investigating and prosecuting, the crisis is still not fixed. The recovery is a fiction, as Dr. Roberts has pointed out. You did read the article you are commenting on, didn’t you? Did it penetrate your thick Obama apologist skull?

            I am fully aware that TARP was passed before the 2008 election, but Obama lobbied heavily for it with the Democrats in Congress. Part of the deal was that Bush got to dispense only half, and the rest was left for Obama. I quite clearly and accurately gave credit to BOTH Bush and Obama.

            By: Bill Rood . February 9, 2012 . 9:53 pm | Flag this comment

  6. avatar

    Got an explanation for the 911 LIE? Got an explanation for the USS Liberty LIE? Got an explanation for the ObamaRahm-a birth certificate LIE? Got an explanation for the (coming) “False-Flag” attack by Iran LIE? The American economy was DELIBERATELY DESTROYED by Greenspan & Bernanke (experts of the Great Depression). They are NO DUMMIES. They were appointed and re-appointed by Bush-it and ObamaRahm-a. They are both Zionists who are loyal to Zionist Israel. Both Administrations and the Federal Gov’t Agencies are TEEMING with Zionists. You have to be a brainwashed idiot not to be able to connect those dots! The American Sheeple have been LOBOTOMIZED by the Zionist-controlled MSM. 911 is the best proof of that.

    By: GodSend . February 7, 2012 . 9:57 am | Flag this comment

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  7. avatar

    When discussing the so called “thieves in office” please remember that we have a representative form of government. If officials seem corrupt it’s because they correctly represent a corrupt electorate. If you consider the comments on a few internet forums you will find that we really do have a majority of people who want things just the way they are. They gave their responsibilities to the government and they don’t want them back for any reason.

    By: Jewels Vern . February 7, 2012 . 1:02 pm | Flag this comment

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    • avatar

      They are not just “thieves in office” – they are TRAITORS to America! The penalty for HIGH TREASON is HANGING! Bush-it and ObamaRahm-a will make a good start – followed by their Administrations, the JCOS and all the Israel-FIRST Zionists in office, elected or appointed. Invest in HEMP!

      By: GodSend . February 7, 2012 . 1:19 pm | Flag this comment

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  8. avatar

    Let me make one final comment here to sum up America’s situation:

    Zionists have seized control of America and its vital institutions, public and private. This will not come as a surprise to anyone who has read “The Protocols of the Learned Elders of Zion.” THEY are determined to reduce America to ashes (slowly but surely) so that THEY can establish their Zionist NWO and “Eretz Israel” (Greater Israel) in the ME. 911 and the Grand Depression (now in progress – Dip#2) are key components of their diabolical plans. Unless American Patriots in the Military stage “Seven Days in January through December”, we will be imprisoned in a full-blown “Gulag Amerika” before you can say: 911-II (“False-Flag” attack on Iran, Martial Law and FEMA camps for all who protest. The Law means nothing any more! Just ask Edgar J. Steele, an attorney FRAMED by the FBI and Dept. of Justice, now imprisoned in a Federal Penitentiary in Victorville, CA.

    That is truth. Anything else is a LIE!

    By: GodSend . February 8, 2012 . 10:06 am | Flag this comment

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  9. avatar

    Basically: I have already been won-over to the global financial doomsayers in regards to the marketplace. Has anybody observed any glimmer of hope in this “recession”?

    By: Theda Siniard . February 9, 2012 . 9:58 am | Flag this comment

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  10. avatar

    Actually, I know exactly what you mean about the financial system. The rising cost of living is detrimental plus we can tell it is going to exacerbate. sigh.

    By: Fermin Barcomb . February 12, 2012 . 1:32 am | Flag this comment

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  11. avatar

    .
    ****** “AMERICA IS UNDER ATTACK!” ******

    United States of America is under attack you know,
    By corrupt Globalists who are running the “SHOW”,
    They own the world and control your life,
    Like serial killers with a great big knife.

    Who are these globalist people you ask?,
    They’re Banksters, Politicians and Presidents,
    They own the Corporations and rig the Media you know.
    To control what you see, hear and how children will grow.

    Those Demons are planning world de-population,
    They want it seven Billion down to half a Million,
    They are doing it slowly by deceitful ways,
    Like poisoning your food, air and water supplies.

    Ask why Obama does not stop the tyranny,
    Why on New Years Eve he signed the NDAA,
    Why he cares not to help the hurting people,
    For he’s a puppet and the people are sheeple.

    Complacent Americans are losing their Bill of Rights,
    By not getting involved and putting up a fight,
    The military pledged to protect “The Land of the Free”,
    Against invasion by a Foreign or DOMESTIC Enemy.

    We call our Military to arrest the President and Politicians,
    For breaking their Oaths to Uphold the Constitution,
    Failure to do so will bring on a Fascist Dictatorship,
    With No Rights, Free Will and would be permanent!

    D.A.W.B.
    Poem 5, Ver 1
    Feb 18, 2012
    …

    By: David A. W. Burla . February 19, 2012 . 12:49 pm | Flag this comment

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  12. avatar

    What the government and the media almost never mention is that many of the jobs people have today are inferior to the jobs people had years ago. Over the past several years solid middle class jobs with health care benefits have been replaced by poverty-wage jobs with crappy or no benefits. The big issue that the media is ignoring or failing to recognize is that of QUALITY OF EMPLOYMENT. What good will it do is if we can get to 5% unemployment when everyone is working poverty-wage jobs?

    By: Frank the Underemployed Professional . March 2, 2012 . 4:13 pm | Flag this comment

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