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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: glenn_a who wrote (53443)	2/11/2006 11:29:25 AM
From: Jim Willie CB	Read Replies (3) \| Respond to of 110194

The USEconomy has entered an unofficial recession, when the light of reality is shed on the system of statistical measurements. The Q4 Gross Domestic Product, reported as seeing 1.1% growth, was knocked back by a 1.18% trade deficit. Practically, the same GDP was knocked back by 1.5% in inventory growth. Remove at least 4% in utterly bold fraudulent exaggeration to arrive at a minus 3% GDP for the fourth quarter. 321gold.com See “Negative Q4 Real GDP, Really” for a clear delineation of the deception inflicted upon the US and world community. This is more than about investments. It pertains to monetary policy, job creation & outsourcing, capital expenditures, federal budget decisions, foreign policy, and diplomatic relationships. The flat and even inverted Treasury yield curve is a very reliable economic signal, correctly forecasting every recession in the past with only one exception in the wake of the Asian Meltdown in 1997, followed by the Russian Debt Default and LTCM fiasco in 1998. The foundation to the GDP lie is the GDP Deflator intended to remove price inflation. Its series is 0.7% lower in 2005 than the absurd CPI. Most growth is simply improperly adjusted price inflation. We label inflation as growth. The Pre-Clinton calculation formula for the CPI runs a full 3% higher than the falsified CPI. So the GDP is really 4% lower than reported. The Q4 GDP should subtract 1.5% inventory growth to arrive at a minus 0.4% GDP from final demand alone. Furthermore, the colossal trade gap removed 1.18% from the GDP. We have plenty of economic activity. It is filling inventory shelves and warehouses, as well as keeping Asian factories bustling with busy workers and new jobs. The economic slowdown & pullback confirms the inverted Treasury yield cuve. Justifications do not pass the smell test. The bond conundrum is the harsh shrill reality exposing the lie of economic statistical deception, massage, and gamesmanship. The bond conundrum attacks the credibility of the flexible system whereby the United States runs massive federal and trade deficits, and the world finances them. Their favorite instrument represents the only liquid arena to handle such large capital blood loss, the USTBond market, which doubles as the device used to rescue the USDollar overnight when it is attacked from crippled fundamentals. Negative GDP would render the USDollar as vulnerable. It explains the attractive investment of long-dated USTNotes and the flat yield curve. This is pure confirmation of the inverted Treasury yield curve signal, not permitted by the statistical fraud. Denial of the situation comes in the form of Treasury yield curve rationalization. This is creative economics. (pulled from my monthly report under progress) thanks, jim