Frankly, it’s impossible to understate how ugly Friday’s NFP report was once one looks past the fabricated, propagandized “headline” number. Recall, we all but guaranteed “higher than expected” job creation and a “lower than expected” unemployment rate; as this was the last NFP report before the mid-term elections. However, we qualified such “optimism” with the usual warning to beware of the internals – which as usual, couldn’t be worse.
Apparently, not only are part-time and temp jobs now considered equivalent to full-time jobs (“temporary help services” was one of the economies’ fastest-growing segments), but so are short-term subcontracting assignments. Moreover, three-quarters of jobs created in the fastest growing segment “professional and business services” – emanated from a subcategory titled, we kid you not, “administrative and waste services, primarily temp services.” Thus, according to the BLS, temporary help services not only have their own indisputably part-time category; but additionally, a sub-category within a decidedly full-time segment. Throw in the fact that the next four job-producing categories were the four lowest paying – and most likely, part-time dominated – and you realize just what a sham the so-called jobs “recovery” is.
Not to mention since the 2008 crisis, all incremental U.S. jobs have been in the 55-69 age category – including 230,000 of September’s supposed 238,000. Moreover, more jobs have been created by the phantom “birth-death model” over the past six years than total jobs created; and oh yeah, following September’s average wage decline, real median household income sits at two-decade lows without even utilizing a real inflation rate. Furthermore, whilst 238,000 jobs were supposedly created in September, 315,000 people left the labor force – enabling an “Obama Administration low” unemployment rate of 5.9%, amidst a 36-year low Labor Participation rate. Frankly, even these numbers don’t do justice to how weak America’s labor market has become, which is why this David Stockman article is a MUST READ; and why the real unemployment rate is dangerously close to that of the Great Depression.
Sadly, this ugly reality is global with essentially all economies plunging and debts surging. Equity liquidity is drying up with the vast majority of stocks declining and interest rates plunging in expectation of “QE to Infinity.” Frankly, if not for the U.S. PPT’s maniacal support in partnership with an equally vicious gold Cartel, we’d probably already be amidst the “big one.” However, there are “ramifications” of such blatant manipulations – which will only hasten the end game making it dramatically more catastrophic.
We’ve written of these topics for years; and frankly, history’s largest Ponzi scheme has created way too many “deformations.” That said, we can’t be more resolute of the devastating inflation the “99%” suffers when FEAR drives investors to the “reserve currency” to the detriment of everything else. Yesterday’s “dollar surge” was a perfect example; as amidst an objectively ugly NFP number, the “fear trade” was alive and well – except U.S. equities, of course. Oil prices plunged, currencies crashed, and interest rates declined – even in the States, despite the “better than expected” number. The Euro is about to plunge through 1.25, the Yen through 110 and the Ruble through 40. I mean, we are talking about some major global inflation; all in the last month, and all following the same world-destroying pattern we witnessed in 2008. Sure, the PPT goosed the “Dow Jones Propaganda Index” just enough to close it above the 17,000 “key round number” it has so blatantly defended all summer. However, such “tape painting” no longer has any correlation to real economic activity; and aside from the “1%” receiving free Federal reserve money, nearly no one has benefited.
Even the MSM has finally noted the giant “pink elephant” in the room; i.e., the massive “dollar surge” not only exports an enormous inflationary jolt, but will have a devastating effect on the historically indebted U.S. corporate sector, amidst a real economy for all intents and purposes, already in mired in recession. In other words, contrary to TPTB’s goal of propagandizing a global recovery, their “island of lies” economic reporting has convinced what’s left of the market that only the U.S. economy is improving, causing massive capital flight to the dollar. This will only make the near-dead U.S. economy that much more uncompetitive; thus, forcing the Fed to “ease up” on its hawkish talk (as if maintaining ZIRP for a “considerable period of time” is hawkish in the first place). This is why global fiat regimes are cannibalistic by nature, and why the “final currency war” is about to take a giant terrifying leap forward.
Yes, a supposedly “rip-roaring” NFP number. And yet, interest rates plunged all afternoon, leaving the benchmark 10-year Treasury yield at 2.44%, less than 15 basis points from its 52-week low. Meanwhile, in its rabid goal of breaking PMs’ major support levels, the Cartel has gone hog-wild in its naked shorting activities – in recent weeks, failing to leave a single “key attack time” unutilized. Silver has been decidedly pushed below its 2013 lows, and gold is within $10/oz. of doing so. Of course, global PM demand is simultaneously exploding – as it did when the Cartel blatantly attacked paper prices during the 2008 crisis; demonstrating just how farcical said “price declines” have become and how close we actually are to the “next 2008” arriving. And as for PM production, you ain’t seen nothing yet!
Again, I not only held 100% of my liquid net worth in junior mining stocks from 2002 through 2008, and a significant percentage from 2008 through mid-2011, but worked as an investor relations officer and/or consultant to dozens of junior miners from 2006 until 2011. I went to every mining conference, met with every Canadian investment bank, traveled the globe inspecting mines, and followed the trading and finances of countless dozens of companies. When I joined Miles Franklin in October 2011, the junior mining industry was already dead and buried – having been strangled by years of capital starvation caused by chronic price suppression, causing everyone from banks to engineers to geologists to run from the industry, kicking and screaming. Moreover, given the utter explosion of mining costs due to Central bank inspired inflation – as well as prohibitively complex permitting logistics and financing hurdles, I predicted that much of the industry would be bankrupt within two years. Well, here we are three years later, and all that remains of junior mining are unfunded company shells with next to no activity ongoing, and not a single major discovery since the perhaps never-to-be-developed Fruta del Norte discovery of 2006.
As for the majors, we correctly predicted massive reserve write-offs a year ago. But compared to what we saw then, 2014 could be significantly worse, particularly if silver ends the year anywhere near today’s unsustainable price. We could not be more emphatic of an upcoming, massive consolidation phase, when miners like Barrick and Newmont are forced to merge to prevent bankruptcy. And as I learned first-hand as an oilfield service analyst during the great 1999 oil consolidation – following oil’s brief plunge below $10/bbl. – the resulting industry paralysis will likely cause already crippled capital expenditure plans to all but disappear. Oil was 15x higher less than a decade later; and rest assured, the same may well occur in precious metals regardless of monetary factors. Yes, the situation has grown that dire, whilst global demand is exploding, worldwide inventories (think Shanghai silver) are rapidly dwindling; and oh yeah, global debt, money printing, and inflation are dramatically expanding.
And thus, it all comes back to “Economic Mother Nature” – whose laws cannot be usurped by Wall Street bankers, no matter how powerful their derivatives, high frequency algorithms, and “off balance sheet” accounting chicanery. And the more they continue this blatant act of “Cartel Suicide,” the more rapidly and powerfully they will be overwhelmed by unforeseen “ramifications.” Which is why there has NEVER been a better time to protect your portfolio with the only asset class proven to do so. And no, we’re not speaking of Bitcoin – which as it plunges below $300, is loudly validating our conclusion that it is decidedly NOT money. Nope, we’ll stick to gold and silver, which undoubtedly will be the “last man standing” when the “big one” inevitably hits.
Bad it is !!! MSM are professional “Spin Doctors” (aka LIARS).
It is going to get much worse as Ebola speads here in the USA and people stay home afraid to go any where. The tanking of the economy will go into hyper mode.
And when the soon to be event happens whereby the banks (especially JP Morgan) say all accounts have be hacked and all accounts are now ZERO we can all watch Russia get blamed as they were for the plane downing in Ukrain (but Russia ia not guilty). The guilty parties are Wall Street and their bought off govts. The sheeple will think the FDIC will come to the rescue, but the FDIC balance sheet is woefully short to be of any help.
Bend over Americans as you are about to get it where you don’t want it !!!
No gold and/or silver, then bend over twice !!!
I really appreciate your indepth straight forward analysis! It’s clear the people that minimize counter party risk i.e. PM, farm land, etc. will at least maintain a good portion of their wealth. “I can’t believe Silver is such a smokin Deal!” Everytime I hear a financial planner say it’s more volatile than gold, I laugh. Silver and Gold are not volatile, it’s the paper market/s that are volatile.
Question on the mining majors “Stock buy backs”. Any figures on the majors shooting themselves in the foot with major stock buy backs? It seems almost every where you look the banks, Corps, etc. are throwing out the baby with the bath water just for short term gains.
Again, thanks for what you do!
You’re welcome, Mike.
As for buybacks, I just read that S&P 500 companies have spent roughly 95% of 2014 earnings on buybacks and dividends. In other words, not investing in the future.
However, rest assured the mining companies are not included. Most are unprofitable, and some, likely, near bankruptcy.
Hello Mr. Hoffman,
I have read your articles almost everyday since 2011 and apologise for not writting sooner. You are absolutely correct in everything you write. I started buyin Ag in May 2008 for all the reasons you have written. I am still buying hand over fist in spite of my wage constraints. I believe we are close and must persevere. I am not dissuaded by the manipulated paper markets and will continue as I have been, trade as many FRN, s as i can for as much gold and silver in my possession as I can.
Thank you for informing people. You too will prevail and in doing so help many others along the way. Miles Franklin has gifted and truthful talent.
You’re very welcome!
And please remember that Miles Franklin would love the opportunity to EARN your business.
Andy – From Table A – Current Population Survey. Check out who is getting the jobs in America. Almost no discussion by media on this subject.
From the Household Data – Seasonally Adjusted (000)
September 2014 employment – 146,565
September 2007 employment – 146,215
Net Increase – 350
From September 2007 to September 2014, folks 55 and older have added net jobs totaling 6.6 million up 25%. All other age segments are flat or down. Here’s the data by age group from September 2007 to September 2014
55 and older – up 6610 or 25%
45 to 54 – down 2103 or 6%
35 to 44 – down 3155 or 9%
25 to 34 – up 488 or 1%
20 to 24 – down 108 or 1%
16 to 19 – down 1382 or 24%
Obvious what’s going on. The middle age guys and gals and teenagers have gotten smashed. Many of the seniors have medical benefits and work for relatively low wages because their retirements are inadequate. Big driver in keeping employment costs down and corporate profits up.
Same situation is going on with the September 2014 job data vs. August 2014. Seniors added 230 000 net jobs. Net additions for the other age groups netted close to zero. Nice. In last year seniors and 25 to 34 year olds have accounted for 50% and 35% of net job additions.
Thanks Norm. I wrote of this extensively on Friday and yesterday – and have been doing so for several years now.
There is not only no labor “recovery,” the U.S. jobs scenario hasn’t been this bad since the 1930s.