5.20.13 - “Today's scandals – especially allegations of partisan political use of the Internal Revenue Service – will have consequences far beyond politics.

“They are also undermining our economy and could push us back into severe recession,” says Craig R. Smith, a monetary expert frequently interviewed by Fox's Neil Cavuto and other prominent business journalists.

“If, as recent news reports imply, President Barack Obama might have manipulated the IRS for partisan political gain, then many will wonder if he is a trustworthy steward of the economy and our currency,” says Smith.

“President Obama was already causing widespread uncertainty and fear about heavier taxes, heavier regulation and Obamacare among would-be investors,” says Smith, author of a major White Paper out later this week titled A Deficit of Trust: The Decline, Fall and Possible Restoration of Values and Prosperity in America.

“This uncertainty and fear slowed investment and hiring, giving us an anemic economy that, at best, is growing at stall speed and producing European-like high levels of unemployment plus underemployment,” says Smith.

“A healthy capitalist economy...requires both financial and moral capital,” writes Smith in A Deficit of Trust. “It also requires what British economist John Maynard Keynes called 'animal spirits' that give confidence, optimism and vitality to consumers and business people.”

According to Yale University Economics Professor Robert J. Shiller, “animal spirits” also refers to “the sense of trust we have in each other, our sense of fairness in economic dealings, and our sense of the extent of corruption and bad faith. When animal spirits are on ebb, consumers do not want to spend and businesses do not want to make capital expenditures or hire people.”

“Distrust is at the heart of today's Obama scandals,” says Lowell Ponte, a former think tank futurist and co-author with Smith of this latest white paper and three recent books, Crashing the Dollar (2010), The Inflation Deception (2011), and in 2012 The Great Debasement: The 100-Year Dying of the Dollar and How to Get America's Money Back.

Their fourth book, The Great Withdrawal, will be published this summer.

“Almost nobody trusts [President Obama]. Americans aren't sure he's even who he says he is. They don't trust him not to grab their guns, or run up bigger deficits or jack up middle-class taxes. Worst of all, they suspect he's playing politics with national security....He's simply not seen as an honest broker,” said a May 9th Editorial in Investor's Business Daily.

“Trust is the glue that holds both our government and our economy together,” says Ponte. “This is what President Obama is destroying.”

“President Obama's worsening deficit of trust has economic consequences that will be seen in less investment, fewer jobs, and more business people voting with their feet to take their skills and savings out of America's increasingly-politicized marketplace,” says Ponte.

“Who can trust the investment climate if, as allegations now suggest, the IRS was targeting eight business owners who were prominent Mitt Romney backers for abusive, widely-publicized audits to intimidate other potential donors?” asks Ponte.

“Who can trust the fairness of government if, as allegations suggest, the IRS denied to conservative groups the kind of tax-exempt status speedily given to left-wing groups – thereby using the heavy thumb of partisan government to tip the scales of democracy to the Left in an election year?”

“This corrupt tilting of our political system,” says Ponte, “may be the real reason Mr. Obama is still president.”

“And who can trust the integrity of a White House that has rewarded with more than $100,000 in bonuses the IRS executive in charge of the office that did this, and promoted her to a new job – head of the IRS office and its new 16,000 agents in control of Obamacare?” asks Ponte.

“Obamacare, it was said, would combine the efficiency of the Post Office with the compassion of the IRS,” says Ponte.

“And now your confidential medical records and health options under Obamacare will be controlled by the same person who ran the office that illegally turned over confidential tax data about conservative groups to Left-wing groups such as Pro Publica,” says Ponte.

“Just imagine how fairly and even-handedly businesses will be treated under Obamacare by a politically-directed IRS, which with more than 100,000 agents is the Federal Government's biggest 'police' force,” says Ponte.

“This Banana Republic kind of strong-arm government intimidation and partisanship could chill more than free speech and political freedom,” says Ponte.

“American confidence in our government is 'as low as it has ever been' because of these scandals, wrote veteran reporter Dan Balz in the May 18th Washington Post,” says Ponte.

“Obama's failed $6 Trillion economic stimulus policies have wrecked Americans' trust in their government and stymied his Big Government agenda,” says Ponte.

“Mr. Obama cannot go forward, except by strong-arm tactics, but as a radical ideologue who has bloated the size of government almost 25% relative to our anemic economy, he refuses to go back to the smaller government that polls show a majority of Americans now want.”

