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I just finished reading Gerald Celente’s excellent Trends Journal, summer edition.  It’s a long read and it covers many topics, but here are some highlights from Celente on gold.

For me, gold, as it has been since the beginning of recorded history, remains golden!

 – Gerald Celente

Gold is golden

THE UPSIDE PROSPECTS FOR GOLD continue to outweigh any downside potential.

Gold can drift lower.  In fact, it may be a year or two before it climbs above $2,000 per troy ounce.  But for me, gold is a long-term investment.  At some point the central bank money-printing, low-interest, stimulus Ponzi scheme will end.  And when it does, the gold bulls will be breaking old records and setting new ones. 

During the 1970’s gold rush, it was mostly a US centric market.  The same held true for silver.  Back then there was no Russia or Eastern European players buying and selling precious metals in the commodities markets.  Everything east of the Berlin Wall was locked behind the Soviet Union’s Iron Curtain.  China, India, Brazil, Singapore and Indonesia, among others, were not major gold payers, if they played at all.

Today, gold demand has gone global.

Another factor that makes the future of gold brighter is that lower gold prices have spurred excessively strong demand for physical gold, particularly among Asian investors.  With demand for physical gold rising sharply, there is also speculation of shortages resulting from less supply coming on the market from gold miners because prices are at or near production cost.

For me, gold, as it has been since the beginning of recorded history, remains golden!

The Trends Journal, August 14, 2013

The Aden Sisters take on gold

I’ve followed the Aden Sisters since the mid-80s.  What’s their latest take on gold?  They say it sure looks like the decline is over.  The summer months are traditionally the lowest of the year and June tends to be the lowest month of the summer, although August is generally the next lowest month.  Therefore, if gold stays above the June low this month, the lows for 2013 have been reached.  The bottom was most likely reached on June 27 at $1211.60.  The month of August is key.  As long as gold stays above its June low and especially if it stays above $1270 the lows are clearly in.  Above $1350 and gold should test $1400.  Then $1450 would be the next step.  Finally, $1536 comes into play.  The key 65-week moving average rests at $1580.  Record highs are a real possibility in the future.  If a record high is eventually reached, it’s telling us that the bull market is still ongoing and is very strong in spite of the almost two year correction that knocked 36% off of the previous top.

With U.S. consumers too indebted to take on more debt, with job prospects dismal and consumer incomes falling, decline, not recover is in the cards.  The Federal Reserve’s money printing policy is inconsistent with negative real interest rates and with a stable dollar.  When the house of cards falls, Americans will face another wealth loss together with rising prices and rising unemployment.

– Paul Craig Roberts

Lies and government lies

Despite what we’re told, an economic crisis still looms

(by Paul Craig Roberts – Trends Research Institute)

Roberts starts his article by saying:

An objective review of the economic data indicate that the U.S. economy is approaching a second downturn of the recession that began in 2008.  Real Gross Domestic Product (GDP), real median household income, payroll employment, real retail sales, and consumer confidence dropped sharply during 2008 and 2009 and have not recovered their previous peaks.  Most are bottom-bouncing at the recession low.

But the government isn’t giving us an honest economic picture.  Key economic indicators that are widely reported in the media are easily and commonly manipulated to get the numbers moving the in the desired direction.  If you strip away the bias built into the publicly released numbers, the statistics reveal an economy that is going nowhere but down.

Trends Research

Let’s take a look at the official unemployment rate.  The official number is 7.6%.  When you add in the discouraged workers who have given up looking the number jumps up to 14.3%.  In this instance, discouraged workers are those who have been out of work for less than one year.  But when you add long-term discouraged workers to the mix the number jumps to 23.4%.  And if that isn’t bad enough, adding part-time and underemployed workers to the formula and the number is an astounding 43.3%.

One of the tricks the BLS plays is moving unemployed workers from “unemployed” to the “given up looking for work” category.

According to John Williams (Shadowstats), a rising share of employment comes from temporary jobs and part-time workers.  12% of the workforce consists of temps, Contract workers, freelancers and consultants.  These folks do not qualify for medical benefits or pensions.  They are paid less than the regular workers and have no job stability.

