ECON Dollar Turns Sharply Soon - John Williams of Shadowstats interviewed on USAWatchdog

[SageRock]

From http://usawatchdog.com/3-9-gdp-nonsense-dollar-turns-sharply-soon-john-williams/

3.9% GDP Nonsense-Dollar Turns Sharply Soon-John Williams

By Greg Hunter On December 3, 2014

Economist John Williams is not buying the recent 3.9% GDP upward revision. Williams explains, “No one I know thinks we are growing at 3.9% other than they are trying to sell a bill of goods to the markets, specifically the currency markets. 3.9% is nonsense. You had 4.6% growth in the second quarter and 3.9% in the third. Here you had two quarters at close to 4%, and we have not seen anything like that since 2003. This is the strongest economy we have seen in 11 years, and I can tell you Main Street USA is not seeing that. . . . If you understate inflation, which the government does, you overstate inflation adjusted growth, and that is probably the biggest problem in the GDP report.”

Recently, the U.S. deficit passed the $18 trillion mark, but using honest accounting, Williams says the debt picture is much worse, “Using generally accepted accounting principles with expenses and obligations, what you are seeing is the actual deficit. Instead of being half a trillion dollars last year, it was more like $6 trillion in the same length of time. The gross federal debt right now is $18 trillion. If you add on the unfunded liabilities such as Social Security and Medicare, you are approaching $100 trillion in terms of total federal obligation. There is just no way that can be covered. . . . The government, long term, is bankrupt.”

That brings us to the U.S. dollar. Williams says, “Right now, we have a big distortion in the market, and that is the strength of the U.S. dollar. I contend the dollar should be getting much weaker, and indeed it’s going to turn very sharply very soon, and that will be an approximate trigger for a major upturn in inflation. The reason the dollar is strong right now . . . the U.S. economy is booming, if you believe the statistics. Main Street USA doesn’t believe the statistics. The rest of the world is in recession, and guess what? We’re in recession too. We’re just not reporting the numbers as accurately as the rest of the world.”

Williams has revised and pushed back his hyperinflation forecast to begin in 2015 and not this year. Williams, now, expects a big upturn in the price of gold and oil next year. Williams explains, “The issue remains the dollar. What is distorted in the system right now is the dollar’s strength. It’s the strongest it’s been in some time. It’s over stated for multiple reasons ranging from outright manipulation to overstatement of economic growth and other games that have been played. That’s going to reverse shortly. As the dollar sells off, you will see inflation pick up. Part of the reason why oil is where it is now and part of the reason why gold is where it is now is because of the dollar’s strength.”

So, what about the future? We start with the not-too-distant past of six years ago. Williams says, “We are still living in the throes of the panic of 2008. What the central banks did at that time, specifically the Fed and the Treasury, was to take actions to push all the issues into the future. They didn’t do anything to solve the basic problem. The banking system is still in trouble. It is far from solvent, far from normal. You don’t have regular bank lending. If you had regular bank lending, the economy would really be much stronger. It’s not.” Williams goes on to say, “People outside the United States know America is in trouble, and they know the dollar is in trouble. It’s not going to take much to trigger a reversal of the current circumstances. It could be an unusually weak economic statistic, and believe me, those are coming.”

Join Greg Hunter as he goes One-on-One with John Williams, founder of Shadowstats.com.

(There is much more in the video interview.)

After the Interview:

There is free information on John Williams’ site. Click here to go to the home page of ShadowStats.com. Williams also provides paid subscriptions where he posts analysis on a variety of economic subjects every week. His subscriptions are $89 for six months, or $175 annually for his detailed analysis. Click here to become a ShadowStats.com subscriber.

Here is the video link:

http://www.youtube.com/watch?v=j5JIDiO-f3Y

 

[Slatewiper]

Too bad that most Americans are too stupid to understand this.

 

[kytom]

money seeks safety. its pouring in here because we are the U.S.A. it has to go somewhere. where will it go?

