The Engineered Market and the Doctored Unemployment Rate

Friday, March 2nd, 2012

Short interview with Mark Leibovit of, who speaks with
NBR’s Tom Hudson about the Fed’s manipulations, the engineered stock
market and the Doctored Unemployment Rate.

Video segment is from NBR with Tom Hudson. Full Transcript.



” My sense is not as optimistic. I don’t believe the figures
that we’ve been getting from the government.”

“There’s a lot of talk about the employment numbers, we know those
have been doctored up…”

Gasoline Prices

By DataAnalytics

February 14, 2012

The mean price per gallon for regular gasoline in the U.S. is now $3.51.
Up 12.5% from one year ago, when prices averaged $3.12 per gallon.
Just a month ago, regular was averaging $3.44 p/gal.
This continual rapid rise is cause for alarm and concern as unemployment
is increasing and the economy is falling deeper towards a double-dip recession.

Feb. 2, 2012
Here’s a quick update on U.S. Fuel Commodity Inflation, part of the
necessary and reoccurring household consuming expenditures.

Unless you have been inducted into the witness protection program or
hiding out in a remote secluded cabin…you know that gas prices at the
pump have been (recently) steadily rising since late November.


U.S. Gasoline Chart


In the week ending January 31st, the national average for regular
gasoline was $3.439 per gallon. Up from $3.101 p/g one year ago.
That’s a 10.89% increase and a 4.5% rise just in the month of January.

Gas Prices


The immediate question is; why? Well of course the most simplistic
and obvious answer would be supply and demand, right? Absolutely,
that would be the correct answer- except that demand for pump gasoline
has been dropping for about the past 3 months.

Demand for pump gasoline during most of 2011 had been approximately
370-million gallons per day, but over the last few months that rate has
fallen to about an average of 340-million gallons per day.

Meanwhile on the supply side, gasoline inventory has increased for the
third straight week, attaining the highest level since March of 2011.
And, with the stockpile of fuel, refinery utilization rate is down by 1.9%.

Typically, U.S. gasoline consumption has historically trended in-step with
employment and with Unemployment at unprecedented highs, the drop-off
in aggregate demand is really no surprise at all.

So the evidence reveals that demand has and continues to decrease, yet
prices at the pump keep rising. Given these two facts, we can surmise that
it is not the result of a Cost-Push trigger whatsoever.

There are many reasons for the jump in crude (both Brent and WTI)
which directly affect retail pump gasoline. DataAnalytics is working
on a story explaining those reasons, which we will publish in the coming months.

The bottom line here is, that the average driving/commuting consumer
is paying approximately 12% more for gasoline than this time last year.
Couple that sizable 15%-20% increase with inflated cost of staple foods
and the grim pressures of affordability to the average American household continue to mount.

The Iron Pump

Household Inflation & Commodity Prices

By DataAnalytics

So, how far is your dollar stretching these days? We know, not very far.
It seems that almost everything costs more today than it did last year at
this time. Well, in fact almost everything does cost more. But wait, the
BLS states that consumer inflation has increased only 3.4%. Really?

Well, you can forget the mostly impractical CPI-U Index published by
the government. What matters abundantly and has a significant
impact to the average consumer is Household Inflation.

Those household ‘commodities’ are the everyday items we all use and mostly
need with a few basic ‘wants’ in the mix as well. Such as; Food, Fuel, Apparel,
household Appliances and Electronics.

According to the “Basket of Goods” utilized in the governments CPI-U index,
inflation is approximately, +3.4% (NSA). The simple fact is that this ‘measure’ of
inflation is not relevant or indicative of real-world household/consumer price inflation.

The fact is that aggregate household-commodity inflation on nominal prices
from one year ago in October- (y-o-y comparative analysis ) for these items-
(Food, Fuel, Apparel, Appliances and Electronics) has risen +35.30%. (cumulative)
(For a breakdown of commodities and price-levels, see the graphs below)

What this really means is that the purchasing power of the average U.S. consumer
has greatly decreased, approximately 35% for these basic staples from 2010.

So what exactly has been the causation of the rapid acceleration in food, fuel,
clothing and electronics then? It”s certainly not Demand-Pull inflation. ‘Demand’
for most household commodities and gasoline has been less than last year and
personal consumption has dropped a whopping 24% from Q2 to Q3.

Could a portion of commodity inflation be tied to a Cost-Push? Perhaps,
but it would be a minor amount of the overall aggregate price rises.

Well on the food side, we know that the prices of cornmeal, sugar, rice and wheat
have been driven up by a variety of factors- first, is the slight drop off in crop
yields and second, is speculation as well as the effects of monetary supply
and wage stagnation.

inflation cereal rice pasta eggs

inflation cereal rice pasta meat eggs

Total Rise of Cereal, Rice, Pasta, Cornmeal, Meat, Poultry, Fish, Eggs: 20.82%

inflation milk fruits bread

Total Rise of Milk, Fruits, Vegetables, Bread: 24.39%
(Total Aggregate Rise of Staple Food Commodities: 22.60%)

Examining Apparel, Appliances and Electronics, specifically, home video
and audio, we see only a moderate increase in price levels from Oct. 2010.

tv clothes appls

Total Rise of Apparel, Appliances and Electronics: 5.54%

On the fuel side, it is down to OPEC and to some extent, futures trading. We know that
OPEC will no longer sell crude for less than $90-$95 per barrel for any length of time.
This ‘built-in’ price floor sets the stage for the loosely monitored, but undeniable
‘fixed-pricing’ basis on crude. Mix in speculative trading and the market is able to
some extent, manipulate the cost per barrel.

avg gas prices

Total Rise of Regular Gasoline Per Gallon Nationally: 7.15%

Given the fragile state of the U.S. economy and the unprecedented
unemployment/underemployment rate of 22%-23%, how much more
price inflation can the average household absorb?

An ideal economy retains price-stability, which at the moment we have
none of. So what does our inflation analysis reveal? Well, the obvious is that
most household commodities are costing over 35% more than they did in 2010.

Secondly, price-inflation seems to be somewhat fragmented and without argument,
some of these price rises are transitory, with a historic trend of being somewhat
predictable. But that has not been the case as of late.

Yes, most household food commodities have been shifting downward since
the beginning of 2011, with retail gasoline following suit, while the rise in rents are
averaging only about 5% nationally. On the other side of the coin, housing asset
prices have declined and continue to fall, with auto prices remaining fairly stable.

So as we close out 2011 the U.S. economy remains in a state of flux with most
tangible assets deflating, while commodities are still above 2010 price levels and
could easily rise again. The bigger question looming is what will this ‘push-pull’ yield
going into 2012? Much of it depends on the broader macro-picture, the all important
labor market, the presidential election and the Eurozone crisis will all play a role in the
macro economic picture.

The bottom line is that the variables involved, both domestically and abroad are
unknown in terms of predictability and performance. The U.S. as well as Europe
and parts of Asia could remain in this unstable economic environment for a couple
of more years or perhaps even longer. But here at home, the dollar can only be
stretched so far, before it eventually breaks.


For analysis purposes the following methods were implemented
*price averages reflect the retail mean.

*each commodity group was weighted.
*food commodities combined. (previous correction)
*apparel, appliances, electronics combined
Partial data derived from IndexMundi, IBD and consumer surveys