The U.S. Economy Is Now Dangerously Detached From RealityBrandon Smith, Contributor We now live in an entirely fabricated fiscal environment. Every aspect of it is filtered, muddled, molded, and manipulated before our eyes ever get to study the stats. The metaphor may be overused, but our economic system has become an absolute matrix. All that we see and hear has been homogenized and all truth has been sterilized away. There is nothing to investigate anymore. It is like awaking in the middle of a vast and hallucinatory live action theater production, complete with performers, props, and sound effects, all designed to confuse us and do us harm. In the end, trying to make sense of the illusion is a waste of time. All we can do is look for the exits There is some tangible reality out there, but it is difficult to find, and there are few if any mainstream numbers to verify. One has to remember always that the fundamental world of money and trade revolves around real people and real circumstances. No matter how corrupt our economic system is, as long as there are human beings, there will always be supply and demand that cannot be hidden. We have to look past the official numbers and look at the roots of trade. Where has demand fallen? Where has supply diminished? Where are the tangible goods and needs and how have they changed? Lets first start with the mainstream version of our system, looking at each aspect of the economy that no longer represents the truth of our situation Much of this information is old news to those of us in the Liberty Movement, who tracked the progress of the global collapse long before the general public even knew of its existence. However, it is useful to take a step back and look at the basic picture every once in a while. According to numbers issued by the Department of Labor, weekly unemployment reports have dropped to a five year low, and the overall employment rate is holding at 7.9%. This would seem to be a vast improvement over the dreadful bloodletting in the system only a few years ago. Has the private Federal Reserve and the Obama Administration really done it? Have they turned back the tide on the greatest fiscal crisis the U.S. has seen since the Depression? No. They havent. They have only changed how the data is disseminated to the public. In order to understand how the employment statistics con is being engineered, it is important to understand the difference between Adjusted and Unadjusted numbers. Labor Department data is seasonally adjusted, using a series of statistical assumptions including something called Trend Cycle Analysis. Trend Cycle Analysis is, basically, a sham, but a sham put together in a very complex and confusing manner. If you ask a mainstream economist what it is, youll likely get a three hour long dissertation filled with financial babble and very little concrete explanation. So let me break it down as simply as I can Imagine that you are going to estimate how much profit you plan to make in a particular month, but you dont just consider your current pay rate and pop it into a calculator; you also throw in the possibility of a few pay raises, an inheritance from a grandma who might kick the bucket, and, your exaggerated expectations of the entire years profit on top of that. You may also take into account future bad weather, a mugging, a nuclear war.whatever. All hypothetical situations not based in reality. Basically, you decide that a particular trend in your income is inevitable, then, mold your statistical analysis around that assumption. When your real profit numbers come in (the unadjusted numbers) and they do not meet your expectations, you simply change them according to what you believe SHOULD have happened. If you insist that your profits are going to go up for the year, and they go down for a couple months instead, you change the variables you use to calculate the statistical average so that the results match your expectations, assuming that it will all balance out in the end. Now, this sounds utterly insane for the common person out there trying to make a living. If you ran your household this way, without accepting the cold hard unadjusted numbers in front of you, youd find yourself broke and on the street in no time. Unfortunately this is EXACTLY how our government handles most financial data; by coming to a final conclusion before hand, and then forcing the numbers to fit that conclusion. This is why in February of 2013, adjusted first week unemployment rate was reported at 366,000 a 5000 person drop from the week before. A seeming improvement in the trend. But, unadjusted numbers came in at 386,176 a 16,000 person spike from the week before. When one examines real unemployment numbers, he finds that the divergence between the adjusted and unadjusted statistics is growing larger with each passing quarter. That is to say, the contradiction is becoming so blatant between the hard numbers and the Labor Departments fantasy numbers that one must question whether or not the government is lying to us outright about the state of the economy (hint they are lying). These same methods are used by the government to calculate progress in the housing market, disposable income, etc. The claim of recovery in the jobs market simply doesnt jive with other indicators, like 2012 Christmas retail, which had the worst showing since the crash in 2008 (and these are still mainstream numbers!): Average household savings continue to scrape the bottom of the barrel, indicating that the public is not spending or withholding cash. They are simply broke: The downturn in consumption and industry also seems to be supported by the Baltic Dry Index, a measure of global shipping and rates. The BDI has fallen to near historic lows THREE TIMES in the past year, which to my knowledge, has never happened before. In the past, the BDI has been a strong prophetic indicator of future market volatility. Usually, around a year after a severe decline in the index, a dangerous economic event takes place. The BDI made its first sharp drop to all time lows at the end of January 2012, exactly a year ago. U.S. household debt was recently reported to have fallen to a 29-year low, but the ratio used by the Federal Reserve applies a statistic for disposable income that is derived from the Trend Cycle boondoggle method. While markets cheer, the truth is, the only reason household