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The US Economy Looks Good On Paper – Here’s Why It’s Actually A Disaster In Progress

March 12, 2024

This article was written by Brandon Smith and originally published at Birch Gold Group

One of my favorite false narratives floating around corporate media platforms has been the argument that the American people “just don’t seem to understand how good the economy really is right now.” If only they would look at the stats, they would realize that we are in the middle of a financial renaissance, right? It must be that people have been brainwashed by negative press from conservative sources…

I have to laugh at this claim because it’s a very common one throughout history – It’s an assertion made by almost every single political regime right before a major collapse. These people always say the same things, and when you study economics as long as I have you can’t help but throw up your hands and marvel at their dedication to the propaganda.

One example that comes to mind immediately is the delusional optimism of the “roaring” 1920s and the lead up to the Great Depression. At the time around 60% of the US population was living in poverty conditions (according to the metrics of the decade) earning less than $2000 a year. However, in the years after WWI ravaged Europe, America’s economic power was considered unrivaled.

The 1920s was an era of mass production and rampant consumerism but it was all fueled by easy access to debt, a condition which had not really existed before in America. It was this illusion of prosperity created by the unchecked application of credit that eventually led to the massive stock market bubble and the crash of 1929. This implosion, along with the Federal Reserve’s policy of raising interest rates into economic weakness, created a black hole in the US financial system for over a decade.

There are two primary tools that various failing regimes will always use to distort the true conditions of the economy: Debt and inflation. In the case of America today, we are experiencing BOTH problems simultaneously and this has made certain economic indicators appear healthy when they are, in fact, highly unstable. The average American knows this is the case because they see the effects daily. They see the damage to their wallets, to their buying power, in the jobs market and in their quality of life. This is why public faith in the economy has been stuck in the dregs since 2021.

The establishment can shove out-of-context stats in people’s faces, but they can’t force the populace to see a recovery that simply does not exist. Let’s go through a short list of the most faulty indicators and the real reasons why the fiscal picture is not as rosy as the media would like us to believe…

The “Miracle” Labor Market Recovery

In the case of the US labor market, we have a clear example of distortion through inflation. The $8 trillion+ dropped on the economy in the first 18 months of the pandemic response sent the system over the edge into stagflation land. Helicopter money has a habit of doing two things very well: Blowing up a bubble in stock markets and blowing up a bubble in retail. Hence, the massive rush by Americans to go out and buy, followed by the sudden labor shortage and the race to hire (mostly for low wage part-time jobs).

The problem with this “miracle” is that inflation leads to price explosions, which we have already experienced. The average American is spending around 30% more for goods, services and housing compared to what they were spending in 2020. This is what happens when you have too much fiat money chasing too few goods and limited production.

The jobs market looks great on paper, but the majority of jobs generated in the past few years are jobs that returned after the covid lockdowns ended (the same lockdowns Democrats tried to keep in place perpetually). The rest are jobs created through monetary stimulus, and then there is the issue of “immigrant jobs” and data that is revised to the negative months later.  I suspect we won’t ever hear the real stats unless Trump enters office in 2025.  Then the media discussion will focus intently on how terrible the labor market really is.

Part time low wage service sector jobs are not going to keep the country rolling for very long in a stagflation environment. The question is, what happens now that the stimulus punch bowl has been removed?

Just as we witnessed in the 1920s, Americans have turned to debt to make up for higher prices and stagnant wages by maxing out their credit cards to historic levels. With the central bank keeping interest rates high, the credit safety net will soon falter. This condition also goes for businesses; businesses that will soon jump headlong into mass layoffs when they realize the party is over.  It happened during the Great Depression and it will happen again today.

Stock Market Bonanza

We saw cracks in in the armor of the financial structure in 2023 with the spring banking crisis, and without the abrupt Federal Reserve backstop many more small and medium banks would have dropped dead. The weakness of US banks is offset by the relative strength of the US dollar, which lures in foreign investors hoping to protect their wealth using dollar denominated assets.

But something is amiss. Gold and Bitcoin have rocketed higher along with stocks and the dollar. This is the opposite of what’s supposed to happen. Gold and BC are supposed to be hedges against a weak dollar and weak equities, right? If global faith in the dollar and in stocks is so high, why are investors diving into protective assets like gold?

Again, as noted above, inflation distorts everything. Tens of trillions of extra dollars printed by the Fed are floating around and it’s no surprise that much of that cash is flooding into the stock market which simply pushes higher right along with prices on the shelf. But, gold and BC are telling us a more nuanced story about what’s really happening.

