Here are my favorite indicators and what they’re doing:
Unemployment statistics from ShadowStats.com:
The U.S. Department of Labor is shamelessly optimistic to a degree that would make George Orwell blush. Actually, optimistic is not the word…just plain misleading is the better descriptor. The official numbers in red versus the ShadowStats numbers as determined by that site’s John Williams, himself a professional consulting economist, demonstrate a discrepancy of at least 10%.
The real macro-trend speaks for itself. The counterfeit dollars (I mean stimulus dollars) that have been directed exclusively to the same large financial institutions who perennially fleece the average Joe have done nothing to offset the carnage that the small business landscape has become. This single chart alone, even if it was the official numbers that were actually true, demonstrate clearly what should be headline news: No broad economic recovery is possible without employment. Dear mainstream financial press editors: Please quit seizing upon temporally insignificant anomalies within macro data and offering them up as evidence of recovery. Nobody believes you anyway.
Baltic Dry Index
The Baltic Dry Index is a relatively pure snapshot of the supply and demand for the global commodities that are transported around the world on ships. When the chart is rising, it indicates there are fewer ships competing for larger numbers of cargoes and when the chart falls it indicates that the competition for cargoes is high because there is less shipping demand. So when you see a prolonged period of sustained declines, such as that which we’ve witnessed since the end of May this year, it’s a strong indication that there is a general deterioration in global economic activity, because the commodities shipped are essentially the building components of everything from roads to cars to industrial machinery.
With a decrease of over 50% in just under three months, the Baltic Dry Index is suggesting that there is a huge lull in commodity movement, which in my view, is an excellent precursor to stagnation in global industrial output. No demand, no supply, no jobs, no money, no recovery.
Price of gold:
It must be idiot season. A growing chorus of clowns on tiny mental tricycles have been clamoring since about May for a great gold sell-off. And as usual, it’s the people with the most impressive credentials leading the lunacy. I’d list them here, but I prefer to stick to my mother’s advice: If you don’t have something nice to say about someone….