Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
UK House Prices Momentum Tory Seats Forecast General Election 2019 - 8th Dec 19
Why Labour is Set to Lose Sheffield Seats at General Election 2019 - 8th Dec 19
Gold and Silver Opportunity Here Is As Good As It Gets - 8th Dec 19
High Yield Bond and Transports Signal Gold Buy Signal - 8th Dec 19
Gold & Silver Stocks Belie CoT Caution - 8th Dec 19
Will Labour Government Spending Bankrupt Britain? UK Debt and Deficits - 7th Dec 19
Lib Dem Fake Tory Election Leaflets - Sheffield Hallam General Election 2019 - 7th Dec 19
You Should Be Buying Gold Stocks Now - 6th Dec 19
The End of Apple Has Begun - 6th Dec 19
How Much Crude Oil Do You Unknowingly Eat? - 6th Dec 19
Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast - 6th Dec 19
Gold Price Forecast – Has the Recovery Finished? - 6th Dec 19
Precious Metals Ratio Charts - 6th Dec 19
Climate Emergency vs Labour Tree Felling Councils Reality - Sheffield General Election 2019 - 6th Dec 19
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19
What UK CPI, RPI and REAL INFLATION Predict for General Election Result 2019 - 5th Dec 19
Supply Crunch Coming as Silver Miners Scale Back - 5th Dec 19
Gold Will Not Surpass Its 1980 Peak - 5th Dec 19
UK House Prices Most Accurate Predictor of UK General Elections - 2019 - 5th Dec 19
7 Year Cycles Can Be Powerful And Gold Just Started One - 5th Dec 19
Lib Dems Winning Election Leaflets War Against Labour - Sheffield Hallam 2019 - 5th Dec 19
Do you like to venture out? Test yourself and see what we propose for you - 5th Dec 19
Great Ways To Make Money Over Time - 5th Dec 19
Calculating Your Personal Cost If Stock, Bond and House Prices Return To Average - 4th Dec 19
Will Labour Government Plant More Tree's than Council's Like Sheffield Fell? - 4th Dec 19
What the UK Economy GDP Growth Rate Predicts for General Election 2019 - 4th Dec 19
Gold, Silver and Stock Market Big Picture: Seat Belts Tightened - 4th Dec 19
Online Presence: What You Need to Know About What Others Know About You - 4th Dec 19
New Company Tip: How To Turn Prospects into Customers with CRM Tech - 4th Dec 19
About To Relive The 2007 US Housing Market Real Estate Crash Again? - 3rd Dec 19
How Far Will Gold Reach Before the Upcoming Reversal? - 3rd Dec 19
Is The Current Stock Market Rally A True Valuation Rally or Euphoria? - 3rd Dec 19
Why Shale Oil Not Viable at $45WTI Anymore, OPEC Can Dictate Price Again - 3rd Dec 19
Lib Dem Election Dodgy Leaflets - Sheffield Hallam Battle General Election 2019 - 3rd Dec 19
Land Rover Discovery Sport Brake Pads Uneven Wear Dash Warning Message at 2mm Mark - 3rd Dec 19
The Rise and Evolution of Bitcoin - 3rd Dec 19
Virtual games and sport, which has one related to the other - 3rd Dec 19
The Narrative About Gold is Changing Again - 2nd Dec 19
Stock Market Liquidity & Volume Diminish – What Next? - 2nd Dec 19
A Complete Guide To Finding The Best CFD Broker - 2nd Dec 19
See You On The Dark Side Of The Moon - 2nd Dec 19
Will Lib Dems Win Sheffield Hallam From Labour? General Election 2019 - 2nd Dec 19
Stock Market Where Are We?  - 1st Dec 19
Will Labour's Insane Manifesto Spending Plans Bankrupt Britain? - 1st Dec 19
Labour vs Tory Manifesto Debt Fuelled Voter Bribes Impact on UK General Election - 30th Nov 19
Growing Inequality Unrest Threatens Mining Industry - 30th Nov 19
Conspiracy Theories Are Killing This Nation - 30th Nov 19
How to Clip a Budgies / Parakeets Wings, Cut / Trim Bird's Flight Feathers - 30th Nov 19
Hidden Failure of SIFI Banks - 29th Nov 19
Use the “Ferrari Pattern” to Predictably Make 431% with IPOs - 29th Nov 19
Tax-Loss Selling Drives Down Gold and Silver Junior Stock Prices - 29th Nov 19
We Are on the Brink of the Second Great Depression - 29th Nov 19
How to Spot REAL Amazon Black Friday Bargains and Avoid FAKE Sales - 29th Nov 19

