I have had a lot of people ask me how it is that the financial game shows and mainstream media are touting how “well” the economy is doing but that they are not seeing it personally. The only answer that I have is that they are either misleading the public or are just too lazy to look at what is really happening. Or it could just be that the advertisers demand that the “official” numbers be put out as an absolute truth- even though the numbers get revised substantially at a later date when nobody is paying attention.
Another problem is that the numbers reported are so massaged that the numbers bear no resemblance to what is happening in the economy. Just as an example, the CPI (Consumer Price Index) has been changed 25 times in the past 40 years. What this means is that they change the calculation so that inflation LOOKS lower but is actually far higher than reported. Funny, it has NEVER been changed to make inflation look higher. This makes perfect sense when we realize that cost of living increases in Social Security and other government programs are tied to the CPI. Lower inflation means lower costs for the government and the promised benefits, while those being paid are able to buy less than they expected.
One example of how the index is massaged would be if a steak goes up in price, they ASSUME that consumers will buy cheaper meat and they put that number in instead. Another example would be if a car cost $20,000.00 in 2020 but now costs $25,000.00 in 2023 they will just say that with all of the technological advances the car is actually cheaper today even though the price went up by 25%. You can see why most people would be confused. They do the same with computers and many other items.
A good source for getting the real story would be Shadow Government Statistics by John Williams who just reports the government’s own numbers without those 25 revisions being built in.
Another thing to be aware of is that if they really wanted you to know the truth about actual unemployment do you think that they would just EXCLUDE 100 Million working age Americans from the calculation? That should tell you all you need to know about the validity of the numbers we are being fed. It is all to give the illusion that all is well when, in reality, things have been deteriorating for decades.
I believe that we are getting to a point where the pedal is nearing the metal. With all of the layoffs that are taking place, with all of the debt people are amassing to keep up with their bills and sustain their lifestyles and with investment markets struggling it is not much of a surprise that the balance sheet of the USA is starting to show even larger signs of stress.
Through April, tax receipts are down substantially year over year. The individual tax receipts are down 3% and corporate receipts are down even more. Fiscal spending is up 13% so the Treasury Borrowing Advisory Committee just raised the deficit projections for 2023-2025 by 30-50%. Keep in mind that this 30-50% increase is on the $1.5 TRILLION that was the original guess. This would make the deficit $450-$750 BILLION per year on TOP of that $1.5 TRILLION. Also keep in mind that this does not include spending that is off-budget like wars, Social Security, Medicare, Prescription Drug plans, etc. I made a quick trip to the USDEBTCLOCK.ORG and I saw that, according to the US Treasury our debt is still climbing- as usual. What was a first for me was seeing the Congressional Budget Office report of tax receipts going DOWN. I have been looking at that site for years and that is a first.
The bottom line is that we are going deeper and deeper into debt and are becoming less able to pay it day by day. This is true through all levels of society from the halls of congress to the poorest among us and everyone in between.
This is a major reason why I ask the question “What is the value of a promise that cannot be kept?”
We couldn’t pay off the nearly $32 Trillion with the dollar maintaining anywhere near its value today let alone the off balance sheet items and unfunded liabilities that have the actual debt at over $250 TRILLION. And that is what we can see. What are they doing that we have no clue about?
The sad part is that this is a global phenomenon. The people to get hit first- and worst- are those who earn the least. In countries that don’t have the reserve currency there are large problems breaking out. In most cases the problems usually start at the periphery and work their way to the middle. In other words, the weaker hands fold first and those higher up the food chain follow.
While the economic problems mount the loss of confidence in the currency usually manifests itself in inflation which we are seeing right now. Some places have it far worse. Even with the financial games being played to keep gold and silver capped (probably so the banks and central banks can buy it all) the price of gold is rising rapidly in many places. Just a few examples on 5/24/2023:
Brazilian Real 9,600.00 per ounce
Chinese Yuan 13,480.00 per ounce
Hong Kong Dollar 15,300.00 per ounce
Mexican Peso 34,800.00 per ounce
S African Rand 37,000.00 per ounce
Russian Ruble 158,000.00 per ounce
Indian Rupee 161,000.00 per ounce
Japanese Yen 273,000.00 per ounce
Argentina Peso 462,200.00 per ounce.
As a currency collapses would you rather have an asset that holds its value or a piece of paper that is nothing more than a unit of debt owed back to its creators- the central banks?
For anyone who thinks we are not on the path to Japan consider this. We have over 43 MILLION people collecting Food stamps (EBT cards). We have over 84 MILLION souls on Medicaid- which means they have NO ASSETS. That is 25% of our population. 20 million of our fellow Americans are behind in their utility bills to the tune of $20 Billion. (USA Today). Credit Card debt and student loan debt are at all-time highs and the banks are getting more selective in who will get loans and who will not. Looking at the horizon before us I can see why they would be leery lending to most of society today as asset prices (collateral) fall. Bankruptcies and defaults on car loans are spiking higher. But hey- turn on the financial game shows and hear that all is well. The Fed has your back. Stocks always go up. Real Estate always goes up. Gold is a barbarous relic. You get the picture.
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