Dave Wrixon

Friday's Job Loss Report: As Bad as It Gets?

The problem is that every bad figure produced by the government this year has been an under-estimate that has subsequently been revised upwards. The real figure for November is far more likely to in excess of three quarters of a million. And what about those 400k plus that mysteriously just disappeared from the workforce at the stroke of a pen?

As for the stock-market, they didn't really see any of this coming in the first place, so the fact they are now able to see ahead and discount all this bad news is cold comfort.

The thing that worries me most is the idea that Bernanke is going to be buying Treasuries. Just when the dollar is peaking on technicalities prior to a deep swoon, it seems that the World is about to be overtly shown that the whole game is just one big Ponzi trick.

The ultimate problem and one that will limit Obama ability to act is that of the financial credentials of the US government. Other governments and sovereign wealth funds are getting twitchy. If they fail to underwrite the rescue then the dollar could nose dive. Some depreciation is essential. Collapse of the currency, however, would be catastrophic.