Someone Please Help Me?

Mr. Carney of the Obama administration explains unemployment insurance as “one of the most direct ways to infuse money into the economy because people who are unemployed and obviously aren’t earning a paycheck are going to spend the money that they get . . . and that creates growth and income for businesses that then lead them to making decisions about jobs” resulting in more hiring.

This statement is very easy to understand, but I have a question. It “creates growth and income for businesses” which might lead to more jobs, and even if it does lead to more jobs, it tends to increase the jobs where the jobs are located. For example, if a scissor company makes scissors in China, and people buy more scissors, any additional jobs will be in China.

Why is not one economist or politician talking about this???

When John and Alice lost their jobs, the jobs were not eliminated. They were moved offshore. In previous American recessions the jobs were eliminated, and were then later restored as the economy recovered. But, this recession is different. Economists are implying that new jobs can be created overnight, but I have not seen one statistic regarding the historical growth of new jobs for “new products” because that is what we are talking about here.

So, someone, please tell me what economic policy that is being discusses today will bring Alice’s job back to America quickly.

About Derivatives and Credit

Here are two paragraphs from a Market Watch article from Brett Arends.

The derivatives time bomb is bigger than ever — and ticking away. Just before Lehman collapsed, at what we now call the height of the last bubble, Wall Street firms were carrying risky financial derivatives on their books with a value of an astonishing $183 trillion. That was 13 times the size of the U.S. economy. If it sounds insane, it was. Since then we’ve had four years of panic, alleged reform, and a return to financial sobriety. So what’s the figure now? Try $248 trillion. No kidding. Ah, good times.

Looking for a “credit bubble”? We’re in it. Everyone knows about the skyrocketing Federal debt, and the risk that Congress won’t raise the debt ceiling next month. But that’s just part of the story. U.S. corporations borrowed $513 billion in the first quarter. They’re borrowing at twice the rate as they were last fall, when corporate debt was already soaring. Savers, desperate for income, will buy almost any bonds at all. No wonder the yield on high-yield bonds has collapsed. So much for all that talk about “cash on the balance sheets.” U.S. non-financial corporations overall are now deeply in debt, to the tune of $7.3 trillion. That’s a record level, and up 24% in the past five years. And when you throw in household debts, government debts, and the debts of the financial sector, the debt level reaches at least as high as $50 trillion. More leverage means more risk. It’s Econ 101.

Read the Full Article Here.
http://www.marketwatch.com/story/the-next-worse-financial-crisis-2011-07-06

The Arithmetic of Debt

You may not like the author of this article, but he makes a compelling argument that the ‘arithmetic of debt’ is not as scary as you might think.

This argument supports the idea that the dollar might be stronger than most people predict, even if the debt ceiling is raised.

Click Here to read.

Forex Kiss your Momma Example

Here is another example and a brief explanation of a Kiss your Momma Forex setup on the Eur/Usd.

The Double-Dip Has Started, But They Won’t Admit It

In the first part of April the ICSC – International Council of Shopping Centers – stated that retail chains experienced a year-over-year gain of only 1.7% as of the end of March. At the same time the Fed announced that consumer credit increased at an annualized rate of 3.75%. That represents a gain of 2.05%. Don’t these numbers look good?

The Consumer Price Index is also reported to be 2.1%, so if we subtract the cost of 2.1 from the gain of 1.7 we find that the real growth rate is -0.4%. We all know that fuel and food inflation is robust (but not included in these numbers), which drives the negative factor further in the red.

Unfortunately the ICSC includes sales for Shopping Centers that sell gasoline that also makes the growth rate look better than it really is. If one arm of the gov’t removes fuel and food from its numbers, wouldn’t you think that the other one would also?

To add icing on the cake, their reports do not include the sales numbers for those stores that closed due to lower sales!!

In this day and age, wouldn’t you think that the use of computers and sensible analysis could provide us with accurate economic data?

Economists can’t figure out why the Consumer Sentiment is not higher, well now you know.

Spain Might Still Be A PIIG

Here is a very interesting article about Spain and its potential bailout that will affect the Euro.

The real estate bubble in Spain was bigger than Florida, yet the current values have only drawn down 20% compared to 50+% in Miami and Nevada.

This implies that there will be even greater pressure on the Spanish banking system that could require a bailout even though everyone is saying that it will not be needed.

No one admits that they do not know what will be needed.

See the full article here

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This Book Is A ‘Must-Read’ For A Winter Weekend

The Tragedy of the Euro by Philipp Baqus (159 pages) which is on-line and is free.

It includes a comprehensive history leading to the creation of the Euro, and why Germany agreed to surrender its Deutschmark, as well as the events of 2010 and now the current outlook for its future predicted demise.

Here is a quote from page 51 “If the Euro means so many disadvantages for Germany, how is it possible that Germany agreed to its introduction? The fact is, the majority of the population wanted to keep the Deutschmark (some polls say up to seventy percent of Germans wanted to keep the Deutschmark). Why did politicians not listen to majority opinion? The most feasible explanation is that the German government sacrificed the Deutschmark in order to make way for reunification in 1990. When the Wall came down, unification negotiations began. The negotiators included the two Germanys and the winning allies of World War II: the UK, the US, France, and the Soviet Union.”

Click Here To Download the PDF File.

John Williams Predicts HyperInflation Sooner Than You Expect

John Williams of www.shadowstats.com who is an economist and has been tracking the gov’t reports for his entire career of 40 years and has published articles on his website since 2004. He looks into the details and reveals how the gov’t changes the yard stick in order to place a positive spin on the economic forecasts.

This interview was recorded by McAlvanyWeeklyReport.com last week. To listen to this 60 minute interview just Click Here.

More Dollar Specifics

Dollar Set For Sharp Decline

On Wednesday Goldman Sachs forecast that the dollar will decline during the next 6 months. Well, for us that is old news. But what is interesting about this new announcement is in the specifics.

they are suggesting that the Gbp/Usd will reach 1.7900 and that the Eur/Usd will reach 1.5000

This is good news for the users of our new Skky Auto Trader because these big moves will most likely be best suited for the algorithm that it utilizes. Everybody loves a trending market and a quick look at the Eur/Usd Day chart tells it all. Can it possibly last another 6 months? It looks like Goldman Sachs is banking on it.

See full article Here.