By Greg Hunter’s USAWatchdog.com
It appeared one of the President’s top economic advisors, Larry Summers, was trying to do a preemptive strike against what may be some bad unemployment numbers. If unemployment is up, blame harsh winter weather! John Williams, an economist from shadowstats.com (also known as Shadow Government Statistics), feels just the opposite. In his latest bulletin, Williams says, “Reuters reported that Larry Summers, in a CNBC interview (Monday, March 1st), claimed “winter blizzards were likely to distort February jobless figures.” I take such comments from an Administration official — in the week of the employment report release — as an effort to alter market expectations and to soften potential negative market impact from worse than expected results.” Whether or not unemployment creeps up, it is outrageous that a top administration official would blame the weather for a less than desirable employment statistic. That sounds like a grade school excuse on the same level as “the dog ate my homework.” SGS points out the straightforward idea “People generally do not lose their jobs due to snow days.” This morning Bureau of Labor Statistics reported unemployment remained steady at 9.7% as 36,000 jobs were shed from the economy. (SGS unemployment now stands at 21.6%, up .4% )
Unemployment continues to look better than reality because of accounting gimmicks used at BLS. In the latest SGS report, economist John Williams says, “. . . As economic activity shows renewed or intensified downside movement in the months ahead, the unemployment rate should rise and payroll declines should intensify (net of short-lived census hiring), regardless of the reporting distortions.”
In other new real numbers from SGS, total obligations for the U.S. government went way up in a just released report. Shadowstats.com said, “. . . total federal obligations as of September 30, 2009, stood at $70.7 trillion, up from $65.6 trillion the year before . . .” What does that mean? Well, in 2002 the total U.S. obligations stood at just $35 trillion and change. So, the indebtedness of America doubled in just 7 short years. With a Gross Domestic Product of $14.3 trillion, total U.S. obligations are nearly 5 times GDP! Rising obligations are not a sign of good economic health.
Finally, have we already started the next wave down on the double-dip recession that is shaping up more and more like a depression? Williams thinks we still have “continued financial system instability.” Williams says things are getting worse and the Fed knows it. He says, “. . . Mr. Bernanke continues to behave as though he has a serious problem. Consider the latest surge in the monetary base.” It surged by $90 billion in just the last 2 weeks of February. It was another new record. Record amounts of money printing will produce very big inflation. I just don’t know exactly when.
Even though a record amount of money is being created and pumped into the banks, SGS says the overall money supply is still shrinking! That means money is being held back from the “main street” economy by the banks. I think the Fed is pumping in money because it knows big losses are coming! The banks will simply need extra cash on hand to pay off sour investments. That’s one big reason they are not lending. So, shrinking overall money supply is the tip-off we are getting on a down elevator and, according to Williams, that is “signaling an intensifying economic downturn in the months ahead.”