September 2, 2011
By Kevin Michael Grace
Was it only three years ago that the entire world hung on Barack Obama’s every word? One likes to imagine that at the height of his adulation he employed an aide to whisper in his ear that all glory is fleeting, but one suspects Obama would have paid no attention. Now the President of the United States, after being bumped for a Republican debate, has been reduced to assuring his countrymen that the televised rollout of his jobs program will not conflict with what they really want to hear: “Are you ready for some football?“
Obama’s speech was planned as the beginning of a political comeback, but after the dolorous employment figures released today, the White House is now consumed with anxiety. So much so that the contents of the jobs speech were leaked for the second time today: “meaningful tax relief,” a little more stimulus and “a strategy for helping the nation’s long-term unemployed.” Now that this mangy cat’s out of the bag, why must Obama make the journey to Capitol Hill? Couldn’t CSPAN simply televise the President’s two teleprompters (one for the right, one for the left) instead?
In any event, the White House has already admitted that nothing Obama promises next Thursday will make much difference. Its mid-year economic update, released yesterday, foresees 9% unemployment in 2012 (down marginally from 9.1% last month). The expected increase in the 2011 GDP has been downgraded to 1.7% from 2.7%, while 2012 GDP increase has been cut to 2.6% from 3.6%.
Even so, according to Reuters, “The more subdued growth outlook did not have a major impact on the expected deficits, and growth was expected to rebound to above 4% by 2015… The White House said the deficit would now decline to 6.1% of GDP in 2012 from a projected 8.8% this year.” Let’s get this straight. Obama is conceding that growth will be anemic—even before the “revisions” that are sure to come—and he plans “meaningful tax relief,” yet revenues will not fall, and the deficit will not rise? Pull the other one; it’s got bells on.
In an essay at GoldSeek.com, Gary Dorsch observes, “Most traders and the public at large are mentally conditioned to look to the White House and the Federal Reserve to ride to the rescue of the US economy whenever there is a crash in the stock market or when the economy runs into a rough patch.” Given that the US economy has been in continuous crisis since 2008 and that the Ben Bernanke’s quantitative easing has not delivered a recovery, this suggests that Washington—or “the entire federal family,” as it is now styled–is falsifying data in order to preserve corporate profits and prevent panic.
Specifically, “On August 29th, the Commerce Department backed-up Bernanke’s optimistic view of the economy, by reporting a surprising 0.8% increase in US consumer spending in July, the biggest increase in two years… even when the U-6 jobless rate hovers at 16%.” Dorsch notes that this flies in the face of four recent major surveys indicating that US consumer confidence has fallen to near-2008 levels: not surprising considering that 8.4 million jobs have been lost, and Americans are now “desperate for any work available, accepting of lower wages and cuts in medical benefits.”
Despite the recent obsession with unemployment, there has been little consideration of the nature of the jobs now on offer to the majority of Americans. In the September Atlantic, Don Peck demonstrates that the Great Recession has served to accelerate a trend—the rich are getting richer, while the middle class threatens to disappear. For instance, “From 2007 through 2009, total employment in professional, managerial, and highly skilled technical positions was essentially unchanged. Jobs in low-skill service occupations such as food preparation, personal care and housecleaning were also fairly stable. Overwhelmingly, the recession has destroyed the jobs in between.” Specifically, “Since 1993, more than half of the nation’s income growth has been captured by the top 1% of earners, and the gains have grown larger over time: from 2002 to 2007, out of every three dollars of national income growth, the top 1% of earners captured two.”
Peck ascribes the rising inequality in America to the expected consequences of globalism. But this inequality has not been borne equally with regard to sex. Peck presents two alarming data in this respect. “In 1967, 97% of 30-to-50-year-old American men with only a high-school diploma were working; in 2010, just 76 percent were,” and, “Real median wages of men have fallen by 32% since their peak in 1973.”
Even as we celebrate that the “glass ceiling” has been smashed, it is disquieting to observe that, as the so-called Arab Spring has demonstrated, a rising tide of jobless, hopeless men has the potential to overwhelm political systems previously thought stable.
Another consequence of the accelerating failures of globalism has been historic bull markets in precious metals. At week’s end, gold was trading at $1,870 (up $41 Friday) and silver at $43.07. This does not sit well with our elite. In the New York Times, Steven M Davidoff complains that “The Commodity Futures Trading Commission, the primary regulator of the gold market in the United States, does not appear to want to act.” He argues that the CFTC could “force American exchanges to further raise margin requirements, reducing leverage and the ability of investors to buy more gold. The agency would also have to act to limit the gold acquired individually and by the ETFs. All of these measures would have to be coordinated and put into effect on a global basis.” He further advises that similar measures “could” be applied to oil, food and silver. Who says the era of big government is over?
At Business Insider, GoldCore notes that while gold has almost completely recovered from its fall from $1,913.50, silver remained (as of Wednesday) 20% below its recent high of $50. Taking into consideration the traditional 15:1 gold-silver ratio, he sees silver rising as high as $130, with $50 being reached again in early autumn.
At Seeking Alpha, Robin McCutcheon argues that a continuing “liquidity trap” means the bull market in gold won’t end anytime soon but that, as a result, bullion is too expensive for the average investor. So, “Why not buy your gold while it’s still in the ground?” In his opinion, “Junior gold miners like Paramount Gold and Silver Corp and Great Panther Silver Limited are still relatively inexpensive compared to the mainstream miners.”
Also at Seeking Alpha, Bruce Pile contends that gold equities will not rise until bullion attains a “stable, average price… [that] will anticipate future financial performance.” That said, he identifies three juniors “with very low cash-flow valuations relative to a possible fast climb in revenue”: Harmony Gold, Nevsun Resources and Richmont Mines.
At the Financial Post, Peter Koven reports that with the merger of AuRico Gold and Northgate Minerals, Primero Mining is likely “to seek out another deal in the near future.” UBS Securities analyst Dan Rollins has “upgraded the stock to buy from neutral and placed a price target on it of $5.50.” (It was $3.60 at press time.) Koven reported Tuesday that AuRico shares fell 21% on news of the merger; by week’s end, AuRico had recovered slightly to $11.96.
And at the Globe and Mail, Damien Lynch’s small-cap mining stocks to watch were Aurizon Mines, Diamond Frank Exploration, Foundation Resources, Stellar Pacific Ventures and Typhoon Exploration.
Finally, a study released by Australia’s Climate Institute claims that governmental inaction on climate change will lead to an increase in mental illness. This is not as far-fetched as it might seem. Two words: Al Gore.