• Real Earnings Contracted in Fourth-Quarter 2016
• Fourth-Quarter Production Fell Quarter-to-Quarter and Year-to-Year, Protracted Patterns Never Seen Outside of a Recession in 99-Year History of the Series
• Despite a Large Boost from an Irregular, Weather-Driven Surge in Utilities, December Production Still Was Down by 1.10% (-1.10%) from Its Pre-Recession High, Down by 1.98% (-1.98%) from Its One-Month, November 2014 Recovery
• December Manufacturing Remained Down by 6.18% (-6.18%) from Its Never-Recovered Pre-Recession Peak
• CASS Freight Index Continued in Low-Level, Non-Recovering Stagnation
• December 2016 Monthly Inflation Firmed by 0.3%, Pushing Annual CPI-U Inflation to a 30-Month High of 2.1%, with
CPI-W at 2.0% and ShadowStats at 9.8%
• December Nominal Retail Sales Gains of 0.63% Month-to-Month and 4.13% Year-to-Year, Turned to 0.34% and a Recessionary 1.99% on an Inflation-Adjusted, Real-Growth Basis
• Net of Year-End, Incentive-Spiked Automobile Sales, Real Holiday-Season Shopping Turned Down in November and December
• Despite Continuing Nonsense Volatility in Monthly Data, Smoothed Housing Starts and Permits Held in Non-Recovering, Low-Level Stagnation, Activity Down Respectively by 46% (-46%) and 47% (-47%) from Pre-Recession Peaks

• The 2016 Headline Cash-Based Federal Deficit was $0.587 Trillion; Using Generally Accepted Accounting Principles, the Deficit Was $1.048 Trillion
• Including the Net Present Value of Unfunded Liabilities, the GAAP-Based Federal Deficit in 2016 Appears to Have Widened by About $7 Trillion versus 2015
• Nominal December Retail Sales Gain of 0.6% Was Not Good News; Incentive-Boosted Auto Sales Borrowed Activity from First-Quarter 2017; Holiday Season Real Sales Growth Likely Did Not Break-Even
• Annual December 2016 PPI Energy Inflation Rose Meaningfully for the First Time Since the Collapsing Oil Prices of 2014
• Monthly December PPI Inflation: Goods Up 0.74%, Construction Down 0.09% (-0.09%), Services Up 0.09%, Total Up by 0.27%

• November Trade Deficit Widened Sharply, Setting the Stage for the Worst Quarterly Real Merchandise Trade Deficit Since 2007, and Taking a Large Chunk Out of Fourth-Quarter 2016 GDP Growth
• Nonsense Employment Detail: Payrolls Rose 156,000 in December, Gained 703,000 in Last Four Months, but
Full-Time Employment Rose 35,000 in December, Flat (-8,000) in Last Four Months
• Annual Growth Rates in December Payroll and Full-Time Employment Fell Sharply, to Multi-Year Lows; Nonfarm Payrolls at Weakest Growth Since Exiting the Recession
• Household Survey Revisions Were Minimal for Widely Followed Details, yet January Unemployment Data Face a Series Break, while the Payroll Survey Faces Net Downside Benchmark Revisions Next Month
• December 2016 Unemployment Rates Mixed: U.3 Rose to 4.7% from 4.6%, U.6 Eased to 9.2% from 9.3%, ShadowStats-Alternate Rate Eased to 22.7% from 22.8%
• Despite a Monthly Nominal Gain and Downside Prior-Period Revisions, Real Construction Spending Remained Down by 22% (-22%) from Recovering Its Pre-Recession High
• December M3 Annual Growth Notched Higher to 3.9% Versus an Upwardly Revised 3.8% in November; Still Down from 4.5% in June

• Consumer Expectations Soar Along with Anticipated Changes to that Former Malarial Swamp on the Potomac
• New Fiscal Stimuli Could Boost Economic Activity by Early-2018
• Yet, the Near-Term Economy Continues in Renewed Tumble, Never Having Recovered Fully from Its Collapse into 2009
• Intensifying, Headline Downturn Threatens Resurgent Fed Pressures for Expanded Quantitative Easing and Intensified Dollar Debasement
• Budget-Deficit Issues Should Refocus Global Currency Markets on Long-Range U.S. Sovereign-Solvency Concerns
• Sovereign-Solvency and Quantitative-Easing Issues Threaten to Crash the U.S. Dollar and Stocks, Roiling Financial Markets by Mid-2017
• Long-Range Economic and Financial-Market Health and Stability Depend on Resolving Both the Misdirected Policies of the Federal Reserve and the Solvency Concerns of the Global Markets
• Given Issues of Fed Independence and Ingrained, Systemic Intransigence, Early Resolutions of the Fed and Solvency Problems Are Not Likely
• Accordingly, Massive U.S. Dollar Selling, Debasement and Hyperinflation Remain the Primary Risks to Domestic Economic and Political Stability; Precious Metals Remain the Proven and Established Primary Inflation Hedge

• Consumer Expectations Soar Along with Anticipated Changes from the Incoming Administration
• Yet, the Near-Term Domestic Economic Outlook Remains Bleak, Fueling New Fiscal Stimuli but Frustrating Fed Policies
• With Resurgent Pressures on the Fed to Expand Quantitative Easing, and with Global Markets Refocusing on Long-Range U.S. Treasury Solvency Issues, Massive Selling of the U.S. Dollar and Stocks Is Highly Likely by Mid-2017
• Serious Inflation Problems Should Accompany the Dollar Selling; Precious Metals Remain the Primary Inflation Hedge
• Since the Onset of the Millennium, Gold Still Has Outperformed Stocks, Including Reinvested Dividends, Despite Recent Heavy Gold Selling and Stocks near All-Time Highs

• Decline in November Durable Goods Orders Was Dominated by a 74% (-74%) Plunge in Irregular Commercial Aircraft Orders
• Ex-Commercial Aircraft, Orders Gained for the Month, but Smoothed Activity Showed Ongoing Recession
• Latest Revisions to Third-Quarter National Income Were Not Credible: Annualized Headline Growth of 3.5% (Was 3.2%) for GDP, 4.8% (Was 5.2%) for GDI and 3.4% (Was 3.1%) for GNP
• Better-Quality Indicators of Broad Business Activity Still Show the Economy Never Recovered from Its Collapse into 2009 and Is Turning Down Anew
• Home-Sales Activity Continued in Broad, Non-Recovering Stagnation
• Gain of 5.2% in November New-Home Sales Was No More than Statistical Noise, Still Down by 57% (-57%) from Pre-Recession High
• November Existing-Home Sales Still Down by 23% (-23%) from Pre-Recession Peak; 0.7% Monthly Gain Largely Was Due to Downside Revision in October
• Annual Existing-Sales Growth Heavily Skewed by Year-Ago Reporting Inconsistencies
• Proportion of Existing Sales in Foreclosure Rose for a Second Month

• November Freight Index Signaled Continued Weakening Economy and Non-Recovery
• Nonsensical Month-to-Month Volatility in Housing Starts Continued: September Fell 9.6% (-9.6%), October Gained 27.4%, November Fell 18.7% (-18.7%)
• Most-Extreme Reporting Instability Since the Depths of the 1980 Recession
• Smoothed Housing Starts and Permits Held in Non-Recovering, Low-Level Stagnation; Activity Down Respectively by 52% (-52%) and 47% (-47%) from Pre-Recession Peaks
• Broad U.S. Economic Activity Has Continued to Falter

• November 2016 Annual Inflation Firmed by Another 0.1%, with CPI-U at 1.7%, CPI-W at 1.5% and ShadowStats at 9.4%
• November Inflation-Adjusted Retail Sales Fell by 0.12% (-0.12%) in the Month, Year-to-Year Growth of 2.02% Generated an Intense Recession Signal
• Real Earnings Fell for Fourth Straight Month in November, On Track for a Fourth-Quarter Contraction
• FOMC Rate Hike and Prospective Further Rate Increases Face Massive Hurdles from Intensifying Economic Weakness that Will Stress Systemic Liquidity and Solvency
• U.S. Dollar Is Particularly Vulnerable Now to Unexpected Economic Deterioration
• Market Upheaval and Dollar Doom Remain Likely in 2017 Due to a Still-Dysfunctional and Deceptive Federal Reserve

• Given Renewed Signals of a Faltering Economy, the FOMC Rate Hike Does Not Preclude Subsequent Expansion of Quantitative Easing
• Fourth-Quarter Production Appears Locked into Annual and Quarterly Contractions, Protracted Patterns Never Seen Outside of a Recession in 98-Year History of the Series
• Down by 0.44% (-0.44%) versus October, November Production Remained Down by 1.77% (-1.77%) from Its Pre-2007 Recession High, Down by 2.65% (-2.65%) from Its One-Month, November 2014 Recovery
• Down for the Month, November Manufacturing Remained Down by 6.21% (-6.21%) from Its Never-Recovered Pre-Recession Peak
• Upturns in Oil and Gas Exploration Continued to Boost Mining Activity, Despite a Monthly Downturn in Coal Mining
• Nominal November Retail Sales Gain of 0.1% Was a Contraction of 0.2% (-0.2%) Net of Seasonal-Factor Gimmicks and a Downside Revision to October
• In an Unhappy Start to Holiday Season Sales, Headline November Retail Activity Most Likely Was Negative After Inflation Adjustment
• Monthly November PPI Inflation: Goods Up by 0.18%, Construction Up by 0.09%, Services Up by 0.54%, Total Was Up by 0.39%
• Consumer Liquidity Has Not Caught Up with Surging Post-Election Optimism

