Chart usGOLD   Chart usSILVER  
 
Food for thought
When gold argues the cause, eloquence is impotent.
Publius Syrus  
Search for :
LATEST NEWS  :
MINING STOCKS  :
Subscribe
Write Us
Add to Google
Search on Ebay :
PRECIOUS METALS (US $)
Gold 1175.18-23.42
Silver 16.06-0.42
Platinum 1229.70-8.60
Palladium 774.00-1.90
WORLD MARKETS
DOWJONES 17195227
NASDAQ 456617
NIKKEI 16414756
ASX 550548
CAC 40 414131
DAX 911532
HUI 165-13
XAU 68-5
CURRENCIES (€)
AUS $ 1.4254
CAN $ 1.4077
US $ 1.2576
GBP (£) 0.7865
Sw Fr 1.2063
YEN 139.9300
CURRENCIES ($)
AUS $ 1.1334
CAN $ 1.1194
Euro 0.7952
GBP (£) 0.6254
Sw Fr 0.9592
YEN 111.2670
RATIOS & INDEXES
Gold / Silver73.17
Gold / Oil14.65
Dowjones / Gold14.63
COMMODITIES
Copper 3.120.01
WTI Oil 80.22-0.30
Nat. Gas 3.72-0.01
Market Indices
Metal Prices
RSS
Precious Metals
Graph Generator
Statistics by Country
Statistics by Metals
Advertise on 24hGold
Projects on Google Earth
In the same category
Job Creation via Jobless Benefits and Fed Money Printing : Signs of a a Modern Day Depression
Published : November 29th, 2012
679 words - Reading time : 1 - 2 minutes
( 2 votes, 5/5 ) Print article
 
    Comments    
Tweet

 

 

 

 

When reading Wall Street Journal stories such as CBO: Unemployment Extension Would Add 300,000 Jobs, it’s easy to come away with the impression that the economic world we live in is radically different than it was just a few years ago. And, now almost three-and-a-half years after the Great Recession officially ended in 2009, when perusing Wall Street Journal reports such as Fed Stimulus Likely in 2013, it’s not hard to conclude that we are living in a modern day depression.

The times are surely different than 80 years ago, one of the biggest differences being how the federal government has responded to this economic crisis, and therein lies a frightening possibility for our collective future for anyone who thinks the malinvestment that developed during another historic asset bubble must be purged before sound economic growth can continue – if the Great Depression lasted a decade with far less government support, how long might the current slowdown persist, given that large swaths of the economy are being propped up by massive deficit spending and money printing in Washington?


 

Perhaps more importantly, have the borrowing and spending efforts by elected officials and the money printing actions of central bankers in recent years set us on a cataclysmic course, one that wasn’t even possible 80 years ago?

Without reading the first sentence in the first story noted above about extending unemployment benefits, you get the clear impression that the financial media and policymakers may have reached a new level of desperation in their quest for more jobs and stronger economic growth.

To be sure, it is the job of the CBO (Congressional Budget Office) to do all sorts of calculations to help policymakers make decisions, but when borrowing another $30 billion to continue extended jobless benefits directly translates into “adding” 300,000 jobs to the U.S. economy (and boosting growth to boot), something is seriously wrong with what the CBO is being asked to do these days.

If the U.S. government was sitting on piles and piles of money, one might argue that they should just write checks to all U.S. citizens – not just the unemployed – and this would give the economy a real boost, but nearly half of what the government spends is borrowed money, though this seems to bother fewer and fewer people with each passing day, particularly since the election earlier this month.

Some 15 million families (or almost 50 million Americans) now rely on food stamps that account for a whopping 80 percent of the $1 trillion “Farm Bill” passed by the Senate last summer. While no one likes to see people go hungry, it’s worth pondering the long-term impact of making food stamps as easy to use as swiping a credit card, that is, rather than the stigma and inconvenience associated with Depression era breadlines.

 


 

The fact that the nation has a major obesity problem and that consumers still find a way to fund holiday purchases during the madness otherwise known as “Black Friday” make this an even more intriguing comparison to the 1930s, one that historians will no doubt delight in analyzing many years from now.

But, probably the most disturbing comparison between the 1930s and today is the lengths to which the Federal Reserve has gone to aid the ailing economy, already printing about $2 trillion in new money to buy housing and government debt and, as detailed in the second Wall Street Journal story above, now likely to up their money printing efforts to about a trillion dollars a year, until such time that the economy improves.

Never before has the central bank printed so much money with so little impact and this is another important distinction between 80 years ago and today – nobody knows where the Fed’s past and future actions will lead.

Most historians credit the onset of World War II and the resulting surge in U.S. war-related exports to Europe for pulling the economy out of its decade-long funk, however, there is nothing of that scale on the horizon to turn things around during our modern day depression.

 

 

Tweet
Rate :Average note :5 (2 votes)View Top rated
Previous article by
Tim Iacono
All articles by
Tim Iacono
Next article by
Tim Iacono
Receive by mail the latest articles by this author  
Latest comment posted for this article
Be the first to comment
Add your comment
TOP ARTICLES
Editor's picks
RSS feed24hGold Mobile
Gold Data CenterGold & Silver Converter
Gold coins on eBaySilver coins on eBay
Technical AnalysisFundamental Analysis

Tim Iacono

Tim Iacono is the founder of Iacono Research, a subscription service providing market commentary and investment advisory services specializing in commodity based investing.
Tim Iacono ArchiveWebsiteSubscribe to his services
Most recent articles by Tim Iacono
10/22/2014
10/21/2014
10/21/2014
10/20/2014
10/20/2014
All Articles
Comment this article
You must be logged in to comment an article8000 characters max.
 
Sign in
User : Password : Login
Sign In Forgot password?
 
Receive 24hGold's Daily Market Briefing in your inbox. Go here to subscribe or unsubscribe.
Disclaimer