Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Stock Review : Markets : News Wire : Quotes : Radio : Silver : Stocks - Main 
  
 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

It's no laughing matter
By: Bill Holter

Everything You Need to Know About the S&P Until Christmas
By: Andrey Dashkov

The Price of Gold and the Art of War, Part II
By: Darryl Robert Schoon

Record September Gold Eagle Sales… A Big Price Move Coming?
By: Steve St. Angelo, SRSrocco Report

Jay Taylor Urges Investors to Stay Liquid for the Coming Gold Boom
By: The Gold Report

Singapore Becoming Global Gold Hub - Launches Kilo Bar Contract And Gold ATMs
By: GoldCore

Asian Metals Market Update
By: Chintan Karnani, Insignia Consultants

Gold Seeker Closing Report: Gold and Silver End Slightly Lower
By: Chris Mullen, Gold-Seeker.com

Into The Fray
By: Captain Hook

The Inverse Symmetry of Market Reflexivity
By: Market Anthropology

 
Search

GoldSeek Web

 
Economic Recovery Nonsense Continues



-- Posted Tuesday, 14 December 2010 | | Source: GoldSeek.com

By: Moses Kim

For the duration of what I estimate to be a 10 year economic slowdown (we are entering year 4), you will hear countless experts proclaim that the economy has recovered. Economic recovery evangelists were temporarily silenced earlier in the year, but they have now come out in force. In today’s FOMC statement, the Fed actually had the chutzpah to say: “The economic recovery is continuing, though at a rate that has been insufficient to bring down unemployment”. That the Fed can continually get away with saying such asinine comments this far into the recession is very surprising.

The economic recovery crowd will no doubt point you to the rise in retail sales. However, they will probably leave out a couple of key points. They probably won’t tell you that wholesale prices rose 0.8% in November, the most in 8 months. They also won’t tell you that the rise in retail sales was driven largely by the rise in food and energy costs. I keep hearing that oil prices are rising show that the economy is recovering.  In that case, would $10 gasoline evidence an economic recovery for the ages? Is the weak dollar, not demand, not driving wholesale prices higher?

Retail sales are denominated in dollars, so you would expect a rise in sales year after year on a nominal basis. Also, core inflation has been relatively stable compared to headline inflation, which includes the price of the goods that retailers are selling. Given the relatively muted inflation figures of our government, this implies some core prices are falling.

Retailers announced a “surprising ” jump in apparel sales. Well let me tell you that this shouldn’t be so surprising since apparel was one of the few items in the CPI that went down year-over-year. Revenues (sales) may be up, but margins are down.  Discounts started earlier this holiday season and lasted longer. Please see Best Buy, which was down 15% this morning on weak earnings figures. So all in all, let’s not get too bent out of shape about buoyant retail sales.

CPI change Year over Year

The government will never tell you that it is inflation that is driving economic statistics higher. The strong rise in commodities reflect an undercurrent of inflation that is eased away via government statistics. People will consistently be puzzled by the phenomenon of high unemployment and supposedly rosy economic statistics because the data has becomes so skewed at this point. This is why I always say to focus on the gold, dollar. and bond markets. Focus on gold first and foremost, since it is a globally traded asset that is not easily manipulated by central banks, especially since they have drained there reserves over the years. Government statistics are just noise in this ongoing economic drama.

Moses Kim

http://www.expectedreturnsblog.com/


-- Posted Tuesday, 14 December 2010 | Digg This Article | Source: GoldSeek.com




 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2014


© GoldSeek.com, Gold Seek LLC


GoldSeek.com Supports Kiva.org

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.
OilSeek.com