Economic Collapse: the breakdown

[Xru]

I told ya'll last year about the coming Apocalypse. I tried to warn ya. But ya wouldn't listen!!!!!

[seanD]

Why gas prices are rising:

Contrary to what excuse the Obama admin will likely use to blame gas prices, the steady rise in gas has nothing to do with potential war with Iran (though this can cause sudden spikes, not steady rises over years of time), nor is it supply and demand (fuel consumption this year is lower than even last year). It's based on speculation with trillions of dollars that have been unleashed into the system with a vengeance via the Federal Reserve (stimulus, bailouts, quantative easing, extremely low interest rates on loans, etc.). The stock market is currently in a bubble due to monetary policy, which is why it’s skyrocketing (with the exception of the last couple of days) while all the other numbers (GDP, unemployment, etc.) are indicative of a recession (I’ll get to unemployment numbers in a minute). So if we theorize that rising gas prices are also a result of monetary policy, then we should expect to see a correlation in rising trends with both the gas price and the stock market. And this is exactly what we see. The S&P from 2009 to the present almost perfectly aligns with the gas trend rise…

http://www.youtube.com/watch?v=JvsIQ...2&feature=plcp

Inflation won't stop because not only will all the created liquidity keep pouring into commodities (i.e. food, oil, precious metals, etc.) as things continue to deteriorate in Europe and abroad, but the Fed will undoubtedly keep stimulus going as long as the markets begin to sink into recession-mode... rest assured.


Why unemployment numbers are bogus:

The Labor Force Statistics is more proof that they’re fudging the unemployment numbers, as Labor Force Statistic numbers have lingered steadily under 60% ever since Mar 2009 to this month in spite of the shrinking bogus U3 number (from 9.8% in 2010 to 8.2% today)…

http://www.bls.gov/webapps/legacy/cpsatab1.htm

You'll have to take my word for it or check it yourself (for some reason I can't upload any images).

58d7623bdbebf468f8546279d87df1e0-getty-137025941.jpg

This means that 42% have been out of work ever since 2009. This stasis defies logic if the U3 is supposed to be improving because the Labor Force Statistics represent the REAL numbers that show a recovery or not. Most likely, government is actually deriving at a shrinking U3 based on estimations that there are millions of unemployed that don't want jobs anymore, which is extremely subjective and speculatory.

Consumer spending doesn't mean a thing:

The rise in consumer spending numbers that the media parades as evidence of happy days also don't mean a thing because not only is it purely psychological, but people are NOT spending new income they've earned, but either their savings or going into more debt with credit cards, which is a bad thing...

"Income rose only 0.2% in the same period, meaning that consumers were dipping into savings to spend at the higher levels. The level of savings fell by $70.8 billion to $438.7 billion. That reduced the so-called savings rate, which compares after-tax income to spending, to 3.7% from 4.3% in January."

http://money.cnn.com/2012/03/30/news....htm?iid=HP_LN

Auto sales also don't mean a thing because the surge in auto sales are fuel-efficient vehicles, which means it's most likely driven by fear of a worsening economy. Consumers are dipping into their savings or going deeper into debt hedging their bets on new fuel-efficient vehicles because they're afraid gas prices will get worse, not better.

I could actually go on and on and show you where the MSM has become an utter joke when it comes to this subject, but this should give you some idea of how the general public is being duped on an almost unbelievable scale.

[little_monkey]

Contrary to the OP's fantasy claims made more than a year ago, unemployment rate is steadily decreasing, inflation is at record low, and the economy hasn't collapsed.

Put that theory in the dustbin, it isn't describing the real world.

LOL.

[seanD]

The OP projection of hyperinflation ends in August of next year.

The U3 number is bogus, which is why it doesn’t correlate with the Labor Force Statistics number that has lingered near 40% unemployed since 2009 (expounded in the previous post). I mean… even the MSM is admitting this now. And it is true that official inflation has been fluctuating up and down from month to month, which is normal -- as it rises overall. For example, the UGA (which measures gas prices) has been fluctuating in between months and even years, yet steadily rising overall ever since the Fed initiated stimulus back in 2009. The only way inflation will drop significantly and permanently is if the Fed stops stimulus and lets the markets correct itself and the bubble burst (which means a significant 2008-like crash and a worse recession than there already is)… and this will never happen. And as the EU continues its meltdown, this will put even more pressure on the markets to recede, which will drive Fed to stimulate more.

