Tuesday, December 02, 2003



Well, Forbes magazine doesn't seem uncertain: "Surge at U.S. factories has Q4 GDP looking strong," says its Dubious Administration-sounding headline, bolstered by these upbeat comments:

"All the indications are that the dramatic surge in economic growth in the third quarter, to 8.2 percent, took business executives and factory owners by surprise..."

"Overall economic growth is looking like at least a solid 4.0 percent pace for the October-December period, confirming that the recovery is on a sustainable footing."

"'Q4 is off to a good start,' said Lehman Brothers financial economist Drew Matus, who has revised up his forecasts for growth next year."

"On balance, the data is extremely encouraging and consistent with the view that the economy is gathering momentum and poised for ongoing strength beyond the surge in GDP in the third quarter."

Boy, sure sounds pretty rosy, unless you happen to know that most of that surge is from military spending, which is basically like taking the biggest earth mover in the world and using it to shove your tax money into a bottomless hole 24 hours a day for as long as you allow it to.

Then there's the more realistic appraisal of Jay Taylor:

"The U.S. is already for all practical purposes a bankrupt country. I say that because we are already--even before the baby boomers retire--relying on borrowings of $1.5 to $2 billion per day from foreigners, not to build our infrastructure or plant and equipment that will enhance wealth over the longer term, but rather to continue consumption well over the limits of any other country on the face of the earth. As a nation, we are hopelessly addicted to consumption and it is every bit as pathological as the alcoholic husband that drinks all his paycheck up before he buys groceries and pays the rent for his family. We are living on borrowed time. We are so far gone that we can no longer compete effectively with other nations. Why would foreign countries continue to invest in America? Already we are seeing a huge drop-off from foreign private sector investment in the United States. Central banks are buying U.S. paper, but that is part of the beggar-thy-neighbor currency devaluation pathology that is seeping back into the world for the first time since the 1930s.

Bear in mind that foreign countries don't have to withdraw the money they have already put in the U.S. to cause the U.S. to collapse. All they have to do is stop sending us $1.5 to $2 billion per day and the dollar will tank, big time. As Richard Duncan said in his book, The Dollar Crisis, 'The dollar is destined to collapse because the U.S. economy will soon no longer be able to generate a supply of secure U.S. dollar-denominated investment vehicles sufficiently large to enable the rest of the world to recycle its annual half a trillion dollar current account surplus.' And if that is the case, then why would the Chinese and Japanese continue to send us real tangible consumer goods if all they get back in return are pieces of paper that are without value and in fact continue to lose value against say the yen, the euro, and gold?"

Gosh, that doesn't sound too good; surely it can't be true? Why would the Dubious Administration lie to us? There's more truth to be found in an article in the New York Times, which says in part:

"In other words, the government has cooked the books. It has been a more subtle manipulation than the one during the Reagan administration, when people serving in the military were reclassified from "not in the labor force" to "employed" in order to reduce the unemployment rate."

So who are you going to believe? The Dubious Administration and its increasingly rich friends as upbeat economy floggers, or your own financial future? Maybe it would be best to get ready for hard times, unless you work for Halliburton...

No comments: