The mainstream media is having a field day today about the credibility of the monthly jobs data. The news is beginning to leak out about an errant census employee who fabricated data to show higher number of jobs created to help drop the unemployment rate in September 2012, just in time for President Obama to get re-elected.
While the mainstream media is either denying or accusing the government of manipulations, I believe they are completely missing the point here. I have been writing about data manipulation around the jobs data for several years now. Just look at this page on the Bureau of Labor Statistics own website
if you do not believe me.
If you go back and count unemployment the way it was done in 1978, our unemployment rate is about 23 percent. At this rate we will never have to fear the tapering threat by the Federal Reserve.
On to the next piece of shocking data: It was just announced that the government borrowing has hit the $1 trillion mark in the past six weeks, since the debt ceiling can was kicked down the road.
Can you imagine — $1 trillion in the past six weeks? Yikes! How is that even possible?
Well you see we have been befuddled with trickery again. Back when the debt ceiling debate was raging, the Department of Treasury assured the masses that by using "extra ordinary" measures, they had managed to keep the government from defaulting.
Living in ignorant bliss, has anyone ever checked what these "extra ordinary" measures are? You see, the government nonchalantly "borrows" against cash reserves and funds from various agencies of the government. So pension funds of federal employees, Social Security pools of funds and other reserves that the government has no right to touch are drained and the cash is used to keep the government afloat. These funds are now being replenished by new borrowings. Hence the soaring new borrowings in just six weeks.
If we were to ever resort to such maneuvers and use other people's money, I can assure you that we would be behind bars in a New York minute.
Over at the World Bank, the agency has reduced the global growth rates again. With each go around, they seem to recognize what I have been saying all along. There is no real growth in many regions of the world, and the Western economies stand at the forefront of the regions with virtually no growth.
Just in case someone points out the 2.8 percent GDP rate here in the United States, I want to remind you about the shenanigans that are being played with in that data count. If we look at how GDP was calculated just a quarter or two ago, we would have seen a print of 0 percent or negative growth for the third quarter in the United States. France and Italy are recording negative growth rates already, and Germany is nearly down to less than 1 percent.
One pocket of genuine growth is Poland. Having visited it three times this year, I am attracted to the growth potential, the business friendly government and low inflation environment. The Polish zloty currency has rallied not just against the U.S. dollar, but also the euro.
I would recommend you consider Polish investments, as well as U.S. Treasurys, as the markets realize that tapering may not happen in 2014 at all and yields come down. Gold will also surge as soon as that realization dawns.
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