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Morass It's A Big
Here at the Chembio Update Headquarters, we were suspicious when the Bureau of Labor Statistics came out with a report showing lessening job losses and a slightly improved National Unemployment Rate. We knew it was too good to be true.
Sure enough, after a little study and scouring around on the Internet, we came to realize that, sure enough, we've been lied to.
It seems that the reason there are lessening job losses is because of a slight rise in seasonal hiring:
Stores and shops need help for the Christmas shopping season. How surprising can that be? But according to Dr. Gary North, the real truth is that long-term unemployment is rising, and that is really BAD news.
The Grim News Buried in the "Good" News About Unemployment
Dec. 5, 2009
The stock market boomed briefly in response to the news that the unemployment rate fell to 10.2%. Then it faded. Why? Because the headline concealed bad news.
Take a look at the official explanation of the lower rate.
The unemployment rate edged down to 10.0 percent in November, and nonfarm payroll employment was essentially unchanged (-11,000), the U.S. Bureau of Labor Statistics reported today. In the prior 3 months, payroll job losses had averaged 135,000 a month.
This is the familiar "less bad news than expected." It does indicate improvement, to the extent that the rate of decline has declined. "In November, employment fell in construction, manufacturing, and information, while temporary help services and health care added jobs."
Temporary help is near the bottom of the job market. It isn't as low as fast food, but it's not much above. Pay is low.
Health care is a government-funded sector.
Falling construction and manufacturing points to a continuing contraction. If information technology is suffering -- where the brains are -- the economy is still in trouble.
Most things did not change.
Among the major worker groups, unemployment rates for adult men (10.5 percent), adult women (7.9 percent), teenagers (26.7 percent), whites (9.3 percent), blacks (15.6 percent), and Hispanics (12.7 percent) showed little change in November. The unemployment rate for Asians was 7.3 percent, not seasonally adjusted.
This is another case of "things are not getting worse."
Here is the bad news. Long-term unemployment is getting worse. It was already unprecedented.
The number of long-term unemployed (those jobless for 27 weeks and over) rose by 293,000 to 5.9 million. The percentage of unemployed persons jobless for 27 weeks or more increased by 2.7 percentage points to 38.3 percent.
These people are being paid by states and the Federal government. They are in desperate shape. They are in debt. They cannot find jobs. They have been shoved out of the economy. They are not spending.
If the economy does not fall into a secondary recession this spring, then the labor market will probably improve some. It is unlikely to return to where it was in 2007. "At the start of the recession in December 2007, the number of unemployed persons was 7.5 million, and the jobless rate was 4.9 percent." Today, 15.4 million are unemployed.
The big problem now is the hard-core unemployed. The length of the recession for them has undermined their faith in themselves and in the system. If the unemployment figure has inched down, but they remain unemployed, this sends a message: "Your career is over. You must become a temp or a hospital orderly."
What if it happened to you? Would you recover the mental strength you had at the beginning of your time at home? Could you find work in your field at the same level of pay? Your seniority, if any, would be gone.
A 0% federal funds rate is slowly goosing the economy. But it is creating the same unsustainable conditions that Greenspan's 1% rate produced. Meanwhile, long-term unemployment is getting worse.
The reason the unemployment rate dropped, from 10.2% to 10%, is because the Bureau of Labor Statistics has a bad habit of pretending that workers who remain unemployed long enough to stop receiving unemployment checks no longer exist. These "discouraged workers" are consigned to limbo, no longer counted in the unemployment numbers.
John Mauldin, in an interview included in the December 4, 2009, issue of John Mauldin's Weekly E-Letter, has this to say:
John Mauldin: All of the economic models are created on past performance. For instance, right now the economic idea du jour is what the recovery will look like. So, economists go back and average the eight post-war recessions and say, "Look, this is what the average was and this is how it responded." Well, making a prediction based on that only works as well as the underlying fundamentals of the recession.
This is a deleveraging, deflationary, asset-bubble-bursting recession. We're going to lose 8-10 million jobs. We're back to where we were in early 2000 in terms of jobs. Over the next five years, just to keep up with population growth, we must create another nine million jobs. Plus, we've got another almost five million people who are underemployed. And the Census Bureau took 450,000 people off this year because they said, "They're no longer looking for jobs, and since they're not looking for jobs they're not unemployed." That is a fascinating way of looking at it! Last month you were looking for a job and now you're so discouraged you're not looking for a job, so we're not going to count you as unemployed. That's a patently silly idea!
Damien: That's absurd.
John: Right, it is absurd. Over the next five years we're going to have to create something like 17-20 million jobs to get back to 4-5% unemployment. That's a staggering number of jobs. That's something like a 15% growth in the number of jobs over five years. You'd need real GDP growth of 15% to make that happen. What is the likelihood of total real GDP growth of 15% for the next five years?
Damien: Less than 0%. [Laughing]
John: I think we're going to be lucky to have GDP growth of 8-10%. So there's going to be a real shortfall with jobs. Unemployment is going to stay stubbornly high for the next five years unless something comes out of the clear blue - which is always possible. Somebody could invent a new energy source or we could start retooling our telecom systems - something like that.
Be not deceived, God is not mocked, and neither is Kong.
Our government is jiggering the figures, goosing the figures, and manipulating the definition of "unemployed" in order to convince the American people that things are getting better.
The people, unfortunately, know the truth:
You can't trick people who can't pay their bills and can't find jobs. For some strange reason, they just don't believe it when Uncle Sugar says all will soon be "back to normal." In fact, many of these people are growing more and more certain that things will never be the way they were, and they are getting madder by the minute.
Before long, three or four very hungry people, who have been out of work for some time, will gather and start talking. When they meet again and again, more and more will gather. They will question the system. "Why?" they ask: "The illegals get free food, medical, and so–forth, and we get nothing!" The local, state, and federal governments will be passing more ordinances and laws to place the dispossessed in more dire straits. But now, those who have are beginning to feel the big pinch. Some to many will have joined the ranks of the original group of hungry, angry citizens.
They will meet in homes, lodges, and then parks. They will start moving on their municipalities, the state, and the feds to make their voice heard. They will coalesce into an angry mob! They will start marching on their perceived enemies. Somewhere, during the turmoil, you too will become the "enemy" in their minds.
Their perceived enemies—not you and me—will be implementing more and more regulations trying to keep the money coming in. Municipalities and state governments are broke! The U.S. Government is broke. The Great Dole that has been going on for years, and more just recently, and more to come, with new legislation, will cause them to become more strident and harsh for increased collections. The game is almost up and they know it. Posse Comitatus is gone:
President Bush unveiled his broad "Homeland Security" department proposal in mid-July, including "a review of the law that could allow the military to operate more aggressively within the United States." The proposal champions a "greater involvement of military personnel" in "domestic preparedness and response efforts." Prior to this broad proposal, Department of Defense (DOD) officials repeatedly stated that they had no intention to recommend rewriting or repealing the Posse Comitatus Act, a post-Civil War statute that restricts the military's ability to participate in civilian law enforcement. That cautious approach has now been openly abandoned.
Various economic writers feel someone, somewhere, will knock over something in his garage. It will be kerosene. "Hmmm," he thinks.... A fire bomb is created and this begins the first of the revolt against big government by the poor–the newly displaced–the middle class. A revolution will have begun.
One or more writers say watch California and Detroit, Michigan, especially, for the first revolts. People will be hurting badly before much longer. They will have displaced aggression!
And now, we have a really cogent, concise summary of all the problems facing us from the National Inflation Association, which sees the whole unemployment report as one giant fantasy, perpetrated for purposes of pacifying the people.
Unemployment Decline An Illusion, Financial System Collapse Ahead
On Friday it was announced by the Bureau of Labor Statistics that the U.S. unemployment rate in November declined from 10.2% to 10%. While the mainstream media would like you to believe we have seen a peak in unemployment and the worst of the economic crisis is behind us, we know that this dip in the unemployment number is phony and the recession is only beginning.
Although the unemployment number dipped in November, we still lost 11,000 nonfarm jobs. Unemployment fell by 0.2% only because the civilian labor force shrunk in November by 98,000 people. This means more people are becoming discouraged and giving up looking for jobs. When you combine both short and long-term discouraged workers who aren't included in the labor force along with those who are underemployed with part-time jobs, real unemployment in the U.S. today is nearly 22%.
The most important area of employment to look at is manufacturing jobs. Increasing manufacturing is the only way for our country to truly recover and build real wealth, because it will allow us to cut down on inflation by exporting real products instead of the money we print. Unfortunately, the U.S. lost 41,000 manufacturing jobs in November and has lost 2.1 million manufacturing jobs over the last two years.
The main areas of increasing employment in November were health care and government jobs, which are non-productive jobs that are increasing global imbalances. These jobs are not being created due to a strengthening economy, they are being created due to our artificial, temporary and destructive stimulus. They are forcing our country to get deeper into debt and create massive inflation.
Those who receive a paycheck for a non-productive health care or government job, compete against all Americans for the purchasing of consumer goods, without an increase in the supply of goods. This means after excess inventories of goods are done being worked off, prices of all the goods we consume will increase at an astronomical rate that is unimaginable to most Americans today.
Many Americans with jobs are not concerned about inflation because they believe if the prices of goods go up, so will their wages and everything will balance out. They don't understand our standard of living in America has already been declining for over a decade. Sure, we have plasma TV's, cell phones and the Internet today, but our lives are becoming harder to live and it is becoming more difficult for the middle class to survive.
Twenty years ago, a father with an average job was able to support an entire family of four or five on one income. Today, both parents need to work, and they are still unable to support their family without getting deeply into debt with credit cards, mortgages, auto loans, and college loans. Less families today have health insurance. Wages have not kept pace with inflation, all we have seen is an increase in debt to meet some of the demand from inflation.
With the babyboomers beginning to retire, the decline in our standard of living is about to dreadfully accelerate. The average American peaks in spending at around 46 years old and the last babyboomer will turn 46 in 2010. Therefore, a major drop-off in consumer spending is coming. But more importantly, beginning this next decade, 1.5 to 2 million Americans will apply for Social Security every year until 2026, compared to only 500,000 per year during the last decade. Tax receipts are about to fall off a cliff, at the same time as government entitlement spending for Social Security, Medicare, and Medicaid go through the roof.
Many people have been asking us on NIAnswers, if we see massive inflation and gold prices go through the roof like we predict, wouldn't that be good for the U.S. because we have the largest gold reserves at 8,133.5 tonnes? Well, at the current gold price, our gold reserves are worth approximately $300 billion. Our budget deficit this year alone was $1.6 trillion. If we had to pay back our $12 trillion national debt using only the gold in our vaults, it would require a $45,889.44 per ounce gold price. But once you factor in our $55 to $100 trillion in unfunded liabilities for Social Security, Medicare, and Medicaid, our gold reserves will not put a dent in saving our country from the financial system collapse that lies ahead.
There you have it, folks. For whatever reason, the government is dedicated to treating us like mushrooms, keeping us in the dark and feeding us manure.
That's fine for most people, who do not see what is coming and furthermore, do not WANT to see it. But we are different. We see something coming and we want to know everything we can about it so that we can take steps to prepare, and to preserve as much of our wealth as we can.
Part of your wealth should be items you can use if the system collapses, including a food and water storage plan and a little gold and silver for when things get going again. But remember, folks, you can't eat gold! These times call for stored food and non-hybrid seeds, so you can grow your own fresh vegetables, and a few hens so you can have fresh eggs.
Knowing what's coming is the first part of preparedness, but nothing can take the place of actual preparations.
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