Posts tagged India

20 Signs That The Global Economic Crisis Is Starting To Catch Fire

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Source: http://theeconomiccollapseblog.com

By Michael Snyder

20 Signs That The Global Economic Crisis Is Starting To Catch Fire

 

Lighting-A-Match-Photo-by-Sebastian-Ritter-300x300If you have been waiting for the “global economic crisis” to begin, just open up your eyes and look around.  I know that most Americans tend to ignore what happens in the rest of the world because they consider it to be “irrelevant” to their daily lives, but the truth is that the massive economic problems that are currently sweeping across Europe, Asia and South America are going to be affecting all of us here in the U.S. very soon.  Sadly, most of the big news organizations in this country seem to be more concerned about the fate of Justin Bieber’s wax statue in Times Square than about the horrible financial nightmare that is gripping emerging markets all over the planet.  After a brief period of relative calm, we are beginning to see signs of global financial instability that are unlike anything that we have witnessed since the financial crisis of 2008.  As you will see below, the problems are not just isolated to a few countries.  This is truly a global phenomenon.

Over the past few years, the Federal Reserve and other global central banks have inflated an unprecedented financial bubble with their reckless money printing.  Much of this “hot money” poured into emerging markets all over the world.  But now that the Federal Reserve has begun “tapering” quantitative easing, investors are taking this as a sign that the party is ending.  Money is being pulled out of emerging markets all over the globe at a staggering pace and this is creating a tremendous amount of financial instability.  In addition, the economic problems that have been steadily growing over the past few years in established economies throughout Europe and Asia just continue to escalate.  The following are 20 signs that the global economic crisis is starting to catch fire…

#1 The unemployment rate in Greece has hit a brand new record high of 28 percent.

#2 The youth unemployment rate in Greece has hit a brand new record high of 64.1 percent.

#3 The percentage of bad loans in Italy is at an all-time record high.

#4 Italian industrial output declined again in December, and the Italian government is on the verge of collapse.

#5 The number of jobseekers in France has risen for 30 of the last 32 months, and at this point it has climbed to a new all-time record high.

#6 The total number of business failures in France in 2013 was even higher than in any year during the last financial crisis.

#7 It is being projected that housing prices in Spain will fall another 10 to 15 percent as their economic depression deepens.

#8 The economic and political turmoil in Turkey is spinning out of control.  The government has resorted to blasting protesters with pepper spray and water cannons in a desperate attempt to restore order.

#9 It is being estimated that the inflation rate in Argentina is now over 40 percent, and the peso is absolutely collapsing.

#10 Gangs of armed bandits are roaming the streets in Venezuela as the economic chaos in that troubled nation continues to escalate.

#11 China appears to be very serious about deleveraging.  The deflationary effects of this are going to be felt all over the planet. The following is an excerpt from Ambrose Evans-Pritchard’s recent article entitled “World asleep as China tightens deflationary vice“…

China’s Xi Jinping has cast the die. After weighing up the unappetising choice before him for a year, he has picked the lesser of two poisons.
 
The balance of evidence is that most powerful Chinese leader since Mao Zedong aims to prick China’s $24 trillion credit bubble early in his 10-year term, rather than putting off the day of reckoning for yet another cycle.
 
This may be well-advised for China, but the rest of the world seems remarkably nonchalant over the implications.

#12 There was a significant debt default by a coal company in China last Friday

A high-yield investment product backed by a loan to a debt-ridden coal company failed to repay investors when it matured last Friday, state media reported on Wednesday, in the latest sign of financial stress in China’s shadow bank sector.

#13 Japan’s Nikkei stock index has already fallen by 14 percent so far in 2014.  That is a massive decline in just a month and a half.

#14 Ukraine continues to fall apart financially

The worsening political and economic circumstances in Ukraine has prompted the Fitch Ratings agency to downgrade Ukrainian debt from B to a pre–default level CCC. This is lower than Greece, and Fitch warns of future financial instability.

#15 The unemployment rate in Australia has risen to the highest level in more than 10 years.

#16 The central bank of India is in a panic over the way that Federal Reserve tapering is effecting their financial system.

#17 The effects of Federal Reserve tapering are also being felt in Thailand

In the wake of the US Federal Reserve tapering, emerging economies with deteriorating macroeconomic figures or visible political instability are being punished by skittish markets. Thailand is drifting towards both these tendencies.

#18 One of Ghana’s most prominent economists says that the economy of Ghana will crash by June if something dramatic is not done.

#19 Yet another banker has mysteriously died during the prime years of his life.  That makes five “suspicious banker deaths” in just the past two weeks alone.

#20 The behavior of the U.S. stock market continues to parallel the behavior of the U.S. stock market in 1929.

