The Summer of Recovery

Mon, Jan 20, 2014 - 8:14am

Harken, if you will, to the glorious days of times gone past when the stimulus flowed like honey and the unicorns of government-created prosperity roamed the land dropping their spoor of jobs and skittles hither and yon. The manna fell from heaven on the Potomac and the people rejoiced. Thirty one million dollars were spent to replace two small border crossing signs at an isolated Canadian checkpoint (link)! Five million to study the sexual habits of the snail darter! Eleven million to build a bridge to Microsoft’s headquarters building! And of course, “Everybody in Cleveland got Obamaphone”. You could almost smell the optimism in the air as the citizenry basked in the generosity and largess of the state. Jobs were seemingly being created left and right (well, for specific constituent groups with favorable voting records, anyway) and the promise of green energy called everyone Forward! Forward! into a glorious and eco-friendly future. Out with the old traditions, the hocus pocus, and the backward ways (there is a reason they call them fossil fuels, after all). In with the new, the green, the rationally planned! Oh, the new prosperity was upon us like a starving Zombie on a morbidly obese shut-in.

Those were the halcyon days, where every newscaster breathlessly intoned that the Green Shoots of economic recovery were popping up all across the country like some kind of genetically engineered super-weed of wealth. Every story, every scrap of news was lovingly crafted and carefully fitted into the Green Shoots narrative. A hundred and seventy thousand new jobless claims? That’s less than the figure from three months ago… Green Shoots! Housing starts up 0.0001% from the previous month? Green Shoots! A man started a taco stand in Yonkers? Green Shoots! Everything was evidence of Green Shoots, and if in years past a piece of news would have been considered a worrisome sign of the dire state of the economy, well in this new, magical time it was simply more evidence of Green Shoots (unless you were one of those recidivist inbred morons too stupid to understand just what a wonderful thing was being done for you and your country, in which case your opinion didn’t count anyway).

I still remember the reassuring vision of little Timmy Geithner, flitting from news show to news show like a diminutive pixie of prosperity, endlessly repeating the magical words in that child-like voice of his: recovery… recovery… recovery...

Wise policies were creating millions of jobs with the easy swish of the President’s pen, all of them magnificently shovel-ready. In fact, “shovel-ready” was the descriptor of every new project, our previous Cro-Magnon leadership having apparently left unconscionable numbers of holes in desperate need of excavation. One had the sense of millions of fellow citizens briskly grabbing millions of government shovels and determinedly digging their way to prosperity.

Yes, it was 2010. The fabled and legendary “Summer of Recovery”. I recall its radiant splendor as if it were just four years ago.

. . .

A few months before this iconic summer, Time Magazine named Ben Bernanke as their person of the year, so all the people of the land could rest easy knowing that difficult times were being managed by the most competent economist evah, his skill so surpassing that he was depicted in the thin-line drawing style of our very currency, thus visually linking him to the greatness of Jefferson, Franklin, and Washington on our bills.

The White House itself went on an all-out media blitz, throwing around wild numbers of how many jobs had been created by the government like they were pancakes at a waffle house.

Administration Kicks Off "Recovery Summer" with Groundbreakings and Events Across the Country June 17, 2010

President Obama, Vice President Biden and Other Administration Officials to Highlight Surge in Recovery Act Infrastructure Projects This Summer

WASHINGTON, DC – The Administration today kicks off “Recovery Summer,” a six-week-long focus on the surge in Recovery Act infrastructure projects that will be underway across the country in the coming months – and the jobs they’ll create well into the fall and through the end of the year. The Recovery Act has already funded tens of thousands of projects and put about 2.5 million Americans to work, but summer 2010 is actually poised to be the most active Recovery Act season yet, with tens of thousands of projects underway across the country that will help to create jobs for American workers and economic growth for businesses, large and small.

Economists with PhD’s (from schools you could never get into) all agreed that the recession was over and lent the weight of their formidable academic reputations, professional experience, and general intellectualism to the messaging machine, declaring that the data proved the recession had passed, and the worst was behind us. Brilliant experts all agreed it was so!

