Did anyone ever find it odd that the mainstream business pundits have used the term ‘recovery’ for a full five years now following the Fed’s QE fueled stimulus that started in 2011? By definition, recovery only infers that the item, in this case the markets, are in such a state up to the point in which their lost value has been recovered and anything going forward from there is considered new growth.
This misuse of language is in part how Wall Street and central planners obfuscate the real state of an economy by attempting to program the masses into believing new paradigms that are in opposition to the real data. Politics tends to use this type of hammered programming all the time, with one of the best examples occurring in the 2000 election when nearly every single media outlet slipped in the term ‘gravitas’ to describe what George W. Bush was lacking in.
I show this example because this is exactly what the mainstream business media has been doing through the use of the term ‘recovery’ almost every day for five years now to protect and falsely validate their agenda of massive credit expansion. And just as importantly, these same entities spun the concept of ‘economy’ to mean equity or stock markets and not its long-standing meaning of jobs, productivity, and growth.
But the reality is that the overall economy has never recovered, and was simply immune to the symptoms of its illness through the equivalent of taking large quantities of penicillin, morphine, and vicodin. And any time new indicators showed up that invalidated the central bank’s mantra, they doubled down even more by either discounting the information as irrelevant, or simply ignoring it by turning the people’s attention back to stocks.
In financial history one does not move from a state of recovery directly into a state of recession, but unfortunately for those who have believed the party line these past five years, they missed the true realization that there has been no recovery at all outside of the stock markets, and that the Great Recession of 2008-2010 simply lessened into an ongoing minor recession that is now on the brink of falling back into levels that teeter on depression.
U.S. Factory Orders fall for 15th straight month
U.S. Composite Manufacturing/Services PMI in contraction
U.S. Non-farm Productivity
While revised modestly higher from preliminary levels, US non-farm productivity plunged 2.2% in Q4 2015 – the biggest drop since Q1 2014.
And of course, perhaps the biggest fallacy of all in regards to the ‘recovery’ meme… corporate profits outside of a single inflated quarter since 2009 have not even recovered to their pre-crash levels in 2006.
Real economic indicators show that with GDP growth between 1.7 and 3.5% since the start of zero interest rates and quantitative easing in 2011, there has been no ‘recovery’ at all, and simply anomalous blips here and there in the overall economy due to geo-political and geo-economic circumstances. And with the Fed and U.S. governments riddled with debts they cannot hope to begin to pay down, there is no more ammunition available to keep the ‘recovery’ mantra going, with the last protected indicator, that of the stock markets, showing their true value as central banks can no longer fuel their artificially created highs.