Employment versus unemployment

A Serious Flaw in Our Future
As the population grows, public spending must occur.
But where will this money come from, if not through taxation?
I’ve been seriously thinking about this over the past five years and the only realistic answer is central banks.
As the population grows, those who cannot find work – or longer care about work – will resort to entitlements, à la Obama, as shown in the chart above.
This will lead Obama, or whoever is in power, to pursue further spending to satisfy the growing population of the unemployed.
I haven’t even begun to talk about the Social Security problem that is already getting out of hand.
At the end of 2010, about 54 million people were receiving benefits from the Old-Age, Survivors, and Disability Insurance (OASDI).
At the end of 2011, OASDI was providing benefits to about 55 million people.
Last year, in 2012, it added another 2 million people – doubling the number that was added in the year prior and bringing the total to 57 million.
I am not really sure how this will play out but I know this problem will continue to grow.
Whether we see riots on the streets of America, or a future for our children reminiscent of futuristic movies like Judge Dredd, all are strong possibilities – more so in America, than in Canada.
For now, debt-spending is the norm because the world has joined in unison, with the world’s largest monetary figures printing trillions of dollars together (see The Flood Gates Have Opened.)
But what happens when other countries decide enough is enough? What happens when they want more US dollar for everything the US buys from them?
This will eventually happen and that means we will have to pay more for everything – not just art, collectibles, and gold.
That’s when we’ll feel the effects of hyperinflation – the same effects many growing countries are already facing.
Luckily – for now – America isn’t growing.
Gold and Gold Stocks 
The US Dollar continued to rally this week as a result of the jobs report (yeah, right), and is now right between its 50-day and 200-day moving average:

I remain skeptical of the US Dollar at this point and see it eventually falling back below its 50-day.
Despite the fact there is so much working against the US dollar, the recent rally slammed gold, which now sits below $1300.
Gold stocks traded down immediately at the open on Friday. However, around 15 minutes into trading, a bottom formed and shares began to trade higher. A couple of hours before the close, gold stocks began to rally back, along with gold.
Here’s a look at the TSX Global Gold Index chart from Friday:

I’ve been studying the charts and patterns on many gold stocks, and the gold mining indexes such as the HUI, NYSE ARCA gold bugs, and in particular the TSX gold miners.
I’ve noticed some peculiar trading over the last few weeks but couldn’t quite grasp what was going on.
Then a friend of mine, who has been charting for over 10 years and has made many great calls within the sector (and whom I am trying to convince to write with me), sent me this:
“Ivan – my sense of the market is that someone has undisclosed knowledge that will soon influence the future direction of gold stocks and is affecting the way that gold stocks are currently trading on the TSX. See the chart, which shows some very strange open/close and close/open action over the past 18 trading sessions…..