From the Desk of Craig Griffin, President and Founder of ITM Trading

Jim Rickards: Gold Will Hit $7000 to $9000

I have written many times about the Economic Cycle Research Institute’s (ECRI) recession calls including the recession that ECRI says we are in currently. ECRI has called every recession since 1990 without a false call. At the end of this update I have included their most recent stand on the current economy and I believe everyone should read it.

I also reported in the last few updates that the S&P 500 has risen over 45% in the last two years while earnings have only gone up 5%. Do you see a problem here? I do, and I remember what happened to gold and numismatic gold during and after the recession of 2007-2009. During the recession gold dropped from over $1000 an ounce to around $680 an ounce, and then it went to $1902 an ounce by November 2011.

Jim Rickards of Tangent Capital says that it is wrong to assume that the Fed (Federal Reserve) knows what they are doing, and that their actions are basically all an experiment! I guess the Fed thinks we are all just a bunch of laboratory rats!

Rickards’ credentials are impressive. Rickards was involved in the Iran hostage crisis negotiation and he was the principal negotiator in the 1998 bailout of long-term capital management. Rickards also worked on Wall Street for 35 years. In 2001, Jim began using his financial expertise to aid the U.S. national security community and the U.S. Department of Defense. In his most recent blog Rickards forecasts that gold will rise to around $7000 to $9000 an ounce over the long term.

Source: http://jimrickards.blogspot.com/

So remember, “It would be foolish to acquire gold for the short term but it would also be unwise not to own some gold for the long term!”

From ECRI:

Job Growth Not Trending Higher

Given the consensus that U.S. growth is about to “take off” and reach “escape velocity,” many would just ignore the December payroll jobs data, expecting it to be revised away.

Yet, in the preceding 12 months the economy created 194,000 payroll jobs per month according to the establishment survey, but only 101,000 jobs per month according to the household survey, i.e., over a million fewer jobs over that 12-month period. Which is closer to the truth?

As the chart shows, over the past decade, the mean revision to the 12-month moving average of job growth, as measured by the household survey, was only one-twenty-fifth that for payroll jobs. Since their longer-term patterns tend to be similar, the payroll jobs data are more likely to be revised down.

Separately, the household survey, adjusted to the payroll concept, actually shows a decline in employment since the summer.

Bottom line: even ignoring the December jobs data, the trends are worsening, especially for data not subject to major revision.