By Greg hunter’s USAWatchdog.com
On Friday, both gold and the Dow flashed the same warning signal—the economy is in deep trouble. The Dow plunged nearly 275 points on the news of a weak jobs report, and gold rocketed higher by $66 on speculation global bankers are going to print money to resuscitate a dying financial system. You do not get this kind of tandem move in opposite directions by coincident. Last week, both the stock and gold markets appeared to stop pretending and acknowledged the vortex of debt and insolvency that could suck us all into a black hole.
Renowned gold expert Jim Sinclair of JSMineset.com said Friday, “Those popular gold writers calling for much lower gold prices are simply out of their mind and disconnected from reality.” Sinclair has been calling for “QE to infinity” (money printing) for years now, and he’s been right. Of course, money printing masked the recession/depression since 2008; and now, it looks like more of the same bad medicine is on the way—only a much higher dose. My only question is when does the money printing stop working and turn the currency into confetti? It appears we will find out sooner than later.
I heard one analyst on financial TV say the Dow death dive was overdone and it was “. . . just one bad unemployment report.” I heard another say we’re just going to have to “live with some inflation.” The rich can live just fine “with some inflation.” It’s the folks on the other end of the spectrum I worry about, which is 98% of the rest of us. As far as the unemployment report, there have been so many lousy jobs reports John Williams at Shadowstats.com has been calling what has been going on since the 2008 meltdown “bottom bouncing.” Looks to me we are hitting bottom, once again. Forget the rise in “official” unemployment to 8.2% from 8.1%. It’s been consistently much worse if you measured unemployment the way the Bureau of Labor Statistics (BLS) did in 1994 or earlier. In his latest report, Williams said, “. . . during the Clinton Administration, “discouraged workers”—those who had given up looking for a job because there were no jobs to be had—were redefined so as to be counted only if they had been “discouraged” for less than a year. This time qualification defined away the long-term discouraged workers. The remaining short-term discouraged workers (less than one year) are included in U.6.” If you add those “long-term discouraged workers” back in to the BLS calculation, Williams says unemployment “rose to 22.7%, from 22.3% in April.”
Take a look at this chart of unemployment from Shadowstats.com. The blue line on top is drawn by using data that includes “long term discouraged workers.” Does it look like unemployment is improving like the government says it’s been doing?