The End of the World, Part 2

by JDH on March 10, 2012

Last week, in the The End of the World, Part 1, I discussed the various reasons why the financial world might be ending, or be seriously damaged, this week.  Apparently there was no cause for worry; all is fine; never better.

The United States Department of Labor issued their Employment Information Summary on Friday, and it was great news!: “Nonfarm payroll employment rose by 227,000 in February, and the unemployment rate was unchanged at 8.3 percent.”

Imagine that: 227,000 formerly unemployed people are no productive members of the American workforce.  Well, sort of.

As Charles Hugh Smith breaks down the numbers on his OfTwoMinds website, the numbers aren’t anywhere near as good as they may appear.  Specifically:

  • 33 million people have joined the workforce since the year 2000
  • the economy created 4 million new jobs (full time, part time, temporary, etc.) since 2000.

Well, when you put it that way, the numbers are abysmal.

The U.S. economy now has 115 million full time jobs, about the same number as in 2000.

Let’s review: 33 million new people have joined the workforce since 2000, but the same number of people are employed. How is that possible?  Simple.  You just take out 20 million people from the workforce, to keep the unemployment rate reasonable.

It’s a simple math trick.  Just make a rule that says something like “if you haven’t found a job in a year, you are a discouraged worker, and therefore no longer in the work force”, so that you don’t count in the numbers.

If you didn’t arbitrarily subtract workers from the workforce, what would the unemployment rate be?  According to John Williams at Shadow Stats it would be closer to 25%.

You know, 25%, like in the Great Depression.

But we are obviously not in a depression, because so far this year:

  • the TSX is up 4.59 %
  • the DOW is up 5.77%
  • the S&P 500 is up 9.o1%

(Gold is up 9.3%, but let’s ignore that fact, since it disproves the fact that all is well).

But all is well, and the world is not coming to an end.

Unless you are an American.

On American soil.

Because FBI Director Robert Mueller isn’t sure if President Obama can kill Americans on American soil.  He’s pretty sure he can kill them on foreign soil (like if they come here to Canada?), but he has  to Check to See If Obama Has the Right to Assassinate Americans On U.S. Soil.  Yeah, Bob, why don’t you get back to us on that one…..

So with that backdrop, I can only conclude that we are travelling head long over the abyss.  The books are cooked to make it look like we don’t have the same unemployment levels as we had in the Great Depression, the FBI has to check to see if they can kill you without a court order, but the markets are up, so that’s all that matters.

I think I’ll go buy some gold.

Of course there is some good news out there.   Harold Camping, that old guy who predicted the world was going to end last May, and then last October, has finally admitted that his apocalypse prediction was ‘wrong’.  Of course I guess that was obvious to us when we all didn’t die.  More good news: the solar flare this week didn’t kill us, but says that there is another one due to arrive on Sunday, so there could still be some fireworks.

And in the final bit of good news, MetalMeister over on the Buy High Sell Higher Forum has announced that he has written his first column for Silver Doctors; you can read his analysis about the COT report and the gold and silver futures market.  Sidewinder thinks he’s wasting his time, since this type of detailed analysis takes a lot of time, and since it’s likely to simply encourage ignorant comments from disbelievers.  My thoughts? Go for it.  This blog proves that some people will read anything…….  The COT market is very complex, so my compliments to MetalMeister for even attempting it.  His predictions of the end of the COT market are interesting, and will no doubt be proven true.  Whether or not the world will end, we shall see.

And that’s my point: predicting the end of the world is risky business.  And, as of today, every single person who has ever predicted the end of the world has been completely wrong.  We are all still here, and I expect we will all still be here next week, so thanks for reading, and see you next week.

(And yes, do check out  Silver Doctor’s COT report and the gold and silver futures market; if we all survive, and understanding of that complicated stuff can’t hurt).


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