by ilene - February 24th, 2011 10:16 pm
Courtesy of Michael Snyder at Economic Collapse
Are you ready for an economy that has high inflation and high unemployment at the same time? Well, welcome to "Stagflation 2011". Stagflation exists when inflation and unemployment are both at high levels at the same time. Of course we all know about the high unemployment situation already. Gallup’s daily tracking poll says that the U.S. unemployment rate has been hovering around 10 percent all year so far. But now thanks to rapidly rising food prices and the exploding price of oil, rampant inflation is being added to the equation.
Normally inflation is a sign of increased economic activity, but when the basic commodities that we depend on to run our economy (such as oil) go up in price it actually causes a slowdown in economy activity. When the price of oil goes up high enough, it fundamentally changes the behavior of individuals and businesses. Suddenly certain types of economic activities that were feasible when oil was very cheap are not profitable any longer. When the price of oil rises to a new level and it stays there, essentially what is happening is that more "blood" is being drained out of our economy. Our economy will continue to function when there are higher oil prices, it will just be a lot more sluggish.
In some way, shape or form the price of oil factors into the production of most of our goods and services and it also factors into the transportation of most of our goods and services. A significant rise in the price of oil changes the economic equation for almost every business in the United States.
Today, the price of WTI crude soared past 100 dollars a barrel before closing at $98.10. The price of Brent crude increased 5.3 percent to $111.25. The protests in Libya are certainly causing a lot of the price activity that we have seen over the past few days, but the truth is that oil has been going up for a number of months. Right now we are only seeing an acceleration of the long-term trend.
Things are likely to get far worse if the "day of rage" planned for Saudi Arabia next month turns into a full-blown revolution. Up to this point, the revolutions that have been sweeping the Middle East have been organized largely on Facebook, and now there are calls all over…
Tags: Commodities, Economic Activities, economic activity, Economy, High Inflation, high unemployment, inflation, Oil, oil prices, Painful, price of oil, Profitable, Rampant Inflation, STAGFLATION, unemployment
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by ilene - October 31st, 2009 2:39 pm
Courtesy of Mish
Inquiring minds are asking the question "How many jobs were created out of the various stimulus programs so far and at what cost per job?"
That is a good question. Not that we can believe the reported number of jobs created, but let's assume for the sake of argument that the figures provided by the administration are correct.
White House Hails Stimulus Jobs
The Financial Times is reporting White House hails 650,000 stimulus jobs.
The US economic stimulus programme has directly created or saved 640,000 jobs so far, the White House said on Friday as it battled to find ways to show that its $787bn package was working, despite persistently high unemployment.
Data this week showed that the US economy had started to grow again but the Obama administration has faced rising criticism that it wasted taxpayers' money on the stimulus.
The White House tried to counter this by championing the jobs figures and even uploading videos to its website showing the dollars in action. The figures showed around half of the jobs were in education and 12.5 per cent were in construction.
"These reports are strong confirmation that…we are on-track to create and save 3.5m jobs through the Recovery Act by the end of next year," said Joe Biden, vice president.
But criticism has mounted this week over the accuracy of some preliminary stimulus data released by the White House. Even the Economic Policy Institute, a left-leaning think-tank which has fervently supported the stimulus, said there were serious problems with the figures.
Bear in mind it is impossible to prove how many jobs were created and it is beyond preposterous to think one can estimate the number of jobs saved.
However, let's take the administration's estimates at face value.
Inquiring minds want the official numbers on which to base the cost per job created. So please consider the administration's own numbers as reported on Track The Money Recovery.Gov as of October 30, 2009.
Let's do the math.
…
Tags: Economy, high unemployment, job creation, job savings, Jobs, Obama, temporary jobs
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.