Is Shrinking Labor Force Precursor to $4375 Gold
Today, jobs data sent a shock through markets and put wings under the gold price. Surprise! Surprise! It seems nobody was predicting that only 88,000 jobs were created in the month of March. To blame is the sequester but many business people point to the skyrocketing cost of health care and a reluctance of employers to employ full-time benefit-entitled workers.
These numbers came on the heel of rising jobless claims for the week ending March 29. Surely, the unemployment rate would rise. NOT! Despite these dismal numbers, the unemployment rate dropped to 7.6%. "But ours is not to reason why, ours is but to do and die."
The initial reaction of the markets was to plunge 150 points before doing an about face. Gold immediately reacted higher and closed the day up $25. I think gold got it right first and then the markets caught on later in the day. Unemployment is not falling, it is the Labor Force Participation Rate that is falling off a cliff. Some 500,000 workers gave up the ghost and quit the labor force - or - ran out of unemployment benefits. Look at it as you may, but it all adds up to less workers, less income to spend and less income to tax.
This is not a growing economy and the Fed knows it. Japan here we come. I believe the Fed will not be outdone and that data like this gives the Fed cause to pump up the money supply even further. The Labor Force Participation Rate has not been this low since 1979. A time that saw the gold price rise 178% within 12 months. The Dow, on the other hand, rose 15%.
Are today's numbers a sign of gold prices to come? Did the Pope leave behind his red shoes?
As always, the facts are the facts, the rest is my opinion and yours is but to reason why. For more breaking news and special gold reports visit LearCapital.com or follow @DaveTheGoldDr.
These numbers came on the heel of rising jobless claims for the week ending March 29. Surely, the unemployment rate would rise. NOT! Despite these dismal numbers, the unemployment rate dropped to 7.6%. "But ours is not to reason why, ours is but to do and die."
The initial reaction of the markets was to plunge 150 points before doing an about face. Gold immediately reacted higher and closed the day up $25. I think gold got it right first and then the markets caught on later in the day. Unemployment is not falling, it is the Labor Force Participation Rate that is falling off a cliff. Some 500,000 workers gave up the ghost and quit the labor force - or - ran out of unemployment benefits. Look at it as you may, but it all adds up to less workers, less income to spend and less income to tax.
This is not a growing economy and the Fed knows it. Japan here we come. I believe the Fed will not be outdone and that data like this gives the Fed cause to pump up the money supply even further. The Labor Force Participation Rate has not been this low since 1979. A time that saw the gold price rise 178% within 12 months. The Dow, on the other hand, rose 15%.
Are today's numbers a sign of gold prices to come? Did the Pope leave behind his red shoes?
As always, the facts are the facts, the rest is my opinion and yours is but to reason why. For more breaking news and special gold reports visit LearCapital.com or follow @DaveTheGoldDr.