Mainstream Media Keeps Putting Lipstick on Pig Economy

Hyperinflationary Depression 2012 - 2014: Mainstream Media Keeps Putting Lipstick on Pig EconomyBy Greg Hunter’s USAWatchdog.com 

My slogan is “analyzing the news to give you a clear picture of what’s really going on.”  So, I spend a significant amount of time watching news on TV and the Internet and even the good old fashioned newspaper.  If you only got your news from the mainstream media (MSM), it’s easy to understand whyso many people think the economy is not all that bad.  For example, yesterday, I heard the “R” word a lot.  No, I am not talking about recession but “recovery.”  This is preposterous when you consider the latest report from the Case-Shiller Home Price Index that was released yesterday.  The spin from the MSM said home prices were down from October to November by 1.3%.  Makes you think—ok, not too bad.  The real story is home prices declined on average by nearly 4% year over year.  A quote straight from the actual Case-Shiller press release said, “For a second consecutive month, 19 of the 20 cities covered by the indices also saw home prices decrease. The 10- and 20-City Composites posted annual returns of -3.6% and -3.7% versus November 2010, respectively. These are worse than the -3.2% and -3.4% respective rates reported for October.” (Click here for the complete Case-Shiller press release.)

Are you getting this?  The real estate market is getting worse.  The only city that saw an increase was the pork capital of the world—Washington D.C., and prices were only up by a paltry .5% year over year!     All the folks I heard, yesterday, on the MSM talked as if the so-called “recovery” was alive and well, when the evidence shows unfolding disaster.  Please keep in mind, home prices are falling despite the fact the Federal Reserve is suppressing interest rates.   A 30-year mortgage is going for around 4%.  What do you think will happen when rates rise to around 6.5% (a very good historical rate)?  Don’t you think home prices will continue to slide?

Yesterday, I heard at least two different “experts” say the economy was “getting better.”  The latest news about the Baltic Dry Index (BDI is mostly a measurement of global shipping rates) says just the opposite.  Brandon Smith, from Alt-Market.com, says the BDI “is plummeting like a wingless 747 into the swampy mire of what I believe will soon be historical lows.”   Smith says this is foretelling bad times, not good.  (Click here to read his most excellent post.) 

Another ominous sign was brought to us by the Federal Reserve last week.  It announced it will hold a key interest rate to near 0% through 2014 instead of 2013.  Why is the Fed urgently extending this rate now?  Couldn’t the Fed have told us next year it was extending the 0% interest rate for another year?  Why now?  Because the economy sucks and they see it sucking for at least three more years.  This is NOT a recovery, and the Fed basically admitted it. Jim Willie of Goldenjackass.com sees the Fed’s zero interest rate policy (ZIRP) as a massive failure that reveals an extremely weak economy.  In his most recent post, Jim Willie (who holds a PhD in statistics) said, “The USFed will hold its benchmark interest rate at near 0% for at least the next three years, as a testament to central bank failure. No departure from the 0% rate can be done. The USGovt debt service requires it, demands it, and will default without it. The ZIRP and QE are worn as badges of failure and dishonor.”  (Click here to read the complete Jim Willie post.)

Economist John Williams of Shadowstats.com says 0% interest rates and money printing are really just keeping big banks from going under.  This is not helping the economy to truly recover.  Real estate is going down in price, everything else is going up.   It looks like were headed for a  hyperinflationary depression.  In his annual “Hyperinflation Special Report,” Williams said, “The Fed should be forced to provide new “easing” in an effort to continue propping the banking system (the explanation will be an effort to boost the economy).  Given the Treasury’s funding needs, the easing likely will in the form of renewed buying of U.S. Treasuries, with the Fed remaining lender of last resort there.  Consistent with the precedent set in 2008, the Fed, and likely the Treasury, also will remain in place to do whatever is needed, at whatever cost, to prevent systemic collapse in the United States.  All of these actions, though, have costs in terms of higher domestic inflation and intensified dollar debasement.  (Click here to go to the Shadowstats.com home page.)

Williams says a hyperinflationary depression will hit the U.S. by 2014 at the latest.  He thinks when it hits, it will cause a “financial economic Armageddon.”  He recommends gold, silver, food and foreign currencies as protection.  Williams goes on to warn, “The U.S. dollar remains highly vulnerable to massive, panicked selling, at any time, with little or no warning.  The next round of Federal Reserve or U.S. government easing or stimulus could be the proximal trigger for such a currency panic and/or for strong efforts to strip the U.S. currency of its global reserve currency status.”

The MSM relentlessly spins a picture of a good economy, no matter what terrible news come out.  It is a gigantic disservice to the readers and viewers.  The constant spin job will leave them totally unprepared when the next crash comes, and one is headed our way—count on it.

Comments
  1. Richard

    We can only try to tell people about what’s coming. I post some of the financial news to my Facebook status. It’s not a lot for fear of being “unfriended” but only enough to perhaps cause some of my friends to look into the situation further. While talking to my neice a week ago she mentioned that she liked all of the political posts that I made. I rarely make any political posts.

    I think that most people do not have the capacity to research and understand what they’re reading. I don’t make any pretense to understand everything I read but I get enough of a message to know that we’re in deep do-do here.

