Economic Update - Part 3: Unemployment Up, Recession Clouds Gathering, Time For An Einstein Solution

Okay, I promise this is the last installment, for now, of the mostly bad economic trends, statistics, and expert opinions that are becoming more and more obvious in this country:

- In a recent interview with Yahoo, Peter Schiff, CEO of Euro Pacific Capital stated his opinion that our country's financial situation has gotten so out of hand that: "We're already bankrupt. It’s better to acknowledge that than to pretend we're not."

He cites as proof for his conclusion the fact that the country has become “so broke” that the Federal Reserve has pushed interest rates to record lows, with the 10-year Treasury yield hitting a new trough of 1.61 percent Wednesday, May 30, 2012: “If interest rates were allowed to rise, the Federal government would have no choice but to restructure debt. A lot of our banks would fail. We’d have a bigger drop in our real estate mark. We’d be right back in recession.”

- The U.S. dollar may be in demand today, but it's still a "terribly flawed" currency belonging to an indebted nation, says international investor Jim Rogers, CEO and chairman of Rogers Holdings in a recent interview with Newsmax: "I do own the U.S. dollar. People see it as a safe haven, but it is not a safe haven. But people think that, and so therefore I own the dollar. There is more turmoil coming out of Europe and other currency markets, so people, when they try to look for a place to flee, they flee to the dollar, so I fled to the dollar, too. The dollar is terribly flawed, terribly flawed over the next few years, so be very careful."

Rogers also opined on several other financial and investment issues:

• The "world is running out of farmers, so the price of agricultural products has to go up a lot ... or we're not going to have any food at any price."

• The nation's condition "is very, very dire" and neither Republicans nor Democrats can really solve the U.S. economic problems.

• "In 2013 or 2014, we're going to have another slowdown, whether it's caused by Europe or who knows what going caused it, but it's coming."

• "The U.S. government makes up the official data it releases on unemployment and inflation."

- A Reuters report on May 31, 2012 which summarized that day's latest economic data was not positive:

• According to an ADP analysis, private sector employers created only 133,000 jobs in May, a result that was only a slightly up from April's lackluster 113,000 increase and below economists' forecasts  of 148,000.
• Weekly first time claims for state unemployment benefits rose 10,000 to a seasonally adjusted 383,000, according to a Labor Department report also released on May 31, 2012. First time unemployment claims have now risen in seven of the last eight weeks.
• Also on May 31, the Commerce Department reported U.S. GDP increased at a 1.9% annual rate in the first quarter, down from the 2.2% it had estimated last month. The economy grew at a 3.0% rate in the fourth quarter, i.e. the trend is not good.
• That same report also showed that after-tax corporate profits dropped for the first time in three years last quarter.
• And finally, a report from the Institute for Supply Management-Chicago found factory activity in the Midwest slowed in May. The Institute said its business barometer fell to 52.7, the lowest since September 2009, from 56.2 in April.

- According to a June 1, 2012 Associated Press story:

• U.S. employers created just private sector 69,000 jobs in May, the fewest in a year.
• As a result of the weak job creation results in May, the unemployment rate went up from 8.1% to 8.2%, the first increase in 11 months.
• The Labor Department also announced that it had revised its job creation estimates from the past two months, with the revised estimates now showing that 49,000 fewer jobs created.
• In the same article, the Associated Press reported that consumer confidence, as measured by the Conference Board's May survey, was also down.
• The Labor Department also reported "U.S. employers created 69,000 jobs in May, the fewest in a year, and the unemployment rate ticked up. The dismal jobs figures could fan fears that the economy is sputtering."

- In another June 1, 2012 Associated Press article, the official national unemployment rate has actually dropped almost a full percentage point from August, 2011, from 9.1 percent to 8.2 percent, suggesting the job market is steadily strengthening. However, that is not the case since this calculation does not accurately take into account the massive number of Americans who have stopped looking for a job, given their discouragement in that endeavor.

A better gauge of what is going on in the employee arena is the employment rate. That rate has improved only slightly in that time frame, from 58.3% to 58.6%. Unbelievably, that's lower than when the recession ended, when the employment rate was 59.4%.

- According to a recent CNBC report, at a Hyundai auto production factory in Montgomery, Alabama more than 20,000 people have applied for one of the 877 job openings. Not a good sign for the economy when the ratio of those looking for a job to the number of job openings is about 23 to 1.


Not a good day in the world or the U.S. economy. Tomorrow, we will take a look at what we might do as a nation to finally get out of the rut we are in and start the turnaround. It has to be obvious to most people who have read our past three days of bad economic data and trends and those that have just looked around at the economic carnage, that continuing to do the same tired political class economic programs over and over will not work.

Einstein figured that out long ago: "We cannot solve our problems with the same thinking we used when we created them." Seems like a good time to try his advice.

We invite all readers of this blog to visit our new website, "The United States Of Purple," at:

http://www.unitedstatesofpurple.com/

The United States of Purple is a new grass roots approach to filling the office of President of The United States by focusing on the restoration of freedom in the United States, focusing on problem solving skills and results vs. personal political enrichment, and imposing term limits on all future Federal politicians. No more red states, no more blue states, just one United States Of America under the banner of Purple.

The United States Of Purple's website also provides you the formal opportunity to sign a petition to begin the process of implementing a Constitutional amendment to impose fixed term limits on all Federally elected politicians. Only by turning out the existing political class can we have a chance of addressing and finally resolving the major issues of or times.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
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http://www.reason.com/
http://www.repealamendment/