Tyler Durden at Zero Hedge took a close look at the Treasury Department’s money outflows and found some very interesting tidbits, to say the least, about money flowing out of the Treasury into unemployment insurance benefits. For some reason, the numbers the Bureau of Labor and Statistics is giving us in the form of U-3 unemployment, don’t seem to be adding up with the amount of money being paid by the Treasury – and it’s a significant discrepancy.
There is an old saying, “when in doubt follow the money.” These days investors have lots of doubt about pretty much everything (if not so much money). And with data from the government increasingly bearing the Quality Control stamp of approval of the Beijing Communist Party, there is much doubt in store courtesy of an administration which will stop at nothing in its competition with China as to who can blow the biggest asset bubble the fastest, data integrity be damned. Undoubtedly, of all government released data, the most important is, and continues to be, anything relating to unemployment. This is precisely where the government’s propaganda armada is focused. Yet in matters of (un)employment, the ultimate authority is, luckily, the Treasury, and not the Fed. “Luckily,” because when it comes to making money “difficult to follow” Tim Geithner’s office still has much to learn. Which is why when we looked at the Daily Treasury Statement data we were very surprised: because it indicates that the government could be underrepresenting employment data by up to 32%!
What becomes obvious is that a correlation which used to be almost 1.000 has diverged massively, and now the relative outlays surpass what the government highlights are the number of people actually collecting benefits by 32%! This implies two things: either the average unemployment monthly paycheck has surged, which is not the case, or there is some gray unemployment area which is not disclosed by the government, and which accounts for a shadow unemployed insurance economy. Because while the DOL indicates there are about 9.5 million total unemployed, for the correlation to return to its near 1.0 trendline the number of unemployed on benefits has to be 14 million.