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While the U.S. propaganda-machine (otherwise known as the “mainstream media”) is perpetually distorting facts with its blatant propaganda, it has arguably hit a new low with its reporting of June “new home sales”.

A Bloomberg' headline read “June Sales of New U.S. Homes Climb More Than Forecast”, while Reuters simply gushed “Home Sales Surge”. Meanwhile, back in the real world, U.S. new home sales for June were the second-lowest in history, following the May report, which was the worst in history. And the May number had a huge downward revision – from 300,000 all the way down to 267,000.

The fact that the May report required an 11% downward revision seriously calls into question the statistical validity of the “models” used by the U.S. propagandists, and also suggests that the June number will also face a large downward revision. However, to provide readers with a better understanding of the June number, there's nothing like “pictures”, and here's two which are each worth at least a thousand words.

As you can clearly see with those charts, the U.S. housing market has “fallen off a cliff” (again), as I detailed in a recent commentary (“Second Bubble Bursts”). Given what is happening in the real world, let's compare the Bloomberg and Reuters headlines with an honest headline I'll make-up myself.

Which of these headlines better informs readers (given what you now know from the above charts)?

“June Sales of New U.S. Homes Climb More Than Forecast” [Bloomberg]

“Home Sales Surge” [Reuters]

“New Home Sales Rebound 24% [CNN]

“June Home Sales 2^nd Lowest Ever” [Nielson]

For those who still favor the “don't worry, be happy” headlines of Reuters, Bloomberg, and CNN, keep in mind that the 24% increase in June is only a little more than half the 40% crash which occurred in May. Thus, mentioning the “surge” in June with a headline which does not also account for the crash the month prior is clearly something which was intentionally designed to deceive readers.

More specifically, the entire goal of the propaganda-machine is to get the sheep focused on short-term changes in various markets and sectors. As I have regularly detailed in recent commentaries, any “big picture” view of the U.S. economy shows that it is not only once again “crashing” - but crashing from what was already the lowest level of economic performance in history. This is not another “Great Depression”, but a “Greater Depression” - which will obliterate the U.S. economy unless its so-called leaders stop focusing all their energies on trying to hide its problems, and use those energies to try to halt this precipitous collapse.

The big problem for the Obama government is one of its own making, as I pointed out in “Trapped By Lies”. It has done such a good job of fooling people (such as opposition Republicans) that there is a “U.S. economic recovery” taking place that the Republicans are now trying to take the U.S. economy off of “life-support” (i.e. the largest/most-radical deficit-spending in history). Thus, if Obama wants to ramp-up the stimulus again, he faces two enormous problems.

The first problem is that he must argue against his own propaganda. The second problem is that (as mentioned in a previous commentary) all U.S. government “stimulus” (i.e. borrowed money) is doing is causing the U.S. economy to shrink even faster.

As you can see in the chart above, each new dollar of U.S. federal debt causes U.S. GDP to shrink by nearly 50 cents. What this means is that the Obama “stimulus package” of roughly $780 billion, would have caused the U.S. economy to shrink by roughly 3% - a totally different outcome from the fantasy-GDP numbers which the Obama regime has passed-off on markets, and the American people.

Critics will argue that the government is in a “no-win” position (of its own creation). If it doesn't increase spending, then the U.S. economy will collapse. And if it does increase spending, it will collapse even faster. The truth, however, is totally different.

The U.S. economy has been totally hollowed-out by decades of plundering by the ultra-wealthy: somewhere in the vicinity of $15 trillion. I guarantee that if the U.S. government were to tax-back that $15 trillion (held by only 1% of the population) that all of the consequences of such a policy would be overwhelmingly positive. However, irrespective of that opinion, the simple fact is that the U.S. government has absolutely no choice.

It is hopelessly bankrupt. Attempting to borrow more money, or (more likely) simply printing infinite amounts of new money can only make things much, much worse. There is only one source of revenue open to the U.S. government: the largest pool of “idle wealth” in the history of our species. Whether it is framed as “justice” or mere “necessity”, that wealth must be confiscated through taxation.

Millions of American homeowners are poised to lose their homes as the next crash of the U.S. housing sector intensifies. Parallel to that, the U.S. retail sector (the primary employer in the U.S. economy) is facing its own collapse. There is no more time for more “fiddling” (i.e. propaganda), it is simply “do or die”.

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written by Jeff Nielson, July 27, 2010

Yes, DayOwl. If the media only show the people the short-term picture, then it becomes SO easy to invent new "realities" - and simply pretend that this represents "normal".

Conversely, looking at virtually ANY long-term chart on the U.S. economy shows EXACTLY what is taking place: a meltdown of historic proportions.

In that respect, this earlier commentary has long-term charts on both U.S. incomes and U.S. home prices - so for those who don't mind pulling out calculators, you can compare the "affordability" of homes in different eras.

"The Second Bubble Bursts"
http://www.bullionbullscanada.com/index.php?option=com_content&view=article&id=13125:the-second-bubble-bursts&catid=47:us-commentary&Itemid=132

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written by DayOwl, July 27, 2010

The idea is to keep the sheep thinking it's perfectly normal and reasonable to pay five years worth of income for a house.

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written by Jeff Nielson, July 27, 2010

The answer to that question is really simple, and (by coincidence) I just did a post on this subject on our bulletin board.

"CNN worries about "taxing the rich"..."
http://www.bullionbullscanada.com/index.php?option=com_kunena&Itemid=122&func=view&catid=6&id=826

While I generally say to American readers that "it doesn't matter" which member of the two-party dictatorship you vote for, this is a rare exception to that mantra.

If the Republicans increase their share in the House and Senate in the next election, there will be no taxing of the rich - since the Republicans have openly made themselves the prostitutes of the ultra-wealthy (as the CNN article shows).

For all the (many) sins of the Democrats, at least they would be willing to "take a little off the top" when it comes to the unimaginably obscene hoards of wealth which the ultra-rich have amassed.

A few thousand Americans could pay off your entire "national debt" (and live out their lives in luxury on their remaining "spare change").

The other aspect to this issue is that it is this "hollowing out" of the U.S. economy (i.e. the destruction of the middle-class) which is the #1 reason the U.S. economy is about to implode. So voting "Republican" means voting for "implosion" sooner rather than later.

Under other circumstances, that would be a good thing (versus hyperinflation - and then implosion). Unfortunately, Republican control of the U.S. government means that implosion will be triggered by impoverishing Average Americans at a much faster rate than the Democrats - and that is NOT a "good thing".

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written by redrob25, July 27, 2010

Do you think the US government will tax the wealthy when 44% of Congressman are those same wealthy?

I don't disagree on the proposition or have any moral objections. But I have doubts on whether it will happen since the rulers own both the banks and seemingly the congress.

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