Who Will Be The Next One To Lose Their Job?

I find it mind-boggling that our leaders don't seem to understand why unemployment is so high. While the “official” report places unemployment at 10 percent, it's actually much higher when you count the people who've been unemployed for so long that they've given up looking for a job—or those who are quite happy not having one. When you count those categories, we’re looking at over 20% unemployment.

One simple reason why there are fewer jobs, especially in developed countries such as the US, Europe, England, and Japan, is because wages are too high. Today, US wages are substantially higher than wages in emerging countries. Why would a business owner want to pay $20/hr to US workers when they can higher someone for $5/day in China?

Today, the highest paid workers in America aren't from the private sector—they're in the government. Although many state and local governments are letting people go, the federal government is hiring and paying wages that are significantly higher than the private sector, on average over $71,000 per year for federal workers vs. $44,000 for private sector employees. This makes our economic situation worse because in order to pay for those high-paid workers and their benefits, the government must print more money and increase taxes. This leads to inflation, and more probably hyper-inflation down the road.

In England, the new British government has declared war on middle class benefits, the poor, and parents by cutting many cherished social programs. Meanwhile, here in America, we're increasing benefits for federal workers and the poor—the healthcare bill is a good example. It seems to me that the US should learn from Britain, since Britain is about five years away from bankruptcy. If the US keeps increasing benefits for government workers, the US will go bankrupt faster.

Unfortunately, politicians see the world in terms of election to election—not in terms of the long run. They'll do whatever it takes to get re-elected, which is what the Democrats are doing today. Business people and the rich, however, need to plan for the long term. And they need to see and anticipate the consequences of politicians' short-term, reelection-oriented actions.

For now, in the US, the smart thing to do is get a federal job. That's a good move in the short term. But if you look at Britain, that choice may prove to be a bad idea.

So who will lose their jobs in the near future? I predict it will be anyone who expects to be paid more and do less work that will eventually lose their job. As the bankruptcy of Britain and the US looms, job cuts will come—and high-paying jobs will be the first to go.

For those of you who have read in this field, you know that it's the Fed and the world's central banks printing excessive amounts of counterfeit money that's keeping this economy from going into a depression. The problem is that printing money and creating multi-trillion dollar deficits can't go on forever. If our leaders don't make drastic changes, as Britain and Germany are doing today, the global economic collapse will be severe. Always remember, the bigger the boom the bigger the bust—and it’s very possible that the biggest bust in history is still coming.

Rather than look for a higher paying job, I continue to recommend starting your own business, educating yourself financially, buying some silver rather than saving cash, and preparing for the worst. If the bust never comes, you'll still be better off in the long run.

Britain has about five years to make changes, and the US has about ten. If our leaders make the appropriate changes, we'll all be better off. But if they don't, I'm afraid we're in very serious trouble.

Sources:

“Conspiracy of the Rich” by Robert Kiyosaki
“The Dollar Crisis” by Richard Duncan
“The Corruption of Capitalism” by Richard Duncan
“Guide to Investing in Gold and Silver” by Michael Maloney
“The Ascent of Money” by Niall Ferguson