Yes, things don’t look good right now, but it is important to keep in mind that this is just the beginning.

This is just the leading edge of the next great financial storm.

The next two years (2014 and 2015) are going to represent a major “turning point” for the global economy.  By the end of 2015, things are going to look far different than they do today.

None of the problems that caused the last financial crisis have been fixed.  Global debt levels have grown by 30 percent since the last financial crisis, and the too big to fail banks in the United States are 37 percent larger than they were back then and their behavior has become even more reckless than before.

As a result, we are going to get to go through another “2008-style crisis”, but I believe that this next wave is going to be even worse than the previous one.

So hold on tight and get ready.  We are going to be in for quite a bumpy ride.

This article first appeared here at the Economic Collapse Blog.  Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.

 

 

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No Janet Yellen, The Economy Is NOT “Getting Better”

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Source: http://theeconomiccollapseblog.com

By Michael Snyder

No Janet Yellen, The Economy Is NOT “Getting Better”

 

Janet-Yellen1-300x300On Tuesday, new Federal Reserve Chairman Janet Yellen went before Congress and confidently declared that “the economic recovery gained greater traction in the second half of last year” and that “substantial progress has been made in restoring the economy to health”.  This resulted in glowing headlines throughout the mainstream media such as this one from USA Today: “Yellen: Economy is improving at moderate pace“.  Sadly, tens of millions of Americans are going to believe what the mainstream media is telling them.  But it isn’t the truth.  As you will see below, there are all sorts of signs that the economy is taking a turn for the worse.  And when the next great economic crisis does strike, most Americans will be completely and totally unprepared because they trusted our “leaders” when they told us that everything would be just fine.

It is amazing how deceived people can be.  Just consider the case of 56-year-old Brian Perry.  He is a former law clerk that has applied for nearly 1,500 jobs since 2008 without any success.  But he says that he is “optimistic” that he will get another job soon because he believes that the economy is recovering

By his own count, Brian Perry has applied for nearly 1,500 jobs since being let go as a law clerk in 2008. The 56-year old Perry lives in Rhode Island, where the 9.1 percent unemployment rate is 2.5 percentage points above the national average.
 
Perry remains optimistic that a job is forthcoming. He thinks a more robust economy would create better opportunities for the long-term unemployed like him.

Let us certainly hope that Perry does find a new job soon.  But if he does, it won’t be because we are experiencing an “economic recovery”.  Just consider the following facts…

-In January, we were told that the U.S. economy “created” 113,000 new jobs.  But that figure was arrived at only after adding a massive seasonal adjustment.  In reality, the U.S. economy actually lost 2.87 million jobs in January.  During the past decade, the only time the U.S. economy has lost more jobs in January was during 2009.  At that time, the U.S. economy was suffering through the peak of the worst economic downturn since the Great Depression.

-Prominent retailers are closing hundreds of stores all over the United States.  Things have gotten so bad that some are calling this a “retail apocalypse“…

  • JC Penney, which lost $586 million in three months in 2013, is planning to close 33 stores in 19 states and lay off 2,000 people. JC Penney’s stock has lost 84 percent of its value since February 2012.
  • Sears has decided to shut down its flagship store in Downtown Chicago, and it has closed 300 stores in the United States since 2010. Stock analyst Brian Sozzi noted that Sear’s inventory levels have fallen by 23.7 percent since 2006. He also noted that Sears had $4.4 billion in cash and equivalents in 2005 but $609 million in cash and equivalents in 2012. Sozzi, who calls himself a guerrilla analyst, has a blog full of disturbing pictures of empty Sears stores.
  • Macy’s, one of the few retail success stories, is planning to close five stores and eliminate 2,500 jobs.
  • Radio Shack is preparing to close 500 stores, according to The Wall Street Journal.
  • Best Buy recently closed 50 stores and eliminated 950 jobs at stores in Canada.
  • Target announced plans to eliminate 475 jobs and not fill 700 empty positions to reduce costs.
  • Aeropostale is planning to close 175 stores.
  • Blockbuster has closed down all of its stores.

-McDonald’s is reporting that sales at established U.S. locations were down 3.3 percent in January.

-In January, real disposable income in the U.S. experienced the largest year over year decline that we have seen since 1974.

-As I wrote about the other day, the number of “planned job cuts” in January was 12 percent higher than 12 months earlier, and it was actually 47 percent higher than in December.

-Only 35 percent of all Americans say that they are better off financially than they were a year ago.

-What is happening to the U.S. stock market right now very closely resembles what happened to the U.S. stock market just before the horrific stock market crash of 1929.  Just check out the chart in this article.

For dozens more statistics that show that the U.S. economy is not improving, please see this article and this article.

