The unemployment rate has risen to 9.8% as another quarter of a million jobs were shed last month.
Employers cut more jobs than forecast last month and the unemployment rate rose to a 26-year high, calling into question the sustainability of the economic recovery.
The unemployment rate rose to 9.8 percent, the highest since 1983, from 9.7 percent in August, the Labor Department said today in Washington. Payrolls fell by 263,000, following a revised 201,000 decline the prior month that was less than previously reported.
Economists are calling into question the inflationary policies of the government, which through excessive spending and artificially low interest rates is debasing the US dollar and undermining market stability.
Investment analyst Peter Schiff, who is running for Senate in Connecticut, attributes the country’s employment problem to the loose monetary policy of the central bank.
“The reality is, that if we put interest rates anywhere near where they ought to be, we would bankrupt most of our financial entities and we’d have a real collapse,” Schiff says.
“We’re never going to have a real recovery until the market lets us have a real recession.”
“Our phony consumer-based economy isn’t viable; it only exists as long as the Chinese and Japanese lend us money to buy their stuff.”
Financial analyst Jim Rogers expressed his concern about the effect of the central bank’s artificially low interest rates, currently set near zero. He added that the government is underreporting the inflation rate, which threatens to destabilize the economy.
“There’s no question the US is vulnerable to hyperinflation down the road or certainly the inflation we saw in the 1970s, I would expect that to come back in the foreseeable future, certainly in the next few years,” he said.
“The true inflation rate in America? It’s certainly at least 6 or 7 percent, the US government lies about it, as you know, everybody who shops knows that prices are up, everybody except the US government, and I wish we knew where they shopped so we can shop there too and get good prices.”
Rogers repeated his view that the Fed’s quantitative easing program is “debasing the currency” and said he was “extremely worried” about the fate of the dollar over the long term.
He says that the stimulus provided by central banks is distorting the financial markets.
Q: It has been a big run for equity markets first and foremost, what have you made of it?
A: The governments around the world are pouring huge amounts of money into the world economy. It has to go somewhere and the easiest, best way for it to go is in the financial markets.
Q: It has also concomitant with a big fall in the dollar and there is a call now for greater weakness in that currency, would you concur?
A: I am not optimistic about the US dollar long-term. In fact, the US dollar long-term is going to be a disaster. However, there are many people in the world right now who are terribly pessimistic about the dollar including me, many people have sold the dollar short, and so it would not surprise me if there were not a big rally. If a rally comes, I plan to sell that rally but I am not selling the dollar down here.
To restore a functioning free market, he suggested that the government should stop pumping money into banks and allow those that have been poorly managed to fail.
The chairman of Rogers Holding wrote in the Financial Times, “We need some more Lehmans so we can get out of this.”
During the last 20 years, “Greenspan and Bernanke introduced crony capitalism to the West, which is leading to a lost decade(s),” Rogers writes.
“Market fundamentals are that failures should collapse and be replaced by creative new forces rather than being propped up as zombies. Financial institutions have been failing for centuries and the world has survived.”
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