By the skin of our teeth...

 

 

 

"I haue escaped with the skinne of my tethe"

 

Job 19:20

literal translation of the original Hebrew

 

 

What a crazy mixed up world we are living in right now. The market continues to ignore the "new reality" of unemployment and almost weekly sets a new record high. Our GDP growth continues to be stuck in the mud and we can't find the traction to get unstuck. The world is a keg of dynamite waiting for some crazy nut to light a match.

 

This morning on the seldom watched Morning Joe, Steve Ratner was one of the guests on the show. He had a segment on Europe - recession or depression. It was Ratner's opinion that Europe was now in a full stage depression and things could get even worse. The fact Europe's woes have not yet affected America is nothing more than "we are living by the skin of our teeth."

 

What I found interested about that segment, is Ratner is a huge (like most on MSNBC are) Obama supporter. Many times, he has used his verbal acumen to cover flaws of the President. However, on this issue he was resolute. It is bad in Europe - very, very bad.

 

The unemployment rate in both Greece and Spain is over 25%. That is a higher rate than what we had during our Great Depression. In addition, things are so bad, people who are working are afraid to retire. That means whatever jobs are available are still occupied by old folks. The net result?  The youth unemployment rate in both those countries is over 50%. That is a prescription for disaster. Europe is a powder keg for social unrest. All it would take is one country to start to teeter and contagion would likely result. The fire would spread quickly across the Atlantic and our once rosy stock market could be in the toilet over night.

 

I have said many times the metrics are all wrong for sustained growth in not only our country, but Europe as well. Debt is too high and productivity is too low. If our sock market reflected financial reality, it would be half or less what it is today. However, in the world of La La Land, everything appears to be just fine. Our long term investors have become nothing more than Day Traders, and the shorter the view, the better.

 

So as we continue to discuss immigration reform, gun control, carbon tax and so on, the national debt continues to climb. The Fed continues to print money and the party continues. As was said at the start of this piece, "living by the skin of your teeth" has biblical origins. I will conclude with another saying from the Bible - "Don't build your house on sand". And the sand under this "recovery" might even be quicksand.