    Given an inablity to grasp the concepts that I and others, present to those that read our writings and postings, most people turn to the MSM for a seriously dumbed down and often misleading version of what’s going on.

    • omid m

      Hi Richard. I tried to speak to friends and family on this subject and most people either blow me off or agree, but personally refuse to follow through on take at least small steps to prepare for difficult times. I’m glad you have people listening…but I hope they’re preparing. I don’t have the personal or financial means to help all those I’d like to help when crap hits the fan – but let’s hope I’m wrong and it doesn’t get that bad. Doesn’t mean I won’t prepare though.

      • Elizabeth Hanson

        Hi Guys (and gals) and Greg—

        I think all of us are on the same page and that now it is simply our patriotic duty to do three things: 1) inform others 2) get politically involved by running for offices at any level in any capacity or actively support others who are awake and 3) prepare.

        I sometimes wonder why we were born at this time in history. I sometimes wonder why I personally was shaken to an awake state when the banks were bailed out in 2008. There is a mystery to all this.

        I post a lot of economic articles to a facebook page “occupy the money system”.

        God bless you all. I often say “The lord is my shepherd” throughout the day… or “Thy will be done.” It helps a lot.
        Elizabeth

        • Mike

          Elizabeth… some of the secrets can be found listening to pastor “Lindsey Willams” most recent radio interviews… I’ve been listening to him for over 2 yrs now.. everything this man has been told by the world elite has come true so far… his future predictions are UNREAL… anyway… google Lindsey and prepare as UGLY is coming and very soon…

  2. Airborne 71

    The MSM can’t tell the truth because that will make the supreme leader look bad and NOTHING is more important than keeping the halo on obamas head . That and if they were to tell the truth …NO MORE white house invites , thats a death penality for any msm pundit ! If you are off the “A” list thats it for you , pack it up and go home you are done .

    • Greg

      Airborne 71
      You are correct sir!!
      Greg

  3. Khan

    “It is a gigantic disservice to the readers and viewers.”

    True. But I also think falsely presenting disaster as being an **absolute certainty** is also a disservice to your own readers.

    I agree that we are running risks that no sane person should — every year, we spin a roulette wheel where 5 or 10 percent of the outcomes are labeled “economic catastrophe”. That does NOT mean you can know when the breakdown will come. People were predicting a housing crash for five years before it actually happened.

    Besides, I don’t buy your theory for how Armageddon will actually come. I agree that the economy is in terrible shape — one look at the employment participation rate or the employment/population ratio tells you that — but … hyperinflation? Really? I mean, do you also have a basement bomb-shelter stocked with ammunition and canned food? For strong inflation, you need price increases baked into annual wage increases. Fat chance of getting a raise under these circumstances!

    As for this stuff about the BDI — a quick look at bloomberg shows that it lost 95% of its value in 2008, at a faster pace than the current 65% loss. Since then, it has bounced all over the place routinely. I am completely unconvinced.

    • Greg

      Khan,
      Please tell us all how we are not heading for big trouble? Please explain your points here in detail. For one thing, inflation is not tied to wage increases. As Nobel Prize winner Milton Friedman famously said, “Inflation is always and everywhere a monetary phenomenon.” He didn’t say anything about wages and that is proven pout today. Deflation in housing and inflation in just about everything else while wages are declining for the masses. (Non government jobs) Here’s another question for you: What is going to happen when the $2.4 trillion runs out> Here’s anther: What happens to housing prices when the Fed stops suppressing interest rates so people can get a 30-year 4% mortgage? Please enlighten us all.
      Greg

      • Khan

        Here’s Greg Mankiw, a conservative economist who opposed the stimulus, on wages and inflation: http://gregmankiw.blogspot.com/2011/09/why-i-am-not-very-worried-about.html

        As for Milton Friedman — he also thought that too TIGHT monetary policy caused the Great Depression.

        I can’t speak for anyone else, but my own wages are static — and so is my cost of living.

        When the debt ceiling is reached, there will be ridiculous theatrics from Washington — and then it will be raised again, with little or no immediate consequence. Long term, the debt will be a problem, but not in the time frame you worry about.

        I’m not disagreeing about the condition of the mortgage market. I hope, by the time they finally raise rates, potential buyers will have deleveraged enough to make a normal rate attractive. If not … Great Recession, Round Two. But, unlike you, this just provides me with a very reasonable justification for the actions of the Fed.

        • droidX-G

          Your cost of living is static? WHERE do you live? Mine is far from static.

  4. masterluke

    Do as they do not as they say.

  5. Art Barnes

    Greg, as more homes reduce in value more homes become underwater. This leads to more “walk away” because you can’t sell them if you lose you job or need to relocate etc., thus help making the value continue to cycle downward. The MSM will never give up their spin as they have become embedded with the elite and the political class and love their lifestyle. Nothing will change until you wake up in the morning and the world has changed and you now realize the MSM was pissing on your back and it was not raining as they said.

  6. Vikram Ranade

    Hi Greg,
    Excellent article. Regarding the Federal Reserve’s decision on keeping interest rates low through 2014, this is what I think. Please let us know your opinion.

