Close X Cookies are necessary for the proper functioning of 24hGold.com. By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
EnglishFrench
Gold & Silver Prices in

Clouded by Knee-Jerk Relativism

IMG Auteur
Published : April 19th, 2012
615 words - Reading time : 1 - 2 minutes
( 1 vote, 5/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : Crisis Watch

 

 

 

 

Although relative comparisons are quite useful, the absolute numbers matter, too. In my experience, Wall Street "analysts" tends to give short shrift to the latter. That's why, for example, they can argue (with a straight face, no less) that stocks are cheap vs. bonds -- without making reference to the fact that bond yields are at artificially-depressed extremes as a result of unprecedented Federal Reserve assistance.


In "Don’t Be Fooled by These 10 Misleading Economic Indicators," The Philly Post's Gene Marks highlights a number of instances where knee-jerk relativism has clouded the bigger picture.


What reports like "consumer confidence" and "housing starts" really mean.


We all hear plenty of economic data every week. And recently, the news reports have been generally positive. Increased retail sales. Decreasing unemployment. A higher stock market. But it’s all relative. Sure, we’ve been seeing better numbers lately. But compared to what? The recession? A lot of the economic news is more than a little misleading. Let me give just a few examples, using data and charts from the very excellent Calculated Risk blog written by Bill McBride.


1. Gross Domestic Product
Gross Domestic Product, or GDP, is a measure of a country’s industrial output. During the recession, the U.S. had a negative GDP. So people are high-fiving because the Fed is predicting growth of 2 to 2.3 percent this year, which is up from the 1.7 percent growth recorded in 2011. This is not something to cheer about. China’s economic growth has slipped to (gasp!) only 8 percent! India is growing at a 7 percent rate. Even Sweden—Sweden, for God’s sake—is predicted to grow at more than 3 percent next year. How bad are we doing? If our economy’s projected growth rate doubles to 4 percent it would still be 30 percent behind its growth rate from
before the recession, and half of what it was back in the ’80s.


2. Housing Starts and 3. Home Sales
Did you know that housing starts are about to cap their
best quarter since 2008? Whoopee! But hold on a sec … let’s look a little closer. Yes, the real estate and construction industries are slowly starting to recover. But for small businesses in those places you’ve got a long, long way to go. For example, that fantastic housing starts number? It’s still at one-third the level of housing starts back in the mid-2000’s. Yes, you read right: one-third. New home sales are hovering around 300,000 per month compared to 1.4 million (yes, million) back in the mid 2000’s. And today’s existing home sales are about 35 percent less than they were back at the same time.


4. Unemployment Rate and 5. Weekly Unemployment Claims
People were
slightly concerned the other week when it was announced that the unemployment rate only fell to 8.2 percent. We should be very concerned. Ask any economist, and they’ll tell you that a “natural” rate of unemployment (where the supply of labor is near where the demand of labor is) should be about 6 percent. That’s because there will always be a percentage of people unemployed—seasonal employees, etc. Today, our unemployment rate is much higher than it should be. We still have more than five million people less employed than before the recession started. In early April, everyone was excited because weekly unemployment claims were at 375,000 … a four-year low. That’s really nothing to cheer. Before the recession, weekly unemployment claims were consistently below 300,000. Last month, the economy added 120,000 net new jobs. At that rate, it would take 42 months to get back to the level we were at before the recession. That’s three-and-a-half years!


Click here to read the rest.


Michael J. Panzner 


 


Data and Statistics for these countries : China | India | Sweden | All
Gold and Silver Prices for these countries : China | India | Sweden | All
<< Previous article
Rate : Average :5 (1 vote)
>> Next article
Michael J. Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes, published by Kaplan Publishing.
WebsiteSubscribe to his services
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
U.S.A. Caught in Enormous Policy...
03 MayCameron Waugh1
No comments because there is not much more that can be added to that. Short paper and long the PM's, thanks Jim.
JP Morgan Cornering Silver Bulli...
01 Mayovertheedge
Good article. There is one other conspiratorial reason why JPM might be accumulating major tonnage of silver. Throughout history, silver ha...
10 year Price vs Sentiment Map f...
01 Mayuser4779
Thanks, Bron, for this nice chart---more informative than just a plain old scatter plot. A 5-star article.
Picking Undervalued Gold Equitie...
29 Aprcapitalstars
MCX Commodity Gold Silver Tips is the most favourite service for all of traders but so much risk is involved in bullion trading. In this people can...
It’s Over: This Is the ONLY Pict...
29 Apruser4779
Two questions arise about photo of the fruit seller: when? and where? The laptop or notebook computer puts it probably in the last 5 years. That, ...
Inflation Inferno I
29 AprSilverthumb
Great article. I hope many people get a chance to read it. I'm going to read it for a second time right now. My thanks to the author>
Deconstructing and Debunking Sha...
29 AprDoom
I was under the impression that the inflation stats on his site were, as he explained them: one set is "official government inflation", and the oth...
Martin Armstrong – Gold Bullion ...
22 Aprbaregil
This Armstrong individual suffers from hyperinflation of the Ego. He speaks in a cryptic, sybilline and esoteric fashion, trying to make an impress...
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS
Mining Company News
Anadarko(Ngas-Oil)APC
Anadarko reports wider quarterly loss, output a record
US$ 93.73-0.20%Trend Power :
Corporate news
Helix(Ngas-Oil)HLX
Helix Announces Delivery of Q5000 and Drawdown of $250 Million Credit Facility
US$ 16.49+0.86%Trend Power :
Corporate news
Evolution Petroleum(Oil)EPM
Evolution Petroleum Declares Cash Dividend on 8.5% Series A Preferred Stock
US$ 6.58-4.50%Trend Power :
Corporate news
EOG Res.(Pl-Oil)EOG
EOG Resources reports 1Q loss
US$ 99.39+0.50%Trend Power :
Corporate news
Anadarko(Ngas-Oil)APC
Anadarko Petroleum reports 1Q loss
US$ 93.73-0.20%Trend Power :
Corporate news
EOG Res.(Pl-Oil)EOG
EOG Resources Reports First Quarter 2015 Results and Provides Operational Update
US$ 99.39+0.50%Trend Power :
Corporate news
Anadarko(Ngas-Oil)APC
Anadarko Announces First-Quarter 2015 Results
US$ 93.73-0.20%Trend Power :
Corporate news
United States Steel(Fe-Sn)X
U.S. Steel Absorbing 'Steel Industry Pain,' Barclays Says
US$ 23.74+2.06%Trend Power :
Corporate news
Helix(Ngas-Oil)HLX
Helix to Present at Upcoming Conferences
US$ 16.49+0.86%Trend Power :
Corporate news
EOG Res.(Pl-Oil)EOG
What's Coming For EOG Resources?
US$ 99.39+0.50%Trend Power :
Corporate news
Comments closed