While Washington announced last Friday that unemployment dropped to 8.3% …
And while Wall Street rejoiced with another rally …
The true unemployment in the United States actually rose to an estimated 22.5%, nearly the worst since the Great Depression.
Hard to believe?
Well, thanks largely to John Williams of www.shadowstats.com, we can prove it.
Just consider how the government is lying to us about jobs in America:
Lie #1. “Discouraged workers — unemployed workers who give up looking for jobs — are not really unemployed.”
Even a third grader would know that’s laughable. If jobs are so hard to find that people are abandoning the search, that’s a sign things are actually WORSE, right?
Yes, but that’s not how the government counts its headline unemployment number. Every time more people get discouraged, the government’s jobless number improves!
Lie #2. “Unemployed workers seeking full-time jobs who are forced to accept minimum-wage or lower paying part-time jobs are also not unemployed.”
In other words, based on the government’s definition …
If you’re a laid-off policewoman delivering newspapers for two hours a day, or …
If you’re a former sales manager, greeting shoppers at Wal-Mart on weekends …
You’re not counted among the jobless!
But if you think that’s strange, consider this:
These lies are so enormous and egregious, the government has tried to address the outrage by quietly publishing another unemployment rate, dubbed “U-6.”
This number is never headlined in the press. And the party in power never mentions it.
Why not? Because it’s one of the ugliest and worst-kept secrets of our time.
I’m talking about an official government number that does include some of the part-time and discouraged workers, and that reveals an outrageously high U.S. unemployment rate of 15.1%.
Lie #3 began about 18 years ago during the Clinton administration. Back then, officials at the Bureau of Labor Statistics were counting virtually all discouraged workers — those who had given up looking for jobs because there were no jobs available.
But one day, they decided to STOP counting anyone who had given up looking for more than a year.
So here’s the deal:
If you’re out of a job and you gave up looking for work 365 days ago, you’re still counted as a “discouraged worker” and you’re still among the 15.1% that the government admits are unemployed (based on their less known U-6 number I mentioned a moment ago).
But if you gave up looking 366 days ago, based on their cockamamie scheme, you’re not “discouraged” any more. As far as they know, you’re so happy, you could be dancing in the streets!
Now do you see why I say the government is lying about jobs?
And these are not just trivial factoids that no one cares about. It’s among the most important financial, social, and political problems of our era.
According to Williams’ estimates, if you include all discouraged workers — just as the government itself did before 1994 — the true unemployment rate in America is 22.5%!
That’s nearly THREE times worse than what the headlines say. And it’s even higher than the unemployment of the PIIGS countries in Europe, which are now suffering from massive sovereign debt disasters.
Still skeptical about the idea that the job market in America is not improving? Then take a closer look at what’s happening in the biggest sector of all …
No Recovery From the Housing Depression!
In the housing market, it’s a lot tougher for the government to lie.
Why? Because unlike the job numbers, the housing stats are largely outside of the government’s control; they’re compiled and issued mostly by private research organizations.
But guess what! The government manages to lie about the housing market anyhow.
First, they tell you it’s improving. It’s not.
Second, they promise to fix it over and over again. But they never do.
This is serious: In the U.S. economy, the housing sector and support industries have traditionally been the largest of all.
And in the average U.S. household, the home is still the biggest single asset.
Look. If home builders were selling more new homes or hiring more construction workers …
If most banks were slowing down their pace of home foreclosures …
If average home prices were recovering …
If all this activity were helping to improve consumer confidence … get people to spend more … and get more companies to start hiring …
THEN, the government’s official statements — including the supposedly positive news they released last week on jobs — might have a ring of truth.
But, alas, in the real world of real estate, we see nothing of the kind. Instead, the facts show that, in recent months, the housing market has actually taken a new turn for the worse:
Fact #1. New home sales in the U.S. have plunged to the worst level in history!
See this chart?
Look how home sales went through the roof during the bubble!
Look at how quickly ALL those gains were erased in the first phase of the bust!
And now look how much further they’ve plunged — down to their levels before the housing bubble even began … down to the worst levels of the 1970s and ’80s … and NOW even down BELOW the worst years of the 1960s!
Fewer new homes are being sold in the U.S. now than back in the days when Lyndon Johnson became president and the Beatles launched their first hit LP.
And in proportion to the U.S. population, the picture is even uglier: For each 1,000 people living in the United State today, less than ONE new home was sold last year — quite probably the worst in history.
Fact #2. Foreclosures continue unabated.
There are still an astronomical 6.17 million families in America behind on their mortgage payments or with homes in the process of foreclosure.
That’s a massive pipeline of foreclosed homes being dumped on the market that probably will continue for years to come.
Fact #3. Home prices are falling — not rising.
You probably know most of this story all too well:
• A devastating home price collapse that destroyed the net worth of average Americans …
• A leveling off of most home prices in 2009, and …
• Even some recovery in many regions since then.
But do you know the rest of the story?
Here it is: We’ve recently learned that, by November of last year, single-family house prices in 20 U.S. metropolitan areas fell again, losing 100% of the gains they’d achieved since 2009!
Plus, we have every reason to believe that, in the most recent two months, home prices have fallen even further.
The New York Times sums up the housing market disaster this way:
“Housing has played a dominant role in the country’s economic sluggishness, as homeowners have struggled with foreclosures or mortgage burdens that far exceed the values of their homes.
“Hundreds of thousands of construction workers and other real estate-related employees have been thrown out of work and are still struggling to cobble together incomes.”
An old story? You bet! But that’s precisely the crux of the problem: It’s already been going on for the better part of a decade … and it’s far from over!
The government’s response: More bailouts, more money printing, and zero-percent interest rates till kingdom come.
The end result: Big bonuses for Wall Street elites … sharply higher asset values in some investment sectors … but, for most of America, a catatonic state of joblessness, depressed real estate, and even poverty.
Did Anyone Clearly Warn You About
The Housing Bust Ahead of Time?
Did anyone explicitly spell out the consequences for homeowners?
Did anyone name the companies that would fail?
Did they give you very practical instructions on how to profit from it?
Yes! We did!
In fact, it was almost seven years ago that we first warned of a “Real Estate Boom … and BUST!”
It was just four months later that we spelled out the dramatic impact of that bust, warning that “panic selling will replace panic buying … crashing values will replace surging values … fear will replace euphoria.”
And it was in March 2007 — literally within days of mortgage and banks stocks beginning their sickening 85% swan dive — that we headlined a “MORTGAGE MELTDOWN,” specifically naming subprime lenders, prime lenders, and banks that would go broke as a result.
We all know what happened in the months that followed: Home sales collapsed. The inventory of houses and condos for sale exploded. Home prices nosedived. Trillions in real estate wealth went up in smoke.
Megabanks like Washington Mutual and Wachovia either failed or were forced into shotgun mergers, while megabrokers like Bear Stearns and Lehman Brothers ceased to exist.
Fannie Mae and Freddie Mac suffered hundreds of billions in losses, forcing them into the arms of taxpayers. The stock market suffered its worst declines in decades. And the economy tumbled into a Great Recession.
Today, we wish we could say that signs of a LASTING turn in housing are finally here. But they’re not.
And today, with stocks rising but housing prices still sinking, the key questions for investors are simple:
How can you protect yourself from government lies and home market disasters?
How do you invest in this schizophrenic world?
And how do you find the sectors that are still making investors’ fortunes?
For the answers, stay tuned! Specific recommendations are in the works and will be in your inbox with your regular issues.
Good luck and God bless!