“If those behind the Obama Administration's high-handed abuse of government power are not fired and several sent to prison,” says Ponte, “then this chill climate of uncertainty and fear about corrupt government influence in our taxes and economy will grow – and could plunge American investment and hiring into a new economic ice age. This could freeze for decades...and maybe forever...our prospects for a return to prosperity.”

For an eye-opening interview with Craig R. Smith or Lowell Ponte call: Bronwin Barilla at (800) 950-2428 or email bkbarilla@greatdebasement.com

Sources:

Dan Balz, “Obama's Trust-in-Government Deficit,” Washington Post, May 18, 2013. URL: http://www.washingtonpost.com/politics/obamas-trust-in-government-deficit/2013/05/18/5c0bb23a-bf21-11e2-97d4-a479289a31f9_story.html

“President Obama's Biggest Deficit Is Trust” (Editorial), Investor's Business Daily, May 9, 2013. URL: http://news.investors.com/ibd-editorials/050913-655521-president-obamas-biggest-deficit-is-trust.htm

5.8.13 - On Tuesday the Dow closed above 15,000, a record high in today's inflated dollars. The mainstream media reported this as good news.

“A rising stock market used to mean we had a rising, robust economy, yet this is no longer true,” says Craig R. Smith, a monetary expert frequently interviewed by Fox's Neil Cavuto and other prominent business journalists.

“This week's Dow 15,000 was a magic trick of levitation by the Federal Reserve. It is an illusion created to seduce millions of small investors.”

How is this trick done?

“The Fed hinted that it will keep on conjuring more than a trillion dollars a year out of thin air until at least 2015, with much of this enriching giant hedge funds and banks,” says Smith. “This assures big stock market speculators that their casino will stay open and awash in an ocean of easy, interest-free money.”

“The Fed has also joined other central banks in raising 'financial repression' to unprecedented levels,” says Smith, whose latest book is The Great Debasement: The 100-Year Dying of the Dollar and How to Get America's Money Back.

“Near-zero bank savings interest rates, and European seizure of private bank accounts weeks ago in Cyprus, are being used to pressure millions of small savers to withdraw their money and wager it in the stock market in hopes of surviving the Fed's conjured inflation,” says Smith, whose new book The Great Withdrawal hits bookstores this summer and is already sparking discussion.

“And days ago, some of the world's biggest investment entities suddenly dumped half a trillion dollars worth of paper gold – NOT physical gold....but paper options acquired with a 5% margin payment – to drive down the price of this value haven for prudent investors,” says Smith.

“The price of paper gold staggered from this massive surprise attack, but the price of physical gold rebounded by more than $100 within days as eager gold buyers crowded precious metal stores around the world,” says Smith.

“People are being stampeded into the stock market, where their savings are being harvested by speculators in the expanding Dow stock bubble,” says Smith.

How long will this magic illusion last?

“The huge disconnect between stock prices and the real economy keeps growing. In the real economy, double-digit unemployment plus part-time underemployment and long-term joblessness have become the new norm. Many companies have again become profitable, yet have done so by jettisoning many full-time employees; most of those jobs will not come back,” says Smith.

“One in five Americans now lives in poverty. Average household income fell by more than 5% last Quarter.”

“Real world inflation of 7% has kept our economy's real growth at around minus 5% – a Great Recession that has had our economy by the throat since 2008. Spendaholic Washington, D.C.'s budget deficit is on track to hit $20 Trillion by 2016,” says Smith.

“The bottom line: Dow 15,000 is a trick created with borrowed and conjured money. The real economy is slow and getting slower, sick and getting sicker,” says Smith.

“We're addicted to, and hallucinating from, all this funny money stimulus drug, yet our economy is heading for a collapse, a coronary, or a necessary cure that will cause terrible withdrawal symptoms,” says Smith.

“The higher we and the Dow get, the harder and farther we will fall. Heaven help the world if we fall and crater from Dow 19,000 or Dow 20,000, which might produce a new global Greater Great Depression that lasts for years or even decades.”

This hypnotic, easy-money-induced spell cannot last much longer.

Why did they do this?

“Beginning in 1913, America's once-golden age of prosperity and free enterprise has been replaced by Big Government ideology imposed on the rest of us by Progressives,” says Smith.

