A major theme in my writings is that the mainstream media is not doing its job. Far too often, the media is taking spoon-fed economic and financial headlines from governments and their major trading partners and passing along the information as being true. There are too many instances where the underlying information negates or contradicts the thrust of the headlines, but the media fails in their duty to inform the public of the truth. This failure could be from lack of comprehension, simple laziness, or perhaps because the media support the philosophy of the headlines.
So, much of what I write is devoted to shining light on the data that the mainstream media ignores, omits, or distorts. Here are some more examples.
From a lot of headlines in the past month, many people might be sensing that the US economy is slowly starting to improve. This apparent good news could come from reports that consumer sales are up, banks are earning more profits, consumer prices are holding the line, and employment is rising.
Unfortunately, each of these points is unfounded and contradicted by the underlying facts.
Sure, the Bureau of Economic Analysis (BEA) reports that general business activity in the United States has recovered to its pre-recession levels. If that really were true, you would think that at least one other major economic series would confirm that information. None of them do. While the BEA claims that Gross Domestic Product (GDP) is growing, inflation-adjusted data for retail sales, production and housing show either slow growth or outright contraction on either month-to-month or year-to-year basis.
While the Commerce Department Bureau of Labor Statistics most recently reported that GDP has grown almost 2% from year earlier levels, researcher John Williams at www.shadowstats.com reports that US GDP has been continuously declining since 2007!
Just after Thanksgiving weekend, there was an outpouring of positive reports on holiday season sales. Some of these were derived simply by counting the number of people in malls rather than obtaining actual sales data. Then there were reports of higher car and truck sales by the manufacturers. Well the truth is coming out now, and it’s not very rosy. Supposedly, overall holiday shopping exceeded 2010 levels by 3-4%. However, if you discount this increase by the more than 3% consumer price increase from the prior year as reported by the Bureau of Labor Statistics, sales were flat. If you instead use real world consumer price increase data such as computed by John Williams, consumer prices were almost 6% higher than a year earlier. Using this data, the quantity of goods sold in the 2011 holiday season was actually down from what was sold in 2010!
It’s no wonder that chains like Sears, Kmart, and Bloomingdale’s announced more store closings and others like Tiffany reported falling sales.
Even the automotive sales figures are rigged. Automotive companies record sales when vehicles are moved onto dealer lots, not when they are sold to consumers. In 2011, dealer inventories have grown so much that this almost completely accounts for the so-called boom in automotive sales.
Then there are the deceptive quarterly profit reports from major US banks. Bank of America claimed it made $2 billion in the most recent quarter. However, in the fine print, the Bank acknowledges that it had not yet recorded bad debt losses from fraudulent mortgages by $5 billion. As part of its assets, Bank of America lists $125 billion in home equity loans. A high percentage of home mortgages are underwater, where the mortgage exceeds the value of the property—in which case the home equity loans are technically worthless! It is likely that Bank of America has yet to book sufficient losses that it is facing on this category of assets.
As for JPMorgan Chase, it was sued last week for allegedly fabricating documents in order to recover a greater amount of funds in bankruptcy proceedings. I suspect that such suits will likely be settled before trial, at a cost to the bank that is probably going to run into the billions.
For all of 2011, the construction industry broke ground on 607,000 new homes, according to the Commerce Department. That was up 3.4% from 2010, which is good news. However, the median average price at which all homes, new and previously occupied, changed hands in 2011 declined to its lowest level since 2002. For the housing sector to return to normal, new housing starts would have to rise to 1 to 1.5 million per year.
According to the Department of Labor Bureau of Labor Statistics, there were 135,254,000 non-farm civilian workers in the US in December 2008. Three years later, even though the US population increased by several million, the number of non-farm civilian workers had declined by over 2-1/2 million. There were just over 8.9 million unemployed in December 2008, but the total soared to more than 13.7 million three years later.
The unemployment picture is supposedly improving. However, John Williams calculates the unemployment rate using the methodology employed by Bureau of Labor Statistics until 1993. By that formulation, US unemployment levels are currently about 22%.