Right now, the US government is adding around $1 Trillion every 100 days to the national debt as the Fed holds rates higher to fight inflation.  Higher interest means exponential debt conditions, and this debt is going to crush America’s financial standing for global investors who will eventually ask HOW the US is going to handle that growing millstone? As I predicted years ago, the Fed has created a perfect Catch-22 scenario in which the US must either return to rampant inflation, or, face a debt breakdown. In either case, US dollar denominated assets will lose their appeal and stock markets will ultimately plummet.

Beyond this reality, stocks are not a leading indicator of anything, let alone the stability of the financial system. Stocks are a trailing indicator; they crash well after all the other warning signals have made it obvious that something is wrong. Average Americans, for good reason, do not care what stock markets have to say.

Healthy GDP Is A Complete Farce

Beyond the stock market, GDP is the most common out-of-context stat used by governments to convince the citizenry that all is well. It is yet another stat that is entirely manipulated by inflation. It is also manipulated by the way in which modern governments define “production and market value.”

GDP is primarily driven by spending. Meaning, the higher inflation goes, the higher prices go, and the higher GDP climbs (to a point). Eventually prices go too high, credit cards tap out and spending ceases. But, for a short time inflation makes GDP (as well as retail) look good.

Another factor that creates a bubble is the reality that government spending is actually included in the calculation of GDP. That’s right, every dollar of your tax money that the government wastes helps the establishment by propping up GDP numbers. This is why government spending increases will never stop – It’s too valuable for them to spend as a way to make the economy appear healthier than it is.

The Real Economy Is Eclipsing The Fake Economy

The bottom line is that Americans used to be able to ignore the warning signs because their bank accounts were not being directly affected. This is over. Now, every person in the country is dealing with a massive decline in buying power and higher prices across the board in all assets. Even the wealthy are seeing a compression to their profits and many are struggling to keep their businesses in the black.

The unfortunate truth is that the elections of 2024 will probably be the turning point at which the whole edifice comes tumbling down. Even if the public votes for change, the system is already broken and cannot be repaired without a complete overhaul. We have consistently avoided taking our medicine and our weaknesses have only accumulated.

People have lost faith in the economy because they have not faced this kind of uncertainty since the 1930s. Even the stagflation crisis of the 1970s will likely pale in comparison to what is about to happen. On the bright side, at least a large number of Americans are aware of the threat, as opposed to the 1920s when the vast majority of people were utterly conned by the government, the banks and the media into thinking all was well. Knowing is the first step to preparing.



As the world moves away from dollars and toward Central Bank Digital Currencies (CBDCs), is your 401(k) or IRA really safe? A smart and conservative move is to diversify into a physical gold IRA. That way your savings will be in something solid and enduring. Get your FREE info kit on Gold IRAs from Birch Gold Group. No strings attached, just peace of mind. Click here to secure your future today.

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Brandon Smith

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  • Gotherart March 12, 2024 at 6:38 am

    Their lies.
    “Daniel Wilson and Brigid Meisenbacherat from the Economic Research Department at the Federal Reserve Bank of San Francisco recently discussed the long-term fiscal outlook of the United States, highlighting the concern that the federal debt as a percentage of GDP is approaching its historical peak last seen at the end of World War II. After WWII, the debt-to-GDP ratio decreased significantly due to a primary surplus, rapid economic growth, and low interest rates. However, current projections for the next three decades suggest a persistent primary deficit, with the debt-to-GDP ratio potentially reaching 172% by 2054 without major policy reforms. The primary deficit is driven by mandatory spending on programs like Social Security and Medicare, coupled with an aging population. The outlook for reducing the debt ratio appears challenging, requiring either significant policy reforms, such as tax increases or spending cuts, or a scenario where economic growth outpaces interest rates.”

  • Robert Milfeld March 12, 2024 at 7:37 am

    Brandon, I enjoy reading your stories. Concise and to the point!
    Robert Milfeld

  • Serge March 12, 2024 at 10:06 am

    “The bottom line is that Americans used to be able to ignore the warning signs because their bank accounts were not being directly affected. This is over. Now, every person in the country is dealing with a massive decline in buying power and higher prices across the board in all assets.” Agreed with that.
    It’s the same situation in most of European countries, where I live.
    The Endgame, here we are!

