14 Jan 2011 PeterShiffBlog Everyone is convinced that the US economy is recovering. The only real evidence for a US recovery has to do with consumers spending money, governments spending money, higher retail sales, higher GDP numbers that result from increased spending. But spending borrowed money does not indicate that the economy is recovering. We had 440000 people filing first time unemployment benefits. That is much more than had been anticipated. We had a record year for foreclosures, despite the moratoriums the banks placed. It would have been a bigger record had it not for that. The Fed still has interest rates at zero. The economy is on artificial life-support. Are the plugs going to be pulled…..the Asian economies will decide. CPI — consumer prices were up only 2% a year. The core rate (which is meaningless but the gov’t tracks it) is even less. If you take the starting point from before it is higher. CPI is more like 3%. The rest of the world has inflation north of 5%. Food prices are at a record high. There is a risk of food riots. Countries that have stronger currencies and that are producing the stuff we consume….how can they have higher inflation that the US does? The data are suspect. China has foreign exchange reserves that grew by $200bn. It is now at $2.8 trillion. How can they control their inflation when their money supply is exploding? It is a political problem. There will be instability if the authorities can’t get hold of inflation. They have …