Date: Fri Oct 31 2003 08:20
trotsky (CNBC) ID#377387:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
on 'productivity growth' - which is one of the data points the government has distorted beyond recognition and any semblance with reality via hedonic indexing: "we must recognize that we're in the middle of something extraordinary here in terms of economic efficiency gains". oh yes, we must recognize that - namely that we're facing an unprecedented, truly extraordinary amount of government directed bullsh*t when looking at these data. the same holds for every other set of data that is subject to the aforementioned distortions, and not coincidentally these data are among those regarded as the 'most important' by most economists and the markets, namely GDP and inflation. it is these days virtually impossible to get a read on the true state of the economy unless one makes the effort to 1. meticulously check all data that have so far escaped the machinations of the government's statistics minions ( i.e., forget about productivity, inflation, 'growth' , and employment data. capacity utilization, total credit market debt, and the current account are however o.k. as far as i can tell, i.e. not yet mangled beyond recognition ) and 2. run those stats that they have distorted through a filter that backs the distortions out again. the results are frightening, to put it mildly. they suggest that absolutely HUGE amounts of debt creation over the past 3 years have barely managed to keep the economy in a state of treading water. one of the biggest contributors to 'real GDP' expansion, information technology ( reported growth: 60% in 3 years ) , has in fact seen a collapse in mominal spending of 14% over this span, which is to say that after accounting for inflation, we're looking at a depression in the sector. there is no other word for it. and yet, the government manages to sell this sorry state of affairs as an expansion - which is an audacity almost beyond belief.
of course we know that the bureaucrats are well aware of the true facts - we only need to read between the lines of the FOMC's recent statements accompanying rate decisions, or rather non-decisions of late. what we have is a mountain of debt that keeps growing exponentially, and is supported by shrinking economic activity as well as out-of-this-world asset inflation ( e.g., prices of condos in San Diego have roughly doubled over the past 3 years - while their real, actual value has of course depreciated ) .
oh yes, it is truly EXTRAORDINARY, they got that much right. it's probably the most maladjusted economy in the world's history, and there's an extra element worthy of consideration, namely that the world's monetary dispensation depends on the dollar as its 'reserve currency' - which is to say that precisely the currency in which this overinflation of financial claims occurs is at the same time the very basis for the entire globe's money system, thus ensuring that the collapse will eventually take down everybody.
a financial and economic catastrophe of unprecedented magnitude awaits its 'tipping event', and the longer it takes for same to arrive, the more potential energy will have been stored up and be released.
got gold? |