    Bank for International Settlements produces a list of outstanding derivatives twice a year.
    The latest report can be found at: http://www.bis.org/statistics/otcder/dt1920a.pdf.

    Total notional value of derivatives increased from $601 trillion in December 2010 to $707 trillion in June 2011.

    Interest rate contracts have notional value of $553 trillion, 78% of the total.

    As soon as the interest rates rise, these will trigger. Even if 10% of these do, the western world banking system goes kaput.

    • Greg

      Vikram Ranade,
      I think there are a number of events that could trigger a traumatic event for the world of finance and investing. You have outlined the very biggest!!
      Greg

  7. Denarius

    In this U.S. presidential election year,
    I cannot resist posting some definitions.

    A recession is when a neighbor loses his job.
    A depression is when you lose your job.
    A recovery is when Obama loses his.

  8. Sean

    Slightly off topic (but directly related to economy and war to maintain it), do some research on military activity in and around the Malacca Strait – which handles 25% of all shipped goods in the world. We hear a lot about the Strait of Hormuz because it relates directly to confrontation with Iran, but the Malacca Strait is related specificaly to African, Middle East, and European trade with China, and the potential of Chinese (and/or Russian) engagement or support for Iran. Things are not only heating up in the Middle East and this is one example of why China and Russia are warning that conflict in the Middle East will quickly expand to other area’s of the world. These plans are part of a vast pool of evidence that leaders in the US and Europe know exactly what they are walking into in a war with Iran, and that it is part of planned policy.

    http://www.eia.gov/countries/regions-topics.cfm?fips=WOTC
    “The Strait of Malacca, located between Indonesia, Malaysia, and Singapore, links the Indian Ocean to the South China Sea and Pacific Ocean. Malacca is the shortest sea route between Persian Gulf suppliers and the Asian markets –notably China, Japan, South Korea, and the Pacific Rim. Oil shipments through the Strait of Malacca supply China and Indonesia, two of the world’s fastest growing economies. It is the key chokepoint in Asia with an estimated 13.6 million bbl/d flow in 2009, down slightly from its peak of 14 million bbl/d in 2007.”

    The Russian navy just pulled into nearby Manila:
    http://rt.com/news/china-philippines-usa-military-127/
    “a squadron of Russia’s Pacific Fleet warships en route from the Gulf of Aden, including the Udaloy-class anti-submarine destroyer Admiral Panteleyev, entered the main port of Manila on Tuesday on a business visit. It is the first time Russian naval forces have paid a visit to the Philippines in 96 years.”

    CNO (Head of US Navy) Adm. Jonathan Greenert recently told the crew of the USS Enterprise (who is currently headed across the Pacific towards the region – supposedly towards the Persian Gulf) the following:
    http://hamptonroads.com/2012/01/adm-greenert-fields-questions-enterprise-crew
    “there are plans for a number of U.S. littoral combat ships to operate out of Singapore, on the Strait of Malacca, one of the world’s busiest shipping lanes.”

    Mikkal Herberg, the Research Director for the Asian Energy Security Program at the National Bureau of Asia Research has recently (last week) stated the following:
    http://www.atimes.com/atimes/China_Business/NB02Cb01.html
    “Energy security has become a critical political and economic concern for Beijing’s leadership.” and “China’s growing dependence on oil and liquid natural gas (LNG) flowing through the Indian Ocean, Malacca Straits and [the] South China Sea is also a key driver of its naval modernization and move towards ‘Blue Water’ power projection capabilities by the PLA Navy.”

    Also, Michael Klare, prof. of peace and world security studies at Hampshire College says the following (this is an excellent article, BTW):
    http://www.cbsnews.com/8301-215_162-57356114/war-watch-2012-welcome-to-a-very-edgy-world/
    “In the years to come, the location of energy supplies and of energy supply routes — pipelines, oil ports, and tanker routes — will be pivotal landmarks on the global strategic map. Key producing areas, like the Persian Gulf, will remain critically important, but so will oil chokepoints like the Strait of Hormuz and the Strait of Malacca (between the Indian Ocean and the South China Sea) and the “sea lines of communication,” or SLOCs (as naval strategists like to call them) connecting producing areas to overseas markets. More and more, the major powers led by the United States, Russia, and China will restructure their militaries to fight in such locales.”

    • Harry Beast

      Very great comment. This is interesting…

  9. Norm Ezzie

    Greg,may I suggest you You-Tube George Carlin’s great presentation titled:The Real Owners of America! I look forward to your reply on it!

    • Greg

      Norm,
      Please send me a link and I will post it with some other videos. I am familiar with this rant and it is honest and very good. It would be much funnier if were not so true!!
      Thank you man

  10. Elihu Wygant

    Greg,
    I too, caught that Case-Shiller data, but since I never go to any MSM outlet, I wasn’t able to compare. I just wonder how long the lying can continue before all H@ll breaks lose?! This has been the slowest train wreck I have ever witnessed!
    Thanks!
    Eli

  11. Steve

    You said, “It looks like were headed for a hyperinflationary depression”

    I have been reading Currency Wars, by Richards. Reading how people reacted to hyperinflation in the 20′ and 30′, it is mind boggling and very scary on HOW ANY ONE, especially the elderly will survive…. that moment in history was terrible and here or Fed Chair, helicopter Ben, is heading us right in the same direction.

