“A recession is when your neighbor loses his job. A depression is when you lose your job.”

Is the U.S. in a recession? In real terms, probably. In nominal terms (you know, the kind of data reported by the U.S. Commerce Department), I doubt it.

The government understates the rate of U.S. price inflation. The headline numbers as reported by the U.S. Federal Government for 2007 of 4.1% for retail inflation and 6.3% for wholesale inflation defy credulity.

Before your eyes glaze over, here is the deal. If the economy experiences 0% REAL growth, and inflation of 7%, if the government reports inflation of 4% they can claim 3% in GDP growth. Got that? If the same methodology of collecting and reporting inflation data are employed in the future, we may have a year in which unemployment rises to 10%, and GDP grew by 10% (which is what the U.S. is likely to experience as oil imports decline and the price of oil rises).

Gold and silver are telling you a great deal about where THEY think inflation is.

The stock market is telling you a great deal about what they think REAL economic growth will be for 2008.

Yet the Federal Reserve chairman told Congress that the Fed sees the economy continuing to grow in 2008.

And thanks to the wonders of data massaging and nominal reporting THEY CAN ALL BE RIGHT!!

Confused? You are meant to be. Now go be a good little consumer and borrow some money, order up a double frapa-poofy, swishy-weenie, mocha chino, and watch some T.V. programming interspersed with commercials extolling you to EAT! DRIVE! DIET!
AHHHH!!! The good life…

Yours for a better - post-consumer, non-obese, black coffee drinking, living within your means, real men don’t eat quiche (or how to spell it for that matter) - world.