Is our Economy Floating at best?

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Dr. John Psarouthakis, Founder and former CEO, JPIndusries,Inc., a Fortune 500 industrial corporation. . Currently, Distiguished Visiting Fellow / Professor, University of Edinburgh, Scotland. He is the Executive Editor of www.BusinessThinker.com

The job numbers reported by the U.S. Labor Department today were very disappointing. Lower than hoped 115,000 jobs were created in the U.S. in April. The unemployment rate fell to 8.1%, whatever that means these days. The government’s unemployment rate doesn’t take into account people that are underemployed and cannot get a full time employment. Nor does it include people who have given up looking for work. If we include these unfortunate persons the real unemployment is closer to 15%

We are experiencing the worst post-recession economic recovery since the great depression. The historically low interest rates and the government’s printing of over $2 trillion have kept the economy from falling into recession again. Today’s employment numbers is a clear indication that we have yet to see an economy structural improvement. If the economy does not accelerate soon the odds are in the direction of a mild double deep.

Recession is “Expanding”

It looks like that Britain joined into recession Italy, Ireland, Greece, Denmark, Portugal, the Netherlands, Belgium, and Spain. France is moving in that direction as well. If we add that China is growing at slower rates than in the recent past and if these recessions become somewhat “deep” then   Germany will find herself also in economic straits. Germany’s exports, 30% of GDP, will slow down significantly and her economy will suffer measurably. If all the above hold true into the future then you can all guess well what would be the effect on the USA economy and employment!  It won’t take much of anything for a recession to revisit the USA

Inflation

Central banks most likely will do to offset such a potential economic downturn is print money to stimulate the economies. I wonder if is there anybody in government(s) anywhere seriously worrying about a potentially disastrous inflation that will crawl up on us in the near future due to all that printing.  Though I doubt it, I hope there is someone worrying and doing something to prevent such development!

 

 

 

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