    I do have some PMs, have bought some food, portable electric generator, getting ready. Hoping for the best, preparing for the worst, to what I think it might be.

    I idea I struggle with, is how to tell my friends? History will tell them I am a kook or a nut. If and how much I will tell them, I will remind myself, time will tell. But my own belief is, better early 10 minutes, than 2 minutes late.

    • Greg

      Thank you Steve and CM1,
      Greg

  12. TC

    Thx for ALL your valuable info Greg!
    You’re site/articles/columns are 1 of my regular sources in my daily search for true news about what’s really happening in this crazy world today.
    I close with a question/suggestion which is no way promoting anyone that must be mentioned doing so.
    That question: Do you monitor what George Soros is doing?
    If not, my opinion is that you should.
    I will send more names/links after your reply here.
    No matter your response I will follow your valuable site and thanks for ALL you do.

    TC

    • Greg

      TC,
      I follow Soros some but no more than most. I do know his biggest holding for his hedge fund is in the gold arena. I’ll take all bona-fide information on the site.
      Greg

  13. rich

    The truth seems to be a thing of the past….how do you get it back?

    Holder & Obama’s Propaganda is “Belied by a Troublesome Little Thing Called Facts”
    By William K. Black

    The Obama administration’s record of prosecuting elite financial frauds is worse than the Bush administration’s record, which is a very large statement. Syracuse University’s TRAC issued a report on November 11, 2011 entitled “Criminal Prosecutions for Financial Institution Fraud Continue to Fall.”

    Neither administration has prosecuted any elite CEO for the epidemic of mortgage fraud that drove the ongoing crisis. This contrasts with over 1,000 elite felony convictions arising from the S&L debacle. The ongoing crisis caused losses more than 70 times greater than the S&L debacle and the amount of elite fraud driving this crisis is also vastly greater than during the S&L debacle. Bank CEOs leading “accounting control frauds” now do so with impunity from the criminal laws. They become wealthy through fraud and even if they are sued civilly they almost invariably walk away wealthy with the proceeds of their frauds.

    The fact that a NYT story could reveal this outrage without the authors even mentioning the impropriety of the actions described, without the administration feeling any need to respond to the impropriety, and without any scandal demonstrates how badly we have fallen as a society.

    http://www.neweconomicperspectives.org/2012/01/holder-obamas-propaganda-is-belied-by.html

  14. cossack55

    I just keep telling anyone who actually derives content from the MSM to notice who owns which broadcasting company. They still don’t get it. Been following the BDI since the lows of Dec 08. Quite a ride. Will we soon see more photos of all the parked ships off of Indonesia?

    Wish you would to a followup piece on the whole ISDA criminal cabal.

  15. ONTIME

    So far the major businesses buy back of their own stock increasing their control has made them stronger and rallied the market, jobs and government reporting is misreported and it is becoming laughable. The lady that confronted obama yesterday made that point well, when you have to get a job reference from a government official like the prez to get a job, that says a lot and makes her case.
    The other point is the excitement over the FB IP from Zukker, the expected flow of generated capital and the expected generation of share wealth is high. It’s been a while since Silicon Valley has made the news this big. Now if we can make it better for American companies to produce a product and compete, the rest will take care of itself if the government gets out of the way.
    The obama lend a buck plan to the home mortgage is nothing more than another emotional flim flam for the sake of politick.

  16. Tammy Truth

    One again Greg your words speak volumes of truth. Listening to the news today you would have thought the worse is over. It really makes me mad that the MSM is doing such a disservice to their followers. Instead of telling the truth and taking the consequences they are just tighting the noose a little tighter around the throats of average American citizens. I think I will make a trip to the market tomorrow and load up on more supplies. Please keep the truh train alive.

  17. Hal (GT)

    The question we all need to ask ourselves concerning the spin is, “Why?”

    You’re certainly right about that they are doing a disservice to viewers and readers but to what end? They definitely aren’t ignorant unless it’s a self-imposed ignorance. I’m often troubled by the finance TV shows and how they ignore certain hard facts.

    I think the fact that the election combine machine is bearing down upon us, is good reason for the spin as big money jockey’s for position. But mostly, I think there’s this undercurrent of fear of the truth and its consequences.

    The idea being that if we can just keep the wolf at bay long enough something will come along and save us.

  18. NewAustrian

    Hi Greg,

    While I agree that the economy is clearly in a bad shape, I don’t think a Hyperinflation is imminent. John Williams is a good statistician, but he and a few others (Peter Schiff, Jim Willie, Gonzalo Lira) have been calling for hyperinflation to occur for 2 years now and it has not happened. I don’t believe it is imminent for various reasons:

    1. We’re in an age of massive deleveraging. The system left to itself will deleverage (we saw glimpses of this in 2008). What the Fed and other central banks are trying to do is to “slow down” this process of deleveraging. For instance, with the housing market — they are trying to hold up the mortgage market in a sort of a stasis where losses are acknowledged slowly over time.
    Please consider this paper: http://libertarianpapers.org/2010/43-boyapati-why-credit-deflation-is-more-likely-than-mass-inflation/

    2. Hyperinflations happen in the context of a war or extreme civil unrest (Weimar Germany and Zimbabwe are classic examples) where production facilities are destroyed, food supply chains are destroyed and basically the economy has come to a stand still. We don’t have that now, not saying we won’t have it in the future but this situation is not happening right this very moment.

