Many economist today are trumpeting the improving United States economy, but is this miraculous turnaround really occurring, or are we just putting lipstick on the proverbial pig? Throughout history there is one thing that's for certain, and that is every government does whatever it takes to convince the public that they're doing a good job. This seems to be exactly what's happening when it comes to the deception of the American public. We see numbers such as; the 'lowering' unemployment rate, rising stock market, and the bailing out of European economies, but this is just another sad case of switching the focus from the real issues because the majority of Americans are unable to understand the complex economic issues that are plaguing us as a nation.
Starting with the unemployment numbers, it seems our government is attempting to cook the books as the former Soviet Union used to do during the Cold War. As I have stated in previous blogs, the unemployment number only consist of people who're actually looking for work, and not those that are chronically unemployed. What exactly does being 'chronically unemployed' actually mean? Many average Americans would define this as someone who stops looking for work, or someone who is just plain lazy, but this is not how the government contrives the Unemployment Rate. When someone files for the 99 weeks of unemployment they're considered unemployed by the numbers, but what happens when they run out of the Unemployment benefits? If they're still unemployed the government labels them as 'chronically unemployed' and no longer counts them in the statistics. This is the reason why heading up to the election the unemployment rate began to slip below 8% while the amount of new jobs created were far fewer than the number of newly unemployed. The real Unemployment rate is estimated to be around 11-19%, which would still have us in a deep recession. If you just take a look at the financial situation of those around you, you would see the financial situation of those we love is as bad or worse than it was when the recession hit hard in 2008.
Moving on to the stock market I would like to use the old saying, 'first time shame on you, second time shame on me' to describe it. How many times will we as Americans realize that when the market hits such high highs, with no applicable economic data to back up its rise, it is just the case of the wealthy and hedge funds moving from one asset to another. We fell for it during the late Clinton years when we experienced the .com bubble, which was just the case of people moving out of currency and commodities and moving into securities. Again we fell for it during the Bush years when we experienced the housing boom, along with the extreme rise in crude oil, which was due to trading and holding the oil contracts, and not over consumption. Now we are under the Barak administration and we are seeing the flight from housing and other 'derivative' investments into commodities such as gold, oil, and the markets again. And now with the DOW closing in on 15,000, oil up huge, and gold around $1550/ounce, we are poised for another great sell off in these markets. The one key features of money that the very first bankers, the Medici family of Venice, realized was that there was not money to be made by investments or interest, but rather in the movement of money (the trading of currencies). In modern economics there is a constant flow from commodities to currencies to stocks to tangible property, and the one who is always left holding the bag is the uninformed investor. Now I do believe it your own responsibility to stay informed about your own investments, so I have just a small amount of sympathy for those who let the hype get the best of them and they invest in risky unproven investments.
Europe seems to be the international issue that wealthy investors are using to move the markets in the direction they would like. We move from one Socialist nation to another to raise the alarm and then predictably there is a resolution and the quick drop is followed by a substantial gain (making billions for the investors that are ahead of the curve). The sad reality behind all of this is that eventually these socialist societies will fail due to enormous national debts, but by that time the savvy investor will have long ago found their haven in commodities such as gold, silver, and to a certain extent oil. Many governments around the world are already buying as much gold as possible to help soften the coming economic collapse. There is more than twice the gold in Fort Know being stored by foreign countries under the Federal Reserve Bank in New York. They know what's coming!
I hope that this paper helps to educate you as to the 'possible' calamities that the world may be facing in the near future, and with that knowledge I would hope that you would review where your money is placed and make a wise decision about its future. And next time we have an election coming up, pick a candidate (whether Republican or Democrat or Green Party) that truly wants to cut government spending, because remember we can't keep spending money as we have, because 'money really doesn't grow on trees'! God Bless.
By Jeffrey Brandon Lee
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