Btw, how’s your forecast of -0.7% by April coming along?

[little_monkey]

The OP projection of hyperinflation ends in August of next year.

The U3 number is bogus, which is why it doesn’t correlate with the Labor Force Statistics number that has lingered near 40% unemployed since 2009 (expounded in the previous post). I mean… even the MSM is admitting this now. And it is true that official inflation has been fluctuating up and down from month to month, which is normal -- as it rises overall. For example, the UGA (which measures gas prices) has been fluctuating in between months and even years, yet steadily rising overall ever since the Fed initiated stimulus back in 2009. The only way inflation will drop significantly and permanently is if the Fed stops stimulus and lets the markets correct itself and the bubble burst (which means a significant 2008-like crash and a worse recession than there already is)… and this will never happen. And as the EU continues its meltdown, this will put even more pressure on the markets to recede, which will drive Fed to stimulate more.

Btw, how’s your forecast of -0.7% by April coming along?

My forecast, which btw wasn't mine just that on the quoted website, of minus inflation sucks, but that's besides the point. It only means Obama's policies worked better than those who made those bad forecasting last year. OTOH, yours stinks so far.


Just to draw to your attention, the employment-to-popupation ratio has been decreasing since 2000, and this is attributed to the aging of the population -- more and more boomers are retiring.

See:http://www.thedailybeast.com/article...job-chart.html


That puts a sledgehammer into your argument about the unemployment rate.

[seanD]

When you look at how the price of commodities have climbed since 2009, my forecast is right on target, bud.

And how much of the shrinking participation rate is due to retirees and those who just choose to drop out of labor force is extremely debatable and highly speculatory. Economists that are Obama apologists will naturally put more weight on the former. Yet the Chicago Fed (which I would give more weight to than some Obama apologist) estimates that retirees only account for a quarter of the shrinking participation rate (which is in the article I linked to in the previous post).

Nonetheless, with that aside, one argument might make Obama look better than the other... but so what? A bunch of retirees leaving the labor force makes the situation we're in now even worse... so overall it's still a lose-lose for our situation. And,btw, employment really has no bearing on inflation. Inflation will happen in spite of the unemployment number. In fact, as long as the Fed keeps stimulating, we would expect, in theory, unemployment to lower (albeit it certainly isn't doing it as quickly as Bernanke would like).

[little_monkey]

When you look at how the price of commodities have climbed since 2009, my forecast is right on target, bud.

I'm not sure of your numbers but from http://www.forecasts.org/data/data/CPIAUCNS.htm, calculating the CPI from Jan 2009 to Dec 2011, I get 6.7%. Note: commodities is only a fraction of the CPI.

In fact, as long as the Fed keeps stimulating, we would expect, in theory, unemployment to lower (albeit it certainly isn't doing it as quickly as Bernanke would like).

It's not in theory, but the facts show that the stimulus is working. Yes, not as fast one would like, but those who said three years ago, it wasn't enough are now saying, 'told you so'. Consider that out of the $750B, most of that money was given to the states who used it to balance their budget, in effect saving millions of jobs. Only $100B was actually used to create new jobs, it's no surprise that the unemployment rate is decreasing at a turtle's pace. If you would double the stimulus package, that is, we would have had $850B used directly to create new jobs, and that unemployment rate would read below 5%, but the GOP would never have allowed to have such a package to be passed by Congress. The political reality is that it's not in their interest to see the economy get back into shape. Their doomsday scenario so far has evaporated, but they are still hoping that Europe will implode, dragging along the US, hoping that the public will get mad enough to vote against the present administration.

But if Romney wins and implements what he has said so far, then you'll get what happened in Great Britain after the Conservative Party took power two years ago and implemented their austerity program -- GB's economy has tank in a spectacular way.

Hopefully, what Romney says is just to pander to the far right, and once in power, he will come to his senses.

[seanD]

I'm not sure of your numbers but from http://www.forecasts.org/data/data/CPIAUCNS.htm, calculating the CPI from Jan 2009 to Dec 2011, I get 6.7%. Note: commodities is only a fraction of the CPI.



It's not in theory, but the facts show that the stimulus is working. Yes, not as fast one would like, but those who said three years ago, it wasn't enough are now saying, 'told you so'. Consider that out of the $750B, most of that money was given to the states who used it to balance their budget, in effect saving millions of jobs. Only $100B was actually used to create new jobs, it's no surprise that the unemployment rate is decreasing at a turtle's pace. If you would double the stimulus package, that is, we would have had $850B used directly to create new jobs, and that unemployment rate would read below 5%, but the GOP would never have allowed to have such a package to be passed by Congress. The political reality is that it's not in their interest to see the economy get back into shape. Their doomsday scenario so far has evaporated, but they are still hoping that Europe will implode, dragging along the US, hoping that the public will get mad enough to vote against the present administration.

But if Romney wins and implements what he has said so far, then you'll get what happened in Great Britain after the Conservative Party took power two years ago and implemented their austerity program -- GB's economy has tank in a spectacular way.

Hopefully, what Romney says is just to pander to the far right, and once in power, he will come to his senses.

CPI no longer measures the rise in stable commodities (i.e. gas, food, metals, etc.), so the core inflation number is skewed. We’ve been down this road before… I think this is like the third time. The fact you keep making estimations based on “official” numbers is why you keep getting your forecasts wrong. The U3 number is also skewed based on the Labor Force Statistics, which we previously just got through talking about (it’s as if you’re discussing this in a compartmentalized fashion). So there’s really no relevancy in arguing about it one way or the other -- there’s no way to be sure what the true number is and how much “saving jobs” or “new job creation” serves as a factor in the decline. According to the labor statistics… not much. And because the general public is ignorant about how they get these numbers, the U3 number is grossly misrepresented and used as a sign that the economy is improving, which makes it a deceptive farce. You’re also ignoring what’s happening in the EU. This will have profound adverse effects on any sort of recovery here in the states, and this is true even if you were believe the official numbers.

[seanD]

I meant to say "staple."

[little_monkey]

I wouldn't brag if I were you considering that your forecast is a total disaster. We're not any close to an economic collapse. And your hopes that things might turn out badly in Europe is a sign of desperation on your part. Secondly, the CPI is a relative term, not meant to measure anything absolute. So as such, it is a relative indicator, among many other economic indicators -- and the unemployment rate being another -- of where the economy is headed for.

"CPI no longer measures the rise in stable (staple) commodities (i.e. gas, food, metals, etc.), so the core inflation number is skewed."

There's no need to include those since any rise in price in those will be automatically reflected in the goods produced by the economy.

[seanD]

Coming from a guy who ended up with egg on his face twice in this thread. Your demonstrated ignorance of the economy isn't worth a response anymore.

[little_monkey]

Coming from a guy who ended up with egg on his face twice in this thread. Your demonstrated ignorance of the economy isn't worth a response anymore.

When you can't comment on the issue or defend your position, resort to insults. Way to go. LOL.

[seanD]

You may not like it, but accusing someone of ignorance is stating a fact, not necessarily an insult. And it's not just an accusation. You've demonstrated it more than once.

[little_monkey]

You may not like it, but accusing someone of ignorance is stating a fact, not necessarily an insult. And it's not just an accusation. You've demonstrated it more than once.

That's hilarious coming from someone who doesn't understand CPI. Since you've turned this into a flaming war, there's no need to continue this conversation. Have a nice day.

[seanD]

That's hilarious coming from someone who doesn't understand CPI. Since you've turned this into a flaming war, there's no need to continue this conversation. Have a nice day.

I understand what CPI is. Your arguments, however, go beyond lack of knowledge. Even a person with less than intermediate economic knowledge could look at their grocery and energy bills and compare them to their bills in just the last year or so. I mean, making a prediction that even the core inflation rate would hit the negatives this year, in spite of everything we've seen thus far, was so far out in left field that I'm beginning to think it's not your lack knowledge but something mentally wrong with you.