    3. Hyperinflations typically happen with the political class in control of the monetary system. At the moment, the banking class is in firm control — therefore they won’t destruct the system from which they wish to prosper. In a sense, the banking class are parasites but parasites die too, without the host.
    We could see a massive changes of some sort as these currency wars play out, but generally — the extremely wealthy would want to do it in a controlled way. Hyperinflation is the opposite of control.

    So overall, I deem the risk of hyperinflation as very low.

    I understand you want to provide a balanced approach as opposed to the MSM (who are perma bulls or propaganda machines), but I urge you to don’t go to the other extreme in the process of doing that.

    • Greg

      NewAustrian,
      Please tell me what happens when the $2.4 trillion (that was voted for in the debt ceiling deal) runs out? The U.S. Burned $900 billion of that money in 3 and a half months. At that butn rate we will be raising the debt ceiling again before the 2012 November election. What happens it there is selling panic with the $12 trillion in liquid dollar assets held outside America? Low risk? the facts you did not state say otherwise. Thank you for your analysis and professional comment. You do raise some valid points.
      Greg

      • NewAustrian

        /* What happens it there is selling panic with the $12 trillion in liquid dollar assets held outside America? Low risk?*/

        While there is a risk of panic selling, the risk is much more in other currencies than the US Dollar. The debt problems are there in all currencies (Yen, Euro, Yuan).

        Please consider this: http://www.bullionbasis.com/web_documents/currency_and_marginal_utility.pdf

        The nominal debasement of all the non-Dollar currencies would be vast compared to how much of that currency is already in inventory.

        We know all currencies are on their death march, but US Dollar is the last and the slowest.

        In the light of all these problems, I see deflation as more of a threat than runaway inflation.

        • Greg

          NewAustrian
          I agree the U.S. will be the last man standing but the biggest debtor in the world is the U.S. and the country is not paying back a dime. This is why countries such as China, India, Japan, Russia, Iran and Brazil are by-passing the dollar in trade deals. The handwriting is on the wall for the U.S. dollar to lose its world reserve currency status. The question is when. What about raising the debt ceiling after the $2.4 trillion Congress voted for in August 2011 runs out? You didn’t addtress that issue. What happens if we raise it another couple of trillion? How does this equal a slow debasement? (Of course we did that in part to bail out the banks through Fannie and Freddie.) I don’t buy the argument we can print enormous amounts of currency with little down side. We are already seeing the effects in the form of inflation. By the way, Williams puts the outside chance of hyperinflation at 2014. Thank you for your spirited exchange of ideas!!! Love it.
          Greg

          • NewAustrian

            /* The question is when. What about raising the debt ceiling after the $2.4 trillion Congress voted for in August 2011 runs out? You didn’t addtress that issue. What happens if we raise it another couple of trillion? How does this equal a slow debasement? */

            Greg -

            Raising the debt ceiling is purely a political issue. The US has raised the debt ceiling many times. This is not new. Why do you think yields dropped after the last time US raised the debt ceiling? Like it or not, there’s still demand for US Treasuries and it’s not going to go away anytime soon. We’re talking about the largest, most liquid market in the world.

            As I see right now — money demand is high and velocity is low. Risk of inflation is transitory and headwinds for a US recession are much more stronger (for example a Euro or a US bank failing).

            Secondly raising the debt ceiling doesn’t automatically mean that the Fed is monetizing debt, all it means is that there will be more supply of Treasuries. If the Fed is buying Treasuries, then only there is monetization.

            /* This is why countries such as China, India, Japan, Russia, Iran and Brazil are by-passing the dollar in trade deals. The handwriting is on the wall for the U.S. dollar to lose its world reserve currency status. */

            US Dollar will lose the world reserve currency status, but only after the big wigs have figured an alternative. This could be in the form of SDR, where again US will be heavily involved. As I said before — it is more advantageous for the elites to take a controlled approach, not reach the end state through some uncontrolled disaster.

            /* I don’t buy the argument we can print enormous amounts of currency with little down side. We are already seeing the effects in the form of inflation*/

            I did not say we won’t see any downside. The risk of downside is not imminent that’s all. The inflation that we see today is purely transitory and not real. True inflation can happen only with meaningful increase in wages. You can raise the price to $5 a gallon today, but there has to be masses of people wanting to buy it for you to do that. There’s no such thing as a monolithic price, always a bid-ask spread.

            Happy to contribute to the discussion.

            • Greg

              NewAustrian,
              Raising the debt ceiling is NOT “purely a political issue.” The country cannot pay its bills with politics. We have to borrow or create money to spend it. The U.S.is monetizing a significant portion of its debt. Do you really think the world is loaning us all the money we are spending? No way. This is a gaping hole in your argument. The world is not going to ditch a the fiat dollar for a basket of fiat currencies SDR’s. If it does it won’t work for long. They are trading gold for oil as we speak. When the U.S. dollar is no longer the world’s reserve currency it will be a disaster for 99% of Americans. I do not buy your “don’t worry be happy” analysis. How can you say the “risk of downside is not imminent.” We have record numbers of people on food stamps. We’ve lost millions of jobs and unemployment is chronic (in reality around 22%.) Housing prices are tumbling despite the Fed suppressing mortgage rates to around 4% for a 30-year loan. Oh! and we are about to go war again in the next few months. Only Wall Street bankers were bailed out and continue to be bailed out. With this perspective I can tell you are not hurting and I am very happy for you! “There’s no such thing as a monolithic price, always a bid-ask spread.” You got to be kidding, right? Do you really think we have a true bid-ask spread?–Come on, you are being preposterous now. What do you think QE 1, QE 2 and soon QE3 are? You think the gold market is on the level with naked short selling. How about the silver market? How about the stock market? Have you not heard about the President’s Working Group on Financial markets aka the Plunge Protection Team? Every market is rigged in some way by the Wall Street bankers. And it you blow up your company by doing risky, crazy investments, no problem. Look at MF Global? 8th biggest bankruptcy in history with $1.2 billion in missing segregated client funds and not a single indictment! And if you blow up the world economy, no problem there either. The Fed pumped out $16.1 trillion bailing out the elite of the world and nothing is fixed! The math and the facts are all extremely dollar negative but hey “don’t worry be happy.”
              Greg

  19. Sandy

    Greg,
    It really isn’t fair to blame the main stream media, they’re just the patsies for the political class who give the real marching orders. Could you imagine the President or any other world leader standing up and telling every one the truth? It would be like someone in a crowded theater yelling “FIRE”. There would be chaos and mass panic as everyone rushes for the exits. Eventually, the slow moving collective awareness of the masses will awaken and panic will ensue but even then I’m sure that the propaganda machine will be trying to convince everyone that it’s still just smoke.

    • xxxxx

      The political class is the patsies of the Pentagon. Everything is fake the banking system , Congress and MSM.
      The reason bankers don’t go to jail is the same reason you don’t put the troops in jail for doing there job.
      The BS is so deep the Pentagon had to find a guy who’s dad was not a citizens to hold the country together with hope. That smile of Obama’s is part of the show and Ron Paul could become part of the show. PEACE LOL

    • M SMITH

      In afree market you please the person who is buying your goods & both parties are happy, not forced by some gov to buy sonething you don’t want or need, great work Greg, many are waking!

  20. C Young

    If we were most anywhere else in the world, financial calamity would have already been realized, apparent, and reported. I agree with many other posters here in the sense that there are many with vested interests for stalling a financial meltdown. Europe is the canary in mineshaft example. That being said, illiquid assets and savings for childrens college education expenses (home ownership being the largest middle class asset) gets caught in the cross hairs.

    Another aspect includes the dollar as the last haven for world trade and investment. The tides may be changing in this respect, but only a small percentage is being wagered on other nations currencies at this time. The US appears to be benefiting from fear abroad.

    All said, we are witnessing an evolution, rather than revolution. A trigger may appear that cannot be played by the 1%, but don’t count on it. He who owns the gold makes the rules.

  21. Frank Brady

    The political and banking establishments (but I repeat myself) have become insane, seemingly intent on destroying what is left of the U.S. economy and currency. The U.S. is a continental country, utterly dependent upon energy and so what is Washington doing? Going full speed ahead to impose a virtual blockade on the fourth largest oil producer in the world (Iran) because it believes with absolutely no evidence that Iran may someday produce a nuclear weapon.

    It is reported that the U.S. now has 100,000 troops adjacent to Iran and that a substantial portion of the U.S. Navy is either already in theater or steaming in that direction. Is it not clear what the result of war will be to the price of energy? What the ripple effects of massive energy price increases will be across the economy? What will happen to employment and consumer “confidence?”

    With three of the remaining four Republican Presidential candidates seemingly competing for the right to bomb Iran first, the U.S. has, literally, descended into absolute madness.

  22. Larry W. Bryant

    == No Change, No Hope, No Survival ==

    Yep . . . (P)resident Obama has become our “Baghdad Bob” — standing stoically by the palace gates (i.e., the White House) as made-in-Iran hot-air balloons drop their tons of worthless greenbacks, declaring that all’s fine-and-dandy, just you wait and see how we’re gonna bounce back.

    Our corporo-owned government has sold us, the People, out. And yet, we continue to vote into high office a warmed-over batch of rich, white males over 50 whose chief goal is to become richer. How can we ever hope for a reversal of this sad state of affairs? — Larry W. Bryant (1 Feb 12)

  23. Christopher

    Greg,
    Regarding this article, I just have to say once again you took the thoughts out of my mind and articulated them perfectly. It’s a lonely place to know what we know and to see so many lost in the dark.

