Economy Sinking Government Knows & Giving Bad Info

Ladies and Gentlemen our economy is going down the tubes. I've been saying this since the February and finally the poo is hitting the fan. The reason why I'm posting this here and not some political site or on cnbc somewhere is because I think the government has been giving false data so the population doesn't go into a panic.

Ill do this by 2 steps one telling you why I think the economy is going in the tubes and 2 telling you why I think people are hiding info. Ill start with the reasons.

Reason 1 in the past 10 wages for the top 3% has gone up close to 20% while the other 97% wages have gone stagnant. I feel thats off because the people on capital hill have voted for wage increases 7 times since then. Voted for one minimum wage increase. Hmmm.

Reason 2 energy prices have soared over the past 10 years. Gas, Oil, Natural Gas, Electricity...and so on and so forth. I think it was 10 years ago i was paying .89 a gallon for gas now Im at 3.25.....its odd cause yet without this minimum wage increase people would have to work an hour just to pay one gallon of gas.

Reason 3 the dollar is tanking and it is only going to get worse. Especially now that China (Our great friend in the east..NOT!!) has come out and said they will be dumping our currency...we all knew this was coming. I dont think I need to explain what a weak dollar does as far as the negatives if you need me to let me know...but I will say on the flip side it does help exports but overall a weak dollar is not good for the economy.

Reason 4 Food and housing prices have soared Im not going to go into to much details on this but hopefully with this crappy housing situation we are in now we will see some nice corrections on the housing prices.

Reason 5 alot of our industry jobs are being sent over to china and alot of our customer service jobs are being sent over to India. This causes alot of good paying jobs to go somewhere else. Most of the big corporations do this I dont need to list names but Im sure if you have looked on a toybox you will see where it is made or if you have called for customer service you have got John Smith with an Indian accent.

Reason 6 The credit crunch is for real. I just filed for a line of credit for my business we are opening another location and was denied. I have a credit score of close to 800 and very little debt so if they arent approving me who the hell are they approving for loans and loans are what small businesses need to grow.

I have more reasons buy I'm starting to run out of space so I want to get into why I think the government is giving disinformation. I think they are giving false job reports and other important info because they dont want the truth on how crappy the real economy on main street is doing. They do this because there will be a huge sell off in equities and confidence will go to zero and we will jump right into a depression which i personally think we are a few % on the unemployment to that point. Im just saying this to everyone because I think everyone needs to be prepared. When our economy hits the crapper a great opportunity for a country like china will show itself and I wouldnt be surprised to see them come over and take a shot at taking us over. That aside depressions are not a good thing feeding your family is. Just so you know where I get this info I own an investment company not going to plug it and I deal with this on a daily basis. I know I will get alot of disagreements but alls Im saying is be prepared.

Must agree with what you have said. Thank you for being another one of the few who state the obvious, while everyone else is in stuck on "duh" like its another Hyundai sales event. Star for you bud!

Why is it you claim that the government is making up numbers and then use examples about how much the top X percent if income earners went up X percent? Where are you getting that information, if not from the government? The compiling and publishing of economic reports and statistics is a huge government operation in which literally tens of thousands of civilian employees have their hands in. How is it all these tens of thousands of employees agree to fake the numbers and keep quiet?

Government economic indicators are verified because individual states also compile their own numbers to check for veracity. Additionally, academics spend countless hours analyzing the numbers to debate their innate meaning in academic journals - and they have copies of the raw data.

I would find it very unlikely that the government can "fake" numbers with that many people and that many levels of government involved. Finally, if government was faking numbers, why would they show any negative numbers at all - ever - why not just spoof the entire economy? Sure, they would have to make things a tad bit negative every now and then, but there would be no reason to make up "fake" negative numbers that would induce the occasional market panics that happen every few years or so, like 2001-2002.

1)
There is inherent in this assumption some sort of connection between minimum wage and economic prosperity. Only 520,000 of a 200+ million work force gets paid the minimum wage. How is it that raising it is going to create any real impact on the economy? This of course assumes that the minimum wage is beneficial to the economy at all, research suggests (I can cite many articles if needed) that the minimum wage artificially sets labor prices low and only hurts the economy. If you want minimum wage workers to be paid more, stop using a minimum wage to manipulate the market into paying them less than they are worth.