• Re-Exploding Trade Deficit Suggested a Hit to Fourth-Quarter 2016 GDP
• November 2016 CPI-U Annual Inflation Could Break Above Near-Term Highs Seen in the Pre-Oil-Price-Collapse Environment of 2014
• Once Again, Market Expectations Are for a Looming Rate Hike
• Embroiled in Its Own Credibility Issues, FOMC Still Faces a Deteriorating Economy and Unstable Global Circumstances

• November Help-Wanted On-Line Advertising Fell Month-to-Month, and Declined Year-to-Year at a Pace Not Seen Since the Depths of the Economic Collapse into 2009
• Payrolls Rose by 178,000 in November and 142,000 in October, but Full-Time Employment Gained Just 9,000 in November, Having Declined by 103,000 (-103,000) in October
• Drop in Headline November Unemployment Rate Was Dominated by the Unemployed Leaving the Labor Force Faster than They Could Gain Jobs
• November 2016 Unemployment Rates Moved Lower: U.3 to 4.6% from 4.9%, U.6 to 9.3% from 9.5%, ShadowStats-Alternate Rate to 22.8% from 22.9%
• Participation Rate Declined, with Employment-to-Population Ratio Unchanged
• Despite a Monthly Gain and Upside Prior-Period Revisions, Real Construction Spending Remained Down by 23% (-23%) from Recovering Its Pre-Recession High
• November M3 Annual Growth Notched Higher to 3.7% Versus an Upwardly Revised 3.6% in October; Still Down from 4.1% in September

• In Context of Pending Fiscal Stimulus, Long-Term U.S. Sovereign Solvency Issues Have to Be Addressed
• October Freight Index Continued in Low-Level Non-Recovery
• Post-Election Consumer Expectations Brightened Sharply, Although October Real, Median Household Income Continued to Stagnate
• Non-Credible and Unstable Third-Quarter Reporting Showed Growth of 3.2% for GDP, 5.2% for GDI and 3.1% for GNP
• Underlying Reality Remains Far from a Surging Economic Recovery
• Headline GDP Growth Remained Massively Inconsistent with Recession in Freight Traffic, Petroleum Usage, Corporate Revenues, Construction, Industrial Production and Broad Employment Indicators

• Gains in and Upside Revisions to October Durable Goods Data Reflected Surging, Irregular Commercial Aircraft Orders (up 94%) or Inflation (up 0.4%)
• Going into Fourth-Quarter 2016, Downwardly-Revised Real Durable Goods Orders, Ex-Commercial Aircraft, Contracted Year-to-Year and Quarter-to-Quarter
• That Signaled Continued, Broad Economic Downturn
• October Automobile Orders and Shipments Turned Down and Revised Lower in September
• Home-Sales Activity Continued in Broad, Non-Recovering Stagnation
• Monthly Decline in October New-Home Sales Was Muted by Prior-Period Downside Revisions, Still Down by 59% (-59%) from Pre-Recession High
• Strongest Since 2007, October Existing-Home Sales Still Were Down by 23% (-23%) from Pre-Recession Peak
• Proportions of All-Cash Sales and Sales in Foreclosure Increased in the Month

• October 2016 Annual Inflation Firmed by Another 0.1% to 0.2%, with CPI-U at 1.6%, CPI-W at 1.4% and ShadowStats at 9.3%
• Census Bureau Produced Nonsensical Housing and Retail Sales Gains
• 26% Monthly Surge in October Housing Starts Reflected Extreme Reporting Instability/Volatility Last Seen at Depths of 1980 Recession
• Smoothed Housing Starts and Permits Held in Non-Recovering, Low-Level Stagnation; Activity Down Respectively by 42% (-42%) and 46% (-46%) from Pre-Recession Peaks
• Inflation-Adjusted Real Retail Sales Gained 0.47%, Bloated by and Against a Not-Credible 0.82% Monthly Surge in Nominal October Sales
• October Real Earnings Fell for Third Straight Month, Down in Six of Last Seven Months
• Post-Election Dollar Rally Began Before the First Voting
• Dollar Doom Is Likely in 2017 Due to a Dysfunctional and Deceptive Federal Reserve

