The Deeper Dive: We Are Stumbling on the Truth Around Us Because We Cannot See It

Let’s start with what I said in my last Deeper Dive about the nation’s clearly declining GDP in an economy that the Trump Administration keeps calling “the strongest economy ever!” Having recently reported real GDP for the fourth quarter at a lousy 1.4% growth rate, I went on to qualify that government number:

First, the latest GDP report would have been SO much worse if it had actually subtracted REAL inflation out of the GDP numbers. Just as I was constantly saying the government was over-reporting new jobs—and we learned this week, as I’ll describe below, what a fact that was—I was also saying all of last year that it was under-reporting inflation. All to make the economy appear to be strong. Subtract out true inflation, and the plunge in GDP, while not the worst ever, would have been shocking. Nevertheless, GDP still came in looking quite bad in the latest report, even though the truth is worse.

This past week, we got to see something a little closer to the truth, as even the Trump administration had to cut their original claim of 1.4% growth IN HALF. They came back and reported was really only 0.7% after all. That’s still higher than the number I had in mind, but it is, at least, coming closer to it.

Of course, smarmy Kevin “the hatchet” Hassett had the audacity to smile in all our faces and claim at that same time …

GDP is around 4% but would really be 7 if reported properly, while, without Trump, it would be down in the ones.

He was possibly trying to use the best-looking quarter of 2025, even though that was not the most recent quarter reported, because his number was still way too high for the full 2025 average, therefore meaningless disinformation. The original analysis for the last quarter of 2025 had already come in far below the number Hatchet was trying to get away with:

According to the BEA, the supposed real rate for the 4th quarter was 1.4% if annualized (as in multiplied by four quarters), down from 4.4% annualized in Q3….

To which I said,

So, we are now almost certainly somewhere closer to zero growth or negative GDP growth (decline) if actual inflation were removed.

It is not surprising at all, then, that the latest revision to government-reported GDP last week came in like this:

“Fourth-quarter GDP revised down to just 0.7% growth“

Gross domestic product, a measure of all the goods and services produced across the sprawling U.S. economy, rose at a seasonally and inflation-adjusted annual rate of just 0.7% in the fourth quarter, according to the department’s Bureau of Economic Analysis….

The first revision of the GDP reading was a sharp step down from the previous estimate of 1.4% and well below the Dow Jones consensus forecast for 1.5%. It also marked a considerable slowdown from the 4.4% gain in the prior period….

That revision also had the effect of dragging GDP growth for all of 2025 down a little;

For the full year, GDP posted a 2.1% increase, or one-tenth of a percentage point lower than the previous reading. In 2024, the economy rose at a 2.8% pace.

Remember that GDP for part of the year actually got a huge boost due to major efforts by manufacturers and retailers to front-run the tariffs.

And then they said,

“The big downward revision in GDP is a gut check going into this energy crunch, increasing the risk of stagflation,” said David Russell, global head of market strategy at TradeStation.

I’ve always maintained this cycle ends in stagflation and that stagflation is what we are already in; so, these guys are a little slow by making their prediction of an “increasing risk of stagflation;” but, at least, they are starting to catch up with where I’ve been saying we are.

The numbers are getting forced to start looking closer to reality in order to maintain any credibility. As I keep pointing out, they only start getting closer to being real well after the initial report when fewer people care about a time period is already disappearing in the rearview mirror. They will never get entirely down to reality, but we can, at least, see by the government’s own admission how far off their first reports are in order to understand how inaccurate they routinely are (in the same direction of making the government look better).

With all of that now getting somewhat cleared up by the government via the standard late revisions approach to getting closer to the truth, I continue to stand by the belief I expressed at the conclusion of last week’s Deeper Dive:

So real GDP is likely to fall further now that the Trump-Israel-Iran war is rapidly adding inflation.

No matter how you look through the cloud of numbers, there is NO WAY any reading comes anywhere close to matching Hassett’s opiated lie of 4-7%, told with a big “trust me, we’re all happy here” smile.

The economy is falling, and the best the government can do is pretend to try to end up somewhere closer to the truth after buying itself a long delay away from admitting the truth.

And now, in further agreement with me, they say—or, at least, some of the mainstream media that faithfully parrots what they say,

The inflation data “tells us that the inflation picture wasn’t looking good even before the Middle East crisis,” said Sonu Varghese, chief macro strategist for the Carson Group.

I.e., back when “the Hatchet” and Trump and all the president’s other apparatchiks were telling us “inflation is going DOWN,” the truth agreed with my counterclaim that, no, it’s really going UP!

“An already large headache for the Federal Reserve is going to turn into an even larger one, and it’s likely the Fed will not cut rates in 2026 and may even start talking about rate hikes later this year.”

Yes, the return to rising inflation, especially as companies were already telling us they would not continue to hold off on pricing through tariffs in 2026, was already a large (not mild) headache for the Fed to try to figure out, and the war is certainly going to compound that quickly.

Even Fox, the network that tries its hardest to make the president look as good as it can, reported this past week that the cracks in the economy were already happening prior to the Iran war:

“Cracks emerged in a resilient US economy before war in Iran sent oil prices rocketing”

Consumer spending, after adjusting for inflation, was anemic in January, as inflation remained sticky-high. Hiring has also ground largely to a standstill.

Two major indicators of recession. To recap my last Deeper Dive about the significance of the downward revisions also happing in jobs reports:

Now to the jobs reports to see how bad last year really was because falling jobs certainly indicate a failing economy, which would back my claims about GDP. We see now the great extent to which the Trump administration was covering up a crushing blow to employment….

the economy was expected to soften heading into year-end. It’s now increasingly clear that the economy not only slowed but stumbled into the finish line,” Jim Baird, chief investment officer at Plante Moran Financial Advisors, said in a commentary.

More like the already stagflationary economy did a faceplant.

The revised figures for jobs alone prove we were experiencing stagflation, given that we now know from nearly all accounts inflation was back on the rise last year, and we now know the labor market was also DEAD:

In 2025, they added fewer than 10,000 jobs a month, the weakest hiring outside recession years since 2002.

That is because we are not outside a recession—not in reality. That is why job figures for the entire year of 2025 were the worst seen for any year since the close of the dot-com bust! So, yes, absolutely stagflation—rising prices, falling jobs, and even those rising prices were actually worse than reported.

With that, I want to move on to my perspective about what a grind it is to keep trying to sort out the truth from increasingly corrupt government numbers. (The discrepancy between the numbers and facts is growing so wide and has run so long that it cannot be regarded as a mere continuing mistake; hence the word “corrupt.”) I’m going to provide that perspective in a more personal format because its impact on me is personal:

Recently, I was interviewed by Zahra Sethna on Collapse Life. We talked about how tangled in deception the world has become, particularly in terms of trying to sort out economic truth. I also laid out some of the megatrends that I believe will shape the new world ahead...