John Ransom
By Gil Morales and Dr. Chris Kacher 

The jobs number came in weak this morning, but anybody with at least half a brain could have figure out that this would be the case.

What is interesting is the market's sharp downside reaction on the futures pre-open, but as we wrote on Wednesday, investors needed to get very cautious earlier this week based on the deleterious technical action we were seeing in the major market indexes and a number of leading stocks.
 
Gold is holding to the upside today on the futures prior to the stock market opening, but with stocks tanking some pressure could beset the precious metals since many otherwise stock investors hold ETFs like the GLD and SLV, which in a sharp market sell-off can become "sources of funds" just as easily as any other stock.

However, as we wrote on Wednesday we would look for gold, and likely silver, to outperform the market in any sell-off. We might look for opportunities in gold down to the 1520 level or silver down to the 32-33 level.
 
One thing that today's jobs numbers makes plain, and that is that the impact of QE2 - the Fed's policy of buying government bonds in the open market-  has done little more than to serve as pontoons that hold up a listing economy where water is most certainly splashing upon the decks.

Thus the removal of QE2 may set in motion the implementation of QE3, but the evidence shows that QE doesn't seem to do much in terms of replacing real, organically-generated economic growth that stems from true savings and investment rather than government money-printing.

Investors beware!

Gil Morales and Chris Karcher are co-founders of the Virtue of Selfish Investing.

John Ransom

John Ransom’s writings on politics and finance have appeared in the Los Angeles Business Journal, the Colorado Statesman, Pajamas Media and Registered Rep Magazine amongst others. Until 9/11, Ransom worked primarily in finance as an investment executive for NYSE member firm Raymond James and Associates, JW Charles and as a new business development executive at Mutual Service Corporation. He lives in San Diego. You can follow him on twitter @bamransom.