The United States and other economies aren't recovering but are enjoying a brief respite in an overall downward spiral that won't end until governments, Washington especially, stop intervening with misguided policies, says Bert Dohmen, president and founder of Dohmen Capital Research Institute.
The U.S. government tinkers with inflation methodology to mask the true nature of rising price pressures, and the Obama administration's new healthcare law carries so many tax hikes and other uncertainties that small businesses, those that do all of the hiring in the country, are holding off adding to their payrolls.
"We had a tremendous contraction, and after that you do have a normal recovery attempt. That's what we have seen, and the economy is not coming out of it," Dohmen tells Newsmax.TV in an exclusive interview.
"You see this all over the world, the economies are grinding down. The fuel tank is empty. People have used up all of the equity in their homes. That was in the last cycle. They were using their house basically as an ATM machine. That's gone. The gas tank is empty."
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Today, households and businesses are working to pay down debts and start saving again, while unemployment rates are well above pre-crisis levels.
"Savings accounts have been depleted. The equity in their homes have been depleted. People have lost their jobs and are losing their jobs and they can't find new ones," Dohmen says.
"They can't even move to where the jobs are because they can't sell their homes."
Meanwhile, Washington's policies designed to improve the economy aren't helping.
Attempts such as President Barack Obama's Patient Protection and Affordable Care Act to provide greater access to healthcare are, in reality, pushing up taxes on smaller businesses.
"This healthcare bill has so many new taxes that people aren't even aware of. This is preventing the hiring of anyone," Dohmen says
"Business people just don't know if the healthcare bill is going to be activated and if it is, they don't want these additional expenses because it may mean the end of their firm."
"We need the entrepreneurs to have reasons to go out and build businesses again and to take the risk."
Meanwhile, Washington politicians continue hold up developing sound energy policy, such as halting the expansion of the Keystone Pipeline due to political reasons or hampering the use of new technology needed to extract natural gas and shale oil.
The result, Dohmen says, is the country continues to rely on expensive energy shipped in from abroad.
"Washington does nothing but throw monkey wrenches into it. Right now we are seeing new technology that converts diesel engines to run on natural gas. Trucking companies could save $40,000-$60,000 year by converting to natural gas per truck! A huge savings," Dohmen says.
"I think the greatest threat to the economy is Washington. If we could get Washington out of the way, maybe we could have an economy that functions again."
Even economic indicators put out by the government are manipulated.
Take inflation: the government tweaks the methodology every few years to adjust to changing economic times but in reality, it's making the number more convenient, with private observers putting true inflation rates at over 10 percent, five times higher than the Federal Reserve's target rate.
Revisions to unemployment rates are made available to the public, but they get much less media attention and on top of that, the original numbers are tweaked anyway.
"They issue false numbers. Our unemployment numbers. If you take the first report and then compare it to the subsequent revisions, which really don't get any publicity, you will see there is on average now, over the last several months, a 40 percent difference," Dohmen says.
Turning to China, Dohmen says the rising Asian powerhouse is facing troubles of its own.
The economy grew too fast and monetary policies remained loose for too long that massive asset bubbles swelled in the country's property sector.
Many are worried if the country can avoid a hard landing as policymakers there attempt to slow up the economy.
"If they define soft landing as by landing in quicksand and mud, then they will be right. But this will be a hard landing in my opinion," Dohmen says.
"Condominium sales were plunging — they're down over 50 percent. Prices are down 50-60 percent. Now if that is a soft landing, I think we have to redefine soft landing," Dohmen says.
Like in the U.S., China's inflation rates are kept artificially low, Dohmen says.
"If you would use the actual inflation in China, you would probably have GDP growth of around zero."
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