 

[the watcher]

money seeks safety. its pouring in here because we are the U.S.A. it has to go somewhere. where will it go?

You know, I have been wondering this also. Right now even with it's issues, the Dollar is the strongest in the game, BUT maybe not for much longer as reported over 100 other countries are turning away. That just makes me think when SHTF here, it will be overnight.

Eta a week ago, I would have dumped the house on the Ruble, but didn't see the oil flood coming driving down it's value. No doubt in my mind, this is an attack on the ruble. Saudi's are ignoring all who whine about profit loss. ie, their taking their profits now. How far they will ride that horse remains to be seen.

Read this morning, Russia is offering Turkey a sizeable discount to keep buying from them. AND that almost 80-90% of Russian sales are in Europe.

 

[Hfcomms]

it has to go somewhere. where will it go?

The eastern central banks and the citizens of Russia, China and India already know where it's going to go and they are slopping it up on the cheap. When the GDP [generally dumb public] here in the U.S.
figures it out and tries desperately to get out of their stocks, bonds, 401-K's and other paper investments there won't be any left. The prices are going to be bid up to a point to leave us breathless. It's coming. 6000 years of human history is hard to shake off.

 

[the watcher]

Imo I think Russia can last longer than the Saudis. Again imo, knowing what I do about the economy here, and the fact China has all the gold, I would be tempted to go into Yuans.

Eta to add, besides the Dutch, but I don't trust them lol.

He who has the gold, makes the rules.

 

[Hacker]

Here's another interview with Rob Kirby. This is longer than the USA Watchdog interview - much more of a discussion with more perspective.

http://www.youtube.com/watch?v=WKy_WejmoBs#t=274

Published on Dec 3, 2014

Dec. 02, 2014: Forensic Financial Analyst and Investigator Rob Kirby joins me to discuss recent developments that prove beyond doubt that the US dollar is fast losing its status as world reserve currency at the same time that the Petrodollar is also being rejected by nation after nation including the Saudi Arabia, the lynchpin of the Petrodollar System.

 

[DHR43]

Holding up nicely, up over a point since Williams said it would turn sharply 3 weeks ago.

 

[TimeTraveler]

The dollar will stay strong for a while longer. The reason the dollar will stay strong for a while longer is because all of the other currencies are worse off in losing value. Before there is hyperinflation, deflation will be in effect for some time. Then it goes into hyperinflation. Deflation is the trigger.

 

[joekan]

I agree TT. I think they kicked the can a loooong way down the road.

 

[China Connection]

The Baltic Dry Index Has Never Crashed This Fast Post-Thanksgiving
Tyler Durden's picture
Submitted by Tyler Durden on 12/19/2014 20:40 -0500

Baltic Dry
China



inShare36


We are sure it's nothing - since stock markets in China and The US are soaring - but deep, deep down in the heart of the real economies, there is a problem. The Baltic Dry Index has fallen for 21 straight days, tumbling around 40% since Thanksgiving Day.

http://www.zerohedge.com/news/2014-12-19/baltic-dry-index-has-never-crashed-fast-post-thanksgiving

 

[Adino]

the west has tossed its plays in the currency war out

brics has not made their move yet

until it is more clear what their real move will be all discussion of currency and commodity supply/demand/prices is academic speculation

but i expect the west's financial back to be broken and brics to have some tough years but recover much more quickly

 

[DHR43]

USD is up about 14% since March/2014, about 9 or 10 months ago. It's also up about 15% since February/2012, coming up on 3 years ago.

Not bad for an ugly fiat currency. And for the past many moths, it happens to be more attractive than the other ugly fiat currencies.

This DOES NOT mean the USD will continue up and up forever. It does mean, however, probably, that it has a longer life than most here want. Why? A whole lot of companies, individuals, organizations and investors want the USD, need the USD and want USD debts paid off in USD.