I was also going to use BLS statistics to demonstrate that the income for the 1-3rd quartile of all workers has gone up starkly over the past 10 years - but if you will simply claim that its all a government lie, then I won't bother.


I personally do not like that Congress raises their own pay. However, I do not think it has any real impact on government oulays. We are talking about - at most, a few million dollars in increases for all of congress. A few million dollars is absolutely nothing when considering the federal budget.

2)
Actually, inflation adjusted prices for oil are steady. You are not taking into account the time value of money. Over time, the buying power of all currency declines as a factor of inflation and cost of living changes. I would also point out that 10 years ago the national economy held energy prices artificially low.

3)
China has only threatened to reduce their holdings of US debt. It was merely a political thread in an attempt to gain some political capital - which failed. China has yet to reduce its holdings of US debt. Do you have any evidence that its "only going to get worse"? All signs indicate that the dollars value is simply in an economic cycle. Which is why China is not withdrawing its US debt holdings.

4)
Housing prices have soared, and are now falling. Consumers were in a state of irrational buying and the house market gravy train is now ending. The CPI food market index shows no unusual long term upward momentum in food prices - seems to be quite steady, with a recent spike. But a recent spike is not indicative of a trend.

5)
Outsourcing has been going on en masse since the early 1990's. Is there any evidence to show that this somehow creates a huge impact on the economy now? I do not find any evidence for that. While when a company outsources it does leave people out of jobs, government routinely steps in and retrains people to be able to get jobs in a knowledge economy. I am not sure that shifting away from industrial complexes and into the knowledge economy is BAD thing - seems to be a good thing, as the knowledge economy offers more jobs and better quality jobs for those who are willing to be retrained.

6)
I have no doubt that a subprime credit crunch is real. But this does not indicate any sort of recession. Lenders have historically cycled through periods of excessive and restricted credit. The evidence you provide is a sweeping generalization fallacy. Your example is not representative of the population, because (1) you have a good credit score and (2) you are seeking business credit. The credit crunch will impact those with bad credit for personal credit lines.

There are many business credit lines who will check the credit of your business, and not your personal credit, before issuing you a line of credit. In that case your personal credit does not matter at all, what matters is the financial statements of the business and its historical profits.

By the way, if the government is simply lying on all their economic indicators it would be the end of America's social institutions as you know if it were ever to be exposed. Trust - a key component of a healthy business economy - would be shattered. It would take tens to hundreds of years to recover. Which is why I doubt the government would ever do this - after all, destroying your economy with false information when your found out only impacts the governments tax revenues in a negative way.

Speaking for somebody in the metal fabrication part of business, work for us is down, has been getting slower and slower over the past few years. I work on screw machines, lately the work for those has been so slow, you can't sell the things anymore, warehouses are full. Most of our steel contracts are gone, we make by on aluminum. Most of the folks not in my job area may not feel it, white collars fair better.

Nice OP, yes here in ATS is many of us following the many devious ways that our government is using to keep the American people far away from the problems that our nation is in.

Yes like everything figures can be manipulated and play with even sugar coated to keep the illusion that everything is fine and dandy.

But the truth is just there for anybody that have eyes to see and add one plus one on their own and ears to heard what the old market gurus have been warning about.



[edit on 17-12-2007 by marg6043]

The elephant in the room is the baby boomer's retiring and the first social security check went out this year. As far as we know the government has been eating up the social security for other things. Remember Al Gores Lock box?

First Baby Boomer to receive social security. The wave has just started.

www.ssa.gov...


P.S. 2008 an estimated 8 million homes will go into sub prime which means their monthly rates will go up.

reply to post by LightinDarkness

Only 520,000 of a 200+ million work force gets paid the minimum wage. -LightinDarkness

USDOL says...

1.7 million workers with wages at or below the minimum

...and that doesn't include workers who make a higher state minimum wage.

But of course we don't have to worry about the poorest people in the country who bother to work two or three jobs, because they are not the majority.




[edit on 12/18/0707 by jackinthebox]

reply to post by jackinthebox


Yep. Of 1.7 million, only 520k are AT the minimum wage. I do not include those below it because they include things like servers - who get paid almost nothing per and make way above the minimum per hour in tips.

reply to post by LightinDarkness

The CPI food market index shows no unusual long term upward momentum in food prices - seems to be quite steady, with a recent spike. But a recent spike is not indicative of a trend.

