It never ceases to amaze me the lengths that those “in charge” will go to so that the average person stays so confused that they don’t know what to believe.

Most of us are well aware of the massaging of numbers to hide the true state of our economy -like not counting around 100 MILLION working age people who don’t have a job in the unemployment numbers. Many are also aware the full-time jobs are disappearing at an alarming rate and part-time and gig jobs are growing. Of course, every part-time job is counted as “job growth” in the massaged numbers.

While this sleight of hand makes “job creation” look good in reports, the actual impact on our economy and society is decisively NEGATIVE.

For many who don’t pay attention to the bond “market” it appears that the USA is having no trouble funding our deficits. For those who are paying attention, it is VERY apparent that the Fed and Treasury are working together to keep rates from exploding higher as most of the rest of the world is SELLING treasuries rather than buying them. With the sheer volume of sales by central banks and others, rates would have skyrocketed already if there was not MASSIVE buying by the central bank.

What I have just described is an unannounced QE that has been taking place for a while now. Goldman Sachs has come out and predicted a 50-100% increase in Treasury buybacks. Since the USA doesn’t have the cash to buy back the bonds the Fed will have to provide the funding to pull that off. Since Goldman Sachs is a major shareholder in the Fed, I am sure they are in on what is coming.

One of the most egregious examples of trickery is counting DEBT as GROWTH. The more the government spends (and the more debt it wracks up) the better the GDP numbers look. The most important fact here is that as more debt is being added it is not productive debt. Productive debt is debt that builds something and has a utility that will retire the debt over time. The new debts we are incurring are being used to give the illusion of stability and solvency as well as propping up a collapsing economy. In other words, the debt we are issuing is going mostly for current needs and when that debt is spent all that we will have to show for it is more debt.

We are so far down this road now that we are conjuring up cash to pay current bills, retire maturing debt and to pay promised social spending.

The reason that this is so important is that our debt situation- as measured by debt to GDP- as bad as it is, is exponentially WORSE than most imagine.

The question we have to ask is “What is our ACTUAL GDP if government spending is stripped out?”

This is not a simple question to answer because government spending is just one input. How many times does that initial spending make its way through the economy? Probably at least a few times but to keep it simple:

· Reported $29 Trillion GDP. Government spending is 7.2 TRILLION (US Treasury)

· Debt to GDP is 123.22% (Fed) At 90% the economy is stifled and growth impacted according to experts like Rogoff and Rinehart.

· If $7 Trillion is removed, that leaves $22 TRILLION in GDP vs. 37 TRILLION plus in debt or over 170% debt to GDP. (Likely why the stealth buying is in hyper mode)

· Let’s also keep in mind that the $37 TRILLION that is admitted to pales in comparison to the unfunded liabilities like Social Security and Medicare as well as off-budget items like wars, VA benefits, etc. We can only imagine what is behind THAT curtain!

Anyone who cares to look- we are collecting around $5 TRILLION in taxes which has a direct impact on what the private economy can buy so it is a moot point in my opinion.

The reason we are experiencing a FAR different reality than the numbers portray is because they are not real. Let’s look at a few data points that reflect reality

· According to ABC News in 2009 gambling revenues in Las Vegas show a 14.9% decline in gambling revenues of 10% prior to the 2008 collapse and went down 25% in the months following the Lehman Brothers bankruptcy. The same is occurring today. Preliminary STR data shows occupancy in Las Vegas plunging 14.9% in June.

· Home sales are set to plunge to a 30-year low according to the National Association of Realtors. Its lowest since 1995. The projection is LESS activity than in 2008 and 2009. Who wants more debt when there is uncertainty about the economy and particularly in the job market.

· Inflation- particularly for food is still rising while many are losing jobs or FEAR losing jobs.

These are just a few examples of what is actually happening. How many want to-be real estate “investors” will get hurt badly when the renters they planned on either can’t pay or stop showing up on overnight or short-term stays?

I believe we are in the final stages of a full-blown collapse that will make 2008 look like a warm-up for what is coming next.

Traditional assets that have done well for most of our adult lives will likely be exposed as the manipulated mess they have become. Those who fail to plan for a FAR different future are probably going to be in for far rougher times than those that take the time to seek the truth and plan accordingly.

Hard assets would be a good place to start. While gold is the #1 performing asset since the year 2000 (besides the speculation of bitcoin), Leigh Goering of Goering and Rosencwajg has stated that hard assets are the most undervalued versus financial assets in history.

What is that famous saying that most people get backwards? BUY LOW- SELL HIGH.

Be Prepared!

Any opinions are those of Mike Savage and not necessarily of those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice. The information in this report does not purport to be a complete description of securities, markets or developments referred to in this material. The information has been obtained from sources deemed to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct.

Commodities are generally considered speculative because of the significant potential for investment loss. Commodities are volatile investments and should only be a small part of a diversified portfolio. There may be sharp price fluctuations even during periods when prices are overall rising.

Precious Metals, including gold, are subject to special risks including but not limited to price may be subject to wide fluctuation, the market is relatively limited, the sources are concentrated in countries that have the potential for instability and the market is unregulated.

Diversification does not ensure gains nor protect against loss. Companies mentioned are being provided for information purposes only and is not a complete description, nor is it a recommendation. Investing involves risk regardless of strategy.

Cryptocurrencies such as Bitcoin are not registered with the SEC, not insured by the FDIC or SIPC, and the marketplace is currently unregulated. Cryptocurrencies are a very speculative investment and involves a high degree of risk. Raymond James is not affiliated with and does not endorse the opinions or services of Leigh Goering or Goering and Rosencwajg.