Meanwhile, things continue to unravel all around the rest of the globe as well.

In previous articles, I have detailed how the reckless money printing by the Federal Reserve has inflated massive financial bubbles in emerging markets all over the planet.  Now that the Fed is “tapering”, those bubbles are starting to burst and we are witnessing a tremendous amount of economic chaos.  Here are three more examples…

#1 Ghana:

Ghanaian Economist Dr. Theo Richardson says Ghana’s economy will crash by June this year if the Bank of Ghana continues with its kneejerk measures to rescue the cedi.
 
“The government is facing liquidity problems and if we don’t get the appropriate remedies to address the issues at hand the situation may worsen and by June the economy may crash,” Dr. Richardson said.

#2 Kazakhstan:

With only $24.5 billion left in FX reserves after valiantly defending major capital outflows since the Fed’s Taper announcement, the Kazakhstan central bank has devalued the currency (Tenge) by 19% – its largest adjustment since 2009. At 185 KZT to the USD, this is the weakest the currency has ever been as the central bank cites weakness in the Russian Ruble and “speculation” against its currency as drivers of the outflows (which will be “exhausted” by this devaluation according to the bank). The new level will improve the country’s competitiveness (they are potassium heavy) but one wonders whether, unless Yellen folds whether it will help the outflows at all.

#3 India:

In the wake of a global stock market sell-off driven by worries over slower growth in emerging markets, the head of India’s central bank, Raghuram Rajan, criticized the U.S. Federal Reserve as it pressed on with plans to dial back its monthly bond purchases: “International monetary co-operation has broken down,” said Rajan, who added that “the U.S. should worry about the effects of its polices on the rest of the world.”

We have reached a “turning point” for the global financial system.  Things are beginning to fall apart both in the United States and all around the world.

But at least the dogs at the White House are eating well.  Just consider the following photo that was recently tweeted by Michelle Obama

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This article first appeared here at the Economic Collapse Blog.  Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.

 

 

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Are We On The Verge Of A Massive Emerging Markets Currency Collapse?

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Source: http://theeconomiccollapseblog.com

By Michael Snyder

Are We On The Verge Of A Massive Emerging Markets Currency Collapse?

 

Hyperinflation-300x300This time, the Federal Reserve has created a truly global problem.  A big chunk of the trillions of dollars that it pumped into the financial system over the past several years has flowed into emerging markets.  But now that the Fed has decided to begin “the taper”, investors see it as a sign to pull the “hot money” out of emerging markets as rapidly as possible.  This is causing currencies to collapse and interest rates to soar all over the planet.  Argentina, Turkey, South Africa, Ukraine, Chile, Indonesia, Venezuela, India, Brazil, Taiwan and Malaysia are just some of the emerging markets that have been hit hard so far.  In fact, last week emerging market currencies experienced the biggest decline that we have seen since the financial crisis of 2008.  And all of this chaos in emerging markets is seriously spooking Wall Street as well.  The Dow has fallen nearly 500 points over the last two trading sessions alone.  If the Federal Reserve opts to taper even more in the coming days, this currency crisis could rapidly turn into a complete and total currency collapse.

A lot of Americans have always assumed that the U.S. dollar would be the first currency to collapse when the next great financial crisis happens.  But actually, right now just the opposite is happening and it is causing chaos all over the planet.

For instance, just check out what is happening in Turkey according to a recent report in the New York Times

Turkey’s currency fell to a record low against the dollar on Friday, a drop that will hit the purchasing power of everyone in the country.
 
On a street corner in Istanbul, Yilmaz Gok, 51, said, “I’m a retiree making ends meet on a small pension and all I care about is a possible increase in prices.”
 
“I will need to cut further,” he said. “Maybe I should use my natural gas heater less.”

As inflation escalates and interest rates soar in these countries, ordinary citizens are going to feel the squeeze.  Just having enough money to purchase the basics is going to become more difficult.

And this is not just limited to a few countries.  What we are watching right now is truly a global phenomenon

“You’ve had a massive selloff in these emerging-market currencies,” Nick Xanders, a London-based equity strategist at BTIG Ltd., said by telephone. “Ruble, rupee, real, rand: they’ve all fallen and the main cause has been tapering. A lot of companies that have benefited from emerging-markets growth are now seeing it go the other way.”

So why is this happening?  Well, there are a number of factors involved of course.  However, as with so many of our other problems, the actions of the Federal Reserve are at the very heart of this crisis.  A recent USA Today article described how the Fed helped create this massive bubble in the emerging markets…

Emerging markets are the future growth engine of the global economy and an important source of profits for U.S. companies. These developing economies were both recipients and beneficiaries of massive cash inflows the past few years as investors sought out bigger returns fostered by injections of cheap cash from the Federal Reserve and other central bankers.
 