    This is off topic however, i thought i’d bring up another joke being peddled in the MSM is this recent Bill to stop Congressional insider trading. I think it’s SB. 2038 (originally it was hr 682, then is was hr 1148, who knows how many more). i support this but I do not see any reason for anyone to be overly optimistic. First of all insider trading is already illegal for congressmen and the only reason they are not being indicted is because the SEC didn’t want to set precedence and prosecute politicians (as though they are royalty and not civil servants). Those are Joe Leibermans words not mine, minus the words contained in parenthesis. I don’t think this will do anymore to stop the corrupt activities anymore than Sarbanes-Oxley prevented Lehman bros and Bear Sterns collapse, or any more than dodd-frank will prevent future bailouts. Besides § 929I of Dodd Frank gives FOIA exemptions to the SEC thereby eliminating any transparency of the ‘independent’ SEC. Which didn’t do anything to prevent MF global either. Maybe that dodd frank clause is to prevent or rather protect any future harm to the reputation of honest businessmen like Joe Corzine. Oh and is the NDAA a preplanned way to confiscate gold via a Waco-Ruby Ridge style enforcement? Troublesome times ahead my friends.

    Finally, I just want to add that this is my first post, but i have been following you for a while now. I always enjoy your insight, in this blog and occasionally on coast to coast. I actually remember you and John Stossel were always my favorite investigative journalists on TV back in the day. I appreciate your incite and as another commenter put it ‘your ability to connect all the dots’. Keep up the great work.

  24. norcar survivor

    Greg
    While it is good to be optimistic as NewAustrian and Khan but to make a statement like “It is a gigantic disservice to the readers and viewers.” “True. But I also think falsely presenting disaster as being an **absolute certainty** is also a disservice to your own readers” As in Khans comment, help us understand why the MSM is capable of forwarding the lies and misrepresentations they do. You are one of a very few who not only report the real news but you back it up with specific facts that anyone can follow up on. Some of your readers say that some of your sources gave warnings for years before the big one hit in “08″. Yet it did hit. It would be easy to look at a static financial model and pinpoint the exact point of impact when an economy will fail say $100 will last 10 months if you spend $10 a month, but with the government willing to funnel worthless dollars in to this failed system without regard for repayment then the screen gets fuzzy. The important FACT is that they are right about the results even if wrong on the time.
    If I were a betting man which I am not, I would focus on the results, which affect us and quite worrying about how exactly timed their predictions were. We are facing serious problems yet there are still people out there calling us fear mongers for presenting information from a factual point of statistical evidence as apposed to meaningless words. Lofty words carry no meaning yet we have a world of history and precedent on display before us and still we are called fear mongers. If people are willing to continue to make excuses for the failures of this economy and this government scheme in particular then we must just shake the dust from our feet and move on to the next town. You do a great job Greg and I hope you will continue.
    People forget that Noah spent several days in the ark after it was finished, with all the animals, before the rain came. It didn’t happen just as he was installing the last nail. But I am sure he and the others in his family were happy they put a deaf ear to the scoffers below them as they sat in the Ark awaiting the rains. I’m also sure it was harder to turn a deaf ear to the left behind and their cries when the forewarned foods came.

  25. dejayajay

    America may not ‘fail’ economically, because when things get too bad, it might just use it’s military muscle simply take whatever it wants, from who ever has it.

    • Greg

      dejayajay,
      It has happened before and it is about to happen again. Thank you.
      Greg

  26. dejayajay

    (continued) The real danger to America might be to it’s soul, more than to it’s bank account.

    • Denarius

      America’s soul, embodied in its Constitution, has been sold off in bits and
      pieces over the last two hundred years, the average lifetime of an empire.
      There isn’t much remaining in either substance or time. The work on an
      appropriate tombstone has begun; suggestions for an epitaph are being
      accepted. The supreme irony is that the bill for it will never be settled.

  27. Sean S

    Hi Greg. As usual, spot on comment.

    Clearly, if the economy was in fact in recovery there would be no need for negative “real” interest rates and promises by the FED to retain the status quo on nominal rates for years hence. (Real interest rates = nominal rate minus the inflation rate). The official inflation rate as we all know is grossly understated so real interest rates are far more negative than “official” figures produce. This is terrible for savers and if you discourage savings (which is excactly what Fed policy is doing to force cash into highly speculative assets) then you undermine your potential pool of funds for productive investment.

    Cheap money would be fine if it was being used for productive investment in the real economy. Unfortunately, as we all know that is not where most of the the cheap cash is going.

    The US economy will not improve until the burst housing market significantly improves, productive investment expands, unemployment improves and confidence is restored to positive levels. That is not going to be anytime soon. As Mr. William Gross(PIMCO) wrote in his July 2011 Investment Outlook article:

    “It is becoming obvious that the 2012 election will be fought on a battlefield of job creation. A 9.1% official unemployment rate, and a number nearly double that when discouraged and part-time workers are included in the rolls, portend an angry and disillusioned electorate, which will include millions of jobless college graduates ill-trained to compete in the global marketplace. Over the past 10 years under both Democratic and Republican administrations, only 1.8 million jobs have been created while the available labor force has grown by over 15 million. It is clear, however, that neither party has an awareness of the why or the wherefores of how to put America back to work again.”

    Just as valid now as when written by Mr Gross half a year ago.