Members of the media vied to see who could most vociferously deliver the administration’s message of Green Shoots, with the financial media winning the battle of the carnival barkers. Every story was spun like a top to support the narrative. No exaggeration was too outlandish, no economic report too dour to be spun into evidence of Green Shoots. I’ll never forget reading a story on housing starts showing that the numbers were the lowest they had been in twenty years and had stayed there for two months in a row, only turn on CNBC radio and hear Maria Bartiromo gleefully chirp that “Housing starts were up in yet another sign of economic recovery”… they were up one tenth of one percent from the previous month (well within the margin of error for the survey), and the previous month had set a multi-decade low. No sane person could possibly believe this was good news, yet here was Maria yelping about ‘improving housing starts’, conveniently failing to quote the actual nightmarish numbers. It was truly Orwellian.

There was one place you could find the truth of the situation, however.

Gold and silver were the lone canaries in the coal mine. At a time when every person with a microphone or a PhD in economics was shouting the all-clear at the top of their lungs, when all was awash in cheap money and even cheaper promises of prosperity, only two things were telling the truth. Gold was roaring from 1083 in January to a high of 1431 in December. Silver (the people’s money!) had opened the year at 16.81 and exploded to a December high of 30.70, nearly doubling in a single calendar year. Gold and silver were screaming “You cannot create value out of thin air! All this spendthrift waste comes at the high cost of devaluing the currency! These actions don’t create prosperity; they create a temporary simulacrum of prosperity!” Real money was telling fake money (and the purveyors of fake money) what the actual situation was.

It is no surprise whatsoever that the purveyors of fake money took note of this, and the following year orchestrated the May Massacre for silver, and then the September Slaughter for gold. Price has been effectively managed ever since. Problem solved!

Or is it?

If a patient has a life-threatening infection, secretly pressing ice blocks against his back and shouting that he is recovering because his temperature has dropped does not mean the infection won’t kill him- it means that the symptoms of the infection are being temporarily masked. Pretending that the (fictitiously) low price of gold and silver proves that there are no costs to the unprecedented expansion of the money supply and the explosion of the Fed’s balance sheet does not mean that there will be never be a price to be paid for this epic squandering of wealth and the massive malinvestment that these easy money policies encourage. It just means that the true degree of sickness is presently being hidden through the active suppression of the most obvious symptoms.

. . .

In retrospect, what should we remember about the legendary “Summer of Recovery”? We should never forget the complete lack of accountability of the media who, when reality inevitably showed how completely wrong they had been for months on end, simply moved on to different messaging in the fall- without shame, remorse, or a Mea Culpa of any kind. Never did we hear an explanation of why they spent so many months touting a fictional recovery; never did we hear that they were sorry for so monumentally betraying the public trust to report the truth. The “Summer of Recovery” provided the undeniable evidence that our official news gathering organs had completely devolved into a bad caricature of Baghdad Bob, and henceforth should be trusted accordingly.

We should never forget that the administration’s entire message for that summer was a blatant lie. After repeating the “shovel-ready” mantra endlessly to sell his big spending economic plans, Obama himself later admitted that “There is no such thing as shovel-ready”. For those paying attention, it was a preview of the regard for truth reflected in the “If you like your plan, you can keep your plan” sales-pitch later used to socialize 1/6th of the US economy.

We should never forget that literally billions were thrown down the drain at green energy companies that promptly went bankrupt after their fictitious business models failed, as they were inevitably bound to do.

We should never forget that we are still in the midst of this Orwellian doublespeak and data manipulation. Whenever someone (either through deliberate misinformation or rank ignorance) claims that the economy has recovered and that gold and silver prices are merely reflecting this, point them to this chart:

What it shows is quite simply that the official unemployment rate, which everyone claims as the cornerstone piece of evidence for an improving economy, is only falling because the BLS fails to count discouraged workers who drop out of the labor force every month, pretending instead to the fiction that these people have found work. Without this pathetic sleight-of-hand, unemployment is actually solidly in the double digits and has not appreciably improved for years now, despite trillions in deficit spending, ZIRP, the various QE’s, MBS purchases, POMO cash, etc. Recovery my ass.

We should never forget: The media was wrong, the economists were wrong, the administration was wrong, the Keynesians and their central banks were wrong. Gold and silver were right.

And they will be again. Stack while you can.

About the Author


Jan 20, 2014 - 9:46am


just another nicely written observation of the real world. Here's one for you too.

Wall Street Mega Banks Own Tankers, Pipelines, Utilities, Mines, Metal Warehouses – And That’s Not the Worst of It

There was a distinct chill in the air yesterday as questioning got underway in the U.S. Senate’s hearing on whether the Wall Street mega banks that caused the greatest economic collapse since the Great Depression from 2008 through 2010 should be allowed to effectively control the price of aluminum and other metals by owning metal warehouses and creating bottlenecks in delivery; or allowed to own oil pipelines, terminals and tankers while trading trillions of dollars a year in oil futures – potentially rigging that market against the consumer.

It’s not that there’s limited evidence that these firms will rig markets. These are the same firms that are serially charged and pay enormous fines for fraud and cartel-like behavior. Traders even refer to themselves as “The Cartel” and “The Bandits’ Club” in chat rooms.

The hearing was called by Senator Sherrod Brown, Chair of the Subcommittee on Financial Institutions and Consumer Protection, part of the Senate Banking Committee. And there was good cause for a chill in the air. Despite the most costly bailout of Wall Street in the history of finance after its collapse in 2008, not one of the seven Republican members of this subcommittee showed up at the hearing; not one submitted a question to be asked of the witnesses.

Then there was the fact that the day before the hearing, the Federal Reserve — which was set to testify at the hearing and is the very entity that is solely responsible for allowing Wall Street to turn itself into a commodities cartel by giving the firms waivers to enter the businesses — engaged in one of its favorite stalling tactics. The Federal Reserve issued a request for public comment to a long-winded series of questions on Wall Street owning and/or storing commodities with a deadline two months away; after which time it said it would study the question some more. The long series of questions posed by the Fed are exquisitely wide enough for Wall Street’s legions of lawyers, lobbyists and trade groups to twist in their favor in the typical 20-page legalistic responses.

Senator Brown called this maneuver by the Fed “timid.” Senator Elizabeth Warren, a participant at the hearing, called it “meager.”....................................... for more.

Some more snippets just to piss you off

- Senator Elizabeth Warren was rightfully testy to learn that FERC was still not getting a live data feed of Large Trader Reports from the Commodity Futures Trading Commission (CFTC) so that it could properly investigate if Wall Street was attempting to rig energy markets under the purview of FERC.

- It is noteworthy that the Federal Reserve, on whose watch the collapse of Wall Street occurred, was given increased regulatory powers under the Dodd-Frank financial reform legislation – despite outcries from many quarters. And notwithstanding all that, of the three regulators testifying yesterday, only the Federal Reserve’s top dog of supervision and regulation is an economist, not a lawyer.

- Senator Brown told the participants at the hearing that “the six largest U.S. bank holding companies have 14,420 subsidiaries, only 19 of which are traditional banks.”

- The study showed that U.S. bank holding companies owned 16 utilities; 479 insurance companies; 2,388 real estate firms; 1,682 healthcare and social assistance companies; and 5 mines


- Senator Brown also suggested that Wall Street is not owning up to the vast extent of their holdings, saying: “…physical commodities activities are not comprehensively reported – they are buried deep within various subsidiaries like their Fixed Income, Currency & Commodities units; asset management divisions; and other business lines

Ya think? Duh. <rant off>

Jan 20, 2014 - 9:47am


ZIRP was supposed to get people to spend because they couldn't get yield. Guess what? If you have to live off your PRINCIPAL in retirement instead of interest income, you need to save twice as much (or more). This leads to older people staying in the work force and a drain on consumer spending (Obamacare notwithstanding).

A similar irony. MRSA is the horrible strain of staph bacteria that kills thousands each year in hospitals. It turns out that the bacteria itself isn't resistant to antibiotics, but it forms a sugary "biofilm" around itself as it multiplies which is impenetratable to antibiotic molecules. Now get this, a paper published recently has found that if the skin at the incision site isn't sterilized, the naturally occurring, benign, staph bacteria out-compete the MRSA strain, and the horrible infection doesn't occur. The ZIRP of the bacterial world.

Ferd Torgerson
Jan 20, 2014 - 9:49am

Great One, Pining!

Imagine awakening after a long winter’s nap and finding yet another great piece by a right intelligent chap.

I usually don’t comment on individual articles anymore but hat tip quite a few. Today’s piece by Pining forces me to make the rare exception.

Your well-written rant about the stimulus and green shoots calls to mind my favorite editorial cartoon by my favorite all-time political cartoonist – Michael Ramirez. This thread won’t be complete without it.


