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Is there any way of discerning the truth about the US economy?  Famed John Williams of Shadow Government Statistics makes a living by dissecting government statistics and providing us with the truth.  The following is from his most recent report:


If the economy will not grow, just redefine it.  The US economy continues to stagnate and turn down anew, as part of the deepest and longest economic downturn seen since the Great Depression.  With actual business activity moribund, the US government once again has turned to redefining a major economic series, so as to boost a reported activity.


This agrees with my previous observation that the US economy is sinking, regardless of stock market-top fluctuations.  How long, I wonder, before the real truth decorates newspaper headlines?  Frankly, I’ve never seen a stock market so obsessed with current news.  I grew up thinking that the stock market discounts conditions as they will materialize months in the future.  Americans must be confused as they note the harsh conditions of their current life when compared to what the Federal Reserve and the government tell us.  Ultimately the truth will come out.  And I believe that John Williams is telling us the truth.  This is indeed the longest economic downturn seen since the Great Depression. 


I note that Walmart, with its slipping sales, is now being called “too expensive for the middle class.”  This tells us something about the struggles of the middle class, which are now exiting Walmart, in favor of ... well, staying home.  For the middle class, these appear to be hard times.  Interestingly, the last two generations are the first two generations in America history that have never seen hard times -- that is, unless they've heard descriptions of hard times from their parents, who braved the Great Depression.  Now we hear more and more of children moving back in with their parents, or parents moving in with their older children.  I'm thinking that we will see a good deal of novel living situations as the months go by.


I hesitate to say this because it's so extreme, but I believe the world is in a depression.  We're being lied to by a frightened and desperate government and Federal Reserve.  Sooner or later the US public is going to realize that we're in a depression.  The government and the Fed will fight the gathering depression with lies and propaganda.  To fight the depression, the Fed will open the money spigots wide, creating new trillions of “dollars.”  Some wise investors are aware of all this, which is why gold continues to push higher (over $1300 an ounce today). 


IF we had the actual gold, I feel that the US would unilaterally raise the price of gold to $5,000 or $10,000 an ounce.  The government is not doing this because we don't have the gold.  Once the news of the US gold reserves being depleted is out, this will result in an unbelievable scandal.  Once the dollar index closes below 80, the fireworks should start.  How many items can the Fed manipulate?  Sooner or later the Fed will lose its grip on bonds, the dollar, stocks or gold.  I think gold over 1300 suggests that the Fed is losing its grip.


Actual physical gold is becoming scarce.  With gold climbing over $1300 today, we've seen the end of bargain-priced gold.  I continue to like CEF, which is gold and silver in Canada.  Below GDXJ turning bullish and breaking out of a huge base.  The P&F projection or target is 57, I think this is a really interesting spec.




Another spectacular P&F chart below.  The whole universe of gold is on fire.  Enjoy it while you can.




To subscribe to Richard Russell’s Dow Theory Letters CLICK HERE.


© 2014 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.


IMPORTANT - KWN will be releasing interviews all day today.


The audio interviews with David Stockman, John Mauldin, Eric Sprott, Bill Fleckenstein, Egon von Greyerz, Dr. Paul Craig Roberts, MEP Nigel Farage, James Dines, Gerald Celente, Andrew Maguire, Art Cashin and Dr. Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf -- to listen CLICK HERE.


Eric King

KingWorldNews.com

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