Poor people die on spikes.

The certainty of rising fuel costs is indicative of an upward trend in food costs.

reply to post by LightinDarkness

...who get paid almost nothing per and make way above the minimum per hour in tips.

This is a sweeping generalization. Trust me, I know servers. They may have a good week and be broke for three. I would say that after taxes, they make about minimum wage.

reply to LighinDarkness

By the way, if the government is simply lying on all their economic indicators it would be the end of America's social institutions as you know if it were ever to be exposed. Trust - a key component of a healthy business economy - would be shattered. It would take tens to hundreds of years to recover. Which is why I doubt the government would ever do this - after all, destroying your economy with false information when your found out only impacts the governments tax revenues in a negative way.

The check is in the mail. Yes indeed, the check is in the mail.

All Federal Reserve notes issued after 1964 are illegal under Article One, Section Ten of the U.S. Constitution.


[edit on 12/18/0707 by jackinthebox]

reply to post by jackinthebox


No, poor people don't die on spikes. Government cannot artificially control food costs to ensure prices are 100% stable. Since the population impacted by this is also on food stamps and other government subsidies, this really isn't true at all.

And as for severs - nice try. I also know several servers, and they make at least 2-3 times above minimum wage, with their hourly paying for the taxes. Also, a google search for "server average pay" shows a range of 14,000 - 74,000. With the 14,000 one talking about 20 hours a week.

reply to post by jackinthebox


Yes this really doesn't actually answer the question about why the government would be literally making up statistics.

Article One, Section 10 states: "No state shall..."

If the states minted their own money, you'd be correct. They don't. The federal government does. The federal reserve is not the agency of a state.

[edit on 18-12-2007 by LightinDarkness]

reply to post by LightinDarkness

Since the population impacted by this is also on food stamps and other government subsidies, this really isn't true at all.

If you work one full time job on minimum wage you are above the poverty line, and not entitled to food stamps.

Originally posted by RuneSpider
Speaking for somebody in the metal fabrication part of business, work for us is down, has been getting slower and slower over the past few years. I work on screw machines, lately the work for those has been so slow, you can't sell the things anymore, warehouses are full. Most of our steel contracts are gone, we make by on aluminum. Most of the folks not in my job area may not feel it, white collars fair better.

I would have though a business like that would increase its exports with the dollar being so low.. but what do I know of metal fabrication business?

One thing I HAVE noticed this year.. and much to my liking because I live right next to one.. is mall traffic is down substantially! .. I mean, its empty compared to what it should be. I can actually get a parking space up close for one, stores are not packed by any means .. to me this could be a sign that the worst part of the economic numbers will come out in the next quarter when retailers post substantial losses due to low consumer spending.

Or maybe every one is shopping online because of gas prices, but believe it most likely people won't be spending as much.

LiD:

I would find it very unlikely that the government can "fake" numbers with that many people and that many levels of government involved. Finally, if government was faking numbers, why would they show any negative numbers at all - ever - why not just spoof the entire economy?

The Federal government, and more importantly the Federal Reserve cannot exactly fake numbers.. but they CAN and HAVE held the stock markets propped up with buy out systems, stocks drop, Fed picks them up so as the market is not shocked. The other aspect of this is in the past 8 years after the dot com bust and 9/11 interest rates where so obscenely low that banks and loaners over used and over loaned. All of this has lead to a high inflation .. and while the Federal Reserve would indicate that inflation is "lower then average" taking into account that the US Dollar has dropped almost 25% since 2001 alone should speak volumes.

So while they cannot exactly fake numbers, they can manipulate it easily, and they do.

There is inherent in this assumption some sort of connection between minimum wage and economic prosperity. Only 520,000 of a 200+ million work force gets paid the minimum wage. How is it that raising it is going to create any real impact on the economy?

Double edged sword.

By not raising the minimum wage and with the devaluation of the dollar leading to increasing cost of living in such a short period of time, increasing prices of oil by 100% from 2001 alone takes up a good portion of a minimum wage earners salary.. eventually the live to work to drive to work. The economy left them behind because for so long no one bothered to raise it..

