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America's Second Great Depression 2010 Year-end Update (Part 3)
Wednesday, January 5, 2011, by Stathis
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I continue where I left off from Part 2 of this report. [1]

In support of their claims of an economic recovery, Washington cheerleaders and Wall Street hacks continue to focus on ancillary metrics like GDP and corporate profits, all while fudging inflation data. [2] [3]

The claim made that a recovery is in place can be easily refuted using simple math. If you don’t have healthy employment, you don’t have a healthy economy. In a nation whereby consumers account for close to 70% of the economy, economic growth is ultimately driven by jobs. [4]

Before we examine the GDP data, I wanted to discuss some of the shortfalls with the use of this metric as an indicator of economic growth. The gross domestic product is a measure of the value of all goods and services produced in the national economy available for consumption. As the single most relied upon metric of economic health, GDP has numerous flaws which I detailed in America’s Financial Apocalypse and elsewhere.

Boosting GDP Using Debt

First, GDP numbers say nothing about the source of consumption, whether it’s from cash on hand or mounting debt. Consequently, at anytime Washington can borrow trillions of dollars and send it to consumers and state and local government programs so as to artificially boost the data. This is precisely what we have seen going back to the Bush Administration.

As you can appreciate, this by no means represents real economic growth. It’s similar to so many of America’s $30,000 millionaires who drown themselves in debt, buying all of the latest trendy gadgets and designer clothes, all while taking out an 8-year loan to buy Navigator, so as to appear well off. These individuals are not only not well off, but by racking up a huge debt, they have dug a deep hole for themselves. 

This is precisely what Washington has done by issuing trillions of dollars to bailout the global banking system, real estate tax credits, economic stimulus plans and so forth. Obama’s latest tax cut has only made matters worse at a time when fiscal prudence is absolutely critical to the nation’s long-term future. [5]

GDP Growth Doesn’t Necessarily Lead to Higher Productivity

Another shortcoming of GDP is that it measures output that produces no net change or productivity, such as that seen for reconstruction of New Orleans after hurricane Katrina or the wars in the Middle East. While capital was pumped into the region to help restore living standards, no net improvement was made relative to before the disaster (unless you count the estimated $1.5 billion stolen from FEMA by some). Yet, GDP data assumes these expenditures resulted in improvements. In fact, one could argue that living conditions are worse now. I’m sure those who have been exposed to the formaldehyde-laden mobile homes would agree.

The same may be said of the Wall Street bailout. This was a huge sum of money shuttled to criminals who would have been ten feet deep by now if they had pulled off in China what they did in the U.S. Aided by a relaxation of prudent accounting standards, bank profits have boosted GDP. The problem is that there are no real profits.

GDP Is Poorly Correlated to Living Standards

The importance of GDP as an economic indicator is reflected by its frequent use as a measure of living standards within an economy or nation. However, there are many weaknesses in the use of GDP as a measure of a nation’s living standard. In short, GDP only provides an overall measure of economic output of a given nation, but speaks nothing of individual living standards or the overall well-being of a population. As well, GDP numbers include government spending, such as that for Katrina and the wars in Iraq and Afghanistan. I’d like to know how spending $2 trillion for wars in the Middle East adds to GDP growth.

Consider that a nation which exports 100 percent of its production (Iraq for instance, due to oil exports) might have a high GDP, but not necessarily a high standard of living. As it turns out, many other factors are involved in determination of living standards, such as employment and wage data, inflation, interest rates, currency exchange rates, debt levels, fiscal and monetary policy, and government benefits.

The counterargument is that while GDP may not provide an accurate measure of living standards, trends in living conditions tend to move in the direction of changing GDP data. While that may be true over a long time frame, in my opinion that cannot be said necessarily for less than a five-year period.

Yet, when GDP figures are released each quarter, the stock and bond markets react as if this number has provided an accurate picture of the economy. In reality, this is rarely the case. And when Washington wants to assure consumers that the economy is strong, officials remind us that the U.S. has the world’s largest GDP of any major nation, and thus the highest living standards.

What they fail to mention is that the methods used to calculate GDP are flawed. As well, the productivity gains have not been equally distributed to all Americans. If in fact GDP data serves as an accurate measure of improvement in living standards, it only applies to the top 10% of wage earners at best.

Annualized GDP Data is Extrapolated

When the Commerce Department reports GDP figures each quarter, the data isn’t reported like a U.S. corporation. When a corporation provides an earnings statement, it shows comparisons of revenue, earnings, etc. from the same quarter of the previous year (called year-over-year reporting).

