In the interest of getting some well-earned rest this weekend, I’m writing this midday Friday. Of course, this morning’s “better than expected” NFP employment report – and subsequent increase of “December rate hike probability futures” to 72% is all the rage, as “TPTB” are doing everything in their power to fool convince the dumbed-down citizenry that the “worst global economy of our lifetimes” doesn’t impact the Almighty America – even if every imaginable data point, empirical and anecdotal, screams otherwise. To that end, first feast your eyes on this quote from Pater Tenebarum…
“The NFP report will be revised umpteen times after its initial release. Moreover, in many ways, it is driven by statistical artifacts, like the ‘birth-death’ model. And generally speaking, it is a lagging economic indicator. In other words, its ‘signal to noise’ ratio makes it utterly useless, even if one erroneously ascribes a lot of meaning to economic statistics describing the past.”
And he doesn’t even discuss the fact that NFP data is rigged; which certainly is in the next quote – from Li Keqiang, the current Premier of China, before taking office…
“A few years before he became China’s premier, Li Keqiang said that the country’s economic numbers were ‘man-made’ and ‘for reference only’.”
Which, by the way, sounds a heck of a lot like the disclaimer the COMEX put on all public gold and silver trading and inventory data as of June 2013. Which, I might add, was just two months after the April 2013 “alternative currencies destruction” paper raids – after which, “registered inventories” commenced a freefall that has accelerated dramatically in recent months, to the point that nearly all the gold is gone.
“The information in this report is taken from sources believed to be reliable. However, the Commodity Exchange, Inc. disclaims all liability whatsoever with regard to its accuracy or completeness. This report is produced for information purposes only.”
And finally, what I wrote in July 2014’s “island of lies”; first, regarding U.S. “economic data”…
“Amidst the seas of money printing, market manipulation, and propaganda, an “island of lies” exists where “all’s well.” Said island is populated by fraudulent, government generated “diffusion indices” and employment data – and a handful of bankers, politicians, and corporate titans, sitting atop history’s most destructive Ponzi scheme.”
And, for those seeking empowerment on a frustrating, Cartel-infested day…
“Fortunately, “Jekyll Island” – for wont of a better name – lies well below sea level, with history’s most destructive tsunami heading its way. It won’t be long before this “Island of Lies” not only loses its ability to influence the gargantuan lands surrounding it – housing 99.9% of the world’s population – but is completely engulfed by the relentlessly advancing tide of history.”
To wit, in yesterday’s MUST HEAR Audioblog, “the unmitigated disaster 2016 will be,” I discussed a growing sense that “the powers that be” were more nervous about a total loss of Central bank credibility than even the potentially cataclysmic impact of (temporarily) preventing it, by raising rates…
“The ‘imminent rate hike in December’ movement appears to have a bit more deviousness involved, compared to similar schemes in previous months. To that end, it’s almost as if the powers that be realize that any chance of the Fed retaining even a shred of credibility will be lost if the calendar year passes without action. Even if such action might catalyze the most cataclysmic ramifications imaginable.”
I mean, since the Fed’s “no-decision” two weeks ago, the only things that have been “better than expected” have been “island of lies” statistics like the NFP employment report and Chicago PMI diffusion index – the former due to the same statistical chicanery as usual (which I’ll get to shortly); and the latter, an “inventory surge” at odds with all other industry data – including its own “employment” component, which dramatically declined.” And LOL, how comical is it that the Chicago PMI was not only “better than expected,” but by seven standard deviations; i.e., a one in a 390 billion chance. Yes, Chicago, which was just downgraded to junk status six months ago – whilst its home state, Illinois, technically defaulted on its debt three months ago.
To the contrary, the following U.S. economic indicators were either “worse than expected” or flat out negative in the six business days since the FOMC’s October 28th policy statement. Third quarter GDP; consumer sentiment; consumer comfort; pending home sales; ISM Manufacturing; factory orders; mortgages applications; and the ADP employment report itself – which not only reported ZERO manufacturing jobs, but weaker growth in October than September. Throw in the weakest earnings reporting season since the 2009 financial; surging Challenger layoff data – suggesting 2015 will feature the most corporate layoffs since – again – 2009, and it’s downright comical that anyone can purport a “strengthening labor market” with a straight face.
That said, the level of market manipulation since the aforementioned October 29th FOMC meeting – as discussed in Tuesday’s “speechless” – has been beyond anything I have seen in my 13½ years in the sector; to the point, in my view, of pure madness. From the minute that statement came out – which, as usual, said nothing incremental – gold and silver have been brutally smashed, after having finally broken above their 200 day moving averages that very morning. Meanwhile, PPT-supported stocks have literally not been allowed to downtick, much less decline. In fact, going into today, gold’s 15 declines in the past 17 trading sessions was the first time this had occurred in 17 years – with today’s post NFP raid making it 16 of 18. And this, amidst an environment of wildly PM-bullish news flow, as always.
