Monday, February 18, 2013

Searching For Truth

Buried in the massive dung pile of preposterously positive US regime propaganda pertaining to the perverse presentation of economic data over the past few weeks were a few important items. 

One, Wal-Mart’s Jerry Murray, Vice-President of finance and logistics, said that sales for February (month-to-date as of 2/15/13) were a “total disaster”. He went on to say that this was the worst start to a month he had seen in his 7-year tenure with the company. For perspective, Wal-Mart sells more than the next several biggest retailers put together. So, when Wal-Mart sales are slow, we should infer that general retail sales are poor. This could be especially true when sales are worse than the years 2007, 2008, 2009, and so on. Of course, the ‘total disaster’ was conspicuously omitted from so-called ‘news agencies’. Maybe that’s because the regime just reported consumer confidence rising to bubblicious levels. Maybe over confident consumers bought their goods from higher end retailers. Maybe everything that the regime says is a bald-faced complete lie! Clearly it is passed time to consider a regime change in the US. 

We are grown-ups. We can face the truth. The truth is the current regime is a complete farce. To exemplify what a farce the current regime is, a friend of mine is a business owner and he had a surgical procedure done that required him to miss some time at his business. I told him not to worry as our regime leader has told us, that ‘we didn’t build our businesses’. I assumed that the regime would send someone out to take over for my friend while he recovered. Turns out, no one from the gooberment showed up. Thus, we have another example of a condescending lie coming from the regime. The truth is the regime lies about literally everything.

Two, three of the biggest four economies in the world, the US, the EU, and Japan, reported negative fourth quarter GDP. China remains in positive GDP territory but who really knows? The regime wants us all to believe that everything has ‘bottomed’. Manufacturing and durable goods have picked up. Jobless claims are down. Consumers are positive. Unemployment is falling. Exporters are exporting and consumers are spending. Well, at least they are not spending at Wal-Mart. Well, in reality consumers aren’t really spending at all since most leading economies are in negative GDP territory. Europe, in fact, is getting worse economically unless we are to believe the liars in charge of asset confiscation. The truth is that world economics is still a mess.

Three, the US regime claims to see signs of an economic revival due to the pickup in spending in the aftermath of Hurricane Sandy. Really? Allow me to inject some sanity and intelligence here. If I were to wreck my car, I would have to buy a new one. Yes, a car dealer would get some extra business and a car manufacturer would sell a unit. But now I would be poorer due to the price of the new car. I would argue that this is an economic wash. Or, perhaps this is actually a negative as the new car would cost more than my old car in both price (due to inflation) and taxes. Yet, regimes count the rebuilding of property as only a positive. What about the negative of increased expenses due to the losses? No, regimes don’t count losses. Therefore, everything is a positive. Maybe we should simply bulldoze every city in the nation at the end of every year. Maybe I should wreck my car every day. Imagine what GDP growth would look like then! Thus we should conclude that the truth is that economic data reported to the public is absolutely preposterous.     

Finally, we turn to the chart to see modern economics in action. The chart below is the Japanese yen in red and the Nikkei Average in candlestick over the last year. The Japanese GDP has turned negative in the previous quarter so the central bank of Japan has embarked on the accepted cure-all strategy for economic revival. That is, currency devaluation. Everybody’s doing it. From the US to Venezuela to Zimbabwe to Japan. Every central banker in the world is now engaged in currency devaluation. Has this strategy ever really worked? No, not really. Did Bernanke teach this to his students at Princeton when he taught economics? The reasoning is fairly simple. When economic growth contracts, devalue the currency of that economy. If a gallon of gasoline costs $3.00, then devalue the currency by 33% and now the gallon of gasoline costs $4.00 dollars. Then sit back and watch consumer spending go up producing positive GDP. Of course these same bankers must follow through with the sham by ‘adjusting’ the formulas that calculate inflation such that none of that appears. That way the stupid people that live in the kingdom won’t complain too much about rising prices. The regime’s fuhrer might then want to impose higher minimum wages on the businesses of the kingdom to further placate the woefully ignorant populace. But most importantly, devalued currency inflates stock prices. Yippee!! Slow economies can easily be transformed into robust economies.

Study the chart below. Is there any coincidence that since October of 2012 the yen has lost about 15% while the Nikkei has gained about 15%? We must therefore conclude that the Nikkei stock average has not gained anything. It was merely inflated 15% by the currency devaluation. Inflation is not ‘appreciation’ nor is inflation a builder of affluence. Stock indices have now become a weapon of deceit fired from the cannons of central bankers in a effort to subdue us and confiscate our assets. This is simply a presentation of the truth. 

1 year - XJY in red, NIKK in cadlestick
Chart courtesy

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. Advisory services offered through BMF Investments, Inc.