In contrast, the U.S. government reports changes in GDP relative to the previous quarter. In addition, each quarterly GDP figure is annualized or multiplied by a factor of four, which implies this quarterly figure will continue over the next three quarters. Why do corporations report year-over-year numbers but the U.S. government reports a rolling, highly inaccurate, annualized number?  

Consider that year-over-year numbers minimize the effects of business and economic cycles. The fact is that all businesses (and therefore government operations) experience changes in business health and earnings due to seasonal or business cycle fluctuations inherent to their industry, the dynamics of the company, and the economic cycle. Therefore, in order to minimize the effects of these variables, companies report the year-over-year changes.  In conclusion, because each quarterly GDP figure is extrapolated over 12 months, it’s virtually impossible to detect GDP trends accurately even if the numbers, when reported were accurate. But as we shall see next, accurate reporting is rare. 

GDP Data is Revised for Up to 5 Years 

If the previous considerations haven’t been enough for you to question the accuracy of GDP data, you should keep in mind that Washington provides GDP revisions for up to five years after the data was first reported. That’s why you often hear adjustments to GDP numbers long after they were first made public. It’s also why the government often changes the dates of recessions several months and sometimes many years later.

While these adjustments might be a valuable exercise for historians, they do nothing to alert consumers and investors of the current and future expected economic environment. There’s no way to consistently and accurately predict future growth trends using GDP data due to these inaccuracies. 

Relying solely on GDP data that is subject to revision for up to five years is too inaccurate to provide a reliable measure of economic activity. But when you consider how poorly GDP data reflects real economic activity for consumers, it becomes even more dubious.

Thus, it’s easy to see that a nation that is increasing its debt can show healthy GDP numbers when in fact the picture isn’t as rosy as reported. This is especially true when credit spending has accounted for a large amount of the GDP growth, as in America’s case.

Therefore, when examining GDP data, one should investigate where and how the productivity occurred, whether there was net improvement to the majority of Americans, and what costs (debt or deficit) were incurred, rather than focusing on the magnitude of the number.

The best way to measure economic growth and changes in living standards is to examine other macroeconomic indicators in addition to GDP, such as interest rate (yield curve) and inflation trends (the CPI and PPI, core and non-core), trade imbalances, currency exchange rate trends, job loss and recovery, underemployment, real wage and benefit growth, debt and money flow trends.

And if you do elect to use GDP as a measure of economic activity, at least measure it accurately and make the appropriate adjustments. [6]

I point to the problems with GDP data because this is the primary metric used by economists to determine the strength of the economy. And because most other metrics remain miserable (employment and the real estate market) there has been an especially strong emphasis on recent GDP data by economists as proof of an economic recovery. Now that you have an idea how unrevealing this fudged GDP data is, hopefully you will look past the propaganda delivered by Washington, Wall Street and the media.

Now let’s take a look at pride and glory of Washington and Wall Street; GDP data.

Gross Domestic Product (GDP)

Recall that in 2008 the economy shrank for 4 consecutive quarters; the longest stretch of economic decline since the Great Depression. In addition, GDP fell into the negative territory during this collapse; the first time that has happened since the Great Depression.



While GDP certainly did not collapse to the –30% GDP or so as recorded during the Great Depression, one cannot make one-for-one comparisons because there are too many differences between the two periods as you can imagine.

Washington has handed out trillions of dollars in a variety of forms as a manner by which to fool the America people, from home and auto subsidies, to emergency relief for states. This has been responsible for a partial rebound in GDP as the previous chart illustrates. But this is not real GDP growth because it’s come on borrowed money.

As a result of this printing frenzy by the Fed and wasteful tax dollars via Washington, the economy has registered 5 consecutive quarters of GDP growth according to the agencies responsible for manipulating the data. However, according to my own analysis, once GDP has been adjusted for debt spending and for expenditures that do not contribute to improved living standards, there has been not one quarter of real economic growth since 2007.

In fact, if we go back to 2002, from my estimates there have only been maybe 4 or 5 quarters of GDP growth (out of 36) after adjusting for debt spending and other tricks used by Washington and the Fed to create the illusion of a recovery. 

When monitoring GDP data, it’s important to keep track of previous rather than final estimates because the stock market moves several months in advance of economic data. Earlier in the year, Q3 estimates were above 3%. In recent months, economists slashed these estimates, largely without mention by the media. But as lowered revisions materialized and housing subsidies expired, the stock market has continued to rise. This is not good because the market has not been adequately factoring in the real economic data in my opinion.

Much to my surprise, Q3 GDP was recently revised up from 2.0% to 2.5%. The upward revision was attributed to increased labor income gains that trickled down to fuel consumer spending which rose at the fastest pace since Q4 2006. By now you can imagine that I do not trust this data. However, I predicted the momentum would carry over into the Holiday season, especially given that retailers were bending over backwards to reign in customers with all kinds of discounts and promotions. But keep in mind that a good deal of optimism has been factored into the U.S. stock market.

 



In November, the Philadelphia Regional Federal Reserve Bank reported the results of a survey of forecasters responsible for estimating GDP. They revised Q4 GDP data estimates down from 2.8% to 2.2%. I have continued to forecast further downward revisions in GDP, so this comes as no surprise. You should note that this downward revision was not reported in the mainstream news.

In the February 2010 AVA Investment Analytics newsletter, I stated the following...

“In order to get the unemployment rate down by just 1%, GDP would have to grow by at least 5% by 2010, which is virtually impossible, even with the massive spending by Washington. Based on this, you can make your own estimates about how long the U.S. will have a high unemployment rate.

I’ll give you some assistance here. In the BEST of scenarios, based on current spending projections, I would estimate that over the next ten years, GDP will grow by an average of 3.5%.

But the U.S. would need at least 5 years of GDP growth at around 5% in order to bring unemployment down to around the “fully employed” level of around 5.0%. That also assumes the other five years will average about 3-3.5% GDP growth. 

I can tell you now this scenario is EXTREMELY unlikely, UNLESS we see many additional stimulus packages. But of course additional stimulus packages will be like trading apples for apples because more debt spending will hamper the long-term growth of the economy.

As you can imagine by now, what this means is a lost decade at best.

You should also note that about 65% of the impressive 5.7% GDP growth (2009 Q4 data, which has since been revised down to 5%) was from industrial production; not to meet consumer demand, but to rebuild inventories.

So the next leg is for consumers to deplete inventories so that production will continue. This isn’t going to happen. You should expect to see Q1 2010 GDP data much lower and I expect even worse data for Q2 2010.

We must also question whether funds are being spent to ensure a long-term recovery by boosting demand. I have concluded that both objectives have fallen well short of what is required.

The effects of this collapse will be felt for at least a decade, probably two.”

Source: February 2010 AVA Investment Analytics newsletter.

I also want to discuss some sobering data I presented several months ago. Job growth is directly correlated to GDP as you can imagine. As the first chart shows, the effects of the collapse have permanently lowered GDP through at least 2020. This is based primarily on projections for employment and GDP. 


Financial Crisis Permanently Lowers GDP

GDP % Change, Before and After Crisis

 

By some estimates, GDP would have to average 6-7% annually over the next decade in order to recoup pre-crisis levels. That’s not going to happen.

Understand that in order to keep pace with population growth, at least 160,000 new jobs (or a generously conservative estimate of 125,000) must be created every month. Currently, there are about 2.5 million jobs LESS than in 1999. Over this period, there has been a net loss of jobs (adjusted for population growth) of about 11.5 million. Thus, in order to reach this previous level of employment, we would need to see around 700,000 to 800,000 new jobs every month for about 2 years. While that kind of job creation may happen in China and India, it sure isn’t going to be seen anytime soon in the U.S.

Americans need good jobs; jobs with employee benefits. And they need raises that at least keep up with inflation. Since 1999, real median incomes have not increased by one penny. In fact, they are declined. When you calculate the cumulative inflation since then, you can see how much median incomes have been carved down. Now add the poor effect (a boost in personal savings rates in response to the economic collapse, predicted in America’s Financial Apocalypse) due to the loss in investment and retirement account values and real estate values (i.e. the loss of the wealth effect) and you can see things are miserable.



Next, add a 150% increase in health insurance premiums and a 250% increase in energy costs over the same time frame, and it should be obvious that middle-class Americans (what remains of them) are struggling. The situation is much worse for lower-class Americans who are struggling just to pay for basic necessities. And the results show.

Despite the various subsidies, tax credits, relief packages and other programs established by Washington, 43 Americans are on food stamps, while even more are living in poverty. These expenditures have been allocated so that Washington can make claims that a depression has not set in. However, this debt will come at a price. If you are not willing to pay the piper now, the cost will be much higher down the road. This is a fact.

