The latest unemployment numbers are out and they show another slight increase, to 8.3%. The trend has been headed in the wrong direction for a few weeks now.
The economy is NOT improving and sooner or later this is bound to be reflected in the financial markets. There is just no scenario in which the stock market and real estate market can be healthy while the overall economy is sick.
Government statisticians tried to put a good face on the unemployment news by coupling it with the tid bit that the economy added 163,000 jobs in July, the highest number in some time. But that figure has to be taken with a grain of salt because in each and every month so far in 2012 that jobs report has had to be revised downward in the following month.
In other words, someone, somewhere in the halls of government has their finger on the scale. It is just not reasonable to believe that it is just a coincidence that the employment figures can possibly be wrong in the same direction 8 months in a row.
Yesterday CNBC ran a story that reinforces the contention that the US economy is actually already in a recession and we are just are in denial about it. The unemployment picture is actually much worse than it appears…
Investors may be bewildered by this news, but they need to shake off the cobwebs and realize that this all adds up to eventual very bad news for the financial markets, the stock market in particular. Meanwhile, inflation is making a comeback. Fuel prices made a surprise jump in July and drought is putting upward pressure on food prices across America.
This is building a picture that looks very much like STAGFLATION. Wise investors need to protect themselves against stagflation and the way to do so is to look to history.
The last time stagflation was a serious issue in the US economy was back in the 1973-75 time period, when the stock market fell 45% and the price of gold tripled…