Interest rates and mortgage rates may be close to all-time record low levels. And the Dow Jones Industrial Average may be holding at elevated levels even as US investors are consistently abandoning the stock markets. The interest rates and Dow Jones average are all manipulated by the US Treasury and the government’s trading partners—sometimes openly admitted.
If things were really so wonderful as the mainstream media is reporting, then there would be no reason for the Federal Open Market Committee to announce any major plans at the conclusion of their meeting Wednesday. But I would not be at all surprised if they stated that they find it necessary to stimulate the real estate market. However carefully they may couch their language, I expect the Fed will start to unveil the next round of inflation of the money supply, this time on the order of $1 trillion.
Such a step will inevitably drive down the value of the US dollar even further. Gold and silver prices will rise even faster. And those who believed the mainstream media and failed to protect themselves will be even poorer.
Patrick A. Heller owns Liberty Coin Service in Lansing, Michigan and writes "Liberty's Outlook," a monthly newsletter covering rare coins and precious metals. Past issues can be found online at http://www.libertycoinservice.com/ Pat Heller is also the gold market commentator for Numismatic News. Past columns online at http://numismaster.com/ under “News & Articles". His bimonthly columns on collectibles can also be read at http://www.lansingbusinessmonthly.com under “Articles” and “Department Columns.”His radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com.
The mainstream media “ignores, omits or distorts” because the American audience wants their news in little news-bites, details omitted. Maybe most reporters now just write their stories as text messages on their Iphones, call it done and go to lunch.
Patrick,
Much of this is probably being done in anticipation of the 2012 election. I do think printing will happen this year for that reason as well.
I also suspect some of the reason we’re coasting right now is because of the focus is on Europe, which appears to be coming apart at the seams (no offense to any readers in Europe intended of course). Sooner or later the focus will swing back to us and then things will not be so pleasant.
The MSM is part of the government…no different than PRAVDA was part of the communist party in the Soviet Union. Is this really a surprise to anyone?
Thank you, Patrick, for yet more drivel from the files and mind(lessness) of the John Birch Society. I don’t know how I’d survive a week without it.
Why does a Coin Collecting site constantly allow the fear mongering postings of this guy? I grow tired of the constant Chicken Little cries from Mr. Heller. If I wanted to hear this garbage I’d be reading a completely different news feed.
@Clay Gump, So WHY do you read it??? If you KNOW what it is and you don’t want to hear about it, why do you even look at it?
If you think it’s wrong, dismiss it and go about your life. But, if you were to actually do some research, you’d find that it’s NOT “fear mongering”. It’s all verifiable if you take a bit of time to check things out for yourself.
I notice that nobody ever presents cogent arguments or facts which contradict the articles Mr. Heller writes. The only negative responses involve inuendo, name-calling or ridicule.
Personally, I’d rather make the gravest of errors than surrender my judgement to that of another. But that doesn’t mean I stick my head in the sand and ignore what others say. Rather, I take what others say and see if it can be verified elsewhere and independently. THEN, I couple what I learn with the common sense that God gave me and draw my own conclusions.
So, what have I concluded??? In general, what Mr. Heller says is correct (and verifiable). The only thing wrong with his assessment is in the time frame required for these events to transpire. I myself wonder why the you-know-what hasn’t already hit the fan. The only thing I can figure is that those running the “global economy” are masters at prolonging the inevitable. While, quite plainly, they are so blinded by their adherence to Keynesian economics that they have ZERO chance of “fixing” the economy, they do seem quite adept at keeping the thing from derailing completely. At the very least, they’re darn good at fudging statistics to present the impression that things are “improving.” But, sooner or later, they WILL LOSE CONTROL. And when they do, people like Clay Gump are going to be wringing their hands and asking, “Why didn’t I listen????”
All I have to do is look around my home town. Things continue to get WORSE. Every week at least one more business fails, one more store closes or one more restaurant throws in the towel. You can choose to ignore it or you can choose to try to take steps to protect your assets from currency devaluation–the ONLY means left to “stimulate” the false recovery being reported in the media.