If it weren’t for the tax payer-funded food stamp program, you would see 43 million Americans in bread lines. And rather than the 42 million Americans determined to be in poverty according to Washington’s inadequate and outdated methods of calculation, my own estimates place around 90 million Americans in poverty. [7]


 

Inflation

I have discussed the problems with the official inflation data going back to the chapter I wrote on how the government manipulates economic data in America’s Financial Apocalypse. As well, I discussed the problems in many previous issues of this newsletter. [8]

But why would Washington care to suppress inflation data?

The CPI is used to adjust for annual changes in lease payments, wages in union contracts, food-stamp benefits, alimony, and to determine tax brackets. Thus, miscalculation of this one number can have broad-reaching effects on the benefits and wages of millions.

But it is also used to determine benefit increases to Social Security (via CPI-W), Medicare, and Medicaid. With these programs in deep trouble (Social Security is not in nearly as bad of shape as Medicare and Medicaid) Washington is doing all it can to minimize cost of living adjustments. Finally, suppression of inflation data would also decrease the future liabilities of government programs like Social Security, Medicare and Medicaid. Now you should realize why inflation data is being suppressed.  

By now, most of you probably agree that something just doesn’t seem right about Washington’s claims of low inflation. If you’re like me, when you go to the grocery store, it sure seems like inflation is severe.

I recall just three years ago you could buy a candy bar for a normal price of $0.49. Today, that same candy bar at the same retail outlets goes for $0.99. You see a similar level of inflation with other food items, although many consumers are not aware of the tricks producers have used to reduce container sizes.

Meanwhile, inflation in Canada has reached a 2-year high of 2.4% in October. Unlike the main culprit of inflation in China (food), Canada’s inflation has been largely due to fuel prices.

While the collapse of the commodities bubble and banking crisis in late 2008 resulted in a brief period deflation, all other claims of deflation since then have been unfounded. As I discussed in a previous newsletter issue, we had been experiencing some disinflation rather than deflation. However, inflationary forces have clearly taken center stage. [9]

For several months now, most consumers have felt the effects of inflation. Yet, the official data shows only a very modest amount of inflation. How can this be? The reason for this is simple. Since housing costs account for about 40% of the inflation data, it’s easy to realize that because real estate pricing and rental equivalence costs have collapsed from previous bubble levels, the housing component has added a large deflationary contribution to the total data. Because the housing component of the total inflation data is so large, it has masked the large inflation seen in food, energy, healthcare, higher education and other goods and services; the goods and services working people need to survive.

The problem is that inflation in food, energy and healthcare hits working-class Americans very hard. And because the U.S. is able to export inflation due to the dollar-oil link, we are seeing significant amounts of inflation throughout the globe. For instance, food and energy inflation is causing significant problems for China’s economy.

(click on image for a larger view)



As Washington released numerous economic stimulus packages, the rest of the world was forced to follow suit. The reason is quite simple. Because the dollar is positioned as the universal currency through its links to crude oil and other commodities, every time the U.S. prints an excessive amount of money, the rest of the world must do the same in order to neutralize the effects of devaluation of their currency. As you can imagine, this has led to global inflationary forces that promise to increase over the next several years.

The Fed to the Rescue

The Federal Reserve has offered its own solution to the unemployment problem. They have called it quantitative easing. It was used a couple of years ago in response to the financial crisis. This second phase of QE involves a $600 billion purchase of U.S. Treasury securities to take place over the next several months.

(click on image for larger view)

 

Bernanke argues that this program will reduce interest rates and lead to high stock prices, while encouraging spending by consumers and businesses, leading to job creation. However, this approach is completely flawed, as rates are already extremely low.

As well, businesses are flush with nearly $2 trillion in cash. And consumers continue to save money while paying off debt. Lowering rates a tad won’t do a bit of good other than to provide more of a bailout to banks.

Rather than the result of printing money directly as many have claimed, QE basically involves some book entries into the Fed’s balance sheet. So instead of new government bonds being auctioned off to foreign investors, the Fed plans to soak up this debt and hold it on its own balance sheet.

Combined with the previous phase of QE, the Fed will soon hold nearly $3 trillion of debt on its balance sheet.

So how will the Fed eliminate this debt?

Well, the easiest way is to create a large amount of inflation so it can be bought off inexpensively.

The Federal Reserve Bank is responsible for keeping inflation and unemployment low. However, they are doing just the opposite. Federal Reserve Chairman Ben Bernanke continues to warn emerging economies (specifically China) that the artificial suppression of their currencies is adding risk to the global economy.

The problem is that the latest phase of quantitative easing, totaling $600 billion is artificially although indirectly devaluing the dollar. As a result, the U.S. is exporting inflation throughout the globe at an accelerated pace. And China is the primary recipient of U.S. inflation. And if China feels the effects of inflation so will Brazil, the U.S. and the rest of the world. That’s the down side of relying on one nation to pull the globe out of a depression. When it falls, the rest of the globe will tumble.

This latest phase of quantitative easing will continue to reflate the asset bubble, not only in the U.S. but also throughout the globe. Speculation in the stock market will increase with no happy ending. But for now, things don’t look so bad according to investors, as gauged by the performance of the U.S. equalities market.

There are many more consequences due to the actions taken by the Fed. With Treasury yields expected to decline as the result of quantitative easing, smaller nations face the risk of large investment inflows into their higher-yielding government securities. And once this money is pulled out it could create a major shock to these economies. Thus far, yields across the globe have risen. The problem is that they have risen even in emerging economies where yields were already high. As a result, massive amounts of investment capital has flooded into some of the least developed nations on earth, sending a wave of inflation that is not going to end anytime soon.

The carry trade, hyped up a couple of years ago by the media and others who have no clue what’s going (and thereafter took on a life of its own via the sheep effect) on is now a very big problem. Already, Brazil has raised this foreign investment tax (called the IOF) from 2% to 4% in order to help discourage speculation from foreign investors. Even with higher taxes for foreign investment, Brazil’s 10.75% interest rate remains very lucrative for banks that have essentially no cost of borrowing. After collapsing the global economy and being rewarded with trillions of dollars in bailout funds, the banks continue to siphon off what’s left of wealth everywhere they smell it. And they have noses that can sniff out a dime from a thousand miles away.

Meanwhile, as I have discussed in previous issues, the longer and lower interest rates remain, the more underfunded the public and private pensions will become. This will eventually create a drag on the economy.  But never mind, so long as it allows banks to make easy money. After all, when you have a world that is ultimately under the control of an international banking cartel, why bother worrying about working-class people?

The next chart is one worth remembering, as it really paints an accurate picture of the situation we face. As you can see, GDP has already reached pre-collapse levels. As well, forecasts from the IMF, World Bank, IMF, OECD, Washington and other members of the global establishment conclude that GDP growth for much of the developed world (other than Europe) to surpass pre-collapse levels over the next 2-3 years.



Brazil has already surpassed these levels while China and India have come close. Meanwhile, inflationary pressures in China, Brazil and India threaten to dampen their current growth rate. This has several implications which I discuss in the January 2010 newsletter.  

As discussed in America’s Financial Apocalypse, much of America’s economic growth since the dotcom recession has been an illusion fueled by the real estate bubble; another one of Greenspan’s bubbles created as a way to mitigate the effects of the dotcom implosion. Now Bernanke is creating his first bubble along with Washington.

Perhaps the most significant indicator of global inflationary forces can be demonstrated upon examination of the CRB, the commodities index. As you can see, the CRB is now retesting the highs made in the summer of 2008 during the commodities bubble.





As the U.S. continues to feel the effects of America’s Second Great Depression, consumers have once again resumed their habit of excessive spending relative to production.

The following chart shows the collapse of GDP during late 2008. As you can see, industrial output took the brunt of the losses. We have not seen a significant rebound in this data.

 

When we look at the nation’s productivity since 1995, you can see that having a college degree has not offered much of an advantage in compensation growth over high school graduates. When adjusted for lost time in the labor market as well as student loan debt burden, compensation growth for college grads has actually underperformed that of high school grads. Notice the gap between productivity and compensation growth. As economic growth rises, we should see a similar rise in wages in the labor force. As the chart shows, this has not happened.



So where have the economic gains from this period gone to? Corporate profits, which have trickled down to only the top 1% of Americans in the form of executive compensation and large holdings of equity. [10]

 

 


 

U.S. consumers and workers have taken the beating for the criminal activities of Wall Street. Meanwhile, Wall Street has been handsomely rewarded for its large role in this economic collapse by receiving tax payer bailouts. This is a disgrace.

Similar to all U.S. presidents in recent decades, Obama lacks the backbone to stand up to his puppet masters. With much regret, I must confess we are truly witnessing the permanent decline of the United States.

