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The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

VANCOUVER (

Bullion Bulls Canada

) -- After two years of U.S. "economic growth" and two years of U.S. "jobs growth," the U.S. housing market has now plummeted lower than at the "bottom" of the original crash. How can this be?

Regular readers can easily answer that question. There has been no

U.S. economic growth

or

jobs-growth.

The supposed "gains" in GDP (quarter-after-quarter) are nothing more than the automatic

statistical consequence

of lying about inflation. Quite simply, every percentage point that the U.S. government understates inflation automatically exaggerates economic growth by an identical amount.

For those not conversant with these statistics, all GDP reports must be "deflated" by the full rate of inflation, otherwise rising prices will be mistaken for increased growth. This is why lying about inflation is so popular, especially with Western governments -- it's a lie which always produces a two-for-one pay-off.

On the employment front, the U.S. Bureau of Labor Statistics has methodically twisted all sources of primary data, turning any and every employment report on the U.S. economy into 100% fiction. The empirical evidence paints a clear picture.

House prices continue to plummet and inventories of empty, unsold homes continue to grow despite housing starts sitting at record-low levels month after month. Another

disastrous holiday shopping-season

clearly demonstrated the lack of purchasing power which comes from a lack of jobs. The line-ups for food stamps in the U.S. get longer and longer every month, and no thinking adult who looks at the chart below could possibly believe the myths of a "U.S. economic recovery" or U.S. jobs-gains.

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As I have noted in past commentaries, the tiny "blip" in that chart which we see late in 2008 is where the U.S. government tells us that the U.S. economy "hit bottom," while the steady rise upward in food-stamp usage since that "bottom" is the supposed "recovery."

This brings us to the housing market itself. Yesterday, the U.S. government reported that

housing prices plummeted

below the "lows" in the original crash, back in early 2009. Home prices have now retreated (on a nominal basis) back to their levels of 2002. However, that grossly understates the collapse in prices in this market as it ignores the nine years of inflation which have occurred between then and now (the same "inflation" which the U.S. government insists does not exist).

With nominal U.S. house prices in 2011 equal to the nominal prices in 2002, this equates to roughly a 50% drop in prices below that level -- when expressed in real dollars. However that was only one of the terrible numbers in what was a truly horrendous report.

Roughly 40% of all sales during this reporting period were "distressed sales" (i.e. foreclosures or short-sales), one of the highest figures yet in this category, and another number which totally contradicts any claim of an "economic recovery."

A full one-third of all purchases were made with all-cash, the highest percentage ever recorded for such purchases. Obviously only the very wealthy can afford to make 100%-cash purchases of homes. What this tells us is that the wealthiest 5% or so of Americans are now buying-up one-third of all homes.

It also tells us that the very wealthy are trying to avoid getting enmeshed in the

massive foreclosure-fraud

created by the Wall Street predators. They mistakenly believe that if their homes have no mortgages on them that they won't be affected by the overwhelming stench of fraud in this sector. They are sadly deluded.

When the fears of defective land-titles drive down the prices of most U.S. homes which have mortgages (by 25%?, 50%?), this will exert similar downward pressure on the prices for all U.S. homes. Quite simply, if buyers can purchase homes with a "small risk of fraud" for 50% less than homes with no such risks, then most U.S. buyers (already severely strapped for cash) will have no choice but to "roll the dice."

This means that those Americans holding titles with zero risk of fraud can pretend that their homes are worth much more. However, should they return to the "real world" and actually attempt to sell their home, they are certainly in for a very rude awakening.

If this news wasn't already bad enough, we also heard that the gap between the average price of a new home and an existing home surged to 45%, when this gap is normally only about 15%. As

Reuters observed

, this clearly demonstrates that U.S. home-buyers aren't even willing/able to pay the construction-costs for these new homes, let alone pay-out any "profit" to U.S. home-builders. And yet still the brain-dead home-builders pile even more inventory onto this dying market.

I would be remiss if I didn't also note two of the longer-term factors at play here. As many (including myself) have been writing since 2008, it was always 100% certain that the U.S. housing collapse was going to resume its downward trajectory starting in mid-2010. This was due to the large spike in "mortgage resets" for the infamous "option-ARM" mortgages which Wall Street banks cranked-out by the millions while they were pumping-up the U.S. housing bubble.

With the highest default-rate of any category of mortgage (at a time when all categories of mortgages are at their highest default-rates in history), it was always certain that there would be millions more foreclosures flooding this over-saturated market as soon as these mortgages which were created-to-fail began defaulting. The following chart from Credit Suisse has been frequently circulated since 2008, and yet in all of that time this very obvious mine-field in the U.S. housing market has been totally ignored by all mainstream talking-heads.

In addition, we can never forget the even larger, longer-term trend here: the need for U.S. seniors to dump trillions of dollars in real estate (amounting to at least 10 million homes) in order to partially fund their

grossly under-funded retirements.

Simply, U.S. seniors have no other liquid assets. They can either stop spending (and torpedo the entire U.S. consumer-economy) or they can dump real estate (and merely destroy the housing market).

Accompanying all of this bad news, the Obama regime just reported the largest one-month deficit in U.S. history. With no new spending initiatives, this horrific deficit reflects the collapse in government revenues which has taken place in the U.S., the most obvious symptom of a dying, hollowed-out economy.

While the U.S. housing sector continues to deteriorate in any and every way, all we get from the U.S. propaganda-machine is more "spin." Lawrence Yun, the NAR's perpetual pumper for the U.S. housing market didn't disappoint us with the

following nonsense:

"If the price declines persist, even with the job market recovery, that could hamper recovery in the housing market."

Ignoring Yun's absurd reference to a (non-existent) U.S. "job market recovery," we can only laugh at this rhetoric. With U.S. home prices now below the lowest low in this crash, then officially there is no "housing recovery." Simply, Yun continues to pretend that the U.S. housing market has gone up since the (supposed) "bottom" in this market, when yesterday's report demonstrates unequivocally that the U.S. housing market has now moved down from that "lowest low."

The fact that all of the U.S.'s propaganda-outlets quoted this shill in their own propaganda on this subject is proof of dishonesty. It's always possible that one of these mediocre "news" bureaucracies could have made the mistake of confusing "down" with "up." However, when all U.S. propaganda-outlets choose to quote this ridiculous and obvious fiction, this conclusively demonstrates the (malicious) intent to deceive.

Throughout the entire collapse of the U.S. economy, first the Republicans and now the Democrats have responded in an identical manner to events. As each one of the U.S.'s economic problems grows larger, so do the lies being uttered to cover-up the problems, and the trillions of dollars in new debt being created to prop up this bubble economy, and the compulsive money-printing of Ben Bernanke.

It was the combination of too many lies, too much debt, and too much money-printing which created all of the U.S.'s horrendous economic problems. The fact that both halves of the U.S.'s two-party dictatorship believe they can "fix" the U.S. economy with even more excessive lies, debt, and money-printing is the classic "definition" of insanity...or it could simply represent the behavior of a group of desperate and incompetent bankers who have no "Plan B" now that "Plan A" has obviously failed.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.