Well here we go again listening to all the amazing scientists explain to us why we can now increase rates with the strengthening dollar, and again for the third or maybe fourth time this year they are predicting a rate hike. Mainly we see bull markets smashing up the prices, and an appreciation of the US dollar. This is showing economists that the economy is in an upward swing. In a sense there is “economic growth” occurring in the United States, and the Chinese markets have stabilized. At least that is what they say. Unemployment rates are low, Chinese liquidation is halted, and everything seems to be great with the american assault on thrift.
First of all the unemployment rates are dropping and the economy is “expanding”. However, there has not been any actual job growth since the recession. Rather, the dropping of the unemployment is just a re-alignment of workers in response to the inflationary measures to combat the recession. After the Chinese dollar dump there was an influx of inflationary prices for the Chinese markets, not any stable growth. With the excess reserves the United States fed initially bought back debt from overseas and by doing so it appreciated the value of the dollar, as compared to the euro. This is why the prices have been rising in certain indexes that accept currency baskets for shares. This is not any actual growth, this is market reaction to inflationary signs of adjustment due to the massive devaluation of the Chinese bull, now bearish, market.
So, then, what does that tell us? We are seeing a shift of growth into full time work from part time work and this should not be happening. Especially with wage hikes, and with obamacare regulations. Since full time job growth is rising, it means labor is transitioning. However, labor is transitioning to full time work, while the regulations are calling for more part time work. This means that we are witnessing a transition of the labor market, which occurs during an inflationary boom. When the market feels inflationary pressure it expands, not in a “market oriented” fashion based on the outcome of the market but an artificial price increase. That price increase is unsustainable because the markets have been continually propped up by global policy, and the when the prices fully re-aligns to what the market actually calls for it will collapse from the pressure of the over bloated full time industry.
This is the sign of a coming recession, no matter what other scientists say. Remember, recessions happen when no one expects it. So diversify your currency, brace for the worse because probably after the holidays, and after the Chinese lift their security restraints, the market will fight back with vengeance and we will be moving into the “next recession”, completely oblivious to the fact we never fully recovered from the last.