Rings "mighty" hollow!

The following is only part of an article published by Dr Jim Willy:

Any under-statement of price inflation is labeled as growth in a totally fraudulent fashion. The USGovt has recruited and trained expert accomplished teams of statistical liars in the Bureau of Labor Statistics. Better stat rats are employed in the Census Bureau, where years ago a friend of mine worked. The BLS is just plain conmen doctors of lies. They have been under-stating the Deflation series, the official measure of price inflation used for the Gross Domestic Product, for many years. The Deflator series typically runs lower than the CPI!!! In the above example, temper and moderate the lie. If they say that price inflation was only 1%, then the nominal 5% growth is adjusted toward a final 4% growth statement for the final published report. That is what the USGovt does. They under-state the price inflation, and whatever they deceive by, that amount is falsely called economic growth. That is one method how they have avoided reports for announcing negative growth in 25 to 27 out of the last 32 quarters.

NOW THE TRUTH ON G.D.P.

However, the truth is worse!!! The actual deflator, if reality were chosen, would have used something much higher. They supplied the graph above. The divergence between official story and truth is widening to an alarming level. The Clinton Administration is the original author to this great lie, with Rubin the co-conspirator, a fraud which costs recipients of Social Security, USGovt pensions, and US Military pensions every month. The lie is over 7% nowadays, between the true CPI and official CPI. The Shadow team actually measure 12.5% as the true honest CPI for people who must live in the United States, or is it the Untied States? Given the laws passed and erosion of liberty, it is more like Untied Snakes these days. The same Shadow Govt Stat folks measure the GDP for Q2 at minus 2.5%, after taking into consideration far more than simple deflator issues.

But the USDollar rallied, since even more powerful corruption was dictated before the US Presidential election, and while the USDollar was struggling in the face of both banking system devastation and failing economic prospects. A reality-based economic growth report would have sent the USDollar into a tailspin selloff, maybe even a rout. So they amplified the lies. The greatest production in any US industry is possibly the fraudulent statistics churned out in the dark chambers of the USGovt agencies. They do produce growth! Exceptions might be perhaps the computer, networking, tech telecomm, or biotech industries. To be sure, the US excels in military weapon technology, used to destroy things, and decreasingly on any defensive basis. The difference this time, in my book, is that the USGovt is lying in much more obvious blatant fashion, without bothering to use much to shield their gross lies. These are bold naked lies.

THE INCREDIBLE USDOLLAR BOUNCE

The USDollar has reacted powerfully from three important factors: 1) false USEconomic growth reports, 2) new weakness in Europe echoed by the EuroCentral Bank, and 3) a selloff from a frenzied crude oil price. The August Hat Trick Letter analyzes these items one at a time. An effective backroom force was also utilized by the central banker brethren, who find themselves desperately on the defensive to avoid systemic breakdown and bank system implosion. WHAT DID CENTRAL BANKERS DO??? The foreign central bankers actually doubled their pace of interventions to purchase USTreasury Bonds in US Federal Reserve custodial accounts, which broke the upside resistance. The last three weeks ending early August had twice the pace of USTBond purchases than the previous twelve months. Details are in the August report.

Is it unpatriotic to point out the grotesque economic growth lies and blatant intervention to corrupt free markets? Nowadays, yes, it seems. The newly defined patriot uses lies, covers lies, and criticizes those who expose lies. Such people wear brown shirts underneath their collared dress shirts, a joke that probably only 2% to 5% of Americans comprehend. Hint: see Nazi and nickname “brown shirt” movement in 1928 Germany. The USTBond is the vehicle for US$ support and movement. Clearly, the central banks are intervening to push the USDollar up, perhaps realizing with technical assistance from Treasury Secy Paulson that the DX index was vulnerable to a huge sudden rise.

The EuroCentral Bank was plain and clear. The ECB is not in a position to hike the official interest rate. They confirmed the economic slowdown that is spreading across the European Union. The euro fell right away, and powerfully so. My analysis a month ago was clear, that the ECB was not going to continue on rate hikes, and would probably reverse those rate cuts. Now my thinking is more akin to believing that the ECB wanted to engineer a top of the euro, so it could reverse from speculative gravity. Details of the disaster unfolding in Europe, centered in Spain perhaps, in the August report.

The last powerful factor was the selloff in the crude oil market. As the crude oil price falls, typically the USDollar strengthens. Demand for energy commodities generally are down in the Untied States. The Beijing Olympics seem to have caused a hiatus in energy imports to the Middle Kingdom. The result was a profound fall in the oil price, one fully warned and forecasted here, signaled by the XLE energy stock index. As the crude oil price fell from the 140s to the 110s, the USDollar was again bolstered. The problem zones like now Georgia in SouthWest Asia also create a global shock toward instability. My view is that a possible second front has opened in the Global Energy War, catching the depleted US Military and lame duck president off guard. Depletion of major oil fields continues. Mexico is now a net importer of crude oil? Gotta check that story which crossed my desk. Nigeria will surely continue as a national thug center, thugs in power, thugs armed at bandits, and thugs cutting deals with them. Crude oil output is not stable, regardless of the region globally. Even the Saudis are playing shell games, talking about output, not being clear as to sour crude versus sweet crude, even as their major Ghawar is in its 8-th inning out of nine.

The USDollar, via its DX index, has filled in a technical thin region between 73.5 and 76.5, and did so fast. Notice how in early June another milder but powerful surge was executed, again when the financial system seemed crippled. What has ensued actually makes possible the next serious decline in coming months. Notice the crystal clear symmetry in the chart, as the rise was as sudden as the fall. That spells instability for an easily occurring correction back down again. The US$ DX index has benefited not from inherent strength, but from relative weakness being realized in the euro. The British pound has also suffered steep declines, as forecasted here in the last several private reports. Even the Canadian Dollar has fallen. The Competing Currency Wars are at work, overtime. The USDollar is not gaining strength at all. It looks incredibly vulnerable. What has changed is that the US$ alternatives have vanished quickly.

The chart above is now encountering the 50-week moving average and the down trendline. It faces heavy resistance between 75 and 77 from the turn of year 2008. Look for a more gradual slide back to 73-74 range, as it fills from consolidation tied to much gyrations, debates, fluctuations, and competing scenarios. Like Wiley Coyote poised atop the chasm after a hearty chase, past the cliff ledge, he is in a bad spot. The clownbuck has no legs to stand upon here. The next round of bank failures and their inability to raise cash selling capital in balance sheet replenishment should be rather stark and a big wakeup call for foreigners who view the US$-USTBond tandem as safe haven. Mix some metaphors, why not? This all reminds me of great Tsunami that hit Thailand and Indonesia in late 2005, when a remarkable phenomenon occurred. The tide went out in a profound manner immediately before the floodwaters hit the shorelines. The financial markets are often well explained by water and weather analogies, as they explain market behavior from the ample liquidity flows, built-up pressures, and exposed differentials. The US$ rally is phony, technical, pushed by central banks, and owes more to the decline in euro, pound, aussie, kiwi, and loonie, than to any revival whatsoever in the US or its financial markets or its banks.

This is a bear bounce.

Another AAA move!!

Desperate measures by desperate men!

RUF