Don’t blame the messanger if the truth makes you uncomfortable!
Paul E.
If you had taken in MY Numismatic Theatre presentation at the ANA convention in Chicago, you’d have heard a thorough addressing of where and how Heller is full of, umm, it. Caliing what he does fearmongering is being kind. He knows nothing about economics or finance. What he does know thoroughly is conspiracy theories and propaganda.
Things must be getting close… When the evil empire’s plants (Bellman and Gump) start to double-team against the people who get it (Like Patrick Heller)… then it must be getting close.
What else could it (they) be?… Why would a sensible person continue to read a column each week that they always disagree with?…
Evil empire? That is funny.
Here is the thing. I use Google Reader to check out Coin Update News. It lists all the articles that I’m assuming are about coins. Its is usually not until I’m already partway into reading Mr. Heller’s post that I realize what I’m reading isn’t really about coins at all. Why is this even on a coin site?
So yes, I can and will from now on ignore articles my Mr. Heller. I didn’t even take note of the author before. Now I will.
I was just voicing my weariness of his articles. To each their own. He should spout off his opinions on a platform more suited to his writings. Not a coin site.
Yes, like the Ron Paul campaign’s site or the John Birch Society site, or the wacked out conspiracy theorists’ network of fools, or any of a gazillion loony right wing politics sites, but not numismatic sites. Not if the coin sites want to be taken seriously by non-Kool-Aid drinkers.
This FOOL predicted silver over $100 an ounce by the end of 2011. No one ever takes him to task on this sensationalist garbage. It has ONE purpose – to sell YOU his bullion and take from you all those nasty worthless Federal Reserve Notes you have. He’s worse than a charlatan. He’s a hypocrite.
” Its is usually not until I’m already partway into reading Mr. Heller’s post that I realize what I’m reading isn’t really about coins at all.”
Clay, the article above is properly titled. In addition, the first line or two set the theme, and tone, of the article and makes it perfectly clear that this article is not about coin collecting. Stop making excuses. If you don’t agree with it, don’t read it. If you think it doesn’t belongs here, don’t read it.
CNN, MSNBC, various other websites and blogs present plenty of outlets for fantasy-based dreams that everything is getting so much better. Republican administrations lie with numbers, as do Democrat administrations. You can agree or disagree with Mr. Heller and John Williams if you want. Is there analysis perfect and flawless? Doubtful. However, I’d bet money that they’re a hell of a lot more honest and accurate that the ever shifting stream of lies coming from the MSM and D.C.
Beware ANYONE who seemingly always has gripes with what the main stream (read: professional) media does or does not cover or report. Professional media is restricted by inconveniences like fact checking, editors, independent verification, multiple source requirements. The crazy conspiracy blogosphere can just take true but out of context factoids and build narratives of shadowy conspiracies between the scary government and their MSM shills to hide their true motivations from you. The better explanation is Heller’s business model depends on fomenting economic fear and panic.
@Bellman: REALLY?????? You FAIL to see (or willfully ignore) the shoddy, non-factual, opinions on ABC, CBS, NBC, PBS, CNN, and CNBC? Yes, even FOX has “propaganda” that’s not worth 2c.
Again, though, you prove my point by failing to provide any reference to facts which might lead one to a different conclusion. Instead you once again have resorted to inuendo, name-calling and ridicule. So we’re right-wing, conspiracy theorists, members of the John Birch Society, fools and loons, eh?! Gee, I’m surprised you failed to mention the most horrid insult of all and call us “Libertarians” or “Objectivists”.
And YES, this article IS germane to COIN COLLECTING as coins, by definition, are MONEY–most especially BULLION coins. So ANYthing related to BULLION, MONEY SUPPLY, CURRENCY DEBASEMENT, QUANTITATIVE EASING, etc., DOES belong on this website.
I welcome Mr. Heller’s articles. I only wish he’d write MORE of them!!!