 


 

The U.S. has become the world leader in crony capitalism. Instead of a free and fair market place, the U.S. economy can be described as casino capitalism. Millions of good jobs are gone forever. Corporations have formed oligopolies, while committing accounting and tax payer fraud. Banks take enormous risks in order to land massive payouts. Washington has been bought off to ensure there will be no accountability for fraud and incompetence. The entire system is designed to punish the little guy, while turning its head when massive fraud is committed by powerful individuals and corporations. [11] [12] [13] [14] [15] [16]

 

 


Bernanke is following the destructive path taken by Greenspan in response to the dotcom recession. In my opinion, both Greenspan and Bernanke should be arrested, along with thousands of Wall Street bankers for their role in securities fraud. But of course the media never mentions this. And your favorite financial “expert” plastered all over the media never bothers to mention this either. [17]

It’s quite simple to understand what’s going on if you take the time to think about things. Any person with media exposure who does not call for indictments of the Wall Street executives who orchestrated this collapse is NOT on your side. That means everyone who gives regular interviews with the media, as not a single one of these so-called “experts” has made this statement because they know the media would no longer provide them with airtime.

These “experts” are more concerned with protecting their position as a pundit because it provides them with free marketing which they use to lure the suckers in with their cleverly crafted sales pitches of “imminent hyperinflation” and “$5000 gold and $500 silver,” while laughing all the way to the bank. [18] [19] [20] [21]



 

Everywhere you turn these days, you see these guys on TV, you will hear them on the radio and you will read them on the Internet and in print media. They are all in the same club, and they are NOT on YOUR SIDE. They pat each other on the back publicly, such as “hat tip to…” When you read that line, you need to run because it shows they are part of the vast network of sheep pumping delusions and pushing gold and their other agendas. And when you see the same circle of guys recommending the same websites, you need to avoid them like the plague because they are in the same network of deceit. [22] [23]

Millions have run to gold and silver after hearing the sales pitch of the media’s regular “experts,” unaware that hyperinflation in the U.S. is virtually impossible, and the fact that gold does not serve as a hedge against inflation. Perhaps what upsets me the most is the fact that many of these gold hacks have used my content on their sites with gold ads scattered throughout. [24] [25]

Let me be clear. First, I do not feel that gold is a good investment at this stage although I feel it will go higher. I predicted gold to at least $1400 with a possibility of hitting the $2000 range in America’s Financial Apocalypse. However, gold will not remain higher forever. And when the bag empties, I will guarantee you it will be selling for $300 or $400 for many years. While this may not happen anytime soon, the fact is that it is going to happen. Thus, gold should only be used for a cyclical investment strategy. And if you don’t truly understand what’s going on, you’re likely to get stuck when the bag empties. Finally, if you do choose to buy gold or silver, I would not buy the physical gold because it is not that as liquid as the ETFs. If you doubt what I say, first examine the experience, track record, credentials and agendas of your sources, and then do the same for me. Doing so should put things into perspective.

My track record can be found here.

My bio can be found here

No matter where you turn in the media, whether it’s the CNBC, FBN, radio shows, print media or the Internet, virtually none of the “experts” has an idea what is going on, and that is a fact. Yet, when people see them in TV, hear them on the radio or read what they have to say in print, they assume they have a clue because the media tells you they are experts. [26] [27]

Once you research their track records, once you research their agendas, you will see that not a single one of these so-called experts can be trusted, and they have no idea what is going on. [28] [29]

Knowing what’s going on isn’t their job. Their job is to market to you; to encourage you to buy gold, trade currencies and futures, day trade and other forms speculation. As a trick, the media gets an occasional interview with Warren Buffett to make you think its regular line-up of bozos has credibility. When the media does air a real expert like Buffett, you can bet he isn’t there to help you, so he can’t be trusted either. [30] [31] [32] [33] [34]

Finally, all of the media’s “experts” have gone out of their way to make sure never to mention me…as in say, “there was a guy who told people to short Fannie and Freddie in a book released in 2007, we think you should pay attention to him, especially since he doesn’t sell or receive any compensation for selling gold or gold ads or securities” or “There is a guy who detailed everything that has happened in a book released in 2006, so you might want to listen to what he has to say”… because they don’t want people to know the truth. If people truly realized how clueless these guys are, and how they are only salesmen and marketers, they wouldn’t be making all of the money they are in return for giving you nothing but empty promises and excuses.

