Gold, The Misery Index And Insanity

By Gary Christenson – Re-Blogged From The Deviant Investor

In 1980 Ronald Reagan spoke about the Misery Index.  An economist had added the inflation rate to the unemployment rate, called it the Misery Index, and used it to indicate the social costs and economic difficulty for the middle class.

Today the Misery Index is much smaller than in 1980, thanks to … intelligent fiscal management, economically beneficial monetary policy from the Federal Reserve, and wise political policy from the White House.  If you believe any of those, read no further.

Most people will agree that the Misery Index is much smaller today because the numbers have been gimmicked.  Does anyone believe a few percent for inflation or around 5% unemployment?   Massage (torture) the numbers and the Misery Index declines, incumbent politicians are re-elected, while far too many people remain out of work, earning practically nothing on their savings, and paying too much for food, clothing, drugs, medical care, college, transportation and so on.

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Failure to Launch

By Peter Schiff – Re-Blogged From Euro Pacific Capital

The popular belief that the U.S. economy has been steadily recovering has endured months of disappointing data without losing much of its appeal. A deep bench of excuses, ranging from the weather to the Chinese economy, has been called on to justify why the economy hasn’t built up any noticeable steam, and why the Fed has failed to move rates off zero, where they have been for seven years. But the downright dismal September jobs report that was released last Friday may prove to be the flashing red beacon that even the most skilled apologists can’t explain away. The report should make it abundantly clear that we are far closer to recession than recovery. But old notions die hard and, shockingly, most economists still believe that we have hit a temporary speed bump not a brick wall. But at some point healthy hope turns into dangerous delusion. We may have just turned that corner.
The report was horrific any way you slice it. The consensus of economists had expected to see 203,000 new jobs in September, not a particularly impressive number, but at least it would have been an improvement from the 173,000 new jobs that were added in August. Not only did September miss substantially, at just 142,000 jobs, but August was revised down to 136,000 (Bureau of Labor Statistics) (there were economists who had even expected August to be revised up to as high 247,000). This means that the last three months have averaged just 167,000 jobs, a level that is not even close to where we should have been in a real recovery. But it gets worse from there.

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What Two Risks From Rising Interest-Rates Could Each Trigger A New Global Crisis?

By Daniel R Amerman – Re-Blogged From http://www.Gold-Eagle.com

Why are interest rates at historic lows in the United States and around the world?

The widely-accepted answer is that very low interest rates exist for the purpose of stimulating economic growth and corporate profits, and are thereby helping the United States and other nations that are struggling with persistent and deep-rooted economic and unemployment problems.

However, if we accept this answer, then another question arises. If the US economy is booming while unemployment purportedly nears a mere 5% – then why do interest rates remain so low? Why the continuous drama about whether the Federal Reserve will slightly increase interest rates?

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Groundhog Day At The Fed

By Peter Schiff – Re-Blogged From EuroPacific Capital

Every dictator knows that a continuous state of emergency is the best means to justify tyrannical policies. The trick is to keep the fictitious emergency from breeding so much paranoia that routine activities come to a halt. Many have discovered that it’s best to make the threat external, intangible and ultimately, unverifiable. In Orwell’s 1984 the preferred mantra was “We’ve always been at war with Eurasia,” even though everyone knew it wasn’t true. In its rate decision this week the Federal Reserve, adopted a similar approach and conjured up an external threat to maintain a policy that is becoming increasingly absurd.

In blaming its continued inaction on “uncertainties abroad” (an excuse never before invoked by the Fed in the current period of zero interest rates), the Fed was able to maintain the pretense of a strong domestic economy, and its desire to lift rates at the earliest appropriate moment while continuing the economic life support of zero percent rates. Unbelievably, the media swallowed the propaganda hook, line, and sinker.

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Party Like It’s 2015

By Michael Pento – Re-Blogged From http://www.Silver-Phoenix500.com

In 1982 the artist formally known as Prince released a popular party anthem called “1999”. The song was a premonition that 1999 would be a year we would all aspire to “party like”.  It was obvious that Prince was making reference to the excitement associated with ringing in a new century.  However, unbeknownst to him, the accommodative policies of the Federal Reserve would lead to a festal bubble in NASDAQ stocks, making his call to party in 1999 that much more appropriate.

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Government vs Labor and Business

cropped-bob-shapiro.jpg   By Bob Shapiro

Witnesses observing a crime in progress may tell different stories. Economists looking at the same chart describing the US Economy also may not agree on what’s going on.

A recent article on the American Enterprise Institute (AEI) web site, by James Pethokoukis, The Rise of the Machines vs Workers, in One Chart, showed the following chart:

Corp Profits

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