But now that the Fed has started to dial back its stimulus, many investors are yanking their cash out of emerging markets and bringing the cash back to more stable markets and economies, such as the U.S., hurting the developing nations in the process, explains Russ Koesterich, chief investment strategist at BlackRock.
 
“Emerging markets need the hot money but capital is exiting now,” says Koesterich. “What you have is people saying, ‘I don’t want to own emerging markets.’”

What we are potentially facing is the bursting of a financial bubble on a global scale.  Just check out what Egon von Greyerz, the founder of Matterhorn Asset Management in Switzerland, recently had to say…

If you take the Turkish lira, that plunged to new lows this week, and the Russian ruble is at the lowest level in 5 years. In South Africa, the rand is at the weakest since 2008. The currencies are also weak in Brazil and Mexico. But there are many other countries whose situation is extremely dire, like India, Indonesia, Hungary, Poland, the Ukraine, and Venezuela.
 
I’m mentioning these countries individually just to stress that this situation is extremely serious. It is also on a massive scale. In virtually all of these countries currencies are plunging and so are bonds, which is leading to much higher interest rates. And the cost of credit-default swaps in these countries is surging due to the increased credit risks.

And many smaller nations are being deeply affected already as well.

For example, most Americans cannot even find Liberia on a map, but right now the actions of our Federal Reserve have pushed the currency of that small nation to the verge of collapse

Liberia’s finance minister warned against panic today after being summoned to parliament to explain a crash in the value of Liberia’s currency against the US dollar.
 
“Let’s be careful about what we say about the economy. Inflation, ladies and gentlemen, is not out of control,” Amara Konneh told lawmakers, while adding that the government was “concerned” about the trend.

Closer to home, the Mexican peso tumbled quite a bit last week and is now beginning to show significant weakness.  If Mexico experiences a currency collapse, that would be a huge blow to the U.S. economy.

Like I said, this is something that is happening on a global scale.

If this continues, we will eventually see looting, violence, blackouts, shortages of basic supplies, and runs on the banks in emerging markets all over the planet just like we are already witnessing in Argentina and Venezuela.

Hopefully something can be done to stop this from happening.  But once a bubble starts to burst, it is really difficult to try to hold it together.

Meanwhile, I find it to be very “interesting” that last week we witnessed the largest withdrawal from JPMorgan’s gold vault ever recorded.

Was someone anticipating something?

Once again, hopefully this crisis will be contained shortly.  But if the Fed announces that it has decided to taper some more, that is going to be a signal to investors that they should race for the exits and the crisis in the emerging markets will get a whole lot worse.

And if you listen carefully, global officials are telling us that is precisely what we should expect.  For example, consider the following statement from the finance minister of Mexico

“We expected this year to be a volatile year for EM as the Fed tapers,” Mexican Finance Minister Luis Videgaray said, adding that volatility “will happen throughout the year as tapering goes on”.

Yes indeed – it is looking like this is going to be a very volatile year.

I hope that you are ready for what is coming next.

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This article first appeared here at the Economic Collapse Blog.  Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.

 


Image credit: http://theeconomiccollapseblog.com
 
 

Dr. Paul Craig Roberts – U.S. Gold Gone

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Dr. Paul Craig Roberts – U.S. Gold Gone

 

1-22-2014 6-54-29 AM

 

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Published by Greg Hunter

Published on Jan 20, 2014

http://usawatchdog.com/fed-they-do-no… Dr. Paul Craig Roberts, the Father of Reaganomics, predicts, “I think, this year, you are going to see a further downturn in the economy. The signs are not only that we do not have a recovery, but it’s going to get worse. . . . Christmas sales were very negative. There’s no growth in people’s income and no jobs. So, if the economy goes down further, what does that mean? It means the deficit widens. It means they have a greater debt ceiling lift. They have to have a bigger debt ceiling increase, and all of this will alarm the world. They’ll say, good heavens, they already had a trillion dollar deficit. Now it’s gone up, and the Fed can’t stop the quantitative easing without the stock and bond market collapsing. The banks’ solvency will become an issue. So, the world is watching a bigger deficit, more printing of money, and they are likely to start dumping dollars. When they do that, they’ll say ‘gold, I want gold.’ There’s not much supply to meet demand, and the price has to escalate. So, I wouldn’t be surprised if that shows up this year.” Dr. Roberts also contends that America’s gold is “mainly gone.”

Join Greg Hunter of USAWatchdog.com as he goes One-on-One with economist and former Assistant Treasury Secretary, Dr. Paul Craig Roberts.

