TGR: Isn't the unemployment figure a lagging indicator of a rebounding economy?
DC: If you look at the way unemployment was computed until the early 1980s – something that John Williams from ShadowStats does – the numbers would indicate about 20% unemployment today. Besides, even while the population keeps rising, the number of people reported as actually working is level or even lower. Most indicators of the economic establishment, in my view, don't really make any sense. GDP, for instance, includes government spending – much of which amounts to paying some people to dig ditches during the day and other people to fill them in at night. So-called "defense" spending is almost totally wasted capital. The practice of economics today is pathetic and laughable.
TGR: So, the economy is not rebounding?
DC: No. My take on this is that we entered what I call the "Greater Depression" in 2007. And now, because the government has printed up trillions of dollars in the last couple of years, we're in the eye of the hurricane. We've only gone through the leading edge of the storm. People think this will just be another cyclical recovery like all the others since WWII. But it's not. It's going to wind up with the currency being destroyed. It's going to be a disaster… a worldwide catastrophe.
TGR: You indicated that the government is using these mass infusions of made-up money to prop up the stock market due to the psychological factor – that people will think the economy's doing well because the market is doing well. However, we hear that a lot of that money has been caught up in the banks. Would you comment on that?
DC: As I said, that money has to go somewhere. The banks have been borrowing from the Fed at something like 0.5% and investing it in government securities at 2%, 3% or 4%, depending on the maturity. So, much of that money has been a direct gift to the banks; and they're basically making an arbitrage spread of 2%–4%. So, yes, that's happening with some of the money. Still, it doesn't all just sit in these Treasury securities. A great deal of it, inevitably, goes into the stock market.
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