Unless or are a “Guru” or some such “Seer” into the future making purchases of the capital stocks of the corporations that are listed on the World’s stock exchanges is still a very risky thing to do so far for 2011. During the first 10 days of 2011 the New York Stock Exchange averages havegone up and down like a yo-yo. Good financial news seems to do little to influence such huge swings of the “S&P index,” as well as the “Dow Jones Average.”
However, there are a few economic indicators that have had some influence on investor confidence. That being, the so called new jobs created within the economy each month, new jobless claims for unemployment insurance and the percentage rate of unemployment.
In order to remain healthy and alive people need jobs and an income that will sustain them. Then again, if 100,000 new jobs are created during one month but new claims for unemployment compensation remain between 400,000 and 450,000 per week more people are losing jobs rather than getting new jobs during the same period. To the best of my knowledge, there is no indicator that accounts for the number of small business owners who went bankrupt or have gone out of business. So too, there are tens of thousands of employees who are not covered by unemployment compensation insurance because they worked for employers who themselves went out of business and did not pay into the unemployment insurance fund created by the State in which they did or do business.
Worse yet, inflation is at its highest level since “The Arab Oil Embargo of 1973.” In other words, now is the time to analyze market behavior until such time when there is a significant improvement and/or increase of new jobs within the economy of the United States of America. When and if the rate of unemployment decreases to less than 6 percent the change will clearly be an indication of increased economic activity soon thereafter. More people will be employed and as such they will have more money to spend for goods and services that at this time is not taking place.
You better that people will be selling their share ownership of gold and silver mining corporations and buying shares of goods manufacturing corporations. We can all agree that modern factories need to be built within the United States of America if, for no other reason, to create jobs for the now unemployed.
Our elected politicians must pass laws to restrict and/or reduce the number of jobs that have been “Outsourced” the foreigners within foreign countries. Being “Green Friendly” is the key to future factory construction and job creation and, as such, those new fuel efficient factories will keep American produced and/or manufactured products competitive in the World Marketplace for years to come.
If and when the above takes place only then will it be wise to purchase the shares of those corporation’s capital stocks. So too, the share prices for all of those gold and/or silver mining corporations will drop like rocks that are thrown into a pond. That is what happened during the years after “The Arab Oil Embargo of 1973” and that is what will happen soon after the greed of all of those people within the oil industry subsides, either from the lack of demand for crude oil or future regulation of the oil industry by the elected politicians within the Government of the United States of America.