“By massive taxation, regulation and the invisible tax of inflation, the life blood of the Tree of Liberty has largely been devoured by parasitic mistletoe. Government has grown huge and hungry, now accounting for 39 percent of America's entire Gross Domestic Product (GDP), our whole economy.”

“And because government produces nothing, it lives as a parasite on achievers who do produce things of value,” says Smith.

“Craig Smith is a brilliant business leader who knows what is happening behind the scenes of our economy, and he is a master at explaining this in vivid, understandable terms,” says his co-author of three books, Lowell Ponte, a former think tank futurist and former Reader's Digest Roving Editor.

“In today's Alice-in-Wonderland economy, the market goes down on good news and up on bad news,” says Ponte, “because its speculators want news that will make the Federal Reserve print trillions more stimulus dollars out of thin air. A good economy would mean that no more easy stimulus money is needed.”

“Those who understand how today's economy really works should be worried that the Dow has climbed to 15,000. This could mean that some very wealthy speculators with insider information see some very bad news coming and are eager to lure smaller investors into the market quickly, before a fast-approaching day of economic reckoning arrives to shatter today's stock market mirage.”

Craig R. Smith, a renowned entrepreneur, can explain all this to your audience. For an eye-opening interview with Craig R. Smith or Lowell Ponte call: Bronwin Barilla at (800) 950-2428 or email bkbarilla@greatdebasement.com

SOURCES:

“Dow Hits All-Time High Above 15000, S&P Pushes to New Record,” CNBC, May 7, 2013. URL: http://www.cnbc.com/id/100715566

Nouriel Roubini, “Will the Fed Have to Choose Between Economic and Financial Stability?” Slate Magazine, May 5, 2013. URL: http://www.slate.com/articles/business/project_syndicate/2013/05/the_fed_faces_a_tricky_exit_from_its_third_round_of_quantitative_easing.html

Jared Bernstein, “Where Have All the Jobs Gone?” New York Times, May 3, 2013. URL: http://www.nytimes.com/2013/05/04/opinion/where-have-all-the-jobs-gone.html?ref=opinion

“Jobs Report Brings No Cheer to Main Street,” Investor's Business Daily, May 3, 2013. URL: http://news.investors.com/ibd-editorials/050313-654828-job-report-brings-no-cheer-to-main-street.htm

Rick Moran, “Official Unemployment Rate Drops But Broader Jobless Measure Rises,” American Thinker, May 3, 2013. URL: http://www.americanthinker.com/blog/2013/05/official_unemployment_rate_drops_but_broader_jobless_measure_rises.html

Adam Davidson, “Boom, Bust or What?” New York Times Magazine, May 2, 2013. URL: http://www.nytimes.com/2013/05/05/magazine/larry-summers-and-glenn-hubbard-square-off-on-our-economic-future.html?ref=magazine

4.29.13 - The Federal Trade Commission once tried to ban a TV commercial that depicted a boy growing into a young man in nine seconds from eating Wonder Bread. The FTC said it might deceive consumers into believing that Wonder Bread could make kids grow this fast.

"Last Friday this same Federal Government said that the U.S. economy grew at 2.5% rate during the first Quarter of 2013 -- a growth claim even more misleading than it accused Wonder Bread's ad of being," says Craig R. Smith, amonetary expert frequently interviewed by Fox's Neil Cavuto and other major business journalists.

"Most economists agree that our economy remains anemic and at risk of plunging back into Recession," says Smith. "This new 2.5% number is even weaker than the 3.1% growth many economists had predicted."

"And most of these economists agree that the Second Quarter we are now in will be lucky if growth is between one and two percent," says Smith. "Our economy is already near stall speed, and slowing."

"Economic growth was negative -- Minus 0.1%, in the previous Quarter until the data was massaged up to Plus 0.1% and then Plus 0.4%," says Smith, whose latest book is The Great Debasement: The 100-year Dying of the Dollar and How to Get America's Money Back.

"This is a dangerous time for people to pull money out of safe havens such as government money market funds and gold to gamble in an increasingly volatile, shaky stock market, even though that is what some powerful interests are stampeding small investors and savers to do," says Smith

Why is Smith, with 30 years of investment hedging expertise, skeptical about the government's claim that America's Gross Domestic Product (GDP) grew at 2.5% in January, February and March 2013?

"First, I agree with Harvard economist Martin Feldstein that the claimed 2.5% GDP growth last Quarter is misleading because roughly half of it was companies building inventories that customers were not buying," says Smith. "If you subtract this added inventory, real growth was around 1.2%."

