Silver For The People

Silver Stackers Can End The Silver Manipulation And Stop The Criminal Banksters

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Global Labor and Capacity

financialsense.com / GARY SHILLING PHD / 11/08/2017

Many forecasters, in and out of government, see severe limits to US economic growth in coming years and an inflation threat even sooner. A tight labor market, they claim, is the key reason.

Fed’s Forecast

The Fed is thoroughly convinced that the headline unemployment rate, now 4.2%, is so low that it will soon spawn significant wage inflation that, if left unchecked, will spread throughout the economy. The central bankers fervently believe in the theoretical Phillips Curve that holds that the lower the unemployment rate, the higher the inflation rate. They seem oblivious to the reality that both the unemployment rate and inflation have been falling in recent years.

Nevertheless, the Fed and others see the rising number of job openings while the hiring rate remains flat as clear evidence of a tight job market. In contrast, we continue to believe that employers remain cautious over new hires as they fret about not being able to pass on their additional costs in higher prices.

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