Clearly “something was up” with the Fed’s current perception manipulation strategy. And thus, when none other than Vice Chairman Stanley Fischer, two days ago, made the incredible, “un-Fed-like” claim that “U.S. inflation is not as low as you think” – not only validating what I have said for years, but implying GDP is overstated – it couldn’t be more obvious that a December “rate hike or bust” agenda might be in the cards, even if such action would not have a positive impact on anything – and more likely, a dramatically negative impact. And no, “higher rates” have not the slightest historical correlation with lower gold and silver; especially today, when unprecedented global debt levels make higher interest rates an economic impossibility. Moreover, gold and silver prices have already been destroyed to the Cartel – to the point that demand has exploded, inventories vanished, and the mining industry is on the verge of collapse!
Thus, despite the lack of “supporting” economic data – like even a shred of positivity. And to the contrary, the ugliest economic data yet – worldwide, in every imaginable facet – TPTB had clearly backed themselves into a corner; knowing full well that after weeks of goosing the stock market, attacking Precious Metals, and sending “signals” that a December rate hike is “possible,” they were clearly not going to let something as “trivial” as an NFP employment report stop their hubristic, world-destroying plan, particularly when they can generate any “October employment” number they want.
Thus, today’s equally “seven sigma” beat of expectations – with October’s “job” creation coming in at a whopping 271,000, versus expectations of 190,000 and the ADP report’s 182,000 print two days ago. And “beat” the BLS’ data fudgers certainly did – with the “unemployment rate” falling to 5.0%; and the equally meaningless “average hourly earnings” rising 0.4% – as if anyone believes earnings are rising at a 5% annual rate.
Of course, as always, the “devil was in the details” – with the Labor Force Participation rate remaining at its 37-year low, and not a single manufacturing job created (making the “average hourly earnings” increase appear comical). Meanwhile, 378,000 of said 271,000 jobs were created in the 55+ age category, whilst 35,000 were lost in the key 25-54 category – rendering said “average hourly earnings” increase still more ridiculous. And finally, 164,000 of the 271,000 “jobs” were fabricated by the mythical, always positive “birth-death model” – even though it’s been quantitatively proven that more small businesses are being destroyed than created. Much less, today; as the shale oil business, which was easily America’s largest job generator of the past five years, is collapsing – along with that of the entire global energy industry. In fact, the largest “job” gains were in the (essentially non-profit) healthcare industry – which, as it turns out, was the largest component of the third quarter’s piddling 1.5% GDP “growth.” Which, as noted above, was clearly overstated, given Fed Vice Chairman Stanley Fischer’s overt claim that “U.S. inflation isn’t as low as you think.”
In this comically bogus report’s aftermath, Precious Metals were of course attacked – taking their unprecedented string of declines to eight straight days, and 16 of the past 18. Again, amidst the most astonishingly PM bullish news flow imaginable; including, I might add, today’s NFP report – given its hideous internals, and blatantly obvious falsification. That said, the “Dow Jones Propaganda Average’s” run of non-stop gains – via a prototypical “dead ringer” algorithm – is equally impressive, given the global economy is collapsing at an accelerating rate, and by most metrics, equity valuations have never been higher.
Worse yet, TPTB’s worst nightmares are coming true – as while they still have “last to go” markets like the Dow and paper gold and silver firmly under their control, they are rapidly losing control of everything else. Today, for instance, the CRB commodity index continued its week long freefall, with WTI crude plunging from Tuesday’s “oil PPT” orchestrated high of $48.30/bbl to close at $44.50/bbl; while base metals like copper and zinc (say goodnight, Glencore) closed at new seven-year lows. Moreover, to the chagrin of everyone from corporate America to the White House, the dollar index closed at nearly a 13-year high – with everything from major currencies like the Euro and Yen; to “emerging market” currencies the world round, plunging toward multi-year, or in many cases all-time, lows. And of course, there’s that little thing called interest rates, which surged higher due to the Fed’s suicidal ruse – which unquestionably, will annihilate whatever’s left of the global economy if not rapidly suppressed. I mean, what part of the entire world utilizing record amounts of QE – except for the Fed, of course (LOL) – do people not understand? As cumulatively, even the slightest increase in rates will destroy everything, everywhere.
And last but not least – as discussed in yesterday’s “they’re only making it worse” – is the utter carnage in the mining sector. For all intents and purposes, no miner will be spared; from base metals miners – which produce half the world’s silver; to primary Precious Metal miners, which are on a crash course with massive, balance sheet-destroying write-offs at year end – and subsequently, mine shutdowns, bankruptcies, and consolidations. Just look at how the mining stocks acted in the last two days alone – with many down 10% or more, en route to imminent financial distress if metal prices don’t rebound substantially.
Oh well, I guess we’ll have to wait a bit more – as clearly, the death throes of history’s largest, most destructive Ponzi scheme are far more intense than even I imagined. Today’s NFP farce – yielding surging interest rates, a skyrocketing dollar, and collapsing commodity prices – demonstrates, unequivocally, that if the Fed truly has decided on a “December rate hike or bust” strategy, under the unfathomably moronic premise that it will enable it to “save face,” a bust is exactly what they will get.