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Related post: The Hows and Whys of Gold Price Manipulation

 

Dr. Paul Craig Roberts-U.S. Markets Rigged by its Own Authorities

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Source: http://usawatchdog.com

By Greg Hunter

Dr. Paul Craig Roberts-U.S. Markets Rigged by its Own Authorities

 

1-11-2014 5-13-42 PM

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Economist Dr. Paul Craig Roberts says, “We have a situation where all the markets are rigged.  All the markets are manipulated.”  As an example, Dr. Roberts points to the stock market.  Dr. Roberts contends, “We have a stock market at all-time highs, and where is the economy?  There’s not one.  There’s no recovery.”  Dr. Roberts goes on to say, “53% of Americans earn less than $30,000 per year.  Well, the poverty rate for a family of four is something like $24,000. . . . If there is no income to drive the economy and there is no credit expansion to drive the economy, then how does it go anywhere?  You can’t possibly have a recovery.”

FULL STORY

 

More Misleading Official Employment Statistics

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Source: http://www.paulcraigroberts.org

By Dr. Paul Craig Roberts

More Misleading Official Employment Statistics

 

The payroll jobs report for November from the Bureau of Labor Statistics says that the US economy created 203,000 jobs in November. As it takes about 130,000 new jobs each month to keep up with population growth, if the payroll report is correct, then most of the new jobs would have been used up keeping the unemployment rate constant for the growth in the population of working age persons, and about 70,000 of the jobs would have slightly reduced the rate of unemployment. Yet, the unemployment rate (U3) fell from 7.3 to 7.0, which is too much for the job gain. It seems that the numbers and the news reports are not conveying correct information.

As the payroll jobs and unemployment rate reports are released together and are usually covered in the same press report, it is natural to assume that the reports come from the same data. However, the unemployment rate is calculated from the household survey, not from payroll jobs, so there is no statistical relationship between the number of new payroll jobs and the change in the rate of unemployment.

It is doubtful that the differences in the two data sets can be meaningfully resolved. Consider only the definitional differences. The payroll survey counts a person holding two jobs as if it were two employed persons, while the household survey counts a person holding two jobs as one job. Also the two surveys treated furloughed government workers during the shutdown differently. They were unemployed according to the household survey and employed according to the payroll survey.

To delve into the meaning of the numbers produced by the two surveys, keep in mind that payroll jobs can increase simply because the birth-death model used to estimate the numbers of unreported business shutdowns and startups can underestimate the former and overestimate the latter.

The unemployment rate can decline simply because the definition of the work force excludes discouraged workers. Thus, an increase in the number of discouraged workers can lower the measured rate of unemployment.

Before reviewing this, let’s first assume that the story of 203,000 new payroll jobs in November is correct. Where does the BLS say these jobs are? Are these the long-missing New Economy jobs that we were promised in exchange for giving China our well-paid manufacturing jobs and giving India our well-paid professional service jobs?

Unfortunately, no.

According to BLS, the jobs are mainly the same lowly-paid, part-time, nontradable domestic service jobs that I have been reporting for a decade or longer.

BLS reports that 17,000 jobs are in construction. On the surface this looks like some slight pickup in housing, but less than 5,000 of the jobs are in residential and nonresidential construction. The bulk of the claimed jobs are in “specialty trade contractors.” Specialty trade contractors are involved in repairs, alterations, and maintenance, but some of the work pertains to site preparation for new construction.

The BLS also claims 27,000 jobs in manufacturing. What precisely is being manufactured? Apparently, very little. The manufacturing jobs are spread over about 23 categories.

The manufacture of wood products gained 600 jobs. (Keep in mind that we are talking about a population over 300,000,000, and a participating work force of approximately 155,000,000.) Nonmetallic mineral products experienced, according to the BLS, 2,000 new jobs. Machinery gained 300 new jobs. Computer and electronic products gained 500 new jobs. Electrical equipment and appliances gained 600 jobs. Transportation equipment gained 4,900 jobs. Furniture manufacture gained 2,100 jobs (apparently to fill the foreclosed unoccupied houses). Food manufacturing gained 7,800 jobs. Petroleum and coal products gained 1,600 jobs, chemicals gained 2,200 jobs, and plastics and rubber products gained 1,300 jobs.You can review the remaining categories on the BLS site.

Most the rest of the 203,000 jobs–152,000–were in lowly paid domestic nontradable services (nontradable means that the jobs do not produce a service that can be exported), such as retail trade with 22,300 jobs, transportation and warehousing with 30,500 jobs, temporary help services with 16,400 jobs, ambulatory health care services with 26,300 jobs, home health care services with 11,800 jobs, and the old reliable waitresses and bartenders with 17,900 jobs.