Wow Paul, weekly drivel’s not enough for you? Who knew masochism was so rampant? Here’s a fact for you – the Fed has been doing Quantitative Easing for the MAJORITY of the last 41 years. Except it was called something else. It’s the core raison d’etre of the Fed’s Open Market Committee, to usually expand the money supply by buying Treasuries with newly created money and much less often to contract M2 by selling Treasuries and sequestering the proceeds. QE2 is/was a big nothing because the money never got into the economy, but instead was used to build bank reserves on their balance sheets.
Now, during the bulk of the FOMC’s expansionist policy over 41 years, gold and silver either moved almost not at all or actually declined in price. So what changed lately? Crappy yields in equities because growth has been made a dirty word.
Retail motor vehicle dealers provide data on dollar value of motor vehicles sold to final customers. Final customers are end-users.
The government does not use sales from manufacture to dealer in retail data.
Imported cars are counted.
Purpose of retail sales data: To provide current estimates of
> sales at retail and food services stores and inventories held by retail
> stores. The United States Code, Title 13, authorizes this survey and
> provides for voluntary responses.
> Coverage: Companies with one or more establishments that sell merchandise
> and related services to final consumers.
> Content: Retail firms provide data on dollar value of retail sales and
> end-of-month inventories.
Methods: A mail-out/mail-back survey of about
> 12,000 retail businesses with paid employees; supplemented by estimates
> for nonemployers, new employers, and missed employers obtained from
> benchmarking to the Annual Retail Trade Survey. The sample of retail firms
> is drawn from the Business Register which contains all Employer
> Identification Numbers (EINs) and listed establishment locations. Sales
> and inventories data are collected using one combined survey form.
> Firms selected for the survey are first stratified by major kind of
> business and estimated sales. All firms with sales above applicable size
> cutoffs are selected into the survey with certainty (i.e., probability
> equal to one) and report for all their retail establishments.Approximately
> 3,300 of the 12,000 are selected with certainty. EINs are stratified by
> major kind of business and sales, and randomly selected from each
> stratum.
> The sample is updated quarterly to reflect employer business “births” and
> “deaths”; adding new employer businesses identified in the Business and
> Professional Classification Survey and dropping firms and EINs when it is
> determined they are no longer active. There is about a 9 month delay
> before new firms are represented in the sample.
I don’t necessarily think Mr. H’s arguments are driven by the need or desire to sell more bullion. Bullion pretty much sells itself these days, and it probably is a good investment as long as you buy and hold for the long haul and don’t put all your eggs in that basket.
And sure, of course, one needs to understand the economy to understand the bullion market and coins, but the connection here is too tenuous, and the political bias is just overwhelming.
Lots of people who know a lot more than Mr. H about economics and finance think things are getting better. That certainly does not mean we don’t have a long way to go. Yes, the gov’t. manipulates some things like the CPI by leaving out energy and food, and in other ways, but the notion that there is some sort of grand conspiracy involving the gov’t and mainstream media and economists to trick us into thinking things are better than they are is patently absurd. A lot of things are getting better, and there are plenty of facts to support that.
What worries me about this column is that it always makes the exact same arguments and reaches the same conclusions. No one of serious intellectual heft would do that. I write about this stuff too, and have been published in publications on both sides of the political equation, and my work is widely quoted, but I try to keep things fresh. And when I am wrong, I admit it, and move on. And I never, ever call my critics names, or accuse them in writing of not having thought things through just because they disagree with me, and Mr. H did recently. He does sometimes say things that are useful, but there really is just too much hyperbole. I’ll end with one example, his discussion in Numismatic News last year about the Chinese media reports on gold price manipulation. Yes, they were interesting, but 1.) they do not close the book on the manipulation thesis and 2.) I have worked for the agencies that prepare these media analyses, and I can tell you from having written the same type of reports that they are simply summaries of what foreign media sources are saying about the U.S. and U.S. foreign policy. They need to be taken with plentyof grains of Mr. Morton’s product. Quite frankly, an experienced analyst like myself will point out that the foreign media articles being summarized are chock full of disinformation esp. in a country like China. I mean, c’mon, now he believes what the Chinese media says?
To the last poster – You have a right to your opinion, and thank you for providing it in a respectful way. I for one have a lot of respect for Mr. H. and I appreciate his work. What I consider to be absurd is anyone trusting or believing the government anymore. We talk about the “propaganda” press of some foreign nations and question how can these people be so gullible to believe the fodder that is being fed to them. My opinion – the people in the U.S. who ask that question should look in a mirror.
Part of Obama’s campaign platform was his promise to close Guantanamo Bay. After being elected, what he did instead was to quietly sign into law a bill that allows for the indefinite detainment of American citizens without due process. This scares the bejeebers out of me. Where was the press when they should have been reporting on this outrage! Every day more of our liberties are being stolen from us and it rarely makes the front page of the MSM. Every day us hard working people are made to feel guilty now for wanting to keep our money instead of giving more of it up in the form of taxes so the “non-hard working” people can enjoy the good life too. You want the good life, work for it!
Believe what you want…. Go ahead and believe that the Euro nations are really not in all that bad of shape and that they’ll pull it out. Go ahead and believe that these riots that are now occurring in the U.S. are just media hype….Go ahead and believe that that MF Global collapse was an isolated incident and that the COMEX system is sound and solid… Believe whatever. I believe that history will repeat itself and prove once again that fiat currencies always wind up reaching their intrinsic value – zero. I’ll continue to buy the precious metals.
Dave,
You are putting words in my mouth. The issue being discussed is whether or not there has been some degree of improvement in the economy, which Mr. H says there has not, and I and every mainstream expert says there has. That does not mean everything is fine or that things won’t get worse again soon, which they probably will. It is you and Mr. H who refuse to accept reality. I happen to agree on fiat currencies. I never said any of the things you state. If you really believe that China and the U.S. are somehow equal when it comes to propaganda or anything else, then you are the one who is oblivious to reality. I also happen to agree on Guantanamo and the detention bill, but again that is not what I discussed or what Mr. H raised in his article. I also think the economy may deteriorate soon if we don’t reach an agreement on the budget and if Europe collapses. If you bothered to actually read or try to understand what I said, you will note I said I am bullish on metals. You are way off base. I happen to live a very good life and am very successful. But I don’t think middle class and poorer people should be subsidizing the health care and mortgages of the wealthy. Or that 40% of US corporations should get away with paying no taxes simply because they can afford to hire an entire staff that looks for loopholes and has the funds to bribe the US Congress to write legislation that is favorable to them. Did you know that corporate lobbyists actually write US laws, which is unconstitutional?
You certainly did not speak to everything that I mentioned in my last post, and my apologies for giving that impression. However, in general I find that those who side against Mr. H. are typically the type that think everything is hunky dory, and it’s not!
Your examples about mortgages of the wealthy and the percentage of corps that do not pay tax… to me those are examples of things just getting worse. That’s just another form of corruption, another example of the corrupt elite taking care of each other. But they can’t do that without the help of corrupt politicians.
I’m not a gloom and doom monger, but when I see the Constitution getting trashed while the citizens and the press continue to support the trashers, while I see the accounting rules constantly getting changed so the big banks can disguise their insolvency, when I see the regulatory agencies constantly looking the other way while the bankers screw over the general public, and on and on… Things were not that bad a decade ago. It scares me now to look that far out into the future. And I do look longer term. Regardless of what any indexes say, things are just getting worse.
Dave, Thanks for your comments. We probably agree more than disagree. I would simply suggest that while I agree one should not view the world with rose-tinted glasses, if one refuses to accept that anything is getting better, it becomes a self-fulfilling prophecy. Look at the stock market, which has performed better on Obama than under all but a couple other presidents, or company profits, which are soaring. Sure, the market could tank again and probably will, but the market clearly sees something folks like you and Mr. H do not.
hi patrick，please continue your analysis,thanks