Last week I suggested that of the 200,000 jobs created last month a good portion were seasonal hires and were likely being fired as I typed the posting. Well the rat has emerged from the data pile and 44% of the 200,000 created last month, 88,000, were created in the high paying careers of restaurants, retail and couriers. Gee, who could have seen that coming!
A quick observation: There were over 1.3 billion cell phones manufactured last year and exactly ZERO were manufactured in the U.S. All those jobs were created elsewhere.
Debt and the ability of various governments around the world to issue it at a reasonable rate of interest is going to be a problem in 2012 This month $1.1 trillion of sovereign debt will need to be reissued, i.e. rolled over. In March there will be an additional $1.3 trillion. For the G7 Nations combined the total 2012 roll over amount will be approximately $7.5 trillion. The size alone is likely to push interest rates up a little bit, if not quite a bit. That increase in interest rates will put additional pressure on expenses and budgets of countries around the world.
The current interest rate debt service is barely manageable and at higher interest rates it could quickly become unmanageable. 2012 could just be the year where the cost to carry the debt built up around the world becomes impossible to service. At the very least, anticipate this reality, as we have, in allocating the assets in your portfolio.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
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