"Consumer confidence remains weak. Household income fell 5.3%, the biggest such income drop since the Third Quarter of 2009," says Smith.

"And with declining income, the saving rate fell to only 2.6%, barely half what it was in the previous disastrous Fourth Quarter of 2012. Savings, the seed corn of future growth and confidence, are falling sharply," says Smith.

"Americans were spending more out of their savings," says Smith, "but much of this was on utility bills during a long, cold winter and on higher gasoline prices."

"Spending on business equipment slowed to only about a quarter of the rate it was even in 2012's terrible Fourth Quarter, another sign that private investment and optimism are sinking," says Smith.

"At the same time, we have the lowest percentage of employed Americans in 31 years," says Smith, "and 41 percent of the unemployed are long-term unemployed with sinking prospects of ever finding good-paying jobs. One American in five is now officially in poverty."

"We DO have growth in America," says Smith. "Welfare dependency is growing. Government spending, borrowing and giant debts that our children must pay are growing. Taxes are growing rapidly -- now at their highest level in four decades."

"We also have growing fear and uncertainty among potential investors about all the new ways our spendaholic politicians are proposing to tax away even more of what we earn and invest," says Smith.

"A green economist should tell our leaders that they are destroying the natural environment needed to grow enterprises and hire people," Smith says.

"Ironically, the stock market has been going up because the economy is so fragile," says Smith's co-author Lowell Ponte, a former think tank futurist who for 15 years was a globe-traveling investigative reporter and Roving Editor for /Reader's Digest/Magazine.

"Our weak economy means that the Federal Reserve will have to keep printing more than a trillion dollars out of thin air every year to levitate stock prices, keep the stimulus-addicted Wall Street casino open, and prop up the housing market to prevent another collapse," says Ponte.

"It's all an upside-down Alice-in-Wonderland, Orwellian illusion," says Ponte, "where government spending is called 'investment,' tax cuts are called 'tax expenditures,' and debasing the value of our savings by printing trillions out of thin air is called 'positive inflation.'"

"As University of Maryland economist Peter Morici anticipated, the new 2.5% GDP report is deceptively strong, at best a mirage created largely by people spending the advances they took last December to avoid January's huge tax increases that are now slowing the economy."

"New taxes on achievers will choke the prospects for jobs. If President Obama achieves his goal to restrict the home mortgage interest deduction, then far fewer will be in the market to buy homes -- and home value, which for millions remains their diminished savings nest egg, will be shattered as buyers vanish.

"In the real world, durable goods orders in March plummeted 5.7%," says Ponte. "This almost certainly means an economic 'swoon' is coming later this spring or summer, and with similar economic weaknesses in Europe and China the global economy could also sink, taking us down together."

"But don't worry," says Ponte. "President Obama endlessly benefits from official numbers being 'adjusted' for his benefit. Thus the job numbers were engineered to look better just before the 2012 elections, as we explained in The Great Debasement, although few found actual jobs."

"President Obama's new budget alters the Consumer Price Index (CPI) with an accounting gimmick called 'Chained-CPI' that will manipulate cost-of-living and other factors so that benefits to those on Social Security will be less, but taxes on Americans will jump by an additional $100 Billion over the next few years," says Ponte.

"The government's Bureau of Economic Analysis in the Department of Commerce just quietly announced that starting in July it will alter how it calculates America's Gross Domestic Product (GDP) by counting as assets things that used to be expenses and intangibles -- such as company research and development," says Ponte.

"The government economy will adopt a bit of what might be called deceptive 'Hollywood bookkeeping,'" Ponte says. "And why not, now that the entire economy is a Hollywood fiction in which the only thing real is how much of the fruits of your labor government takes to fund its expansion."

"By this accounting gimmick, America's GDP on paper will instantly appear to grow by an additional 3% every year, creating the illusion of prosperity and pulling Mr. Obama back from the cliff edge of Recession, even though almost nothing will have changed," says Ponte.

"We are carrying these major changes [that enlarge GDP numbers] all the way back in time -- which for us means to 1929," Bureau of Economic Analysis national accounts manager Brent Moulton told the /Financial Times/, "so we are essentially rewriting history."

"Rewriting history to make Big Brother seem infallible is what Winston Smith did in George Orwell's dystopian novel /1984/," says Ponte. "Big Brother, meet Big Barack and BEA."