This is the jobs profile of the American super economy. It is the profile of India 30 or 40 years ago.

Are even these lowly paid part-time domestic jobs really there? Perhaps not. According to statistician John Williams (shadowstats.com), the government shutdown and reopening, the birth-death model, and concurrent-seasonal-adjustment problems can result in misstated jobs.

The unemployment rate is affected by not counting discouraged workers who cannot find employment. No discouraged unemployed worker and no person forced to work in a part-time job because he cannot find full-time employment is counted in the 7.0 unemployment rate (U3).

To be included in the U3 unemployment rate, an unemployed person has to have looked for a job in the past four weeks. Those who have looked for a job until they are blue in the face and have given up looking are not counted in the U3 rate. In November any unemployed workers, discouraged by the absence of jobs, who ceased to look for employment were dropped from the labor force that U3 considers to be the base for the measure of unemployment. Thus, if unemployed workers move into the discouraged category, the rate of unemployment falls even if not a single person finds a job.

The government has a second unemployment rate, U6, about which little is heard. This rate counts workers who have been discouraged for less than one year. This unemployment rate is 13.2 %, almost double the reported rate.

In other words, the U3 measure of unemployment can decline for two different reasons: the economy can create more employment opportunities or people become discouraged and stop looking for jobs. Discouraged workers move into the U6 category where they are counted as unemployed until they have been discouraged for more than one year when they are no longer officially considered to be part of the labor force. The U6 unemployment rate can rise as short-term discouraged workers are dropped out of the U3 measure and moved into the U6 measure, and the U6 rate can fall when the workers become long-term discouraged and are officially removed from the labor force.

Think about this for a minute. The BLS admits that the US unemployment rate that includes people who have been discouraged about finding a job for less than one year is 13.2%. The official line is that the US economy has been enjoying a recovery since June 2009. How is there a recovery when 13.2% of the population is unemployed?

This question becomes even more pointed when the long-term–more than one year–discouraged workers who cannot find a job are included in the measure of unemployment. The US government does not provide such a measure. However, John Williams (shadowstats.com) does. His estimate produces a 23.2% rate of US unemployment. An increase in the number of long-term discouraged workers is consistent with the drop in the US labor force participation rate from 66% in December 2007 to 63% in November 2013.

There is no such thing as a recovery with 23.2% unemployment.

So, if there is no economic recovery, why are stock and bond prices so high, at all-time records? The answer is simple. The Federal Reserve is printing $1,000 billion new dollars annually and the newly created money is going into the bond and stock markets, driving them to high bubble levels.

So here sits the US economy with substantial unemployment, with massive trade and budget deficits that are taxing the US dollar’s credibility, with the labor force participation rate declining because there are no jobs to be found, and we are enjoying economic recovery with bond and stock prices at historic highs.

If this isn’t enough of a puzzle, consider the official second estimate of third quarter GDP growth. According to this estimate, the US economy expanded at a 3.6% rate in the third quarter; yet official U6 unemployment is 13.2%.

And if you believe the government, there is no inflation either. Yes, I know, your grocery bills go up each month.

Keep in mind that many of the new November payroll jobs could reflect seasonal hiring gearing up for the Christmas sales season. Remember, the payroll survey counts one person with two part-time jobs as two jobs.

Economic recovery requires a growth in real median family income and/or an increase in consumer debt, and, except for a rise in student loan debt, there is no sign of either.

US real median household income has declined from $56,189 in 2007 to $51,371 in 2012, a decline of $4,818 or 8.6%. http://www.deptofnumbers.com/income/us/

US real per capita income has declined from $29,554 in 2007 to $27,319 in 2012, a drop of $2,235 or 7.5%.

How do consumers take on more debt in order to finance their consumption when their real incomes are falling? The growth in consumer credit outstanding is due to student loan growth.

I have not seen the establishment’s explanation of how recovery can occur without growth in real purchasing power either from rising real incomes or rising consumer indebtedness.

According to the Bureau of Labor Statistics, there are 1,277,000 fewer seasonally adjusted payroll jobs in November 2013 than in December 2007.

How it is possible for the economy to have been in recovery since June 2009 (according to the National Bureau of Economic Research) and there are 1,277,000 fewer jobs today than existed six years ago prior to the recession?

How has real Gross Domestic Product recovered when jobs and real consumer incomes have not?

These are among the many questions that go unasked and unanswered.

Statistician John Williams says that the economic recovery is a statistical illusion created by deflating nominal GDP with an understated measure of inflation. 

Reprinted with permission from www.paulcraigroberts.org


 

About Dr. Paul Craig Roberts

Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.