However.. once it was raised, the US STILL did not see a significant or even normal rise in Middle Class salaries. The number of millionaires went up 11.8% in 2006 while in 2006 the Middle Class reached its breaking point, leading to the 2007 financial melt down and real estate bubble bursting.. millions more are going to tarnish what little credit they have and loose their home.

And with the minimum wage raising this January I believe is when most state officially change, the price of average goods will eventually rise to the equivalent of what the minimum wage once was, making everyday items even more expensive on the Middle Class, and the lower class..

Actually, inflation adjusted prices for oil are steady.

Not at all.. from 2001 - 2007 the price of gas at the pump has risen over 100% .. on top of that the oil companies shattered every record for profits over any industry in history .. and the government brought in record taxes off it as well. The adjusted price for the 1970's oil crisis would have been almost $88 a barrel .. I think we passed that a while ago no?

China has only threatened to reduce their holdings of US debt. It was merely a political thread in an attempt to gain some political capital - which failed. China has yet to reduce its holdings of US debt.

China's biggest oil importer is Iran, who has officially stopped exporting in American Dollars, and instead chose Euros.. China is dumping certain amounts of American debt and reserves for Euro reserves.. Since China also imports energy from Russia, it also has to diversify in Rubbles since Russia also is now refusing American Dollars. Japan as well had to start building up Euro reserves for energy needs.

Currently China's biggest economic partners are India and Europe, Europe is set to out pace the US's economic investment within a few decades, relieving China of a one nation survival plan, diversifying its investments.

I do agree that the Dollar is in an economic cycle, but I also believe the Fed has and is doing everything to make sure the cycle does not take its natural intended course.

Housing prices have soared, and are now falling. Consumers were in a state of irrational buying and the house market gravy train is now ending.

Man, the rate that houses inflated their prices .. its insane. Luckily for America it was not an American problem .. the problem is actually far worse in some European countries like the UK and Ireland. Ireland for instance, a house in the 1990's that would have cost 70k now cost over 400k Euros.

Outsourcing has been going on en masse since the early 1990's. Is there any evidence to show that this somehow creates a huge impact on the economy now? I do not find any evidence for that.

I find the insourceing of personnel to be an even bigger problem. We outsource jobs, we create high tech jobs, we then import scholars from around the world and saturate our own markets like the IT industry with Indians, Chinese, Japanese etc. Essentially we don't want to pay hard workers good wages, and we don't want to employ our own educated people for high tech jobs, because again, they cost to much.

I have no doubt that a subprime credit crunch is real. But this does not indicate any sort of recession.

I think it could easily build into a recession .. not a depression, but a recession for sure. We have seen the markets slow and industry fall over time, and this holiday season may turn out to be proof that consumers cannot consume like they used to .. a driving force in our economy. Consume, consume, consume.

I know all people are getting from me is a card.

reply to post by LightinDarkness


The Federal Reserve is not the government. It is a private corporation, and therefore bound by the laws of the Constitution.

reply to post by jackinthebox


Indeed. And it is again, not a state government. It is therefore not bound by the section of the constitution you cited.

reply to post by Rockpuck


I agree that the government can manipulate the markets, but they cannot do so long-term. The markets react to interest rate cuts or rates being raised within a few days of the event, but otherwise the government cannot "make up" it own numbers through regulatory action. They can cause a short term momentum or decline, which usually corrects in a few days.

The core of the minimum wage issue to me is not that it does not reflect the devaluation of the currency. No job changes its hourly or salary rate to reflect the value of the dollar. If individuals wish to change their pay rate, they must get another job or try for a pay raise. Why should people in minimum wage jobs be any different? Also, the majority of people in minimum wage jobs are minors who live with parents that make at least double the poverty level. The majority of minimum wage jobs are short-term in nature on by design. There simply are not that many people making the minimum wage. If you raised it to $20 an hour, the impact of that raise on the GDP would be completely insignificant, but you would cause a massive increase in the price of goods produced by those workers - and might see a GDP decline. Of course, I still hold that if you did not force a minimum wage the market would (and has, in other countries) set a rate much higher than any government mandated wage.