In other words, the market is in charge. Not you or I.

 

[almost ready]

The economy is in the toilet.

The only reason there is a good GDP number is that 2014's Obamacare TAX has been incorrectly counted as GDP spending, bundled and thrown into this one quarter, according to zerohedge.

It is also double counted as tax collection.

See this:

http://www.zerohedge.com/news/2014-12-23/here-reason-surge-q3-gdp

Back in June, when we were looking at the final Q1 GDP print, we discovered something very surprising: after the BEA had first reported that absent for Obamacare, Q1 GDP would have been negative in its first Q1 GDP report, subsequent GDP prints imploded as a result of what is now believed to be the polar vortex. But the real surprise was that the Obamacare boost was, in the final print, revised massively lower to actually reduce GDP!

This is how the unprecedented trimming of Obamacare's contribution to GDP looked like back then.



Of course, even back then we knew what this means: payback is coming, and all the BEA is looking for is the right quarter in which to insert the "GDP boost". This is what we said verbatim:

Don't worry thought: this is actually great news! Because the brilliant propaganda minds at the Dept of Commerce figured out something banks also realized with the stub "kitchen sink" quarter in November 2008. Namely, since Q1 is a total loss in GDP terms, let's just remove Obamacare spending as a contributor to Q1 GDP and just shove it in Q2.



Stated otherwise, some $40 billion in PCE that was supposed to boost Q1 GDP will now be added to Q2-Q4.



And now, we all await as the US department of truth says, with a straight face, that in Q2 the US GDP "grew" by over 5% (no really: you'll see).

Well, we were wrong: it wasn't Q2. It was Q3, albeit precisely in the Q2-Q4 interval we expected.

Fast forward to today when as every pundit is happy to report, the final estimate of Q3 GDP indeed rose by 5% (no really, just as we predicted), with a surge in personal consumption being the main driver of US growth in the June-September quarter. As noted before, between the second revision of the Q3 GDP number and its final print, Personal Consumption increased from 2.2% to 3.2% Q/Q, and ended up contributing 2.21% of the final 4.96% GDP amount, up from 1.51%.

So what did Americans supposedly spend so much more on compared to the previous revision released one month ago? Was it cars? Furnishings? Housing and Utilities? Recreational Goods and RVs? Or maybe nondurable goods and financial services?

Actually no. The answer, just as we predicted precisely 6 months ago is... well, just see for yourselves.

In short, two-thirds of the "boost" to final Q3 personal consumption came from, drumroll, the same Obamacare which initially was supposed to boost Q1 GDP until the "polar vortex" crashed the number so badly, the BEA decided to pull it completely and leave this "growth dry powder" for another quarter. That quarter was Q3.

Source: Q3 GDP report: second revision, Q3 GDP report: final revision

Now, Obama brought in the highest ever tax influx to the fed in 2014 (fiscal year ending in October)

“Every one of those $3 trillion is sucked out of the private-sector economy and makes the private sector smaller,” said Chris Edwards, director of tax-policy studies at the Cato Institute. “The $3 trillion isn’t free. It comes out of our pockets and from the private economy.”

Read more: http://www.washingtontimes.com/news/2014/oct/15/feds-tax-take-hits-all-time-high/#ixzz3Ml7oq4HM
Follow us: @washtimes on Twitter


The new taxes are where every single new dollar created is going, and all the new jobs since 2001 have gone to immigrants.

Only a Grinch visiting this Christmas. The Obamas are loving it!

http://www.washingtontimes.com/news/2014/oct/15/feds-tax-take-hits-all-time-high/?page=all

 

[Sacajawea]

And then there's Jim Rikards... this is an excellent, concise summation of where we are. (Ignore the blatant sales pitch for his book unless you're willing to invest in his bank account to get his take on things; I mostly agree but have some quibbles.)

http://moneymorning.com/jim-rickards-coming-great-depression/