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Peter Schiff - The Phantom Recovery



June 07, 2010 – Comments (4)

In recent months, GDP numbers have rebounded - primarily as a result of record low interest rates reliquifying the credit market and government stimulus jolting consumer spending. Although the "positive growth" has delighted Obama's economic brain trust, it has done little to boost the fortunes of Main Street. As I have said many times, GDP largely measures spending, and spending is not growth.

Last Friday we received the latest indication that the real economy is not recovering in the slightest. The Labor Department reported that non-farm payrolls increased by 431,000 jobs in May. In a press statement, the President himself crowed at the news, noting that the official employment rate fell to 9.7% from 9.9%. However, just inches below the headline, red flags were everywhere. Only 41,000 of those jobs were generated in the private sector - far below the median forecast of 180,000. Even more troubling was the fact that the Census Bureau alone accounted for 411,000 new jobs, which were almost exclusively temporary positions.

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4 Comments – Post Your Own

#1) On June 07, 2010 at 9:00 PM, binve (< 20) wrote:

>>and spending is not growth.

Exactly! Nor is it an asset, yet it gets used as one all too often

Thanks for the post man!..

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#2) On June 07, 2010 at 9:31 PM, russiangambit (28.70) wrote:

Can you have deflation and falling dollar at the same time?

Schiff is in the inflation and falling dollar camp. But it seems, absent QE2 we are in for deflation soon.

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#3) On June 07, 2010 at 9:49 PM, 1315623493 wrote:

I was one of those Census workers. Lasted 3 weeks at the most. I was let go at the end of April. 

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#4) On June 08, 2010 at 3:53 AM, ozzfan1317 (70.58) wrote:

Yeah im starting to think about raising cash I think alot of my favorite companies might end up getting a lot cheaper.

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