By Michael McCune

The stock markets continue to soar in early 2012–allegedly from sterling reports, European countries are finding buyers for their debt and the U.S. is peddling its debt with remarkable ease at very low interest rates that badly lag inflation’s bite. This all sounds too good to be true. Among other news tidbits it was revealed American wages rose $6.3 billion in December, the American GDP rose 1.7% in 2011 and there may or may not be a way to reverse cancer’s malignant DNA to benign. Let’s forget about the last item because the rest of the “news” is just about as valid with the many intangibles the statists have added to the mix.

All the other “factual” items are generated from government economists’ reports. As I have said before, economists came into being because God loved weathermen, thought they were getting a bad rap and, to take the heat off his beloved, created economists. If you want a totally irrelevant abstraction take the GDP analysis indicating a 1.7% increase. It reports to us merely the direction of the movement of something that no one knows the true size of and the measurement of which has no connection to reality. Frank Shostak, an adjunct scholar at Mises Institute, recapped GDP thusly: “The framework gives the impression it is not the activities of individuals that produce goods and services but something outside these activities called ‘economy.’ At no stage does the ‘economy’ have a life of its own independent of individuals. ‘Economy’ is a metaphor for something that doesn’t exist.” That should make all economists cringe in embarrasment.

Applying that logic to the rest of the news items mentioned above and you find the fingerprints of the heavy hand of an agenda-driven Administration, and only those fingerprints, all over the place; creating the illusion for an election campaign season that all is well in America.

Let’s start with the wage report. It is true estimates show American workers received $6.3 billion more in December than in November. Sorry, that is an annual occurrence, it is called year-end bonuses. Besides, if you figure it out that amounts to only $20 per person. Heck, Obama’s generous rollback of the FICA taxes put a whopping $40 more in each paycheck each month for all of 2011, so what’s to get excited about a measly $20 when there is no proof yet it will extend to 2012? On the downside, it was reported December wasn’t quite the spending orgy we had been led to believe from early-January reports, consumers spent $2 billion less than they had in November, a reported .1% drop.

My math is a tad fuzzy but if $2 billion equated to a .1% drop then we are spending $2 trillion per month or $9 trillion more than the estimated GDP referred to above. This is where the measurement “which has no connection to reality” kicks in. Somebody, somewhere, somehow has a very large hole in their economic theory. This math means our economy is 50% LARGER now than it supposedly was at the high point of 2007. Hmmm? What happened to the recession’s effects? Why isn’t Main Street caught up in a hiring frenzy? Because the reported figures are bogus, designed merely to help a flailing government.

Next we’ll tackle the rise in GDP in 2011. Taking out inflation, a habit the Administration does not want to indulge in now, shows the economy actually shrank by about 7% from 2010 levels. This contraction continues to suggest our economy is facing a pressure from outside not noticed before. The entire world marketplace is slowing down even though there are more people.

Which brings us to the opening salvo about the stock market surge and national bonds being snapped up. Looking at the evidence the only fingerprints come from (gee you figured it out!) the U.S. Federal Reserve and its runaway printing press. The Fed’s rolling press is the cavalry rushing in to propping up banks and countries around the globe but for how long can the scam…er, illusion continue?

It is akin to looking into a mirror with a mirror behind you. You see good news repeated into infinity (if you’ve created it) with no smudge to distort the view. It feeds itself over and over and over.

Alas! for the Administration, here comes the smudge it refuses to acknowledge, the U.S. dollar is being displaced around the world as No. 1 by several countries’ insistence that rubles be taken instead of dollars for oil, or that yuan or rupees be accepted in lieu of dollars for foodstuffs or manufactured goods. The printing press may run, sooner than expected, into hyperinflation as the Asians move away from the dangerous game Washington is playing.

Every dollar printed, while in essence the same as the previous one, has a lower value because nothing of value is being created by a true measure of GDP. Since Bernanke and the Fed boys have been running the press non-stop for more than two months now in an effort to postpone the inevitable collapse of the euro (where for over a decade this same game was played) the unfathomable collapse of the dollar is now seen if one looks for the distortions in the reflections.

In the past year we already had one downgrade, but the message was not heard in Washington. A second downgrade is being formulated now. Like the ever-hastening increases necessary in the debt ceiling, the third and fourth downgrades can be discerned in the weathermen’s far-reaching radar pictures, quite possibly coalescing into a firestorm before the scheduled election.

Batten down the hatches. Birds don’t just roost during a gathering storm, they can feel it coming and roost close to home territory. Home, in this case, is where the printing press resides.

All comments or suggestions for improving the Rant are welcome. Thank you for your continued interest–Mike

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