Third quarter GDP numbers have no relation to reality says John Williams of Shadow Stats. He believes that unemployment hasn’t really recovered from the 2001 recession. GDP has become a nonsense number, worthless in terms of having any meaning in terms of the real economy.
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Government and Corporate Interests Continue to Erode Citizen Independence
For decades the United States government through Big Business has been involved in monitoring and controlling monetary and labor resources to the detriment of the average citizen and the entrepreneur.
Article on Associated Content by E. Manning
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When compared to the political wisdom being spread about in Washington, D.C. recently, the Federal Reserve, the government watchdog for the U.S. economy stands out in contrast. At the last FOMC meeting, the Fed admitted that (more…)
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2008 ended with an economic whimper mostly because of huge and underestimated American job losses, resulting in further economic collateral damage. Retirement savings that millions have poured their souls into have lost substantial value. At the December FOMC meeting, the Fed spent a considerable amount of time mourning and recounting the flailing job market and resulting economic damage.
What has really garnered attention is their revised picture regarding economic expectations for 2009. The economic gross national product is expected to fall much more sharply in the first half of 2009 than previously anticipated by the Fed. They expect a slow recovery of GDP over the remainder of the year depending on the political stimulus “from monetary and assumed fiscal policy actions.” That is “Greek” for government intervention.
“GDP was projected to decline for 2009 as a whole and to rise at a pace slightly above the rate of potential growth in 2010.” In economics, economic growth or economic growth theory often refers to growth of potential output or production at full employment, which is caused by growth in aggregate demand or observed output. Since all the relevant figures are skewed, the Fed’s statement is pretty much meaningless as far as content, but is designed to inspire hope in the psychological realm.
Americans are taking a beating where their personal wealth is concerned. Interbank lending and bank lending in general remains frozen, the system continues as broken, a creation of the unprecedented greed and misuse of the economic system during the Bush administration as they cheered on the economic boom as true prosperity. Instead, the boom years of the Bush administration has proved to be a manipulation of the system for corporate and personal goals by those in power without supervision and little regulation.
The problem of transparency continues to be the single major issue in all finances across the board. However, the process of making the financial process more transparent will put someone in more control, with the potential to not only to observe and manipulate, but profit directly from the any new process of transparency. Additional transparency creates power for the administrative body that deals with transparency issues, likely creating a fascist influence. The Federal Government isn’t likely to jump at the task of dealing with the prospect of increased transparency that is being heralded. Congress has proved that they don’t really deal with the reality of money.
The process and the profit from any additional transparency will likely fall to the Federal Reserve, a corporate body with their own profit and global agenda: a brotherhood of central bankers. They have received the power so far because of the lack of discipline and direction offered by U.S. government officials, whether executive or legislative. ~ E. Manning
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The U.S. Treasury Department is scared out of its wits regarding the current plight of investment banking institutions. Treasury Secretary Henry Paulson claims that the government must quickly give the Federal Reserve more power to regulate the financial system, saying this year’s financial market turmoil highlighted the need for action. Know this now: we have a red herring or two in the mix.
Paulson said the nation is facing a “trio of head winds – a housing correction, capital markets turmoil and high energy and commodity prices.” While what Paulson says is true, behind the scenes we have another story playing out. The claim that the Congress must quickly give the Fed more power smacks of panic, but not without cause on several counts.
The Treasury Department is looking another failure square in the face despite (more…)
In the major advanced foreign economies, the growth rate of gross domestic product declined in the fourth quarter. The source of the slowdown has varied substantially across economies. In the Euro area and in the United Kingdom, output was restrained by a softening in domestic demand. In contrast, Canadian domestic demand continued to increase at a very strong pace, but because of an offsetting steep decline in net exports, real GDP rose only modestly. Japan was the exception among the advanced foreign economies to the pattern of slower growth; real GDP there strengthened in the fourth quarter with higher domestic spending and continued strength in exports.
Early first-quarter economic indicators for advanced foreign economies pointed to slowing growth. Growth slowed a bit in emerging markets, though it continued to advance at a fairly strong rate. In emerging Asia, the pace of real GDP growth picked up in the fourth quarter in China and South Korea, but it softened in most other countries. The rate of increase in economic activity slowed in Brazil, Mexico, and several other countries in Latin America in the fourth quarter, but remained generally strong.
The outlook for the United States is seen as negative and fragile. The Fed reported problems of declining asset values, credit losses, and strained financial market conditions could be quite persistent, restraining credit availability and economic activity, delaying and dampening economic recovery.
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“The U.S. economy is facing substantial challenges. The housing sector continues to weaken, production and spending in other parts of the economy have decelerated, the labor market has softened noticeably, and the turmoil in financial markets has led to a reduced availability and a higher cost of credit to many households and businesses. Indeed, real gross domestic product (GDP) rose at an annual rate of only 0.6 percent in the fourth quarter, and the available data suggest that the economy has relatively little momentum going into the first quarter. Moreover, upward pressures on inflation have emerged, emanating in part from the rapid increases in prices of crude oil and some other commodities.”
The Fed finally comes around to telling most of the truth. It’s a bit late, but the public word is finally out. Mishkin is not summarizing however. The description that Mishkin provides is strongly reminiscent of the meaning of the word “stagflation”. How long will it take for the Fed to admit to this truth? The stopwatch of truth is running.
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