Market Oracle FREE Newsletter

UK House prices predicting general election result

Abysmal June Employment Figures Warn of Great Depression Ahead

Economics / Great Depression II Jul 10, 2011 - 06:00 AM GMT

By: Robert_McHugh_PhD

Economics

Best Financial Markets Analysis ArticleThe June Jobs numbers were horrendous, just like May's were, telling us the QE2 strategy of the Fed has failed, and the Central Planners' policy to keep taxes high, and not significantly cut them or rebate them has failed. There is so much focus on making sure the rich get properly taxed that true economic stimulus is paralyzed. QE was false economic stimulus. Trillions of new dollars were printed, however there was no effective delivery system in place to move that money to households, where the real economy begins. Wall Street got the cash, bid up the price of commodities with that cash, and inflation rose. That was about it.


The Bureau of Labor Statistics within the Labor Department reported Friday, July 8th that in the month of June, only 18,000 net new jobs were created in America. That is a disgrace. It means our Central Planners' policies have failed miserably. They drove the budget deficit up, drove the debt ceiling up, yet created no net jobs over the past several months. You see, the 18,000 figure is a lie. It is false. The true number was much worse. The CESBD Birth/Death adjustment in June was 131,000. In other words, the Labor Department took a wild assed guess that 131,000 jobs probably were created by new businesses they think started up in June. This is a pure guess. Plus, anyone who has ever started a new business knows folks take no pay or deep pay cuts at the start. The truth is, if you back out the 131,000 phony guesstimate CESBD figure, we find that the economy actually lost 113,000 Jobs in June. May's figure was revised lower to 25,000 new non-farm payroll jobs being created from what was originally reported as 54,000. But again, if you back out the 206,000 CESBD make pretend jobs, May saw a decline of 181,000 Jobs. So, for the two months May and June, the economy lost 294,000 Jobs. Then, if you consider we need to create 150,000 new jobs each month just to keep pace with population growth, this means the economy fell short of breakeven by 594,000 jobs just in May and June. This is alarming. Not only are we not creating new jobs to get those who are unemployed back to work, but the situation is worsening.

The BLS reported Friday that the number of unemployed persons increased 545,000 since March 2011 as part of their Unemployment number report, which is in the ballpark of the above non-farm payroll analysis. The unemployment rate rose to 9.2 percent in June, and is up 0.4 percent since March 2011.

There were 14.07 million folks out of work that meet the BLS definition of being out of work. There were an additional 2.7 million good folks who looked for work in the past 12 months, but did not look in the past four weeks, so were excluded from the BLS unemployment figure, many of whom were too discouraged to keep looking. Then, on top of this there were 8.6 million folks who were stuck in a part-term jobs (ie. very likely, low paying hourly work) involuntarily due to their hours being cut back, or they cannot find full time work. That totals 25.4 million underemployed folks in June, or 16.5 percent.

Wealth redistribution is not the answer, a communistic welfare state where the government provides all, is not the answer, which is part of the reason Greece is in such a mess. Government jobs, government handouts, and taxing the rich is not the answer. Giving trillions of dollars to Wall Street is not the answer.

The answer is to get cash, lots of cash, into the hands of households, to kick start this economy. Real stimulus for a prospering economy begins at the household level, trickles up to small businesses, trickles up to large corporations, trickles up to Wall Street, all the while the local, state and federal governments benefiting from increased tax revenues every time a dollar is passed up the economic food chain. If you kill off all small creatures on earth, there will be no food for large carnivorous creatures, and the large creatures will also die. The household must be fruitful and multiply so the rest of the economy can live and prosper.