 

Ask yourself why the media is not airing those who have the best track records. Instead, they air individuals with either no real track records or poor track records. Either way, they always air Wall Street hacks or gold hacks. Why isn’t the media airing the truth? Why isn’t the media giving you content from proven experts who have no bias? Why is the media airing extremists and snake oil salesmen who have been positioned as investment experts?

By now you should know the answer to these questions. The media only cares to please its sponsors because they spend millions of dollars buying ad time and commercials. Who are the primary sponsors of financial programs?  Wall Street, gold dealers, mutual fund and insurance companies; the complete collection of vultures. Thus, if the media aired qualified, credible and unbiased experts, it would be more difficult for their sponsors to take your money.


 

Despite all of the media’s experts, all of the other books that were promoted by the media and the sheep, very few investors were able to avoid this collapse. They were taken again by the media and Wall Street.

In desperation, Americans have turned the media, without realizing it was the media who hide the truth that resulted in their losses. Instead, they aired gold salesmen who offered no alerts to buy into the market at its lows.

Some have continued to insist that investors short the market throughout most of the 80% gains it has made since reaching the March 2009 lows. The reason for their horrendous advice is because they are marketers, not experts. As marketers, they only know one direction and it is always down. The Wall Street hacks are marketers too, but the direction they always preach is up. Either way, the media is only airing extremists. And you will never make money by listening to extremists.  [35]

But the vultures have come out in full force, still offering ways to make a fortune buying real estate. Others have now shifted from real estate to gold and stock trading, with false claims that they predicted the market collapse. They are holding investment, real and wealth conferences all across the nation. One of the biggest events that promote a huge collection of clowns and deceitful newsletter scam artists is the Money Show, which also has partnerships with the media and Wall Street.

 

 

Even Tony Robbins, the “I was broke until I went on TV and told you how I turned my life around to make millions” marketing guru has offered investment advice based on his “top investment expert.” Listen to this guy’s BS. If you fall for this crap you have no chance to succeed in life.  

 


So basically, Robbins is saying HE PREDICTED THE COLLAPSE.  Notice how he mentions CDS and such as if he had a clue what they were before the media talked about them AFTER the collapse. The only other way he might have known about this problem because I detailed it in America’s Financial Apocalypse (2006).

Pay a visit to www.dailypaul.com and you will see the sheep there have fallen for this garbage, which is why they posted the video there.

This really gives you an idea just how bad things have gotten regarding how clueless people remain and how much the vultures are out to take what little you have remaining.

Never mind that Robbins has been through a divorce. He can show you how to have great relationships.

Never mind Robbins has never run a legitimate business (unless you call his deceptive marketing scams a business). In fact, he has been sued by the Federal Trade Commission for screwing his business partners. But this doesn’t matter. He can still help you become a great business manager.

Never mind Robbins has no experience and no training in the investment field, he has written a book on Wall Street. Even though he was sued for copyright infringement, I’m sure he can help you make a fortune.


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With nothing more than a high school diploma, Robbins I demonstrates that you don’t need to be well-educated in order to succeed in the sales business. All you really need is lack of integrity and the ability to lie through your teeth. The sheep do all the rest when they buy into the pitch. 

Others have not improved their options by turning to penny stock scams, get-rich-quick infomercial scams, multilevel marketing (MLM) and other tactics promising to make them rich by trading stocks or buying real estate. Millions of Americans head to the nearest casino or convenience store to stock up on lotto tickets. 

 

Finally, the New York Department of Education shut down Donald Trump’s bogus “university,” self-described as “Ivy-League quality.” Rather than a legit university, it was nothing more than a network of get-rich-quick snake oil salesmen and losers from his dog-and-pony TV show, The Apprentice. 

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Do you really think these guys on infomercials are any different than the “experts” on CNBC and other media networks? The fact is they are no different. So if you've been fooled by any of these scam artists in the past, whether it's been the bozos on CNBC, Bloomberg, FBN, the Associated Press, the Wall Street Journal, or infomercials, it's time you wake up and realize you were taken. More important, it's time you pledge to never be taken again. [36] [37] [38] [39]

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Others blog for dollars, working indirectly for corporate America by placing ads on their blogs, making certain to adhere to the demands of ad companies, which means you cant be critical of their sponsors. In other words, most of these blogs and websites are little more than glorified advertising sites offering generic content obtained by the media while often violating copyright laws.


 


The list of these guys is endless, and they are all in the same club, which is NOT on your side. This is why they have continued to stay clear of any mention of me. Regardless of the source, all of these guys are the same. They are useless to you and they are vultures preying on your fear and desperation.

So why have I spent so much time discussing the media and the various hacks and extremists in this piece? 

Understanding the reality of the media is directly related to your fate through America’s Second Great Depression. If you are led astray, things will become much worse for you. It’s natural for people to have anxiety about their future right now. As a result, most people spend more time reading the print media and watching TV to find out what’s going on. But I want to assure you that if you aren’t going to the right source, your fate will be much worse through this depression.

So if you plan to spend time reading websites, listening to talking heads and others in the media, you’d better be damn sure you are convinced they know what they are talking about and they have no agendas. That means you need to spend more time researching your sources than you spend swallowing what they say.

The problem is that many people lack the intelligence to determine credible sources. Others simply don’t have the time to do the required research. As a result, the vast majority of people fall victim to the vultures.

Let me save you a good deal of time. I will guarantee you that you will suffer much more than benefit if you watch TV, listen to the radio, read print media or content from financial and economic websites. So if you are unable to do the required research to determine the legitimacy of your sources, you are much better off tuning out.

If you want to know more about how the media uses simple tricks to fool you, all while laughing all the way to the bank, I advise you to read this list of articles I have written on the media. 

Anyway you look at it, America is in a depression as is much of the globe. As I have stated in the past, at the best of scenarios this depression will last for a decade. At worst, it is likely to last for two decades.

Throughout this dark period you won’t hear any mention of this from the media, as their job is to serve their financial sponsors, corporate America and Washington. So if you want the truth, I invite you to follow me at AVA Investment Analytics.

While the next several years promise to be filled with further devastation, there will also be several spectacular investment opportunities, but only if you are well ahead of the curve. And because most investors will be on the wrong side of the trade, those who truly understand what is going on will be positioned to make a huge sum of money.

I invite you to join other subscribers who wish to become great investors, as they learn how to navigate the financial landmines that promise to be commonplace for years to come. The best way to achieve this difficult task is to subscribe to the AVA Investment Analytics newsletter. There is simply no other investment newsletter like it in the world.  www.avaresearch.com

 

References:

[1] http://www.avaresearch.com/article_details-668.html

[2] http://www.avaresearch.com/article_details-72.html

[3] http://www.avaresearch.com/article_details-519.html

[4] http://www.avaresearch.com/article_details-431.html

[5] http://www.avaresearch.com/article_details-464.html

[6] http://www.avaresearch.com/article_details-134.html

[7] http://www.avaresearch.com/article_details-639.html

[8] http://www.avaresearch.com/article_details-133.html

[9] http://www.avaresearch.com/article_details-628.html

[10] http://www.avaresearch.com/article_details-444.html

[11] http://www.avaresearch.com/article_details-201.html

[12] http://www.avaresearch.com/article_details-267.html

[13] http://www.avaresearch.com/article_details-171.html

[14] http://www.avaresearch.com/article_details-154.html

[15] http://www.avaresearch.com/article_details-658.html

[16] http://www.avaresearch.com/article_details-496.html

[17] http://www.avaresearch.com/article_details-83.html

[18] http://www.avaresearch.com/article_details-659.html

[19] http://www.avaresearch.com/article_details-291.html

[20] http://www.avaresearch.com/article_details-320.html

[21] http://www.avaresearch.com/article_details-555.html

[22] http://www.avaresearch.com/article_details-584.html

[23] http://www.avaresearch.com/article_details-470.html

[24] http://www.avaresearch.com/article_details-589.html

[25] http://www.avaresearch.com/article_details-64.html

[26] http://www.avaresearch.com/article_details-338.html

[27] http://www.avaresearch.com/article_details-333.html

[28] http://www.avaresearch.com/article_details-365.html

[29] http://www.avaresearch.com/article_details-205.html

[30] http://www.avaresearch.com/article_details-146.html

[31] http://www.avaresearch.com/article_details-239.html

[32] http://www.avaresearch.com/article_details-122.html

[33] http://www.avaresearch.com/article_details-594.html

[34] http://www.avaresearch.com/article_details-416.html

[35] http://www.avaresearch.com/article_details-611.html

[36] http://www.avaresearch.com/article_details-184.html

[37] http://www.avaresearch.com/article_details-225.html

[38] http://www.avaresearch.com/article_details-279.html

[39] http://www.avaresearch.com/article_details-252.html

 

 

 

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