"Today nearly 40% of America's Gross Domestic Product IS federal, state and local government spending, and 40% of Federal spending is money either borrowed or invented from nothing," says Ponte. "Today's U.S. economy is largely a magic trick, an illusion created by credit cards and government credit or cash-conjuring out of thin air."

"And now twice as many Americans are employed by government than in all of manufacturing combined," says Ponte. "Remember when America actually made things, back before today when 49.1% of American households have someone who gets a government check?"

"Now that government takes roughly 60 percent of everything you earn via direct plus hidden taxes or the invisible tax of inflation, can you please tell me what government makes?"

For an eye-opening interview with Craig R. Smith or Lowell Ponte call: Bronwin Barilla at (800) 950-2428 or email bkbarilla@greatdebasement.com.

SOURCES:

"Gross Domestic Product, First Quarter 2013 (Advance Estimate)," U.S. Department of Commerce Bureau of Economic Analysis, April 26, 2013. URL: _http://www/bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm_

"Oops! Economic Growth Wasn't So Great After All," CNBC, April 26, 2013. URL: _http://www.cnbc.com/id/100678290_

Gerald J. Thain, "Advertising Regulation: The Contemporary FTC Approach," /Fordham Urban Law Journal/, Vol 1, Issue 3 (1972). Pages 356-359 discuss the Federal Trade Commission action against Wonder Bread; a judge rejected the FTC action. To see 9 seconds of one such a Wonder Bread ad: _http://www.youtube.com/watch?v=gbAqqeZo97o_

For Harvard economist Martin Feldstein, see his April 25 interview: _http://video.foxbusiness.com/v/2328213181001/is-fed-helping-or-hurting-economy/?playlist_id=937116503001_

Peter Morici, "Deceptively Strong GDP Report Expected," /United Press International / UPI/, April 25, 2013. URL: _http://www.upi.com/Top_News/Analysis/Outside-View/2013/04/25/Outside-View-Deceptively-strong-GDP-report-expected/UPI-26051366862820/_

"Orders for U.S. Durable Goods Fall 5.7% in March," /Associated Press /Cleveland Plain Dealer/, April 24, 2013. URL: _http://www.cleveland.com/business/index.ssf/2013/04/orders_for_us_durable_goods_fa.html_

Steven C. Johnson and Andy Bruce, "Manufacturing Data Stokes Fears of Global Spring Swoon," /Reuters/, April 23, 2013. URL: _http://www.reuters.com/article/2013/04/23/us-global-economy-idUSBRE93M0G820130423_

Robin Harding, "Data Shift to Lift US Economy 3%," /Financial Times/, April 21, 2013. URL: _http://www.ft.com/intl/cms/s/0/52d23fa6-aa98-11e2-bc0d-00144feabdc0.html#axzz2RCnHCegl_

Robin Harding, "US Economy Gets a Hollywood Makeover," /Financial Times/, April 21, 2013. URL: _http://www.ft.com/intl/cms/s/0/63bbbd22-aa95-11e2-bc0d-00144feabdc0.html#axzz2RDhxijf7_

Tyler Durden, "US GDP Will Be Revised Higher by $500 Billion Following Addition of 'Intangibles' To Economy," /ZeroHedge.com/, April 21, 2013. URL: _http://www.zerohedge.com/print/473110_

Shelly Smith and others, "Preview of the 2013 Comprehensive Revision of the National Income and Product Accounts: Changes in Definitions and Presentations," Bureau of Economic Analysis / U.S. Department of Commerce,March 2013. URL: _http://www.bea.gov/scb/pdf/2013/03%20March/0313_nipa_comprehensive_revision_preview.pdf_

"New Sources of Growth: Intangible Assets," OECD (Organization of Economic Co-operation and Development, Paris), September 2011. URL: _http://www.oecd.org/sti/inno/46349020.pdf_

"As GDP Falls, President Obama Runs Out of Excuses" (Editorial), /Investor's Business Daily/, January 30, 2013. URL: _http://news.investors.com/ibd-editorials/013013-642576-gdp-economy-decline-president-obama-policies.htm_

Karl Smith, "GDP And The iPhone Problem," /Forbes/, April 23, 2013. URL: _http://www.forbes.com/sites/modeledbehavior/2013/04/23/gdp-and-the-iphone-problem/print/_

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