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The Market Doesn't Care About Jobs... Should You? |
 | By Alex Moschina, Associate Publisher |
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A chaotic debate... soaring debt... no end in sight to the global pandemic...
And you know what?
The market DOESN'T care.
Not even a 7.9% unemployment rate can tank this market. But don't you go blaming those heartless fat cats on Wall Street.
You can thank your pals at the Fed.
As Tim Duy writes in Bloomberg: | | | The U.S. employment report that is usually released on the first Friday of every month has traditionally been viewed as the most important piece of economic data. No longer. The Federal Reserve's new monetary policy regime has relegated jobs data to the back burner while thrusting inflation to the forefront. | | |
In sum... if the Fed doesn't care about the jobs report, neither should anyone else.
Put out the good towels. Dow 100K will be here before you know it...
Changing Course
This chart illustrates why the Fed is switching up its strategy. Defying conventional wisdom... it turns out a booming labor market does little to boost inflation. As a result, the Fed is now pledging to keep interest rates near zero for the next several years at least... no matter how quickly U.S. jobs recover... in order to force inflation's hand.
But we can't forget the real story with the jobs report... That Uncle Sam already issued $376 billion to keep businesses from laying off their employees during the pandemic. He's currently debating whether he should dip back into the coffers for another round of support.
Make no mistake: It isn't just our economy that's propped up... Our labor force is on the dole as well.
It's unprecedented... and the long-term effects are unknowable.
But for the foreseeable future...
It's all great news for stocks, gold and crypto.
Wondering Where to Invest? Here's a MAP
That's why I'm so excited about the rollout of what Andy's calling "modern asset portfolio" (MAP) theory.
It tosses aside the old rules of investing and focuses on what works now... in these unprecedented times.
It's taken the better part of a year to get MAP theory ready for prime time. But I'm happy to say that it finally made its debut in the October issue of Manward Letter.
Here's how Andy defines it: | | [MAP theory is] an investing concept that doesn't hinge on shaky correlations and historical averages. Those ties have been snapped.
Instead, it hinges on the thing that matters most... those dead and dying interest rates.
The theory is simple.
Instead of keeping the lightheadedness and clammy palms to ourselves, hoping it will all just go away... MAP theory focuses on what's causing the issue and adjusts accordingly.
With it, we no longer have to depend on a portfolio that's pulled down by counterweights that never seem to do their job. Our plan cuts them lose and finds protection from what ails us, with, as the name implies, modern assets. | | |
You can read more about MAP theory - and the logic behind it - here.
And be sure to stay tuned. We'll be expanding on the concept over the weeks and months ahead. |
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| The Federal Reserve wields a huge amount of power over you and your money. But few investors know the real story about how the Fed came to be. If you've ever wondered why a handful of ultra-connected - and unelected - folks have so much control over the economy, click here. |
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| Target-date funds are a favorite among investors who want to keep things simple. But if that sounds like you... you might want to rethink your strategy. Time has proven that these popular funds are a recipe for mediocrity. They rely on a flawed investment model. And if you're not careful, they could cost you... Keep reading. |
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"Error is better than apathy. Error can be corrected in time to change the outcome. Apathy is seldom corrected until it is too late."
- G. Edward Griffin, author of The Creature From Jekyll Island |
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