Issue link: http://resourceworld.uberflip.com/i/638235
8 www.resourceworld.com f e b r u a r y / m a r c h 2 0 1 6 Time to Buy Gold? by Mehran Bagherzadeh, MBA – Brazil Resources Inc. The economy and gold Are you ready for the first recession post the greatest money printing job of all time? If your answer is yes, then you have been taking advantage of the current ultra low gold price. And if your answer is no, then you need to befriend a gold bug right away. You see, the current bull market in US stocks started in March 2009. The current run is 32 months longer than the average bull market and has had the second big- gest run post World War II for the last 82 months, at the time of the writing of this article. And now, the asset bubble driven trickle-down economy that was deliber- ately planned and executed by the United States Federal Reserve (the Fed) has met its first interest rate hike in over nine years. Now what could go wrong with this pic- ture? First off, bear with me while I outline the circumstances and events that impact the price of gold. (Prices in US dollars) labour markeT Has anyone seen the latest US job reports coming out for the months of November and December 2015? The US economy created 211,000 new jobs in November and 292,000 new jobs in December. Then something really interesting happened, the price of gold actually jumped 2.3% on December 4th, the day that the November jobs numbers came out. The biggest one- day gain since January 2015. I know what you are thinking; job numbers excellent, economy is doing great, rates are going up and gold had its big- gest one day gain in almost a year? Yes, you guessed it – red flag. After all, higher rates cut the appeal of gold because it doesn't pay inter- est or offer returns like competing assets. Then, the spectacular December job numbers came out on January 8th, yet gold just took a temporary hit and still finished the day above $1,100 an ounce. The main- stream media will tell you that gold traded above $1,100 an ounce because of its safe haven shelter status thanks to the Chinese stock market meltdown. Perhaps that is a viable explanation, yet bullion investors, people who buy and sell gold for a living, saw past the headline numbers and paid attention to a very specific detail in both jobs reports – the underemployment rate. The underemployment rate, reflecting a rise in the number working part-time for economic reasons moved higher in the month of November and held steady for the month of December. This num- ber emphasises a measure of labor market slack, termed and closely monitored by the Fed Chair's Janet Yellen. So job num- bers high, yet full time high paying jobs not that high? Where have all the high paying full time jobs gone? Do we have new jobs, but not higher wages? You could be onto something. The three culprits for low wages and f e w e r f u l l t i m e jobs, in my opinion, are outsourcing, technology and robotics. Outsourcing obviously needs no explanation. Technology application in everyday life on the other hand makes our daily rou- tine ever more efficient by eliminating the middleman and, yes, killing jobs in the process. Moreover, current advances in robotics will only set the manufacturing sector at a much higher margin business, hence more efficient. All of the above translates into a regular footing of employment down- sizing that were previously serviced by the great North