THE US JOBS REPORT - WHAT'S NEXT

US jobs fell to 160,000 from an estimate of 200,000. What is the significance of this?

Here are my thoughts:

1) Despite the huge amount of debt borrowed by US companies, little were put back into the business. Instead they were ploughed into financial engineering to improve the EPS but not the revenue nor the net profit. With little money spent on the business, and with falling revenue and profit, hiring of employees will also be affected. So this should come as no surprise as the egineer of growth and high paying jobs- manufacturing sector has steadily declined y-o-y.

Jobs loss from the oil and gas sector continues to grow as yet another string of oil and gas companies filed for bankruptcy protection in Q1 2016.

2) The retailing sector has been among the hardest hit. With major retailers reporting disappointing results and many malls are destined to be closed in the coming months, the number of unemployed will grow and negate the impact of jobs growth.

This is further reinforced by a spate of bankruptcy among several retailers.

3) Financial institutions too are laying staff as has been reported in several new media. When financial institutions are laying off staff, it is the greatest indication that all is not well with the economy.

4) Slower jobs growth will impact upon the overall US economy which is consumption driven. This is again reflected in both lower consumer and business confidence reading over the last week.

So it looks like a vicious cycle has begun.

If you look at the U6 data and not the feel good U3 data used by the Fed, unemployment has remained persistently in the 10% range, higher than the period before the Global Financial Crisis. What does this show? No one needs to be reminded that growth in the US, EU, Japan and China are stalling.

This goes to show that despite the QEs, ZIRP and NIRP and bonds buying, after spending trillions of dollars, the central banks have failed. All we have now are inflated assets bubbles and a world tethering on the brink of yet another crisis as debt skyrocketed higher than ever before.

I believe we are now on the verge of further disappointments in both GDP and jobs growth, and a high probability of assets bubbles bursting, sending major stock indices down in a massive correction. If common folks can see it coming, one wonders what the central bankers see. Oh yeah, an anomaly that will soon pass....

So it pays to prepare yourself as this correction could send us all into no-man's land because never in the history of finance has the world accumulated so much debt and printed so much fiat currency.

I still believe that owning physical gold and silver, related miners and ETFs are the best hedge against any disruptions. You can also look at ETFs that are inverse to the various indices.

Remember to do your own research because our risks acceptance differs.