The global economy has slowed; China has slowed dramatically, so commodity exporters that trade with China are slowing as well. This is already happening in Australia, where the housing market is beginning to crash.
The Fed has managed to stoke the stock market as well as inflate the corporate bond market, but corporations aren’t hiring.
Fed Chairman Ben Bernanke has ignited a rally in gold, as well as in silver, energy and food. But other commodities such as steel have plunged. This will adversely affect the economies of exporting nations such as Australia and Canada.
The bottom line is too much monetary printing. Gold will be the big beneficiary, and possibly silver as well. A chart of gold tells the tale: A perfect consolidation wedge has been forming for a little over a year now.
Shedlock expects all the central banks to push on the string once more, but doesn’t expect to see any job creation as a result of that. Investors don’t realize that we are in a global recession, he says, but they will shortly.
Bernanke is panicked over jobs (or lack thereof), and the recession. America’s most recent jobs report is nothing short of a disaster.
Last month, the Household Survey had a decline of 195,000 jobs; this month the decline is 119,000. Thus, in the last two months, there are 314,000 fewer employed.
Over the past several years people have dropped out of the labour force at an unbelievable rate, keeping the unemployment numbers artificially low. Some of this was due to major revisions, but most of it is simply economic weakness.
Here are two key Household Survey figures: In the last two months employment dropped by 314,000; and in the last two months the labor force fell by 518,000 while those not in the labour force rose by an amazing 929,000!
In the last year, the civilian population rose by 3,695,000, yet the labour force only rose by 971,000. Those not in the labor force rose by 2,723,000 to yet another record high of 88,921,000.
That is an amazing ‘achievement’ to say the least, and one that has the Fed in panic mode
To read Mike Shedlock article: Panic!
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BullionBuzz is a weekly eNewsletter that offers investors a quick snapshot of must-read news pertaining to the markets and precious metals. This week: Euro: Current Course Is Leading to Disaster Continue reading
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