Thoughts from the Frontline

What’s That Hissing Sound?

By John Mauldin

March 7, 2008

The BS from the BLS
Help Me, Obi-John
A New Program for All Investors
2,500,000 “Lost Jobs” and Counting
Taking a Long-Term Perspective
Leverage in Reverse Gear
What’s That Hissing Sound?
A Response from Tiffani

The official number for employment suggested a loss of 63,000 jobs. But could it have been more like 200,000? And I will make a case for 2,000,000 lost jobs last month. This week we will take a look at the confusing labor-market picture in the US. We will also look at the debate over the money supply. Is the Fed increasing the money supply at a reckless rate, fueling inflation fears down the road? All this and a lot more as we look at how the recession in affecting everyone and everything, from individuals to large businesses. (The letter will print a little long, but there are a lot of charts.)

This week's letter is triggered by an amusing (but very flattering) note from a reader. Matt M. wrote:

"John, you have been my rock for the last few years. Will this decline be equal to the 1970's, the 1930's or the 1900's when we had a similar wealth disparity? I must use a line from Star Wars, 'Help me Obi-John, you're my only hope.'"

Well, Matt, there may be some who say that I am on the Dark Side of the Economic Force, but I don't think we are in for a repeat of the early 1900s or even the '70s. Yes, the economy is in recession and it is likely to get worse. Oil is at $106. Gold is close to $1,000 and the dollar is in the tank. Inflation has everyone looking for their old bell bottom…

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