A Tale of Two Interpretations of Economic Data

Two Interpretations of Economic Data

Is the Economy Improving as the main stream media claim, or do the alternative media have it right- there is no economic recovery?

JM Bullion

Buy Gold And Silver Coins

The mainstream media claims the economy is accelerating; the alternative media isn’t having any of it. Who’s right?

Podcast Summary:

0:00-3:54 Introduction

3:54-4:45 Review of the five long years of the Fed’s Quantitative Easing (QE) program and Ben Bernanke’s comments in 2009 regarding when the economy “begins to recover” the Fed could halt the program and start to raise interest rates.

The Fed Plays the Normal Card

4:45-5:50 discussion of how the Fed is starting to characterize the economy as “normal”

San Francisco Fed President John Williams

“As things get better we can kind of get back to our normal approach to policy,” San Francisco Fed President John Williams said recently during a speech to the Utah and Montana Bankers Association, predicting normal inflation by 2016.

St. Louis Fed President James Bullard

“The Fed (FDTR) is closer to its goal than many people appreciate,” Bullard said recently in an interview with Fox Business Network. “We’re really pretty close to normal.”

Fed Chair Janet Yellen

The Yellen Doctrine

Yellen noted that the stock market valuations are normal and that interest rate policy won’t be used to fight bubbles.

The Yellen Doctrine: the Fed can use monetary policy to unwittingly inflate asset bubbles through low interest rates, negative interest rates, or QE, but then not use monetary policy to deflate them!

A Tale of Two Interpretations of the Economy & The Non Farm Payroll Report – Main Stream Media vs. Alternative Media

The Main Stream Media Gushes Over the Non Farm Payroll Report!

5:50-8:02 discussion how the main stream media continues to insist that the negative first quarter growth was attributable almost solely to bad weather. AP,(Associated Propaganda), Fortune CNBC and Reuters and that the recent non farms payroll report is evidence of an accelerating economic and labor market recovery.

Examples given on the extreme positive spin the main stream media outlet put on the non farm payroll report that purported to create 288K jobs in May.


Happy birthday, America! You get a killer jobs report

“the economic recovery is accelerating and that recent news that the U.S. economy contracted in the first quarter was an aberration rather than a portent of further economic malaise.”

The New York Times

“Now, these broader economic gains are prompting businesses to actually hire significantly more workers in response to growing demand, rather than taking half steps, like adding hours to stretch existing work forces.”


“Job growth blew past expectations and the unemployment rate fell to the lowest level since before the financial crisis peaked six years ago, creating a firm foundation for a stronger U.S. economic expansion.

Associated Press

Associated Press went one step further and extolled the United States as a shining exemplar of economic growth.

From the Associated Press:

“How does the U.S. economy do it? What’s making US economy a world beater? ..the U.S. job market is humming, and the pace of economic growth is steadily rising. Five full years after a devastating recession officially ended, the economy is finally showing the vigor that Americans have long awaited. After having shrunk at a 2.9 percent annual rate from January through March – largely because of a brutal winter – the U.S. economy is expected to grow at a healthy 3 percent pace the rest of the year.”

The Associated Press gave five reasons the United States is outpacing other major economies, including crediting the Federal Reserve policies.

Alternative Media Reveals the Sobering Numbers Behind the Non Farm Payroll Report

8:02-9:48 discussion of how Zero Hedge, Doctor Paul Craig Roberts and David Stockman point out the weakness in the labor market that the non farm jobs report contained – 840k new part time jobs created but 523k full time jobs lost pointing to a part time economy. not a healthy labor market. They also point out the low quality jobs being created and the declining labor force participation rate.

9:48- 14:28 discussion of how the main stream media will say anything to promote the concept of an economic and jobs recovery despite evidence to the contrary.

Twitter Debate with Fortune Reporter (click to follow)

Keynesian economist Justin Wolfers touted the non farm payroll report as all good- his followers disagreed.

The Stock Market Marches Upwards- Evidence of the Recovery
Share Buy Backs, Not Sales Drive Shares Higher

14:28 discussion how the Fed and the media tout a rising stock market as evidence of a recovery when companies’ stock prices are rising mostly because sovereign funds have trillion of dollars invested in the stock market and companies have been buying back their own shares at a record pace.

Profits are up with Price earnings at “normal” levels but price to sales ratios are at historic highs as corporate profits are not being driven by increased sales but by expense and outstanding share reductions.

Discussion of the law of small numbers as it applies to the labor and the housing market.

Whatever Happened to Real Estate as Part of the Recovery Story?

