With continued uncertainty in global markets, today James Turk spoke with King World News about the harsh reality of what is really happening in the world.
Don’t Believe The Propaganda
James Turk: “It looks like Friday’s unemployment report washed out gold and silver for the time being, Eric. But it is important to note though that nothing of substance has changed…
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James Turk continues: “As we discussed last week, it is not unusual for the precious metals to take a breather in August, particularly given the fantastic year they are having. Price corrections from time-to-time are a fact of life. So we should not be surprised that gold and silver were hit after the unemployment report was released Friday morning. The numbers were better than expected, but the report seems to be doctored, based on the growing number of economists who are rising their eyebrows on the unusual and so-called “seasonal adjustments” that made the report look good.
These adjustments are not based on hard analysis. The pseudo-science used by the number crunchers at the Bureau of Labor Statistics is supposed to make the adjustments sound reasonable, but they are subjective, which makes them an easy feature to create some miracle results in an election year.
The Harsh Reality Of What Is Really Unfolding
Regardless of the numbers being cooked in Washington D.C., the economy is lackluster and employment is weak (see stunning illustration above). That’s why the labor force participation rate – people actually employed compared to the total number of people capable of working – is at multi-decade lows. Once the window dressing disappears after the election, reality will hit home. It looks like a recession is near and may have already begun. That means job losses will follow.
It also means that the country continues moving toward a 1970s-style stagflation. As everybody who lived through the 1970s knows, stagflation is the worst of both worlds. You get a weak economy and rising inflation. What’s worse, I continue to believe that we are moving toward hyperinflation, so I continue to look for evidence that we remain on that path.
Here is one of my favorite charts suggesting that the Federal Reserve remains on a hyperinflationary path. It is the so-called “velocity” of money.
This chart supposedly shows that money is moving too slowly in the economy, but you are grabbing the wrong end of the stick to reach that conclusion. The reality is something very different.
This chart is showing too much money is being pumped into the system relative to the amount of economic activity taking place. This pumping up of the stock of dollars is causing people to loss confidence in the currency. So businesses are buying assets – including their own shares. They are not investing in economic growth.
The issue today is that many people – including Fed policymakers – do not understand that the continual and never-ending issue of currency does not create wealth, nor does it even stimulate economic activity. If it did, living standards today would be rising, and we know they are not, which of course is leading to political changes. Brexit is just one example of this change. Another is the obvious polarity in the US political process.
You Must Own Physical Gold & Silver
So we all know what to do to protect our wealth from this uncertainty. Physical gold and silver are the best safe haven to protect us and our family from any turmoil.
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