Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
The Deep State vs Donald Trump - US vs Them Part 2 - 21st May 19
Deep State & Financial Powers Worry about Alternative Currencies - 21st May 19
Gold’s Exciting Boredom - 21st May 19
Trade War Fears Again, Will Stocks Resume the Downtrend? - 21st May 19
Buffett Mistake Costs Him $4.3 Billion This Year—Here’s What Every Investor Can Learn from It - 21st May 19
Dow Stock Market Trend Forecast 2019 May Update - Video - 20th May 19
A Brief History of Financial Entropy - 20th May 19
Gold, MMT, Fiat Money Inflation In France - 20th May 19
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19
It’s Not Technology but the Fed That Is Taking Away Jobs - 16th May 19
Learn to Protect your Forex Trading Capital - 16th May 19
Gold Ratio Charts Offer The Keys to the Bull Market - 16th May 19
Is Someone Secretly Smashing the Stock Market at Night? - 16th May 19
Crude Oil Price Fails At Critical Fibonacci Level - 15th May 19
Strong Stock Market Rally Expected - 15th May 19
US China Trade Impasse Threatens US Lithium, Rare Earth Imports - 15th May 19
Gold Mind Reader's Guide to the Global Markets Galaxy: 'Surreal' - 15th May 19
Trade Wars and Other Black Swan Threats to Your Investments - 15th May 19
Our Long-Anticipated Gold Momentum Rally Begins - 15th May 19
Defense Spending Is Recession Proof - Defense Dividend Stocks - 15th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

Gold Understands that Stock Market Liquidity Rallies Do Not Create Jobs

Economics / Economic Stimulus Oct 07, 2009 - 01:10 AM GMT

By: Chris_Galakoutis

Economics

Best Financial Markets Analysis ArticleOutside of minimum wage jobs and Wal-Mart poverty line work, today’s US economy appears unable to create good jobs.  If the US economy cannot create new jobs, Americans will be in no position to save and invest for their futures, nor will they have any purchasing power that would boost the economy. 


This is what the government doesn’t seem to understand.  Talk of deficit spending, stimulus packages, rebate checks, etc, helping to boost demand, is nonsensical, for demand is not the problem.  Demand is infinite.  People will always want things.  The only way to get those things is by working hard and earning enough money with which to make the purchases.  With no job or marketable skills, demand might still be there, but the means is lacking. 

A government going into debt, and sending Americans a rebate check with which to make the purchase, only makes matters worse, for the right to make that purchase has not been earned, and the lack of productivity will not yield a net positive for the economy that would allow for that debt to be repaid.  Therefore, demand is not the problem.  The problem is supply.  We need to supply ourselves with the means that would accommodate our demand.

What this country needs is for entrepreneurs to think up ideas and create new products that will be in demand, worldwide, like green-energy, perhaps.  Those products then need to be manufactured in the US, providing American workers with the purchasing power this country needs to pull itself out of this mess. 

The US has experience with building great products.  In the 1950’s, US made products were in high demand worldwide.  American workers earned the highest wages in the world.  It was all about quality, and there was nothing better than a product stamped “Made in the U.S.A.”  We need to go back to that model.

But that can only happen if government gets out of the way, slashes spending and onerous regulations, and by cutting taxes.  And, in a parting of the ways with rabid free-market thinkers, let’s go one step further.  It is understood that a return to the old model will take years.  For one, the US dollar would have to fall to where the market determines its value should be, helping to reverse the off shoring trend.  That will take time – time unemployed Americans do not have. 

In the meantime, we need to fight this free-for-all when it comes to the assault on those US workers.  This is an emergency.  Just like mortgages should never have been issued to anyone with a pulse, work visas should be severely restricted where there are qualified, unemployed Americans who can perform the work. 

Similarly, entire regions need not be torn apart, the social fabric of this country destroyed, via the off shoring of entire industries.  What good does it do to enforce immigration laws, when corporations dodge those rules by off shoring the jobs instead?  That is akin to guarding the front door, while you are robbed blind out the back.

Why even have immigration laws and restrictions on the employment of foreigners, when you then allow corporations to stick it to you by simply relocating and hiring them overseas?  Immigration laws might not be broken in such cases, but surely the spirit of those rules are violated one would think. 

Can we not be believers in free-markets while also respecting immigration laws?

Even Adam Smith believed that some government intervention, if it benefited the economically disenfranchised, was indeed necessary.  And it is necessary on the jobs front.  Sorry, but you just can’t allow a Wild West mentality to rule the day, country be damned! 

In the meantime, a strong to steady US dollar policy and strong job growth appear to be mutually exclusive positions at this time.  And with no meaningful job growth in an era where positioning for the next election takes precedence, government will be forced to plug the spending hole, and that means more of the same inflationary money printing/quantitative easing that continues to fuel these so called “liquidity rallies” in the US stock markets.  Rallies that will surely end in tears.

This is what gold understands.  And this is why gold is going higher. 

By Christopher G. Galakoutis

CMI Ventures LLC
Westport, CT,
USA Website: www.murkymarkets.com
Email: info@murkymarkets.com

© 2005-2009 Christopher G. Galakoutis

Christopher G Galakoutis is an independent investor and commentator, who in 2002 re-directed his attention to studying the macroeconomic issues that he believed would impact the United States, and the world, for many years to come. He works diligently to seek out investments for his own portfolio that align with his views, and writes about them on his website. With a background in international tax, he also works with clients holding foreign investments (ExpatTaxPros.com), ensuring their global income tax costs are being minimized.

Christopher Galakoutis  Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules