You just can’t keep a good economy down. At least, that’s what you think upon reading the headlines this weekend.

“Fears of double-dip recession recede,” was the headline in The Financial Times.

Why the receding fear?

The private sector created 235,000 new jobs in the past three months, the paper explained.

And here’s the “good news” report from Bloomberg:

Companies in the US added more jobs than forecast in August, easing concern the world’s largest economy is sliding back into a recession.

As private payrolls that exclude government agencies climbed 67,000, after a revised 107,000 increase in July that was more than initially estimated, Labor Department figures showed today. Overall employment fell 54,000 for a second month and the unemployment rate rose to 9.6 percent as more people entered the labor force. The median estimate of economists surveyed by Bloomberg News called for a gain of 40,000.

Wait a minute. The economy needs 120,000 jobs per month just to keep up with population growth.

Okay…okay… Let’s not quibble about that. The census workers got dumped back onto the unemployment rolls, “causing overall payrolls to fall by 54,000” and the unemployment rate to jump from 9.5% to 9.6%.

Hmmm… Let’s get this straight. Unemployment went up, right? Right.

There are fewer people working now than there were three months ago, right? Right.

And the number of jobless people is still growing too, right? Right.

All of which prompted Mr. Obama, in a moment of candor, to admit that “there’s no quick fix…”

He should have said there’s no fix at all coming from the feds. The economy has to fix itself. But nobody seems ready for that level of candor. Transparency, yes. But still, draw the curtain behind the actors… Let voters see the farce…not the dirty dealings and incompetence backstage.

The level of thinking about what caused the crisis and how to respond to it is pathetic and absurd. Even the deepest thinkers on the subject seem unable or unwilling to consider the matter in any but the most superficial terms. Has the unemployment rate gone up? Has GDP gone up? Never mind about what goes on underneath these numbers…about what they really mean…or about how an economy really works.

Technicians need measures and gauges they can work with. Nobody seems to mind that they don’t really make much sense.

But news from the unemployment front – following a couple of days of rising stock prices – was all it took to allow investors to put aside their worries about a “double dip” recession for the Labor Day weekend.

On the last day of trading they bid up the Dow by 127 points and took a couple of points off bonds and gold. Gold settled at $1251 – just $11 short of its all-time high. Which set us to wondering about the metal. It seems to be in an extraordinary bull market. When stock prices were going down a week ago – gold was going up too. This past week, stocks were going up. Still gold went up too.

Risk off…risk on… Gold doesn’t seem to care. An amazing analysis in The Financial Times told us that investors are now buying gold when they think the risks of DEFLATION are increasing. Doesn’t make much sense…deflation should increase the purchasing power of dollars. No need for gold.

Don’t bother to write and tell us how well gold performed during the Great Recession. Gold was officially money back then. The US government increased the value of gold – by pronunciamiento – in order to reduce the value of the paper currency.

Our guess is that gold goes up when deflation threatens because people expect the Fed to do something rash and stupid – a familiar subject here at The Daily Reckoning.

All of which seems to make gold a “can’t lose” bet. If inflation picks up, gold is, well, golden. If deflation gets a grip, on the other hand, gold goes up too.

But what if nothing happens? What if this Japan-style slump continues? What if the Fed doesn’t do something rash and foolish?

Bill Bonner
for The Daily Reckoning

It’s hard to believe that more than ten years have gone by since we began writing The Daily Reckoning out of a Paris office back in July of 1999…

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An awful August, but it was great for Howard Ruff. And he expects to continue that way.

Over the year to date through August, Ruff’s Ruff Times is now up 8.8% by Hulbert Financial Digest count, as compared to negative 3.9% for the dividend-reinvested Wilshire 5000 Total Stock Market Index. Over the past 12 months, the letter is up 44.1%, against just 5.1% for the total return Wilshire 5000.

Ruff is a veteran of the 1970s gold wars, and in essence he argues that era’s stagflation (or worse) is returning.

His record is long and checkered. His relentless self-promotion tends to irritate financial journalists, who are sensitive souls, but he did make perhaps the handsomest recantation I’ve ever seen, when Mark Hulbert and I found he had exaggerated his gold record — which was actually quite impressive enough. ( See Oct. 30, 2006, column.)

In recent years, Ruff has done particularly well. He was one of 2009’s top 10 performers by Hulbert Financial Digest count, despite being skeptical of the overall stock market all year. ( See Dec. 28, 2009, column.)

