- Welcome to Capital Account. The IMF lowered growth forecasts and warned of a world-wide recession in its World Economic Outlook report. This was the IMF’s bleakest assessment of global growth prospects since the 2009 recession, according to the Wall Street Journal. Is the IMF late to the party? It upgraded growth prospects for only one major nation from its previous forecast: the US! Did the IMF take into account that the US is in a QE induced coma? We talk to Mike Shedlock about the meaning behind the IMF’s report.
Also, the US jobs numbers released by the BLS last week are still making headlines. The downturn in the unemployment rate during the election season prompted some high profile people, such as former GE CEO Jack Welch, to suggest that President Obama’s team manipulated the data. Our guest, Mike Shedlock, Investment Advisor for Sitka Pacific Capital, is here to dispel the conspiracy theories around the drop in unemployment.
In 2003 Austan Goolsbee, who later became an Obama aide, argued that in previous economic downturns “the unemployment rate has been low only because government programs, especially Social Security disability, have effectively been buying people off the unemployment rolls and reclassifying them as not in the labor force.” He cites the loosening of the standards to qualify for disability payments in the 1980s and 1990s as a reason for the increase of those in the disability system, a form of ‘invisible unemployment.’ The trend of rising disability insurance has continued in this recent economic downturn. We talk to Mike Shedlock, author of the popular blog Mish’s Global Economic Analysis, about factors that cloud and complicate the unemployment picture.
Plus, Angela Merkel is in Athens offering words of support for her Greek counterpart. Talk is cheap, far more expensive are the conditions for more bailouts and debt write-downs! Words of support don’t pay the bills or reignite a stalled economy. Lauren and Demetri look at how the mainstream media has misrepresented the problems in Greece. Also, Iran faces hyperinflation…or does it? Lauren and Demetri discuss the economic impact of sanctions and price controls in today’s “Loose Change.”