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General News    H3'ed 2/2/12

The Real Economic Picture

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This article cross-posted from Paul Craig Roberts website.

John Williams, a specialist in government economic reporting, is the best and utterly truthful statistician that we the people have. If you have any money and you want to understand the lies that "your" government tells you with statistics, subscribe to John Williams at shadowstats.com.

The charts below come from John Williams Hyperinflation Report, January 25, 2012. The commentary is supplied by me.

Here is the chart of real average weekly earnings deflated by the US government's own measure of inflation, which as I pointed out in my recent column, Economics Lesson 1, understates true inflation.

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This chart (below) shows the behavior of inflation as measured by "our" government's official measure, CPI-U (bottom line) and John Williams measure which uses the official methodology of when I was Assistant Secretary of the US Treasury. The gap between the top and bottom lines represents the amount of money that was due to Social Security recipients and others whose income was indexed to inflation that was diverted by the government to wars, police state, and bankers' bailouts.

This next chart shows the gains that gold and the Swiss franc have made against the US dollar. The Swiss franc is the top line and gold is the bottom. When gold and the Swiss franc rise, the dollar is falling. Notice that during President Reagan's first term, when I was in the Treasury, gold and the Swiss franc dropped, that is, the dollar rose in purchasing power. Obviously, the supply-side policy that Reagan implemented strengthened the US dollar. It was only with the advent of the Bush policy of endless trillion dollar wars, reaffirmed by Obama, that the US dollar and economy collapsed relative to gold and hard currencies.

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The recent drop in the Swiss franc is due to the Swiss government announcing that the country's exports could not tolerate any further run up in the franc's value, and that the Swiss central bank would print new francs to accommodate future inflows of dollars and euros. In other words, Switzerland was forced to import US inflation in order to protect its exports.

Here is nonfarm payroll employment. As you can see, the US economy has been in recession for four years despite the easiest monetary policy and largest government deficits in US history.


Here is consumer confidence. Do you see a recovery despite all the recovery hype from politicians and the financial media?

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Dr. Roberts was Assistant Secretary of the US Treasury for Economic Policy in the Reagan Administration. He was associate editor and columnist with the Wall Street Journal, columnist for Business Week and the Scripps Howard News Service. He is a contributing editor to Gerald Celente's Trends Journal. He has had numerous university appointments. His books, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is available (more...)
 

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