A Big Middle Finger to Changes In the U.S. GDP (8/25/2013)

The changes in how U.S. economic reports are calculated over the last 4 years brings government propaganda to a level not seen in generations. The huge amount of fraud by way of “cooking the books” has undermined the credibility of the current Administration as well as the Bureau of Labor Statistics (BLS) and the Federal Reserve System.

First it was manipulating the CPI which is used to calculate inflation. Not only does the CPI not include the biggest inflationary items in the economy like healthcare and education, but they even substituted items from the 7,000 families survey done back in 2009. The idea is to substitute higher priced items with lower priced ones so that inflation is non-existent. Such substitutions include things like chicken for steak. (Source: Response to BLS Article on CPI Misconceptions)

Next came unemployment manipulation where the loss of one full-time job and the creation of 2 part-time jobs to take its place was counted as +1 job. Then we had the usual manipulation where if someone gives up looking for work because they can’t find a job, that makes the unemployment rate go down.

Now we have the grand-daddy of them all: GDP manipulation. By making the economy larger and counting more things towards GDP than at anytime in the history of the country, it serves two purposes. First and most obvious, if you count things like expenses towards GDP, you can claim that the economy is continuing to grow because of positive GDP. Second and what a lot of people have overlooked in the mainstream financial media, by making GDP larger, you make debt a smaller portion of that GDP so that the debt to GDP ratio goes down.

The truth to many people is just too horrible to face in regards to their government lying. Instead, most people willingly stick their heads in the sand. Others will wait for mainstream media approved talking points to surface and then mimic those points as if they are their own. Case in point: GDP calculation changes happen every 5 years so it’s no big deal. A giant category 3 hurricane happens every 5 years too, is that no big deal as well?

At no time in the history of this country has the GDP calculation been changed to this extent. The GDP calculation changes that happened this year are so dramatic, they change the very definition of what GDP is.

If you take the manipulation of the rate of inflation (CPI), unemployment rate, and GDP as isolated events, you lose sight of the forest for the trees. Looking at these changes as a whole, we see the shocking and horrifying truth. The CPI was manipulated to make inflation lower. The unemployment rate is manipulated to make the unemployment rate appear lower. The GDP was manipulated to make the economy seem like it has more growth and less debt relative to GDP. In other words, some numbers are manipulated up, others are manipulated down, with the larger goal of making the economy look bigger and stronger than it really is. This directly impacts the decisions that we make as traders. How many times have you been blindsided by a big move down in the market that you never saw coming because you believed these economic reports? This is why you should join me in giving the Obama Administration and its Bureau of Labor Statistics (BLS), and the Bureau of Economic Analysis (BEA), a big middle finger (BMF).

If you think the situation in the U.S. economy is not grave, check out this interview that Peter Schiff did recently about how changes in the way the GDP is calculated are so extensive that it changes the very definition of what the GDP is. Folks, if the economy was slowly improving, there would not be a need to manipulate these economic reports to the extent that we are seeing. Check out the video below and let me know what you think.

Rexahn Pharmaceuticals Beating Cancer

Disclosure: I am not long RNN nor have I been compensated to write this article.

Rexahn Pharmaceuticals (RNN) looks kind of awesome right now from both a fundamental and technical perspective.

On the fundamental side, this clinical stage biopharmaceutical company, has had a flurry of patent awards as of late.

Rexahn (RNN) makes a cancer drug delivery system and has teamed up with researchers to bring back Taxol (paclitaxel). Taxol was considered a breakthrough drug, back in the 90s, to treat breast, ovarian, lung, and head and neck cancers but had controversy over the environmental impact of harvesting the tree bark needed to synthesize the compound, estimated at one point to possibly cause the destruction of 360,000 trees annually to treat all US cancer cases.

Rexahn (RNN) with its targeted cancer therapy not only delivers anti-cancer drugs directly to the cancer tumor so less of the drug is needed, and increasing its effectiveness, it also reduces the horrible physical effects of chemotherapy that has traditionally been delivered in a shotgun blast approach, killing the good cells along with the bad. Way back in November 2010, Rexahn published its first results on the quinoxalinyl compounds it created, showing that it kills colorectal cancer cells that had become resistant to Taxol.

The FDA has sped up its first cycle review approvals of new drugs for rare diseases. This has helped boost the Biotechnology sector over the last year. Check out the strong uptrending Biotechnology Spider XBI.

The chart of Rexahn (RNN) has a badass sort of look to it (below).

Each time RNN has dropped down to this trend line, it has popped hard. A 20%+ gain from its current price seems reasonable.

Corporate Profile recently interviewed Rexahn Pharmaceuticals CEO Dr. Peter Suzdak. Check it out and let me know what you think in the comments section below.