By Giordano Bruno
Neithercorp Press - 03/10/2010
Winter is slowly melting away here in the U.S., and Spring will soon be upon us. Wall Street is currently flush with delight at the year long run of the stock market (driven by fiat bailouts), which at first glance appears to be doing quite well, though international incidences such as those in Dubai and Greece have revealed how shaky the market actually is in the face of any unhealthy news. In the meantime, the dollar, recently on the edge of detrimental value loss, has made a semi-miraculous recovery in the span of a few months, especially as the Euro suffers. Official employment numbers, despite the continuous loss of jobs monthly, have somehow fallen and are for the moment stabilized. Is it time for America to dust off the old credit cards and return to the wild and rollicking carefree spending days of pre-2007? Perhaps not…
While the mainstream media puts on the recovery song and dance, the fundamental problems of the collapse remain the same, and in some cases are growing ever more precarious. Subsections of the public, unaware of the real issues at hand, are holding a misguided jubilee in the tranquil eye of a hurricane, wrongly assuming that the storm has passed.
The world is breathing a hasty sigh of relief at the beginning of 2010, but what are the facts behind the current “peaceful” economic moment? In this article, we will examine whether or not the good news is legitimate, or, if are we being lulled into a false sense of security…
Job Market Statistics Manipulated
At the beginning of the year, official unemployment stood at around 10%. This number of course does not include those people who are off unemployment benefits and still have not found jobs, or those people who are underemployed. The Labor Department then announced their intention to revise their “birth/death ratio” method of calculating job loss, which would supposedly add a whopping 800,000 lost jobs to their books that were hidden before:
Directly after this news was released, markets braced for a substantial increase in the unemployment percentage. Yet, by some act of magic, the unemployment percentage fell to 9.7%!
How is this possible? Well, those of us who were hoping for greater Labor Department transparency (including myself) should have known better. With the Labor Department, two-plus-two NEVER equals four…
As the EPI article above indicates, while the government has reportedly changed their dubious “birth/death ratio” method, they also at the same time changed their “home survey” method. This survey is meant to give the Labor Department an overall view of unemployment percentages, but now the government has sharply reduced the number of households they actually survey, making the results more volatile and easier to manipulate. This why even though nearly a million jobless people were added to the unemployment rolls, the government was still able to report a drop in unemployment percentages. Sound like a dirty trick? Yes, it is…
According to the EPI’s estimates, which are probably still conservative, over 11 million jobs would need to be created in order to bring employment rates to pre-2007 levels. This is called the “jobs gap.” To fill the jobs gap by 2013 (which is about the time frame that the government has suggested it would take for a full recovery) the U.S. would need to generate over 400,000 jobs a month for the next three years! As I think most of you can see, this is not going to happen. Last month according to official numbers the U.S. lost another 36,000 jobs. Jobs are not being created, and will not be created anywhere near the 400,000 a month mark required for a three year recovery.
Also not often reported is the span of weeks at which those who are unemployed have to wait until they find another job. This “lag time” in-between jobs has grown markedly higher in recent months as the chart below shows:
In January of this year alone, 6.3 million people (over half of those unemployed) had been without a job for more than 6 months. This is an astonishing number, and it shows just how out of touch MSM reports of recovery are. Anyone who has been unemployed for more than just one month knows how tense and uncertain such a situation makes life. Imagine the misery of a 6 month hiatus from steady work, not able to fully support ones self and not knowing when you’ll be able to again. The Labor Department, nor the media, seems to take the factor of ‘duration’ into account when considering whether employment is actually in recovery. Nor do they take into account the fact that most of the jobs lost over the past two years were high paying and specialized, while most of the scant few jobs created have been low paying service sector positions.
What is most frightening about this information is that it reveals deliberate mishandling of statistics. Instead of being more open about unemployment numbers, the government is moving to hide them further. But why would they escalate secrecy on the economy?
The Day The Dollar Died
Last week, Li Ruogu, chairman of Export-Import Bank of China, a lender tasked with supporting the country’s foreign investments, stated that China would continue to support the dollar and that reports of a break from U.S. treasuries were “absolute nonsense.” Investors in treasuries this week seemed to take the comment as a good sign that the dollar’s place as world reserve currency is assured. However, one might ask why it was suddenly so important for China to comfort treasury markets?
Interestingly, statements of China’s “affection” for the dollar have come right after their central bank decided to dump $34 billion in U.S. treasuries. Along with other nations, the U.S. suffered the worst one month treasury dump on record so far at $53 billion:
This follows a treasury dump last year by China of $25 billion, after which we predicted that such dumps would occur more frequently and in larger amounts. Apparently, we were right:
Initially, it was reported after their latest dumping of U.S. bonds that China had lost its position as the number one investor in U.S. debt, placing Japan in the top spot. Strangely, only days later this report was rescinded after the Treasury released a statement claiming that China did indeed dump $34 billion in bonds, but, they were still the number one investor in T-bills:
How is this possible? According to the Treasury, they “forgot” to include Chinese treasury holdings in third markets such as Hong Kong and Britain. This is very strange. Who holds these extra bonds and what are they doing sitting in foreign venues? Is it not convenient that these bonds appeared from thin air just as news of China’s treasury dump was hitting the bond market? And now we suddenly have a Chinese finance official attempting to reassure the world that China still wants T-bonds while at the same time they are trying to get rid of them? If this behavior seems confusing it is because this is what occurs when governments lie big; no matter how good they are at it, they can’t make the facts add up.
If one examines Treasury Auctions month-to-month, they would find that “Primary Buyers” of treasuries (who have to buy treasuries when no one else is buying) now dominate auction sales. Indirect buyers, who cannot be tracked, also make up a large portion of competitive bids on treasury bonds. It is suspected that most of these indirect buys are made by the Federal Reserve itself in order to prop up the dollar. The article below explains the process succinctly:
The bottom line is that foreign governments are NOT buying treasuries at volumes necessary to keep the U.S. afloat amidst its ever climbing national debt, and in some cases, they are now trying to quietly and gradually dump what they have so as to not arouse immediate suspicion from the markets. In fact, the Treasury and the Federal Reserve seem to be helping them do this!
The dollar is, in effect, dead, but disinformation and market manipulation, mainly by the private Federal Reserve, is being used to reanimate it for appearances. The result is the conjuring of a kind of “zombie currency,” a Weekend at Bernie’s currency that the Fed props up with strings and pulleys to fool everyone at the party.
The most obvious question here is, why go through so much trouble to keep the dollar around at all?
World Government And The SDR
Since the “Great Recession” began, economic forums and conferences such as the G20, and the annual World Economic Forum (WEF) in Davos, Switzerland have spoken of little else except the formation of a centralized world economy and the establishment of a legal body that has the power to run it. At the Davos “workshops,” economists and others present ideas for world governance as if they were the originators of the concept. It may not be surprising to most of us that there is rarely if ever anyone who participates in the WEF meetings that supports the restoration of national sovereignty. In fact, nearly all the participants seem to assume that a world government is the solution to all our ills. It is also important that like the G20, government officials from all over the world attend, including those from the U.S., and that very often the policies developed at these forums end up in legislation and mass media here at home. Meaning, the laws and propaganda supporting forced globalization and world government are fine tuned at the meetings and then brought to America for mass consumption. Below are a couple video examples of Davos workshops: