Stats Say Yes, It’s a *Depression*

John Williams, Dartmouth economist, is a specialist in government economic reporting. More specifically, he exposes the lies and distortions that now run rampant through these government-created statistics.

Mr. Williams’ web site, ShadowStats, reports real stats as they used to be reported prior to the Clinton administration. He’s just issued a flash alert:

The annualized real contraction for fourth-quarter 2008 retail sales was 17.1%.

Consistent with a still-deepening recession, fourth quarter 2008 production showed an annualized quarterly contraction of 11.5%, following an 8.9% contraction in the third quarter.

A depression is defined as a recession where peak-to-trough contraction exceeds 10%, a level currently exceeded in annualized terms by both fourth-quarter real retail sales and industrial production.

Did you get that?

Retail sales actually fell off a cliff last quarter, down by over 17%. This is more than DOUBLE the 7.7% drop the government “officially” reported Jan. 14th. [link to “official” report]

This massive drop in retail sales and fourth quarter industrial production easily exceeds the “10% Rule” for defining the difference between a recession and a depression.

Yes, we are now in a DEPRESSION, not a recession.

Spread the word, and brace 4 impact.


13 Responses

  1. I just can’t believe that so many people post spam on sites especially blogs just for the sake of some links. I need to stay alert 24/24 even with fancy pluggins like akismet… I dont want to imagine what would happen to my work if I didn’t had this kind of protection.

  2. Cornholio, Let me get this straight, I’m confused.
    Uncle is a Precious Metals trader & he anticipates an unwinding of the short positions which would cause a tremendous price spike and he is short? Dont get that.

    Are you guys hittin the mining co’s?

  3. Me two.

  4. I like money.

  5. Auntie just called, she is long PM’s, while Uncle is short; so they’re cancelling each other out.

    I buy beans, rice, seeds,,,,,PM’s are too priceeeeee.

    Buy coal; it at least serves a purpose.

    Or donuts…jelly-filled…yumbo…

  6. Uncle just called me and said he is now SHORT all PM’s. I asked why, he said, “Trust noone; the bluebird flies at high-noon…”

    I am now short PM’s too, dazed, and a bit confused.

    Be wary.

  7. No, my Uncle isn’t connected that way, so I have no knowledge of ML. He’s concerned about a MASSIVE short position in Au & Ag, which if unwound in a forced manner, will likely cause an upward spike in price that we can’t imagine as possible.

    Regarding getting food stored; he’s also concerned about disruptions in the supply-chain, should we see severe dislocations in the currency & credit markets.

    The key here is “OTC Derivatives”, and how they are dealt with. Mr. Buffett, I believe, called them financial weapons of destruction, or something like that. Bottom line, gold us up $30/ounce today, and fear is everywhere.

    Be wary.

  8. Wow, Cornholio.

    Pretty mysterious and dire.
    Sounds like a martial law scenario you’re talking about.

  9. Cornholio,
    Did Uncle say if we are looking at a bank holiday?
    Martial Law?
    What are his sources?

  10. Scott,

    I just heard back from my uncle in Chicago. In case you don’t remember, he’s a PM trader; and this is what he said to me over the weekend:

    “Next week this all comes to a head. Get three months food stored up NOW, and get four to six months living expenses in cash. If you have any money left over, go buy some one-ounce coins, if you can find any. Be careful; keep you eyes open at all times. Call me next weekend.”

    It was a two-minute phone conversation (he’s a very busy guy), but I got the message, and I trust him. The SHTF moment could be days away.

    – Good luck

  11. Hello Scott,
    Your conclusion of depression is a bit premature.
    The annualized numbers extrapolate the quarterly trend for a year usually by multiplying the quarterly number by four.
    The definition of depression applies to GDP as a whole; taking bad sectors is not sufficient.
    If I look at the GDP growth chart on
    The the SGS estimate of GDP growth turned negative in late 2004 is negative since then. If I add all the shrinking (0.5% 2005, 0.7% 2006, 2.2% 2007 and 3% 2008) up, the number is below 10% contraction. For example, health care should not shrink that much for now, holding the numbers up.
    Even the annualized numbers taken quarterly do not add up to 10%. Calculated back 8% annually in Q3 means 2% Q2 to Q3 and 17% means 4.25% from Q3 to Q4. Added that is 6.25% plus some compound but the numbers are below 10%.
    Anyway, the trend is bad and does not appear to be turning soon.

  12. Thanks for the info. I’m book marking Mr. Williams site. I thought the sales were a lot worse then they were reporting. That pretty much seals it for me.

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