Is the Recession Really Over?

What I'm going to discuss this week you just can't make up. There was actually a report that was treated as if it were credible, stating that the recession ended in June of 2009. You read that correctly. The recession was supposed to have ended in June of 2009. 15 months ago. According to the National Bureau of Economic Research, whose credibility is now greatly in question, the recession officially began in December 2007 and ended in June 2009.

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If you think back, you'll remember the big joke when it was announced a year into the recession that we were actually in a recession. No kidding! Now 15 months after it supposedly ended, we're told about it. The NBER said the economy bottomed out in June 2009, followed by a slow expansion. Did I miss the memo? I don't recall seeing any kind of expansion. Do you recall seeing any kind of expansion? The group went on to say the 18-month recession was the longest since a pair of 16-month slumps in 1973-75 and 1981-82.

In the spirit of true political doublespeak, the group cautioned that its findings bear no relation to the current state of the economy or represent a forecast about the future. If another downturn occurs anytime soon, they said, it would constitute a separate recession.

The only voice of reason in this report came from economist Lawrence Katz of Harvard who said:  “For the typical American family, the economy is still stagnant,” “There is very little sign of widespread prosperity.”

The purpose of official sounding reports like this, that will undoubtedly be reported as fact and assumed to be true, is perceptual engineering. The mantra that the recession ended is a statistical invention for political purposes heading into a mid-term election. Short term history is being rewritten before our very eyes to make things sound good. The recession, which is really a depression, never really ended.

Need I remind you there are over 8 million homes in some state of default or foreclosure. Commercial real estate continues to crash and destroy bank capital. True unemployment is closer to 20%, not the widely reported 10% number. Jobs that have been lost are not returning. People, families and savings are being eaten alive by a slow burn that is painful and often remains hidden as people suffer in quiet desperation. And we're supposed to believe the recession is over?

Rhetoric is so far out of touch with reality, I think those who create the rhetoric have so completely insulated themselves from what is happening, that a total, intellectual disconnect has developed, and a severe backlash of unknowable consequences is just around the corner.

I mean just this week, White house economic advisor Larry Summers announced he is departing Washington. This follows on the coattails of White house budget director Peter Orszag who stepped down in July and White House Council of Economic Advisors Chairwoman Christina Romer who left her job at the beginning of this month. 

All of this administration's key economic personnel are jumping ship. They know what's coming. They know its unstoppable. They know what Alan Greenspan said in a speech on Sept 15th to the Council on Foreign Relations is true... And that is: "that fiat money has no place to go but gold." Ultimately in the battle between paper and metal.... metal WILL win. Checkmate.