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Contributors Disability is Growing Twice as Fast as Jobs
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Last week, the government lied to all of us once again by announcing that the unemployment rate dropped from 8.3% to 8.1%. The reason the unemployment rate dropped was because 368,000 people were removed from the labor force. According to the government measures, you’re not unemployed if you have not looked for a job in the last four weeks.

The chart below from the St. Louis Fed tells you all you need to know about unemployment. Both the employment-to-population ratio and the participation rate are down to roughly where they were 30 years ago.

This is helping to keep the “official” unemployment rate below 10%. With more people out of the work force, the rate stays artificially low.

 

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If you’re on disability, you’re also not considered to be in the labor force. One of the explanations for this drop in participation rate is the fact that more Americans are mysteriously becoming disabled.

Since June of 2009, nonfarm payrolls have grown by 2.3 million jobs. During that same period, the number of disability enrollees has grown by 4.7 million. This is very disturbing. And it will have tremendous financial implications for all of us.

Since we’re not creating a whole lot of jobs, the Fed is likely to print more money to “stimulate” the economy. This is likely to lead to inflation down the road, reducing everyone’s standard of living.

As an investor, you can protect yourself from this nonsense by buying gold and silver. Precious metals are likely to move a lot higher as the Fed tries to reduce unemployment by printing money.

Regards,


Evaldo Albuquerque
Senior Analyst

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