By now, you have surely heard that our elitist banks passed their recent government sponsored “stress test”? Forget about it! Relying on this incestuous bunch to grade themselves is like putting Madonna in charge of screening convent applicants. Take no comfort in shams of this nature.

There are bigger fish being fried. The entire American nation is in the crosshairs and will be severely tested like never before.

Very few people comprehend the scope of the problems that continue to unfold. The Dow is up a couple of thousand points so everything must be normalizing, no?

No! Look deeper.

The US Hits the Treadmill

The core of our problems lies deep in the roots of the overall system.

The US economic model has been extremely flawed for more than an entire generation. Our “money” holds no intrinsic value. We follow the consumption mantra instead of the production model. ...

Many years ago, when Dad and I used to look at official data and analysis, we knew they were flawed. So we developed our own. That’s how we figured out that the capital of savings and loans was grossly overstated and that thousands of S&Ls were headed for a massive bust. Our awareness of the flaws was also a key factor in helping us warn consumers prior to the failures of giant insurance companies during the 1990s. (See the review of our work by U.S. Government Accountability Office GAO.) It was critical to helping us warn you of nearly every major financial failure in the debt crisis that began more than two years ago. (See my blog for our forecast track record.) Plus, it’s one of the main ...

Yesterday the Bureau of Economic Analysis (BEA) revised its 2Q08 GDP growth to an annualized rate of 3.3%, up from 2.7%. It’s a shame this data had to be revealed on August 28, a date not associated with humorous pranks; had it come out on April 1st investors would have a much better clue that the BEA is joking. There are several problems with the BEA’s data. But the most glaring of them pertains to its inflationary measures. According to the BEA, the GPD price index—its primary measure of inflation—was 1.2% for 2Q08. I’ve thought long and hard about what demographic possibly experiences inflation of 1.2%. The closest group I could come up with was the Amish—who don’t use electricity or drive cars and therefore are immune to energy prices—though their status as “food consumers” hurt even this hypothesis—food is second only ...