'Tis Only My Opinion!

February 2015 - Volume 35, Number 2

The Circus Returns!

During the latter stages of the Roman empire, politicians used the Coliseum and the games presented therein to mollify their citizens.

Today, the Super Bowl and other sports events like the Olympics have become the opiate to divert the U.S. citizens attention away from the crumbling base of the once dominant US superpower.

But, like the Roman Empire, we are seeing the facade of invincibility wash away before our eyes.  The following photo shows the current status of the old symbol of the Roman Empire after the politicians had debased the currency and left behind the principles on which the Empire was based.

lf you listen to the pronouncements from the Ministry of Truth and the main stream media as well as President Obama's State of the Union speech, you would believe that the U.S. economy is well and that our position in the world is strong.

Unfortunately, the real situation is somewhat different.

The stated cash deficit was supposed to be lower at $484 billion for FY 2014. If correct, how do you explain the fact that the U.S. stated cash debt rose $1.2 trillion.

By changing the methodology of calculating the GDP in 2013, the Ministry of Truth was able to suggest that the 3rd quarter 2014 GDP was increasing at a 5.0% rate.  The change in methodology added about 3% to GDP.

John Williams of Shadow Government Statistics calculates the GDP using the methodology existing in  1980. The data using that method would show that the country entered into recession during the 3rd quarter of 2004 and has not recovered as shown in the following graph.

The Obama Administration touts the falling unemployment rate as being indicative of an improving economy. Yet, almost 48 million people are receiving food stamps and the labor participation rate has fallen to levels not seen since the 1970's.

By changing the calculation of the Consumer Price Index, the appearance of inflation continues to be muted as reported by the Ministry of Truth.  Since June 1996, the CPI has been modified 22 times.  The following chart from Shadow Stats shows the difference of the original series as well as the modified series.

As the above chart shows, consumer inflation as calculated by Shadow Stats is running about 9% per year whereas the Ministry of Truth indicates that it is between 1 - 2%.  The Chapwood Index continues to show that the real cost of living as evidence by their actual purchases in metropolitan areas is running between 8-13%.

The Ministry of Truth points to a rising stock market as evidence that all is right with the economy even if much of today's corporate profits can be attributed to financial engineering.



As the stock market rises, many U.S. citizens believe that things are getting better.  However, if you take a look at the S&P 500  and the NASDAQ indices priced in gold, a totally different picture arises.

The stated goal of all central banks is to foster inflation ... in the U.S., the Keynesian's believe that it takes between 2 to 2.5% annual inflation to keep the economy moving forward.  Of course, what the central bankers really are saying is that they want to tax away 18% or so of your wealth in the next decade.

As nations instigate swap agreements for trading between nations, the role of the U.S. dollar as a reserve currency is lessened as well as the multitude of benefits which the U.S. enjoys in financing its debt.  Historically low interest rates have enabled the U.S. to continue to increase the nation's debt.  However, when interest rates increase and make no mistake, they will .... the piper will be paid.

 I am not taking any bets on that outcome. 

But, turn on the TV and watch the Super Bowl! Let the games begin!

Sit back and forget for a few moments, the multitude of black swans facing the nation.  Anyone of which could trigger a major meltdown!

But then - 'Tis Only My Opinion!

Fred Richards
January 31, 2015



Corruptisima republica plurimae leges. [The more corrupt a republic, the more laws.] -- Tacitus, Annals III 27

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Last updated - December 31, 2014