Oil prices have indeed risen steadily when you consider the fact that gas prices up until 2000 were held artificially low. Until 2000, gas prices had not even caught up with inflation. That they did so quickly does not indicate that gas is now "over priced," it just means that it has now caught up with where it would be if supply controls had not artificially restrained prices. You also have to consider that a huge portion of gas prices has nothing to do with oil - it's government taxes. Which have been added to - big time, depending on your state - since 2000.

China is not as a matter of fact dumping US debt, because the Chinese realize this is another economic cycle. They lose money wise by dumping our debt over the long term. If you have evidence that China is actually selling off US Debt (and not US investments - that is something completely different based on Chinese investors playing with currency speculation) - please provide links.

The US economy is long overdue for a recession (NOT a depression). I have no doubt that one will occur. When it happens, I agree subprime mortgages can be an issue. But I do not see a problem with the banks - and the mortgage holders, each respectively paying for their stupidity. The banks paying for loaning out money to people who have no ability to repay it, the borrowers for taking out loans they couldn't repay. I do not think that the "credit crunch" (I hate that word, the media uses it over and over) will be the main reason for it - could definitely be a contributing factor. I think the main factor will be that the housing bubble has burst and people will have to come back down to reality that houses are not meant to be investments and you shouldn't treat your house equity like its a bank.

You need to think more in terms of consumer goods import/export, than oil prices...

the practice of American corporations offshoring their production for US consumers. When US corporations move to foreign countries their production of goods and services for American consumers, they convert US Gross Domestic Product (GDP) into imports. US production declines, US jobs and skill pools are destroyed, and the trade deficit increases. Foreign GDP, employment, and exports rise. article

U.S trade deficit counts for way more than oil import..

US corporations that offshore their production for US markets, account for a larger share of the US trade deficit, than does the OPEC energy deficit.
Half or more of the US trade deficit with China consists of the offshored production of US firms. In 2006, the US trade deficit with China was $233 billion, half of which is $116.5 billion or $10 billion more than the US deficit with OPEC. article

Its quite "simple" in the understanding, but more difficult to make reality, but you need more export than import to safe the dollar.

When the US firm brings its offshored goods and services to the US to be marketed, those goods and services count as imports. article

U.S Exports = $1.023 trillion
U.S Imports = $1.861 trillion
Total = - $838 million ( $838,000,000 ) Source

You need to stop buying U.S products manufactured offshore, and start buying products manufactured in U.S.

Go even further and start buying locally produced goods.

You need to buy locally produced goods, to get your community to grow. This may cost a bit more, but you will get better quality instead of some cheap offshore produced "buy and through away" item.

In Denmark we call it the "priciple of closeness".
Locally bought goods increase local income, witch increases local spendings, witch increases local production, witch increases local workforce, witch increase emplyment, to yet again increase local spendings ....and the circle starts to grow ...oohh and even more Export becomes available too.

This princible has almost become a "national unconsiousness way of shopping" for people in Denmark and it works very well

We now have the lowest unemplyment rate ever
People have more money in hands
Higher survival rate for newstarted business
A plus on the national account balance every year, allowing the country to decrease debt.
Stronger communities, with a "help eachother" way of thinking
etc. etc....

This is almost 100% due to the "principle of closeness" and most people don't even know why they prefer local goods anymore, they just do it.
It has become a way of consumers lifestyle.

Don't underestimate your power as a consumer, you have more power than you know

I wish a merry X-mas to all Americans, and hope for the growth of everyones prosperity.









[edit on 18-12-2007 by Bluess]

"China is not as a matter of fact dumping US debt, because the Chinese realize this is another economic cycle. They lose money wise by dumping our debt over the long term."

source: www.bloomberg.com...

``We will favor stronger currencies over weaker ones, and will readjust accordingly,'' Cheng Siwei, vice chairman of China's National People's Congress, told a conference in Beijing. The dollar is ``losing its status as the world currency,'' Xu Jian, a central bank vice director

Source: www.dailyreckoning.com.au...

“A sharp drop in foreign holdings of US Treasury bonds over the last five weeks has raised concerns that China is quietly withdrawing its funds from the United States, leaving the dollar increasingly vulnerable.”

The report continues:

“Data released by the New York Federal Reserve shows that foreign central banks have cut their stash of US Treasuries by $48bn since late July, with falls of $32bn in the last two weeks alone.