A few weeks ago unemployment claims were at their lowest point in eight years. The dollar was strong, it’s strongest in 14 years. But there are some problems, and it seems we’ve tipped the crest.
Leaks in the Economy
For one thing, speculation is out of control. People are predicting disasters- especially if Hillary Clinton is elected next Fall. China has threatened to go to war with us if the election doesn’t go their way. The new Muslim mayor of London has threatened us with Jihad, if we elect Donald Trump. A significant number of airlines and hospitality corporations have merged leaving consumers with fewer options.
The $15 dollar minimum wage has gone into effect in Seattle, New York, and elsewhere- costing people their jobs in those economies- and being a politically correct policy- it had huge non-reasoning support behind it. So it looks like there will be more $15 minimums in the near future.
The world’s gold supply has been vacuumed up by global banks despite its steadily dropping in value over the last eight years- and China has all but locked in its commitment to switch to the gold standard.
What’s worse, many countries have expressed serious doubt over whether or not the Federal Reserve still has any gold in its coffers. If all of that isn’t enough, the dollar reached its highest point since 2002 in February, and all the historical charts tell us that it will drop steadily for the next seven to nine years.
Tipping the Crest
While you may be hearing a great deal about how strong the dollar is, and that unemployment has hit record lows- the fact is that all the indicators are saying these two factors have topped out. They have to drop, and nothing can stop them.
To understand this, you have to know that all markets move in cycles. Generally, they go from recovery to boom, to bust- and back, because every economic upturn is essentially a bubble, and bubbles only last as long as their structure can support them- which is, of course, a limited amount of time.
So a macro economy would look like a boiling broth over time. The real trouble is that we don’t see it this way. We see every collapse as the result of a series of mistakes. We fail to prepare for the economic winter. This is happening now.
A Sign of Decline
The dollar has just begun its long slope into a decade-long trough, and unemployment has begun to rise over the last four weeks. The dollar began dropping, predictably, in February- as we have said. And jobless claims started rising one month ago. What this should tell you is that industries are cutting back on overhead because they see the dip coming.
Even if it weren’t for all the destabilizing factors that we mentioned under ‘Leaks in the Economy,’ the dollar would still be dropping as it always does at this point in the cycle. This could mean that we’re in for a very steep descent into the trough.
Just over one month ago, unemployment statistics were in the negative, meaning employment was in the black. However, employment has been good since September of 2014- and has been steadily declining since then. It’s only been in the last few weeks that unemployment has peaked above nil and made the news.
Those who have been watching the numbers, however, should have seen this coming since at least March of 2015, if not sooner.
Jobless rates are not the best indicator of the natural state of the economy. This is because the numbers are so easy to manipulate, and employment can be boosted or busted in so many ways. As we have seen over the last seven years, the president can make employment stats jump like a trained animal. You might think of unemployment claims as being like the body of a car, it doesn’t tell you how well the engine and other vital parts have been cared for- but significant damage can reveal either negligence, bad driving, or vandalism.
We’re not saying the economy is being intentionally sunk, this time. What we’re saying is that the natural ebb and flow of economies is not common knowledge to the common person. But it is standard knowledge to captains of industry. They are preparing for a long slow slump into the next recession- and you should be too.
To sum up, take our advice, and prepare for the dollar to slowly deflate and for employment opportunities gradually to dry up. We don’t have to get hit as hard as we did in 08, not if we educate ourselves about market cycles. This is a time for saving, preparation, and research.
Regards,
Ethan Warrick
Editor
Wealth Authority