    One could not put it better than this if one tried.

  28. Nathan

    If you want to keep things as simple as humanly possible :follow the price of Gold . The hedge against insanity as i call it , the Fear trade as Wall St calls it . Think about this : The Dow is currently 1300 points away from its all time high of 14,087 on October 1st 2007 . Gold was trading in the upper 700′s then . Now 5 years later its around 1740 and the markets are nearing their all time highs on absolutely no good news , worse housing conditions , more people on food stamps , a possible war , crude at around 100 dollars ,etc etc etc ? The European meltdown wasn’t even thought of yet ? Ask yourself which is the bubble ?

    • norcar survivor

      Went to get some silver two weeks ago when Silver was at $32 per oz. They wanted $42 per oz. because he said he was paying $40 for 1 oz. rounds. That sounds like an up economic sign……not.

  29. JZ

    Greg,

    The MSM often times only speaks to inflation per the exact dollar cost of an item: “It’s the same price as two years ago.” Maybe so but is the product the same QUALITY and QUANTITY as five years ago? Nope. Five years ago, one Chick-Fil-A sandwich was almost a hearty lunch. Not anymore. You almost have to order two sandwiches now for a filling lunch and it is not the fault of the company. McDonalds food has never been that good for decades, but now it is lousy. No food quality there anymore or very little. Gasoline is higher in dollar terms but it is also of lesser quality because more water is added, it is less refined, and more “enriched” ethanol is added. Higher price AND far less quality and quantity, a double whammy.

    John

  30. Matslinger

    Here’s a foolproof investment.

    BUY NICKELS !

    In 2013 steel minted nickels will appear.

    In 1965 silver dimes and Quarters become worthless slugs.
    In 1967 Congressed passed a law to outlaw melting of these coins.
    In 1969 they had confiscated most of America’s silver, and repealed the law so (THEY) could melt the silver.

    In 2006 it became illegal to melt US circulating coins….

    do you see a pattern here?

  31. Sean

    Greg,

    I like you’re linked article on “Petrodollar pumping US policy on Iran, backfire looms”.

    Some of us were talking about this scenario prior to the US invasion of Iraq. My prediction is that history will prove petrodollars to be a primary driver (but not the only driver) behind the Middle East revolutions, which were likely modeled after the social media driven Rose Revolution in Georgia that was funded by George Soros, who later bragged that his effort was a success.

    Using social media to influence citizens and voters in sovereign nations is a huge psychological warfare opportunity for corporate globalists. When propperly harnessed, they have proven that they can use technology to influence opinions and motivate millions of people to support replacement of strongly sovereign leadership with leaders who are sympathetic to global integration and control by bank-controlled regional and international organizations.

    I suspect that this is the case in the Middle East – with revolution driven by globalist sponsored social media campaigns that are designed to eliminate leaderships who are not supportive of petrodollars and future central banking harmonization.

    To be clear, the globalisation plan certainly requires the eventual elimination of sovereign currencies like the dollar. Europe is the test bed. But this can’t happen on a global scale until all of the Central Banking organizations are in place and functioning within each economic region. Until that time, the US dollar is the hegemonic vehicle to finance the military needs of the globalists, and to justify and manipulate the control of all nations who depend upon imported oil and therefore need to invest in US securities as a pre-requisite to meeting their energy needs.

    Therefore, if you were to place yourself in the shoes of a globalist strategist, you have an absolute requirement to protect the petrodollar until you have moved the rest of the world into conformance with World Bank, IMF, WTO, and UN standards that enable implementation of common, harmonized central banking systems. In other words, unless something else gives and Iran stops it’s efforts to break free of petrodollar domination, there is an absolute requirement to break Iranian leadership. Otherwise, the corporate globalisation plan that has been under way for 100 years and has cost the lives of 100′s of millions of people will fail when they are only a few yards away from the finish line.

    • Greg

      Thank you Sean.
      Greg

  32. overtheedge

    I’m with you Greg.

    The real irony that what props this old barn up is “velocity of money” instills confidence in the money’s value. Then the MSM lives and dies by advertising revenues which is dependent upon consumption by increasing the velocity of money. And enter gov’t needing increasing tax base that depends on increasing the velocity of money. The MSM and gov’t depends on lipstick as well as an occasional gob of body putty and paint.

    Just remember that if these “pros from Dover” could fix it, they would. The “Time” issue (time to create, ergo time to fix) is nonsense. The bearings on a machine wear out over time. Repair and replace, hours to a few days. Time issue, no. This is a bunch of folks trapped in a deep well refusing to climb the rickety ladder because they know several WILL fall off.

    We can’t fix it but if we study this a bit more, maybe we can identify and manage who falls. Isn’t this the definition of “Politics?”

  33. Tomas Handzlik

    I’m really loving the theme/design of your web site. Do you ever run into any internet browser compatibility problems? A small number of my blog audience have complained about my site not working correctly in Explorer but looks great in Opera. Do you have any tips to help fix this problem?

    • Greg

      Tomas,
      Not that I know of and I cannot help you with your problem. So sorry.
      Greg

  34. Basement Finishing System

    Thanks for the information, it’s been useful.

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