Employment versus unemployment

EMPLOYMENT VERSUS UNEMPLOYMENT
Dear Readers,
I am going to show you something in this letter that will really make you think about your future.
But before I do that, let’s start with answering a question that I seem to have gotten a lot over the past year.
This one is from Ennio in response to my Letter, “The Reality of Canadian Debt Levels from last week. He writes:
“There appears to be a contradiction. On the one hand you recommend gold, as it is a hard asset can’t be printed. On the other hand you recommend US stocks which are just paper issued by the companies. How financially sound will these companies be when the US collapses due to the debt load? You are negative on gold in the short term? When are you looking for gold to move up?”
Those are very smart questions and one I get asked almost on a daily basis.
To keep things simple, I have been recommending – and still recommend – US stocks for one simple reason: they’re the easiest asset class to inflate. It’s really that simple.
Until there is stronger movement away from the US dollar and the current monetary system, shares of US companies can still be converted into cash, which can then be converted into goods and services.The trick here is knowing when to get out – and signals of that have yet to come.
If the US collapses under its debt load, I would be shorting the heck out of stocks but would be much more worried about the financial system, rather than individual company profits. Gold will act as a strong hedge against this scenario.
You may want to go back to my past letters to understand why gold will move higher in the coming years: CLICK HERE
My negative short term outlook on gold has been confirmed with gold falling below $1300.
But let me get back to this later because what I am about to share with you will really open your eyes to the realities of our future.
The Magic Behind Data
Job numbers came in and everyone is cheering. But they’re cheering for all the wrong reasons.
Sure, everything seems bright and dandy because the latest jobs report blew away expectations, showing a gain of 204,000 job for the month of October – more than double analyst expectations.
But as I mentioned in my letter, “Why the Fed Didn’t Taper,” employment numbers are getting better as a result of those leaving the workforce, not those joining it:
“While the unemployment rate has been falling over the past year, don’t be fooled; it was more the result of people leaving the workforce than actual jobs being created.”
Here is a chart from that Letter: