Gold Climbs the Bull Market Wall of Worry

A weekly excerpt from the subscription issue of The International Forecaster, taken from Bob Chapman's weekly publication.

October 6 2010: Joblessness dogs the economy, its worse than the 1930's today, suffering and pain on the streets, no incentive to create jobs, living standards continue to fall, pray the incumbents are defeated, blame for the Flash Crash, TARP sequels coming.

Joblessness still dogs the economy, which needs 125,000 jobs monthly just to keep up with population growth. As we await September’s statistics we wonder if they’ll be as bad as August’s loss of 54,000 jobs? This unfortunate situation has been going on for more than three years; 22 million Americans do not have jobs and some 10,000 million additional are forced to work part-time, some 34 hours a week. Having real unemployment at 22-5/8% makes recovery very difficult. That figures is U-6 less the bogus birth/death ratio. It’s not surprising that credit card and mortgage debt go unpaid as default and foreclosure accelerate. These conditions are certainly a drag on sales. As those sales falter businesses lay off more workers, which exacerbates the problem.

In actuality today’s conditions are much worse already than in the 1930s, due to today’s social underpinnings, such as welfare, food stamps, government hiring and unemployment insurance. That said, spending by the administration and the Federal Reserve over and above the social safety net, has been almost totally lavished upon the financial sector and transnational conglomerates.

Those who call for another WPA do not understand the history of the 1930s. In 1939 unemployment was 17.2% and in 1940 it was 16.4%, down from a high of some 25%. That to us means after increasing government spending by 45% from 1935 to 1940 only marginal gains in employment were made by these policies and had not a war been created, who knows where unemployment would have been in 1942. All we hear are the same old tired nostrums of Keynesian fascist economics and they do not work.

There is little political will to change this because 95% of the House and Senate have been purchased by Wall Street, banking, insurance, Pharma and the transnational conglomerates. That is why little constructive is accomplished. The interest behind the scenes control just about everything and that is why almost all incumbents have to be defeated in November.

From a political viewpoint the Republicans would probably do the same thing the Democrats are doing, because the same interests pay them. Due to the system it is easy for Republicans to display indifference. The Democrats wanted the job so let them deal with it. Doing what is being done about unemployment certainly isn’t working. We can well understand why Democrats are jumping ship like so many rats.

The business community says little or nothing as they discharge millions of workers to improve earnings, so their stocks will rise and they can profit from their options and bonuses.

The suffering and pain of millions of discharged workers continues, as the safety net keeps them out of the streets. Wars and occupations continue, as deficits and debt climb and revenues fall.

There is little incentive for big business to create jobs. Regulations and legal roadblocks are becoming a major impediment to expansion and hiring. Investors won’t invest in a hostile environment. Capital gains are much lower in other countries and tax credits spur production and innovation. Everything simply costs more in America for a variety of reasons. Business wants subsidies like those being offered elsewhere. It is also called corporate welfare. Such as keeping $1.6 trillion offshore so taxes do not have to be paid in the US. This subsidy is to offset subsidies offered in other countries. Like in the manipulation of currencies for advantage, which has been going on for years without a peep from government, because the end result was the purchase of US Treasuries and Agencies and lower prices on imported goods to keep inflation down. The excises of business are endless. The answer to subsidies and currency manipulation is tariffs on goods and services. That will bring this beggar-they-neighbor policy to an end. Copying what other countries are doing isn’t the answer. We do not want to build bigger and better crime syndicates.

Business does have some legitimate complaints and among them is the cost of protection from lawsuits from the government concerning discrimination, safety and the environment. No country in the world has the outrageous regulations the US business community is subjected too.

The administration’s policies have done nothing to increase employment and to restore economic growth. In fact their policies are just an extension of the policies of the previous administration. After two stimulus packages over the last four years nothing has been learned. They simply do not work and are continued to be used because the bureaucrats and the Fed do not know what else they can do. Corporatist fascism reigns under both political parties, and that is why almost all incumbents have to be voted out of office in November. They are supposed to be working for the voters, not special interest groups. These crooks are destroying America as unemployment rises, living standards fall and the rich get richer.

We live in a corporatist fascist world when the Treasury Secretary tells us losses from the TARP program are only going to be $50 billion that you get to pay for in bailing out bankrupt banking, Wall Street and transnational conglomerates. Of course, government never tells the truth. What we do know is that the losses will be more than $50 billion and these parties will live another day to gouge and steal from you again in the future. If you let them, they will eventually enslave you. They will also bring you the biggest depression in history.

On a somewhat different note we find no recovery in sight, and we believe as usual that the “expertsâ€