 

Jim Rogers Says “Abolish the Fed and Resign”

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Jim Rogers Says “Abolish the Fed and Resign”

 

It was an historic day on Wall Street with the Dow topping 16,000 on Monday. We’ll tell you why-and-what caused the run.

And the revolving door of Washington-to-Wall-Street takes another spin! This time it’s Timothy Geithner in the turnstile. We’ll tell you where he’s going.

Also, “What Would Jim Rogers Do”? We follow up with the legendary investor, and bow-tie aficionado, to get his take on what he would do if put charge of the Fed.

Finally, foreclosures are up from September. In some cities one in every 300 homes received a foreclosure filing last month. Is yours on the list? Rachel Kurzius and Erin discuss in today’s Big Deal.

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The Coming Shortage Of Physical Gold That Will Change Everything

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Source: http://endoftheamericandream.com

By Michael Snyder

The Coming Shortage Of Physical Gold That Will Change Everything

 

Gold-Coin-300x300Is the paper gold scam about to be brutally crushed by a crippling shortage of physical gold?  If so, what will that do to global financial markets?  According to the Reserve Bank of India, “the traded amount of ‘paper linked to gold’ exceeds by far the actual supply of physical gold: the volume on the London Bullion Market Association (LBMA) OTC market and the major Futures and Options Exchanges was OVER 92 TIMES that of the underlying Physical Market.”

In other words, there is a massive amount of paper out there, but very little actual physical gold to back it up.  And right now, we are witnessing voracious hoarding of physical gold all over the globe.  This is especially true in Asia.  Just see this article and this article.  All of this hoarding is putting a tremendous amount of pressure on those that have made all of these “paper promises”, because the truth is that there really isn’t all that much physical gold on the planet.  In fact, Warren Buffett once estimated that if all of the gold in the entire world was brought into one place, it could be formed into a cube that would only be 69 feet long by 69 feet high by 69 feet wide.

As the emerging shortage of physical gold becomes increasingly apparent, the massive Ponzi scheme that the bullion banks have been running for decades is going to completely fall apart.  The following is what Egon von Greyerz told King World News the other day…

Governments and central banks have, for decades, leased or sold their gold to the bullion banks.  So they are very likely to own very little of the 23,000 tons that Western central banks are said to hold.
 
But now bullion banks also have a problem:  They tried to replenish their (physical gold) coffers during the massive manipulative selling that we’ve seen over the last few months in the paper market.  Although they took the price down, most of the physical (gold) that was released by selling from ETFs and hedge funds was absorbed by Asia.
 
So the bullion banks are still massively short of physical gold.

Right now there simply is not enough physical gold out there and the bullion banks and the central planners are starting to panic.  One of the individuals that really has his hand on the pulse of what is going on is billionaire Eric Sprott

We have seen the COMEX inventories decline rapidly. We know that all of the dealer inventory on the COMEX has already been spoken for by delivery notices, so essentially there will be zero (inventory) if they ever make the delivery.
 
And the central planners (also) went to India and said, ‘Look, you’ve got to do something about all of this gold buying in India.’ So we’ve had ten different steps by the Indian government to try to curb demand — a 2% tax, a 4% tax, a 6% tax, an 8% tax, and a ruling that banks couldn’t lend money for people to buy gold.
 
They also convinced the Jewelers Association that as of July 1st they couldn’t sell gold bars and coins. Just last week there was a new rule implemented that if you are importing gold you have to prove that a certain amount is being re-exported. We’ve probably had ten or twelve things (restrictions) happen in six months, all of which is a huge attempt to get the second biggest buyer of gold in the world, after China, to decrease consumption because the gold isn’t around.
 
The central planners have arranged all of these things. I think it’s just been one big scheme to try to get people dissuaded from owning gold and to cause supply to come out. As you mentioned, because of it (central planner actions) we have the gold forward rates (for gold) being negative, backwardation, and inventories plunging, all of which have been manifested because there is a shortage of gold.

Already the emerging shortage of physical gold is starting to cause some very unusual things to happen in the financial markets.  A recent article by Reg Howe did a good job of explaining what we have been witnessing lately…

By undercutting normal gold lease rates, these super low interest rates have forced central banks to reduce their lease rates to nonsensical levels in order to prevent gold futures from going into overt backwardation. Recall that GOFO, the gold forward rate, is the interest rate for a given maturity less the lease rate for that maturity, and that a negative GOFO represents backwardation. See Gold Derivatives: GLD and Ass Backwardation (5/24/2010); Gold Derivatives: The Tide Turns (5/25/2009). Passing the argument that widely reported premiums for spot physical delivery represent a form of backwardation, figures from the LBMA have now shown a negative GOFO at the shorter maturities for almost three weeks (July 8 through July 25) due to a surge in lease rates, which still remain below more normal historical levels.
 
