There is a French saying: "The more things change... the more they stay the same." Lately people have been saying that the economy is recovering and that we are gaining traction. I wonder which planet these guys live in? Last thursday we go the latest unemployment number and it was not pretty, the number of people losing their jobs came higher than expected, and the overall unemployment rate in the US is now 9.5%, this number has not been seein decades, and the question is: where are the jobs going to come from? The US consumer is up to his eyeballs in debt and is finally stopping his spending habits, the savings rate for the US went from a negative 0.4 to a positive 7% in a span of less than a year. The fact that we do not see any more banks on the brink of bankruptcy does not mean that we are safe, my fear is that we are just breathing before we go under water again. I hope I'm wrong, but many of the economic indicators and publications I read do not sound very hopeful. In the meanwhile the US government keeps printing and selling dollars to whovever is brave enough to take them.
The dollar has been in a narrow trading range and who knows whether it will break to the up or downside in the short term, but make no mistake, I do not hold high hopes for the dollar in the long term, unless our government makes radical changes to the way it does things, we will just be getting deeper and deeper in the hole. In addition to that, the world is about to undergo the most radical change in demographics that it has ever experienced, millions and millions of baby boomers are about to start retiring, and unfortunately, we do not have enough young people to keep the ponzi scheme of the government going. My guess is that inflation will set in as we lose employees to retirement and young workers get tired of working extra hours to produce the goods needed to support the retired people. There is a very interesting special supplement in the economist from last week about the ageing world.
It has been a month since I wrote my last blog and during this time my son had his 9th B-day and we also celebrated Fathers day. It is amazing how quick time goes by, I can still remember when my son was born, and pretty soon he will be taller than me (which is not a great feat by the way). The summer is also flying by, we are almost halfway through the summer and the temperatures here in Houston have been almost borderline uncomfortable, and also very dry, I'm hoping for rain, but not a Hurricane please!
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