John Williams Eyes Gold as Insurance Against Armageddon
Source: Karen Roche of The Gold Report 01/10/2011
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JW:
It's more than a zero sum.
They end up adding maybe 200,000 extra jobs per month that don't exist.
The last time the government went back to benchmark its numbers, they found that they'd underestimated the decline by something over a million jobs by the time they published the benchmark revision.
They've announced that the benchmark revision for March of 2010 (to be published with the January 2011 payroll numbers) will be a downward adjustment by something like 370,000 jobs. The point is that if you put those numbers in you end up with a much weaker employment picture than popularly gets reported.
JW:
The official number at the U3 level is around 9.8%. The U6 level is up around 17%.
Adding in my estimate of long-term discouraged workers gets you up to around 22%.
That startles people because they remember hearing that unemployment hit about 25% during the Great Depression.
Estimates of unemployment in the Great Depression were all done after the fact, because the government didn't start surveying unemployment until 1940.
The estimate for 1933, which is viewed as the worst year of the Great Depression, was around 25%—and that was in an environment where 27% of the population worked on farms.
A lot of people went to live with relatives and help on their farms. Because today less than 2% of Americans work on farms, I think a comparable number for the Great Depression would be the non-farm unemployment estimates—which hit about 35% in 1933. In terms of historical comparisons, my 22% range may be the worst of the post-WWII era, but it's not at a Great Depression level at this point.
JW:
We could see hyperinflation breaking in the next year or two. I put an outside date on it of 2014.
I'm talking about a hyperinflation in which the USD becomes virtually worthless, which means all kinds of unstable markets, unstable times politically over the long haul.
(Check out what John has to say about hyperinflation. His website still carries his original Hyperinflation Special Report, published in 2008—after the Bear Stearns implosion but pre-Lehman, pre-TARP and pre-Obama. John revised and republished it in December 2009, and updated it again last year—Editor.)
As an economist looking at the broad trends—I'm not an investment advisor—people in a USD-denominated environment will need to try to preserve their wealth and assets and protect the purchasing power of the dollars they have. That means holding some physical gold, physical silver, getting some assets outside the U.S. dollar. I still like the Australian dollar, Canadian dollar and Swiss franc, and I think they will come out of this relatively unscathed versus the USD. Over the long haul, gold really is the preeminent asset, with a history of holding its purchasing power over time.
theaureport.com
note: Thanks to John McCarthy.. |
