Unemployment Declines When Almost 350,000 People Leave Job Market

May 7, 2012 by · Leave a Comment
Filed under: Economic News, Employment 

Some might take the declining employment numbers as good news, but when you look at the actual cause of the April 2012 unemployment rate drop from 8.2% to 8.1% you then see the numbers have been quite fudged. Heritage.com reports that the labor force participation rate is at a 30 year low. Despite the 115,000 jobs added in April (lower than the estimate of 165,000), 342,000 left the job market and will no longer be counted as even looking for employment.

So, these people are not unemployed, they just aren’t interested in employment due to retirement, sickness or most likely, long term unemployment for more than 99 weeks. After you stop collecting unemployment from the government, and have still not found a job, you will drop off unemployment rolls and be in some kind of suspended animation I guess. Who knows what the current political regime thinks you are?

While many economists expected the labor force participation rate to go up, the troubling sign is that it is still dropping since the recession officially began in December of 2007. The rate at that time was 66% and has since dropped to 63.6% with the latest statistics from April 2012.

Below is a chart that shows the decline back from January of 2001. These are troubling statistics no doubt:

Labor Force Participation Rate

Source and chart from Heritage.org

What Does Political Upheaval In France And Greece Mean for The Price Of Gold?

May 7, 2012 by · Leave a Comment
Filed under: Economic News, gold bullion 

Now that Nicolas Sarkozy has lost the presidency to a socialist in France and Greek voters have decided that they really don’t want their country to get out of debt, what does that mean for the price of gold? New French President Francois Hollande wants to lower the retirement age from 62 to 60 thus making the country even less productive as a whole and he also wants to tax millionaires at 75% of their income. Not a big deal here because French voters put him in office based on these profoundly unsound economic thievery principles.

While this is temporarily strengthening the US dollar while it is weakening the Euro, the immediate effect is to lower the price of gold. However, once new President Hollande figures out he can’t possibly pay the bills with such early retirement and tax policy foolishness, economic stagnation will begin in France (worse than it already is) and spread around Europe like cancer. And with Greek voters rejecting any austerity measures, Eurozone collapse is soon to follow thus making for that possible day of reckoning that will put the price of gold through the roof.

The next few short months in Greece should be quite interesting as all the hard fought austerity measures and agreements hashed out to try and bring some stability to the sinking ship that is the Greek economy gets scrapped and everybody goes back to the drawing board. That is surely something German Chancellor Angela Merkel as well as German voters won’t be happy about. There probably won’t be much tolerance for shenanigans from Greek riots and then asking for bailout money from the rest of Europe once again.

The day of reckoning is much closer.

Source: MarketOracle.co.uk

Warren Buffett Won’t Buy Facebook Stock

May 6, 2012 by · Leave a Comment
Filed under: Economic News 

Warren Buffett Won't buy FacebookEven with the more than huge hype surrounding the impending Facebook IPO somewhere around May 18th, billionaire Warren Buffet will not be buying Facebook stock. Buffett’s partner at Berkshire Hathaway Charlie Munger will also not be investing in the social network with more than 900 million members. As for a reason why, Buffett says:

“The idea that something coming out…that’s being offered with significant commissions, all kinds of publicity, the seller electing the time to sell, is going to be the best single investment that I can make in the world among thousands of choices is mathematically impossible.”

And Munger goes on to say:

“I don’t invest in what I don’t understand. And I don’t want to understand Facebook”

But don’t think the two Berkshire partners are all that negative on Facebook, in fact, they think they are fantastic companies along with Google and Apple. The problem they say is that they cannot come up with a good projection as to where these companies will be in 5 years. That could be good advice as anyone else considers buying into the Facebook IPO as the web is still relatively new as a business medium and change is about the only constant online these days. Just take a look at MySpace. Just a few years ago it was the social network to be a member of, but with the growth in popularity of Facebook, its decline was fast and furious.

While Apple is likely to be a contender in 5 years because they have real assets and produce a physical product, Facebook and Google on the other hand are pretty much digital businesses and no one really knows what will happen in 5 years in the web.

Source: CNN.com


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