• Early Trend for Fourth-Quarter Industrial Production Suggested Renewed Quarterly Contraction and Fifth-Straight Quarter of Annual Contraction
• Outside of Formal Recessions, Two-or-More Consecutive Quarters of Annual Decline Remain Unprecedented in 98-Year History of the Production Series
• Little Changed versus September, October Production Remained Down by 1.38% (-1.38%) from Its Pre-2007 Recession High; Down by 2.27% (-2.27%) from Its One-Month, November 2014 Recovery
• With October Monthly Growth Boosted by Downside Third-Quarter Revisions, Manufacturing Remained Down by 6.19% (-6.19%) from Its Never-Recovered Pre-Recession Peak
• Coal Mining Rebound and Bottoming Oil and Gas Exploration Continued to Boost Mining Activity
• Monthly October PPI Inflation: Goods Up by 0.37%, Construction Up by 0.70%, Services Down by 0.27% (-0.27%), Total Unchanged at 0.00%
• October 2016 Year-to-Year Energy Inflation Turned Positive for First Time Since 2014 Oil-Price Collapse

• Headline Nominal October 2016 Retail Sales Boomed On Top of Significant Upside Revisions to September and August
• Other Than a Spike from Inflation, Details Were Not Credible in the Context of Underlying Weak Consumer Conditions and Anecdotal Evidence
• Similar Surges in Recent Years Usually Have Been Followed by Downside Revisions or Offsetting Declines in Subsequent Reporting

• Markets Have Responded Positively to the Trump Victory, Although Surging Early-November Consumer Sentiment Was Surveyed Pre-Election
• Election Polling Confirmed Continuing, Non-Recovering Economic Activity
• Fiscal Stimulus Usually Takes Nine-Plus Months to Kick In
• Difficulties Loom in Balancing Federal Fiscal Conditions
• Federal Reserve Remains Beset by Systemic Liquidity Crises
• Physical Gold Remains the Primary Hedge Against Still-Looming Dollar/Inflation Crises

• October Annual Payroll Growth Declined to a 42-Month Low
• Full-Time Employment Declined by 103,000 (-103,000) in October
• October 2016 Unemployment Rates Notched Lower: U.3 at 4.9%, U.6 at 9.5%, ShadowStats-Alternate Rate at 22.9%
• Drop in Headline October Unemployment Rate Reflected Unemployed Leaving the Labor Force, Not Getting Jobs
• Participation Rate and Employment-to-Population Ratio Declined
• With Continuing Contractions in Monthly, Quarterly and Annual Activity, Real Construction Spending Remained Down by 24% (-24%) from Recovering Its Pre-Recession High
• Narrowing of Third-Quarter Trade Deficit Due to Short-Lived, Soybean-Export Surge
• Collapsing Annual M3 Growth Showed Increasing Flight to Liquidity for Big Money; Growth Soared in the M1 and M2 Subcomponents of M3

• Third-Quarter GDP Growth of 2.9% Was Not Credible
• Politically-Massaged Data Traditionally Have Negligible Impact on Voters
• Real Annual Growth of 2.3% in Third-Quarter Disposable Income Held Below 2.9%, Indicating Incumbent-Party Loss of the White House
• Underlying Economic Reality Remains Far from Recovery and Expansion
• Headline GDP Remained Massively Inconsistent with Recession Seen in Freight Traffic, Petroleum Usage, Corporate Revenues, Construction, Industrial Production, Broad Employment Indicators, Etc.
• Third-Quarter Velocity of Money Slowed Anew
• Monetary Base Tumbled to a Three-Year Low in a Record Year-to-Year Drop, Annual M3 Growth Turned Sharply Lower in October
• September Real Median Household Income Continued to Stagnate, While Consumer Attitudes Took a Beating in October

• Fedspeak Enters the Realm of the Ridiculous, Suggesting Healthy Payroll Growth at a Recessionary 50,000-to-100,000 Jobs per Month
• The Fed Moves to Redefine U.S. Economic Normalcy as Reflecting Non-Recovering, Stagnant Activity and
Large Numbers of Labor-Force Non-Participants
• An Extraordinarily Volatile and Uncertain Presidential Campaign May Be Constraining Near-Term Economic Activity
• Third-Quarter Durable Goods Orders Declined Quarter-to-Quarter and Year-to-Year, Both Before and After Adjustment for Inflation; Ex-Commercial Aircraft, Orders Gained
• Home Sales Activity Continued in Broad, Non-Recovering Stagnation
• September New-Home Sales Gained in the Month, Only Because of Massive Downside Revisions Back to June
• September Existing-Home Sales Gain Boosted by Downside August Revision