The unemployed, very numerous during this economic depression, get benefits for up to 99 weeks. Many are reaching that point. More here.
From the New York Times:
GUANGZHOU, China — Just a year after laying off millions of factory workers, China is facing an increasingly acute labor shortage.
As American workers struggle with near double-digit unemployment, unskilled factory workers here in China’s industrial heartland are being offered signing bonuses.
Factory wages have risen as much as 20 percent in recent months.
Congratulations to Obama, the Democrats in Congress, and the criminals at the Federal Reserve! You have created new jobs in China!! In the US, not so much.
And BTW, the Chinese labor shortage and increased wages will increase the price of imports from China thus driving up US inflation rates. When the Fed prints money, inflation always follows.
Tea Party anyone?
Yahoo Finance reports:
Theon Wednesday, in a surprise move, said it will buy up to $300 billion worth of longer-term U.S. government debt over the next six months …
This is outright money printing, and in time will devalue the dollar and any assets held in dollars.
Update 3/20/2009: Here’s Richard Russel‘s take on this from his 3/19 post (subscription web site, well worth it IMHO)
Russell Comment — They’re calling it “The Rambo Fed.” Bernanke is not fooling around any longer. He’s playing all his cards. He’s going to put a floor under housing and boost asset prices in an all-out attack on the bear market. Bernanke wants to drive mortgage rates down and refinance housing at 3-4%. On the news, the dollar swooned, the Euro surged, the long T-bond exploded higher by six points, and the yield on the ten-year Treasury bond sank to 1.51%. Whew, what a day and what an announcement.
Late comment — We’ve now entered into the what I call “the land of unintended consequences.”
Here’s Peter Schiff’s take. Who’s he? Just someone who predicted the financial crisis about a year before it happened!
There is an old adage on Wall Street that no one rings a bell at major market tops or bottoms. That may be true in normal times, but as many have noticed, we are now completely through the looking glass. In this parallel reality, Ben Bernanke has just rung the loudest bell ever heard in the foreign exchange and government debt markets.
While nearly every facet of America’s economy has been devastated over the past six months, our national currency has thus far skipped through the carnage with nary a scratch.
This week the Federal Reserve finally made clear what should have been obvious for some time – the only weapon that the Fed is willing to use to fight the economic downturn is a continuing torrent of pure, undiluted, inflation. The announcement should be seen as a game changer that redirects the fury of the financial storm directly onto our shores.
In its statement, the Fed announced its intention to purchase an additional $1 trillion worth of U.S. treasury and agency debt. The purchases, of course, will be made with money created out of thin air through the Fed’s printing presses.
Now that the Fed has recklessly shown its hand, the mad dash to get out of Treasuries and dollars should not be far off. The more the Fed prints to buy bonds the less the dollar is worth.
With such a policy in place, America has now become a banana republic. It won’t be too long before our living standards reflect our new status. Got Gold?