Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

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

© 2005-2022 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