Friday, August 15, 2014

Fungible Truth


Truth - The real facts about something
Fungible - Interchangeable equivalents 

Fungible Truth therefore, is the interchangeability of facts. Of course, in today’s world, there really aren’t any ‘facts’. We live in a new world in which the truth must be so horrible, so despicable, so vile, so repulsive, so true, that it cannot be spoken. Nor can it even be fathomed. Well, except here. And of course, the financial page the Market Oracle from the UK. The Market Oracle is the only web page that has the guts to print the truth. Don’t bother with the rest of them. Reporters of facts have all become repeaters of propaganda for the regime.

So what do I mean by ‘fungible truth’? As we all know, the regime is busy selling us on the economic recovery. The regime reports data to back up their sales pitch. This past week we have been getting deluged with reports from the regime pointing to the improving employment situation. All states, all communities, all over the country are reporting better than average job creation and lower than average unemployment. Mathematically this is of course impossible. If we were to average 2 and 4 we would get 3. If everyone was above 3, where did the 2 come from? Okay. So there is the first fungible truth. 

Next, news headlines are reporting the improving economy as evidenced by the wonderful jobs news. Nevermind that new jobless claims just increased last week. Nevermind the truth. The regime didn’t like the real number so they replaced it with a more palatable number. Fungibility. The regime’s number fits their narrative. The public accepts the regime’s number partly because the public, well, the public is like Stevie Wonder in a paint store, and, most importantly, the regime’s numbers make stock prices rise. 

There was even a headline that noted the reported job creation was proof that the economy of Texas was getting stronger. Ditto for California. 

Now, this struck me as odd given that the Deere company, maker of farm equipment, just reported weakening sales resulting in layoffs. Deere sells farm equipment. Texas and California are farming states. The IT company Cisco just reported weak sales and layoffs totaling 6,000. Yes, business is good! Sure it is. 

Should we even talk about Walmart? The company reports that foot traffic in existing stores has declined for 7 straight quarters. Sales are weak. JC Penney saw their stock price jump because they only lost $.73 cents in the last quarter. Yes, the stock price rose because expectations were for the company to lose even more. Just about every retailer that I know of has reported weak sales. Yet, the regime continues to stick by the fungible truth that consumers are spending more and more. If that is so, then consumers aren’t spending extra money at retailers. I suppose they are lined up at busy malls on Mars. Again, retail ‘sales’ figures are indeed fungible. 

The regime claims that consumer confidence is up (whenever they need a stock rally) yet a poll was out reporting that 75% of americans think their children will be economically worse off than previous generations. Fungible truth. Or maybe, fungible truthiness. 

Finally, Fed officials are trying to ‘talk down’ the fear of rising interest rates. Their message is that the economy is still fairly weak and interest rate hikes are far down the road. Again, as I have written, as I have written years ago, interest rates are not going to rise. Does Japan ring a bell? The central bank of Japan took interest rates to zero more than two decades ago. How did that work out? Are rates rising in Japan? Are rates going to rise next year? Are rates going to rise in the next century? No, of course not. Saving bankrupt banks comes with a heavy price to the society who gives up their Treasury for this purpose. 

Sadly, the result is the extinguishment of truth. American people are constantly lied to about literally everything. American leaders must themselves be pathological liars to even hold office. So be it. Investors need to understand that every piece of data they read or hear is communicated to support a story. The result is that the economy becomes a bubble because no one knows the truth. This week in August gave us a good example of the bubble. On Thursday, home sales were down 2%, unemployment claims rose to 311,000, Walmart cut future earnings expectations, war raged across the world (including Ferguson, MO), and yet the Dow rose 67 points. Isn’t that all that matters?  

Disclaimer: The views discussed in this article are solely the opinion of the writer and have been presented for educational purposes. They are not meant to serve as individual investment advice and should not be taken as such. This is not a solicitation to buy or sell anything. Readers should consult their registered financial representative to determine the suitability of any investment strategies undertaken or implemented. BMF Investments, Inc. assumes no liability nor credit for any actions taken based on this article.