Indeed, this unusual event has attracted considerable attention even from those outside the narrow world of gold. See, e.g., J. Skoyles, Backwardation, negative GOFO and the gold price, The Real Asset Co. (July 24, 2013); M. Kentz, Gold futures hiccup indicates demand outpacing supply, Reuters (July 19, 2013); G. Williams, What If, Things that Make You Go Hmmm, Mauldin Economics (July 15, 2013).

The bottom line is that there is a very serious shortage of physical gold, and as this becomes increasingly apparent to the rest of the world, this is likely to cause a tremendous amount of instability in the financial markets in the months ahead.

For much more on this, please see the recent interview with Alasdair Macleod of goldmoney.com that is posted below…

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Right now we are also witnessing tremendous demand for physical silver as well.

For example, the U.S. Mint is going to break the all-time record for July by a very wide margin, and it is being projected that sales of Silver Eagles will likely be above 45 million for the entire year.

And remember, unlike gold, silver is used in thousands of different consumer products.  So silver is continually being used up and taken out of the overall global supply.

FULL STORY

Image credit: http://endoftheamericandream.com

Breaking News–Today’s Job Report

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Source:http://www.paulcraigroberts.org

By Dr. Paul Craig Roberts

Breaking News–Today’s Job Report

 

Do you remember the promise of the New Economy that was going to replace the lost “dirty fingernail” manufacturing jobs with innovative highly paid New Economy jobs? Well, the promise was just another deception from the elites who have stolen Americans’ future.

For the umpteenth consecutive month and year, the June BLS payroll jobs report (released on July 5) shows that the US economy has created no such jobs. The same old tired categories account for the same old lowly paid new domestic service jobs.

Of the 195,000 new private sector jobs alleged to have been created, 75,000 or 38% are accounted for by the category “leisure and hospitality.” Within this category there were 52,000 new waitresses and bartenders, and 19,000 jobs in “amusements gambling, and recreation.”

Retail trade added 37,000 employees. Is your local shopping center that busy?

Wholesale trade added 11,000.

Zero Hedge points out that the retail and wholesale jobs numbers seem inconsistent with the latest report from the Institute of Supply Management, which shows a sharp drop in new order components and business activity. http://www.zerohedge.com/news/2013-07-03/non-manufacturing-ism-crashes-lowest-february-2010-new-orders-devastated-july-2009-l Perhaps the New Economy’s inefficiency requires more people to sell less.

Professional and business services added, allegedly, 53,000 jobs, which are largely building management services, janitors, employment services, and temporary help.

Ambulatory health care services added 13,000 jobs.

Financial activities allegedly added 17,000 jobs despite the Bank of America moving its property appraisals to India. http://www.bizjournals.com/charlotte/blog/morning-edition/2013/07/bank-of-america-routing-property.html?ana=lnk

Local government, despite severe budget cuts, added 13,000 jobs.

The BLS news release points out that the number of involuntary part-time workers (the number of people who are unable to find full-time jobs or whose hours were cut back) increased by 322,000 in June to 8.2 million.

This deplorable report provided the cover for the market riggers to take the stock market up and the gold market down. Remember that economic theory about “rational markets”? Another deception.

Reprinted with permission from www.paulcraigroberts.org


 

About Dr. Paul Craig Roberts

Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.

 

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Related posts:

Lawlessness Is The New Normal

Washington Is Driving The World To The Final War

The Rational Market Myth

Dubai Gold Demand Off the Charts as Price Plunges

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Source: http://libertyblitzkrieg.com

By Michael Krieger

Dubai Gold Demand Off the Charts as Price Plunges

 

Only in the gold market does huge demand equal a price collapse!  I suppose the problem is they don’t buy Comex contracts in Dubai and India.  As I mentioned on Twitter earlier today, the pile-on from gold bears is reaching extreme proportions, something like you’d expect near a bottom.  I bought physical silver today for the first time in over a year. 

From the UAE’s The National:

The price drop led to a rush of buyers for Dubai gold from the Middle East, South East Asia, the Balkans, Turkey and parts of Europe according to Tarek El Mdaka, the managing director of Kaloti Gold in Dubai.

“I cannot find a place for transporting gold on Emirates, on BA on Swiss Airlines this weekend,” Mr El Mdaka said. “I am shipping in one-and-a-half to two tonnes of gold every day and it is going straight out.”

Mr El Mdaka added that gold is in such short supply in Dubai that he is able to charge a US$3 premium per ounce. “In the last week or so that has gone up from $1.25, $1.50 to $1.75. But now it is $3. We are really squeezed.”

Full article here

In Liberty,
Mike

Follow me on Twitter!

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