We need a massive tax rebate to every household, with significant tax cuts across the board, to get this economy on the right track. The deficit created from the tax rebate will be more than made up with increased tax revenues from a growing and prosperous economy that will inevitably result after the tax rebates to households occurs. If we were to rebate $50,000 to every household, for example, or two years of income taxes, and require them to use half the money to pay off debt, a lot of great things would immediately occur. First of all, households would start spending with the extra money. This would create increased revenues for small businesses selling goods and services to households. This would incent small businesses to hire workers, creating millions of new jobs. Small businesses would have to boost their supplies of goods available to household consumers, so would approach large corporations and buy goods and services from them. Large corporations, seeing demand for their products and services grow, would approach Wall Street Investment Banking firms for capital to expand. On every sale at every level, the local, state and federal governments would receive increased tax revenues at low tax rates, which would balance deficits, and provide funds for infrastructure improvements which would again, create more jobs and boost the economy. Households (consumers) account for 70 percent of GDP in a healthy economy. Small businesses account for 70 percent of new job creation in a healthy economy. The system works when allowed to. But the key is, the Central Planners have to have the guts to enact a huge income tax rebate to every household to get things kick started, and on the road to recovery.

The byproduct is that by requiring half the income tax rebate to be used to pay down debt, every credit institution in America sees their risk-based capital levels improve dramatically, strengthening the entire financial system. Non-performing loans would be reduced as bad debts are repaid. Household balance sheets would strengthen as debts are reduced, meaning more households would qualify for loans. Further, credit institutions would become flush with cash, increasing their appetite to lend. They get a redo. They get more good loans and get to erase bad loans.

A massive income tax rebate is the solution, the answer, to avoiding the Great Depression which is coming if this policy is not adopted, and soon.

The next chart is warning a Great Depression is coming. We see a massive stock market topping pattern which should complete over the next 9 to 12 months. Time is running out. A significant tax rebate could change this dour outlook.

We cover a host of indicators and patterns, and present charts for most major markets in our International and U.S. Market reports, available to subscribers at www.technicalindicatorindex.com 

If you would like to follow us as we analyze precious metals, mining stocks, and major stock market indices around the globe, you can get a Free 30 day trial subscription by going to www.technicalindicatorindex.com and clicking on the Free Trial button at the upper right of the home page. We prepare daily and expanded weekend reports, and also offer mid-day market updates 3 to 4 times a week for our subscribers.

by Robert McHugh, Ph.D.  
technicalindicatorindex.com

Robert McHugh Ph.D. is President and CEO of Main Line Investors, Inc., a registered investment advisor in the Commonwealth of Pennsylvania, and can be reached at www.technicalindicatorindex.com.

The statements, opinions, buy and sell signals, and analyses presented in this newsletter are provided as a general information and education service only. Opinions, estimates, buy and sell signals, and probabilities expressed herein constitute the judgment of the author as of the date indicated and are subject to change without notice. Nothing contained in this newsletter is intended to be, nor shall it be construed as, investment advice, nor is it to be relied upon in making any investment or other decision. Prior to making any investment decision, you are advised to consult with your broker, investment advisor or other appropriate tax or financial professional to determine the suitability of any investment. Neither Main Line Investors, Inc. nor Robert D. McHugh, Jr., Ph.D. Editor shall be responsible or have any liability for investment decisions based upon, or the results obtained from, the information provided. Copyright 2008, Main Line Investors, Inc. All Rights Reserved.

Robert McHugh, Ph.D Archive

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


Comments

jcs
24 Oct 11, 07:55
What happened to your DOW 1,000 call?

What happened to you "Dow 1,000" call you made back in the spring of 2009? With all the bears on board now, this market is heading higher.

Please note, the "broadening top" has a 50-50 proposition AT BEST of playing out if you look back at historical patterns.


Post Comment

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

6 Critical Money Making Rules