16:15-20:28 Discussion as to (as predicted) housing would be removed from the “recovery” narrative of the media and the Fed. Discussion of the new home market and comparisons to the new home markets of the 1960’s and 1970’s.

New homes sold since

*the current U.S. population is approximately 317 million. The U.S. population was approximately 226 million in 1980 and 203 million in 1970.

Millennials and the Housing Market

20:28-30:00 Discussion as to how the media is finally catching on that millennials don’t have jobs and can’t buy homes. Smaulgld covered this top in April 2013 in “Student Loans and Unemployment are Holding Back the Economy and Real Estate Market

When the main stream media was touting millennials as a potential driver of the housing market “recovery” last summer, Smaulgld dismissed these predictions as Great Pumpkin style fantasies in “Waiting on Household Formation“. Discussion of the lack of investigative reporting. Discussion of the new home market vs. the existing home market.

Discussion of how a drop in the number of unemployment benefits being paid is not a sign of an improving job market.

30:00-33:45 discussion as to how long the low interest rate environment can last. The media’s positive economic recovery narrative does not square with the negative reader comments to their stories. Discussion of the narrowness of the number of people participating in the stock market boom and housing price boom.

Japan and the United States

33:45-37.20 discussion of the lost decades of economic growth in Japan and their recent increase in inflation. Discussion of what might sink the global economy.

How Involved Are Governments in Markets?

37:20-44:00 Discussion of how deeply involved governments are in all markets to the point they are eliminating price discovery. Discussion of gold and silver manipulation and speculative stocks with large stashes of cash from IPOs. Discussion of how long speculative bubbles last – sometime years.

Part Time Job Woes

44:00-45:40 discussion of the issues that part time workers face.

Central Bank Reliance

45:40-54: discussion of how the central banks are claiming that low growth may be a permanent feature of the economy and therefore the need to keep central banks in charge-things would be worse if they were not involved. Discussion of the lack of value that banking and regulations provide to an economy and consumers.

Everyone Should Work at the Post Office!

Where Does Wealth Come From- The Government, of course

54:20-56:00 discussion of guaranteed government jobs and income. Discussion of the mentality that some have that money and wealth comes from the government-they print it don’t they? Will the government can bail out students, colleges and newspapers.

Rethinking the Need to Go To College

56:00 people should think twice about sending their kids to college. Discussion of surveys, including one by the Federal Reserve on the value of a college education. Why Keynesian economics is taught in college- the apparatus pays the professors’ salaries.

A Tale of Two Interpretations of the Economy

Get Free Updates From Smaulgld.com

Subscribe to Smaulgld.com and get the free In Case You Missed Itweekly email as well as updates and analysis on gold, silver, real estate and the economy.

Also get the free report “Twelve Key Differences Between Gold and Silver” when you subscribe.

Further Reading:

Smaulgld Gold Buying Guide

Smaulgld Silver Buying Guide

Initial Jobless Claim Misinterpretation

How QE Encourages Stock Buy Backs, Discourages Hiring and Stunts the Housing Market

The Housing Recovery and the Law of Small Numbers

Royal Canadian Mint

Please visit the Smaulgld Store for a larger selection of recommended Kindles, books, music, movies and other items.

Or you can support Smaulgld.com by making purchases from our affiliates or by making all your Amazon purchases through the search widget below:

Buy American Gold Buffalo Coins

*DISCLOSURE: Smaulgld provides the content on this site free of charge. If you purchase items though the links on this site, Smaulgld LLC. will be paid a commission. The prices charged are the same as they would be if you were to visit the sites directly. Please do your own research regarding the suitability of making purchases from the merchants featured on this site.

The content provided here is for informational purposes only. Making investment decisions based on information published by Smaulgld (SG), or any Internet site, is not a good idea. Accordingly, users agree to hold SG, its owner and affiliates, harmless for all information presented on the site. SG presents no warranties. SG is not responsible for any loss of data, financial loss, interruption in services, claims of libel, damages or loss from the use or inability to access SG, any linked content, or the reliance on any information on the site.

The information contained herein does not constitute legal, tax or investment advice and may be subject to correction, completion and amendment without notice. SG assumes no duty to make any such corrections or updates. As with all investments, there are associated risks and you could lose money investing. Prior to making any investment, a prospective investor should consult with its own investment, accounting, legal and tax advisers to evaluate independently the risks, consequences and suitability of that investment. SG disclaims any and all liability relating to any investor reliance on the accuracy of the information contained herein or relating to any omissions or errors and as such disclaims any and all losses that may result.

Post Navigation