muses of the moment

July 24, 2012

Bold the headline, bury the revision on page 12

Filed under: Economic Crisis, John Williams shadowstats — totallygroovygirlfriday @ 12:25 pm

This is an old newspaper trick for promoting “information”. The government uses this trick liberally with the official stats. That’s why gg never uses official stats for anything besides causal conversation. If you or your broker are making investment decisions based on official stats, you will get it wrong.

gg uses John Williams real stats at, it is a paid subscription.

Click here.

We were never in a recovery.


  1. A must watch interview with David Stockman –

    Excerpts: Stockman’s take on the coming crisis and how to protect yourself –

    David: Yes. As I say, when the crisis comes in the Treasury market, it will be the great margin call in the sky. They’ll start unwinding all of the carry trades, all of the repo. Asset prices generally will be affected, because this will ricochet and compound through the system.

    Alex: That’s a pretty stark picture. So as an individual investor, what are we to do? How do we protect ourselves in this type of situation? Should I be owning bonds and staying out of stocks? Should I be owning stocks?

    David: No, I would stay out of any security markets. These are unsafe markets at any speed. It’s all tied together. As I was saying when the great margin call comes and they start selling the Treasury bond, they’ll take everything else with it. Real estate is priced off Treasuries. Mortgaged-backed securities are priced off Treasuries. Corporates are priced off Treasuries. Junk bonds are priced off Treasuries. Everything. The stock market will go into a panic. We don’t know when the timing will come – we’ve never been in a world where there is $15 trillion worth of central-bank balance sheets, like we have today. The only thing I think you can conclude is preservation is the only thing you are about as an investor. Forget about yield. Forget about return. Just keep yourself liquid and preserve your capital, because you can’t predict the day when, as I say, the great margin call in the sky comes down.

    Alex: So if it’s not about coming out ahead, it’s about coming out not behind everybody else. It’s just losing a little less. What’s the most effective way to do that? Do you want to hold cash? Alternative options?

    David: Yes. I don’t even think there’s nothing wrong with owning Treasury bills. I mean, if you want to get, for a one-year Treasury, what is the thing now? Twenty basis points or something?

    Alex: So when the great Treasury crash comes, I should own Treasury bills?

    David: Well, it doesn’t mean the price of the Treasury is going to crash, no.

    Alex: Okay, so we are just going to see interest rates skyrocket on new issues. The US government is not going to be able to borrow.

    David: That’s why you’re short. If you’re in a thirty-day piece of paper, you’re not going to lose principal.

    Alex: What happens to the dollar in all of this? If I’m holding dollar denominated assets –?

    David: Well, the dollar, in theory, people would think is going to crash. I don’t think it is because all the rest of the currencies in the world are worse.

    Alex: So the economy will collapse. The dollar will be okay, because we still need a medium of exchange and the dollar is the least-bad currency in the world. How does gold fit into the picture? Do you think that gold is a good asset?

    David: Yes, I think that gold is a good asset. It’s the only currency that anybody is going to believe in after a while.

    Comment by sw — July 25, 2012 @ 12:29 am

  2. Good link. I especially like the part about the whole point is not losing as much as someone else. Sometimes, when I hear investors talk about gold or some other investment, they seem to think that they will make money during the crash. So far the only ones to make money in this pre-crisis are the banks and that’s becasue they basically stole it. The goal is to keep money.


    Comment by totallygroovygirlfriday — July 25, 2012 @ 10:52 am

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