    On money and banking, remember these words from Ludwig von Mises – more topical than ever:
    “This country(i.e. U.S), and with it most of the Western world, is presently going through a period of inflation and credit expansion. As the quantity of money in circulation and deposits subject to check increases, there prevails a general tendency for the prices of commodities and services to rise. Business is booming(I might add, for some people and companies…; for example? BlackRock or VanGuard?!).

    Yet such a boom, artificially engineered by monetary and credit expansion, cannot last forever. It must come to an end sooner or later. For paper money and bank deposits are not a proper substitute for nonexisting capital goods. Economic theory has demonstrated in an irrefutable way that a prosperity created by an expansionist monetary and credit policy is illusory and must end in a slump, an economic crisis. It has happened again and again in the past, and it will happen in the future, too.”

  • Serge March 12, 2024 at 10:11 am

    P.S.: A very, very relevant article:

  • old geezer March 12, 2024 at 11:12 am

    are grubmint stats believable ?

    or are my eyes lyin ?

    • Serge March 12, 2024 at 12:39 pm

      I suggest you this article by Brandon Smith: “Explaining the end of the economic game”(2014).

      • Serghei March 25, 2024 at 3:12 pm

        Thanks for the song. Btw, you said you’re from Europe. What country? I’m from Romania

  • Roundball Shaman March 12, 2024 at 5:13 pm

    There’s the old meme:
    ‘What’s the difference between a Recession and a Depression?’
    The answer:
    A ‘Recession’ is when your neighbor gets laid off. A Depression is when YOU get laid off.
    All economies are local. Hyper-local… like it begins and ends with your very own finances. Who cares what the phony stock market is doing? It’s all about how much money you have to work with and how much debt you are burdened with. Everything else is just a blizzard of numbers happening to somebody else.
    United States Incorporated has been running on made-up money out of thin air for a long time now. It carries so much debt that it is truly beyond the scope of the human mind to fathom that many trillions. In other words, US Inc. is bankruptcy squared and squared again and again.
    This may be the first time in history when a Nation’s leaders keep singing, ‘Happy Days Are Here Again!’ while the American people slip further into personal debt and their own bankruptcy. And many of us will be singing, ‘Brother, Can You Spare a Dime?’.
    There’s another meme that’s been around…
    ‘We pretend to work… and They pretend to pay us…’
    Well, we all pretend that the paper we carry in our wallets or the pixels that form numbers in bank ledgers have real value – but they don’t. Only real things have real value. Not made-up money that everyone pretends has value. Or small plastic strips that burden you further with each swipe.
    One can pretend only so long before reality slaps you good. Some of us don’t need to be slapped to know what a perilous place and time we are in right now. While plenty of others better get ready to take a really big gut punch.
    Maybe Steely Dan says it best…
    “When Black Friday comes… I stand down by the door… And catch the grey men when they
    Dive from the fourteenth floor…”

    • pierre palmer March 12, 2024 at 5:52 pm

      Dude, that was illuminating, thanks.

  • Onekama Man March 12, 2024 at 6:42 pm

    It’s simply really …………… Democrats lack the economics understand gene.

  • Luke March 15, 2024 at 4:43 pm

    We’re in so much trouble guys. I’m going to keep watching the body language of the elites (particularly Trump) because I have a modicum of trust/respect for him. When he starts to buckle get ready for hell. I said modicum of respect mind you. That’s means a lot more of me doesn’t trust him.

    Gonna vote for him regardless. Nothing to lose and if I am wrong the left might just blow shit sky high and start the war themselves. If my instincts are correct he will be installed regardless of how many of us show up. I say this FULLY cognizant of what they did to remove him. Your eyes didn’t lie to you that was a forced removal (coup):

    Why would I think they might bring him back? Because they are getting desperate and time grows short. The financial stats Brandon lays out are all factors but even worse is our loss of Super Power status in the world. They want him to re energize the military and even the American spirit (To a degree; they hate it). He is aware of all this I think.

    Take it easy on me; this is just a crazy ass hunch. We will know if there are NOT many significant disruptions to his candidacy in the coming months. Little theater here and there but nothing of note. If that be the case you know I am correct. Like I said I will vote for him either because it doesn’t matter or because he could force their hands.

    Either way things are coming to a head. Lol as Thanos says “Dread it, run from it reality arrives all the same. And now it’s here; or should I say I am.” …..ok I subbed destiny for reality but you get the point. It’s true and no way to dodge it forever.

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