Letter: Says info is manipulatedThere are two popular phrase amongst Austrian Economics market neophytes: Extend and Pretend, and Bullish. Extend and pretend refers to the extraordinary actions taken to perpetuate this false economic recovery the government has been feeding us and pretend everything is just fine.
By: Robert Burke, Town of Troy, Hudson Star-Observer
There are two popular phrase amongst Austrian Economics market neophytes: Extend and Pretend, and Bullish.
Extend and pretend refers to the extraordinary actions taken to perpetuate this false economic recovery the government has been feeding us and pretend everything is just fine. Bullish is our comment to bad news and trend data that will, in today’s manipulated market world, result in a market rally up even though in a normal market it would easily send the market down. Total manipulations both of them.
The U.S. economic sentiment, built on the three pillars of an improved labor market, higher corporate earnings, and the return of the housing market, is based upon misleading data. They tell us employment has dropped again to 8.3 percent but we haven’t had this low of a workforce participation rate since 1983! Sales and profits are up but only because of our current 12 percent inflation and stagnant wages — stagflation. After throwing Trillions (with a T) at the housing market the Case Shiller National Composite fell by 3.8 percent in the fourth quarter alone, and is down 33.8 percent from its second quarter 2006 peak — housing prices are still falling!
Yet as reported by the news media Feb. 28, “The Conference Board’s Consumer Confidence Index now stands at 70.8, up from a revised 61.5 in January, helped by consumers’ improving assessment of the job market.
Analysts had expected a reading of 63.” So you see, Uncle Bernanke has re-“inflated” your expectations- Extend and pretend.
Bullish! I am going to talk about one example in specific — The Baltic Dry Index (BDI). The BDI is a number issued daily by the London-based Baltic Exchange and the index provides “an assessment of the price of moving the major raw materials by sea.” I like this number because government doesn’t get to mess with it and it’s totally data drive. As of Feb. 28th the BDI has fallen 56 percent year to date. “Nothing to see here move along” as we like to say. Clearly a market rally is due (up roughly 5 percent YTD) and confidence should rise with such bullish news. Of course no one wants to comment that European Union and U.S. are sliding into a deep recessions.
Although if they did I am sure the markets would skyrocket with euphoria.
Finally, I want to share what I am most worried about — your coming paradigm shift. Yes, you too will see the world as I do- full of lies and deception by our corrupt central planners coupled with actually doing something about it. The only question left is will you get there before or after it’s too late. You really should go on Youtube and watch the “Collapse of Argentina.” I’ll give you a hint how bad this was — suicide rates doubled.