The gurus on CNBC and elsewhere were expecting to see the US add 150,000 jobs in the month of May, but the actual number came in at 69,000, with an official unemployment rate of 8.2%. Of course, we know that the “real” number is 18-20%, when you factor in those that have stopped looking for work and those that are working part time because they cannot find full time jobs–that official number does not factor these folks in.
(As bad as this reality is, for the first time ever, unemployment…officially…surpassed 11% for the Euro Zone, led by Spain’s 25%+ depression figures).
The scariest number out this morning for the US continues to be the Labor Force Participation Rate, which stands at 30 year lows, or 63.8%. This means that 36% of the country is capable of having a job, but for any myriad of reasons, is simply not participating in the job force. The major reason for this? Why get a job that pays minimum wage…the only area where jobs remain for many…when the government will pay you “not to work”. We recently learned that half the country is on some kind of government support. I used to say “Europe here we come”….but that’s been changed to “Europe, here we are”.
Speaking of Europe, Spain continues to implode, with a complete collapse in the country’s banking system under way NOW. Government officials there will not admit to this, but depositors there are withdrawing deposits as fast as possible…a bank run is occurring….and the Greek playbook is at work once again. Were it not for the European Central Bank (ECB), the Euro Zone would have ceased to exist long ago…and now the ECB is working on steroids…acting as essentially the ONLY source of liquidity and lending.
Years ago, when I first warned that Greece was the canary in the coal mine, and that Ireland, Portugal, Spain and Italy were next, few believed it could be true…but now, the reality of this fact is staring the planet right in the face. Next up, Italy and the rest of the Euro Zone, followed by the UK, Japan, China, and of course, the US. But first…..LOTS of money printing!
THE BIG WINNERS: GOLD, SILVER AND SHORT SELLERS – THE ARMAGEDDON TRADE
Go here and learn how to make Money with Silver and Gold http://goldbars-silvercoins.com
Gold and silver are flying this morning, with gold up $47/ounce to $1611 and silver up close to $1, at $28.5. Initially, with massive fiat currency printing globally, gold will be the biggest winner (silver is still viewed as an industrial metal, but this will only be a short term impediment). Whatever you do, please do not forget this most important of points; gold and silver are the only true currencies on the planet, and as our existing funny money continues to be diluted by the printing press, precious metals will continue to skyrocket in price. If you were a bit late to the party, and maybe purchased gold and silver at either current or higher prices, it may not feel like they have been skyrocketing, but importantly, think back to where prices were just a short while ago…2009.
In mid 2009…just 3 years ago…gold first broke $1000/ounce. In that same year, silver first broke $10/ounce. Had you done nothing but invest in gold and silver back then, you would have gold gains of 60% and a whopping 180% in silver. Going back further of course, back to 2003 when I first recommended gold and silver at $300/ounce and $5/ounce, the gains become something like what you would expect in an Apple or Google… 400% plus for both.
PLEASE REMEMBER THIS: going forward, gold and silver will post returns that at least equal what we’ve seen over the last decade, and ultimately, quite a bit more. The reason? Global governments know only one solution for solving our ongoing solvency problems…money printing/debt issuance. Central banks will print the money, and governments will sell the debt. Rinse and repeat…rinse and repeat.
If you doubt this, then all I ask you to do is consider the situation we’ve seen in Europe over the last few years. One by one, countries have realized that Keynesian economics, aka socialism, does not work. As these countries are forced into drastic austerity measures (or risk going the way of Zimbabwe and Greece, with no one willing to lend to them), government layoffs will continue to drown out any growth from the private sector. This vicious cycle….this death spiral…will feed on itself until it becomes clear that even central bank money printing cannot solve the problem. And folks, that’s when things get really interesting…that’s when the bailer-outers need a bailout…and that’s when gold and silver really go parabolic.
My target for gold continues to be (roughly) $10,000/ounce and $250/ounce for silver. And yes, this means that you should also continue to buy the leveraged ETF’s DGP (2x gold ETF) and AGQ (2x silver ETF). Forget about what happens in the short term…dollar cost average monthly into physical gold and silver (primarily) followed by the leveraged ETFs. The right mix for your personal portfolio is your call….it has to be your call…because no one but you understands your own risk/reward parameters.
Finally, the other protection (and source of major profits going forward) is being short the equity and debt markets. With the VRA, we do this through ownership of SPXU (3 x short S&P 500) and the new addition FAZ (3 x short financials). Over the last month, SPXU is up 30%. FAZ is up close to 8% today alone. These are incredibly volatile, but with a global collapse in the making, incredibly profitable as well.
Go here and learn how to make Money with Silver and Gold http://goldbars-silvercoins.com
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