Jan 20, 2014 - 9:52am

That post immediately made me

That post immediately made me remember this video from a couple of years ago……

Jan 20, 2014 - 9:56am

New Forum Topic

Good morning all! I have never started a new Forum before, but all of the comments this weekend about restoring our health through food has inspired me to try and pool the vast amount of knowledge we have all accumulated about what is good and bad for us. I will start posting my research there and I hope all of you will as well:

Jan 20, 2014 - 9:59am
Jan 20, 2014 - 10:55am
Jan 20, 2014 - 11:17am

2014 Pining mantra

"STACK WHILE YOU CAN!" Yes, a continued prepping for fiat collapse common sense advice. Always proving a wise course of action under all governments who have printing presses; digital key stroking instant fiat currency money creation. Action cures fear! I know as I'm thoroughly comfortable with 6 years plus stacking and no silver eagle purchase over 25 benron confetti bux. Average in 100's purchased 17, in monthly, quarterly, and now semi annually with EEE paper pricing pressures. Bulk gathered in January '08 to May '09. Don't buy unless it's a super bargain over 100 plus eagles any date 86 to present. Last purchase 100's plus at 21.16 spot. Lets not for get the lesser barter able metals costing much less than silver and gold from '08 to present: LEAD! LESSON-- A 250% return in common lead ammunition over 3 years is not too shabby.

Lead is the current primary metal used in ammunition. "Raw" lead, such as in batteries and tire weights are not as readily exchangeable as complete ammunition except perhaps to those who reload their own ammunition.

So, dear reader, if you wish to reserve a bit of your wealth for future barter, common ammunition of ALL calibers and gauges will be as sound as investment as food and seeds, cheaper than gold and silver, and is easy to store for long term. Just keep it in a sealed mason jar with some desiccant and it will last for perhaps a century. I currently fire mil surplus ammo from WW2, more than 70 years old.

Anytime you see a reasonable deal on any ammo, snap it up whether you actually have a gun which fires that caliber or not. Many other people will have a need for it, or may trade for what you need.

A gun without ammo does not even make a decent club.

I have listed below a BETA site which is maintained by the shooting sports industry. It is updated instantaneously by many different dealers as to their current stock and prices. You can order online, or simply use the site to determine the going price, should you run across local deals at Walmart or your local stores.

Here's the site. Happy thinking


I have no reservations in stating in Jan '08 besides my 15 month accumulation of monthly silver eagles I went on a lead or ammo buying spree. For all my nato weapons I have 1000's of rounds purchased in a 6 month period and spent particularly a large sum on .22lr ammo. I had read back in '08 that .22lr is the most barter able ammo in an economic breakdown, as many if not most Americans own a 22 or can get there hands on one. I beefed up the financial protection in the family as well as protection in guns and ammo. My better half of 34 years took up food storage and water for her challenge. Every thing we invested in 6 years ago is sitting in the plus column. You can not go out and buy anything we purchased then; '08 to May '09, with benron burnokio funny money for less in food; guns and ammo, and wealth protection physical metals on hand. In the next two years those of you who prep with common sense and dump paper benron bux for assets of substance, will be thrilled you did. Lets say we're very close to the end game and 2 years is really a stretch in time left for preparing against the coming epic great depression II. Very good to you all in the new year adding to your economic life boats.

If I may mention in closing. I am absolutely beyond fear in dealing with the EEE and the presnece of the cowards thugs at my front door. I know where my line is drawn. At the threshold of my families door. There will be no entry by thigs and in my like minded community for that matter of those who do not precisely hold to entry of our homes accounting to the constitutional. Bring it on cowardly EEE. You lose in the end as the republic is restored! The constitution sets peoples free and our world will not be cheated out of freedom for slavorading tyranny. We will live free or die and we know absolutely who dies before the constitution dies.

Jan 20, 2014 - 12:49pm

Pining - very nicely done

One question. How do demographics play into the chart you posted regarding the workforce. Many claim that the reason for the decline in the labor force participation rate is primarily due to the retiring of the baby boomers. It is an argument that has been put forth to me numerous times when I state that the decline in the participation rate is merely a trick used to improve the unemployment numbers. Have you looked into the issue? Cheers.

Jan 20, 2014 - 1:13pm

Stock Canines

Am on my phone and running about, so this has to be a quick hit- my understanding is that the boomers leaving the workforce voluntarily to retire are being more than balanced out by those who are staying in the workforce longer than planned because historically low interest rates and pitiful returns on fixed income have meant that they don't have enough income to retire on. No time to search for links right now but it's a great question - in the end, I think both of these mean it is a wash so the above chart does reflect what we think it reflects.


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