Ruff only publishes once a month, and much of his letter is musings on current affairs and extracts from services he respects. Thus, his most recent issue includes a summary of Shadowstats.com’s John William’s blood-curdling prediction of an imminent hyperinflationary depression. It also contains Ruff’s reflections on the Constitution, the need to defend Arizona in its struggle with the Obama administration over its anti-illegal immigration legislation (“we have to stand up for the states”), and a joke about a husband and wife stopped by a traffic cop.

At times, Ruff has seemed almost bored by the stock market. His attitude seems to be that he’s identified the major trend and provided what he calls his “shopping list of recommended investments” (which the HFD — as always, when no allocation advice is provided — treats as a fully invested model portfolio). And that should be enough, damnit.

Ruff’s latest issue does contain this unelaborated summary of what he calls his “forecasts”:

An awful August, but it was great for Howard Ruff. And he expects to continue that way.

Over the year to date through August, Ruff’s Ruff Times is now up 8.8% by Hulbert Financial Digest count, as compared to negative 3.9% for the dividend-reinvested Wilshire 5000 Total Stock Market Index. Over the past 12 months, the letter is up 44.1%, against just 5.1% for the total return Wilshire 5000.

Ruff is a veteran of the 1970s gold wars, and in essence he argues that era’s stagflation (or worse) is returning.

His record is long and checkered. His relentless self-promotion tends to irritate financial journalists, who are sensitive souls, but he did make perhaps the handsomest recantation I’ve ever seen, when Mark Hulbert and I found he had exaggerated his gold record — which was actually quite impressive enough. ( See Oct. 30, 2006, column.)

In recent years, Ruff has done particularly well. He was one of 2009’s top 10 performers by Hulbert Financial Digest count, despite being skeptical of the overall stock market all year. ( See Dec. 28, 2009, column.)

Ruff only publishes once a month, and much of his letter is musings on current affairs and extracts from services he respects. Thus, his most recent issue includes a summary of Shadowstats.com’s John William’s blood-curdling prediction of an imminent hyperinflationary depression. It also contains Ruff’s reflections on the Constitution, the need to defend Arizona in its struggle with the Obama administration over its anti-illegal immigration legislation (“we have to stand up for the states”), and a joke about a husband and wife stopped by a traffic cop.

At times, Ruff has seemed almost bored by the stock market. His attitude seems to be that he’s identified the major trend and provided what he calls his “shopping list of recommended investments” (which the HFD — as always, when no allocation advice is provided — treats as a fully invested model portfolio). And that should be enough, damnit.

Ruff’s latest issue does contain this unelaborated summary of what he calls his “forecasts”:

1. Socialism marches on as the Obama Administration unfolds.
2. In 2010, the Republicans take back the House and the Senate, as taxpayers revolt. But a new president is elected in 2012. [This is a change. Ruff used to say that, after losing Congress, Obama would be re-elected.]
3. Gold and silver gradually rise to new highs; gold over $2,300 and silver over $100.
4. The following industry groups do well: a) gold mining; b) silver mining; c) uranium mining.
5. Taxes rise sharply.
6. Interest rates rise as bond markets sag.

The latest Ruff Times has, what seems to me, an unusual emphasis on silver, pointing out in two places that “history has no example of the government seizing silver.”

Among stocks that Ruff recommends as “pure silver plays”:

Hecla Mining Co. (HL 5.94, +0.09, +1.54%)

Pan American Silver Corp. (PAAS 26.38, +0.45, +1.74%)

Silver Wheaton Corp. (SLW 24.16, +0.27, +1.13%)

Silver Standard Resources Inc. (SSRI 18.54, +0.14, +0.76%)

Coeur d’Alene Mines Corp. (CDE 17.91, +0.23, +1.30%)

Silvercorp Metals Inc. (CA:SVM 7.97, 0.00, 0.00%)

Endeavour Silver Corp. (EXK 3.98, +0.09, +2.31%)The latest Ruff Times has, what seems to me, an unusual emphasis on silver, pointing out in two places that “history has no example of the government seizing silver.”

Among stocks that Ruff recommends as “pure silver plays”:

Hecla Mining Co. (HL 5.94, +0.09, +1.54%)

Pan American Silver Corp. (PAAS 26.38, +0.45, +1.74%)

Silver Wheaton Corp. (SLW 24.16, +0.27, +1.13%)

Silver Standard Resources Inc. (SSRI 18.54, +0.14, +0.76%)

Coeur d’Alene Mines Corp. (CDE 17.91, +0.23, +1.30%)

Silvercorp Metals Inc. (CA:SVM 7.97, 0.00, 0.00%)

Endeavour Silver Corp.  (EXK 3.98, +0.09, +2.31%)

http://www.mint.com/blog/finance-core/a-visual-guide-to-deflation/