debt obligations have fallen at all is because bank lending and credit issuance remains frozen. Consumer debt falls when there is no money to borrow. In fact, the Federal Reserve actually pays large banks NOT to lend to the public; an activity which was exposed by Dennis Kucinich in 2009 on the House Committee on Oversight and Government Reform. An activity that continued through 2012: Keep in mind, one of the primary arguments the Federal Reserve used when promoting the bailout concept was that it would free up credit markets so that lending could pick up again and fuel a recovery, and yet, at the same time, they were paying banks to NOT lend. Meanwhile, the supposed job recovery has produced an astonishing increase in welfare recipients in the U.S., including a record 46 million Americans on foodstamps (approximately 15% of our population): If we are to apply any trend to our calculations on overall economic health, then we should include the extreme level of government handouts, and poverty levels which are now at all time highs. The facts are undeniable; the number of people who have much less than they did in 2008 has grown. How then could the U.S. be considered in recovery? National Debt And The Fiat Lie With the Dow Index hovering near highs of 14,000 our system truly looks to be on a rocket ship to pre-2008 money market bliss. In a mere five years we have returned to equity spikes that stagger the mind and the wallet. At least, thats how it all appears What needs to be taken into account, though, is the amount of fiat money being created by the Federal Reserve, and how much of that printed pixie dust currency is fueling our magical flight to Neverland. Since 2008, our official national debt has increased from $10 trillion to $16.4 trillion, and some estimate $17 trillion to $18 trillion by the end of 2013 (unless, of course, a collapse occurs). Which means our national debt, which took decades to reach the $10 trillion mark, will have nearly doubled in only six years! So, what has a doubling of our national debt in such a short span of time bought us? Well, credit markets remain frozen, property markets remain stagnant, poverty is at historic levels, welfare recipients are at epic highs, and consumer activity and GDP is back at 2008 lows. Where did all that printed money go? Where was it spent? To answer that question, we only need to find what area of the economy has seen the most positive (or fantastical) activity. What sector is seeing a massive boost while the rest tumbles? I suggest that a large portion of QE1 through QE3 has gone to prop up the stock market, and nothing else. I suggest that American taxpayers are fronting the bill for the equities bonanza we see today. I suggest that the Dow is being used as a Red Herring to distract the populous for as long as possible while real assets are being snapped up and hoarded by international banks and foreign entities. I suggest that we are being leached dry and that the parasites are almost ready to move on When will it all end? Perhaps sooner than many people think. The decision by D.C. to delay talks on the so-called Fiscal Cliff until March may not be coincidence. Extensive cuts in federal spending are absolutely necessary and cannot be dismissed forever, but, because the last vestiges of our system that still operate do so through government money, such cuts will cause immediate damage to the economy, including possible default and dollar devaluation. Refusal to make cuts will result in credit downgrades, currency inflation, and a loss of the greenbacks world reserve status. There is no right way out of this quandary. When this collapse is initiated, it would certainly behoove all parties involved, including central banks, international banks, and criminal politicians, to have a scapegoat handy for the citizenry to direct their rage at. Event Horizon Economics An Event Horizon in physics is a moment or singularity in spacetime at which a gravitational pull becomes so great that there is no way to escape it. It is a point of no return. I believe Americas economy has reached its own Event Horizon. Our system is now entirely fiat driven, with very little or no true economy left. Without constant injections from the Fed, and perpetually low interest rates, the country would implode tomorrow. This is not recovery. Actually, Im not sure what to call it. Today, independent economic analysts cannot look to the numbers to determine future trends. Most are fake, and the rest are ugly, and Im not sure much else can be said in their regard. Instead, we must now look to events, rather than statistics, because our country has been maneuvered into a position of utmost frailty. Like an avalanche shelf waiting for that perfectly timed disturbance to trigger its roaring collapse. All that is needed is a macro-crisis, and it is no great feat for such a thing to be created in our tension filled global environment. War in Syria and Iran leading to a tripling of energy prices. Sanctions and strife with North Korea leading to Chinese economic retribution. Conflict between China and Japan, again leading to Chinese economic warfare and perhaps real warfare. An opportune cyber attack which could be used as an excuse for a market crash and even an internet shutdown. A political impasse between Reps and Dems which leads to a default of U.S. credit. Any one of these catastrophes could easily occur (with a little nudge from some well placed people) and feed a wider global tragedy. The important thing to remember is that while this event will be blamed for the breakdown, it was international banks, the Federal Reserve, and elements of our own government that made the domino effect possible. They put the pieces in place. The act that knocks them over is secondary. You can contact Brandon Smith at:brandon@alt-market.com Alt-Market is an organization designed to help you find like-minded activists and preppers in your local area so that you can network and construct communities for mutual aid and defense. Join Alt-Market.com today and learn what it means to step away from the system and build something better. To contribute to the growth of the Safe Haven Project, and to help us help others in relocating, or to support the creation of barter networks across the country, visit our donate page here: http://www.alt-market.com/donate linkwithin_text=Related Articles: 