It is obvious that much of the American workforce lacks discretionary income that is needed to drive our economy (two-thirds of the economy is based on retail sales.)

On July 1, average weekly unemployment benefits dropped by $43 and in some states by twice that amount.  Millions of Americans now live hand-to-mouth.

Roberts went on to say below:

Over the past two decades, the once fabulous U.S. economy has been destroyed by the manufacturing and financial corporations.  Wall Street is the main culprit.  The old standby – start a business – is no longer possible.  Main Streets are history.  What small business is going to compete with chain restaurants, Walmart, Home Depot, franchised auto parts suppliers?  Starting a business is what middle and upper middle class professionals do who are laid off.  They start a consulting business and work for half the pay.

Few, if any, including the Federal Reserve Bank, knew what they were doing.  Consequently, today the consumer economy is mired in debt, deprived of employment, and without growth in spendable income.  Recovery is not in the cards.

But have no fear.  The Fed is there to help – but their attention is not focused on Main Street, it is directed toward the “too big to fail banks.”  In order to keep them solvent, the Fed has rigged the bond market by purchasing $1 trillion in bonds annually.  This keeps interest rates low and keeps the prices of the debt-related derivatives on the banks’ books high, indicating solvency where it does not really exist.

The bond market is one big bubble because the Fed is keeping interest rates below inflation.

Roberts said:

Generally, one house of cards suffices to bring down the structure.  The U.S. has three houses of cards.  The second is the stock market.  Stock prices are driven by the liquidity that the Federal Reserve is pouring into the banking system and by layoffs that reduce corporate costs and raise profits.  Eighty percent of the trades on Wall Street are computer attempts to front-run buy and sell orders.  The stock market is no longer a real market.  It is a rigged market based on spun news and Fed liquidity.

The U.S. dollar is the third house of cards.  With U.S. consumers too indebted to take on more debt, with job prospects dismal and consumer incomes falling, decline, not recover is in the cards.  The Federal Reserve’s money printing policy is inconsistent with negative real interest rates and with a stable dollar.  When the house of cards falls, Americans will face another wealth loss together with rising prices and rising unemployment.

But Wall Street is in ecstasy, proclaiming recovery, the end of quantitative easing (the policy of supporting bond prices), and rising interest rates.  One wonders what world Wall Street lives in.  Rising interest rates would collapse the bond and stock markets.  The solvency of banks “too big to fail” would take a hit from the falling prices of debt-related derivatives on their books.  If the Fed were actually to end quantitative easing, the Fed would be faced with the collapse of U.S. financial markets and would have to start printing again immediately.

So that’s where the U.S. stands.  Without massive money creation, the game is over in the short-run.  With massive money creation, the game is over in the long-run.

Trends Research is one of my favorite publications.  Gerald Celente is a futurist and he presents a unique view toward the future.  I give it my highest endorsement.

Here is the latest information on unemployment below from Zero Hedge:

BLS, We Have A Problem: Polled Unemployment Soars To March 2012 Levels

Submitted by Tyler Durden on 08/22/2013 – 09:27

Gallup tracks daily the percentage of U.S. adults, aged 18 and older, who are underemployed, unemployed, and employed full-time for an employer, without seasonal adjustment. Due to the lack of Arima-X ‘magic’ the results are specifically not comparable to the BLS data, but, as the chart below suggests, the correlation is high. What is most worrying about the latest data is the rapid rise in both unemployment and underemployment that the Gallup poll finds (to 8.9% unemployment and 17.9% underemployment. Unemployment rates have jumped notably in the last month to their highest in 13 months. Will the Fed ‘allow’ this data to filter into the BLS data and ‘avoid the Taper’ or are there non-economic reasons (G-20, deficits, technicals, sentiment) that the Fed needs to SepTaper.

This does get a bit confusing, as the “numbers” vary slightly, but as you can see, from any perspective other than the “official” BLS propaganda, things are MUCH worse than we are led to believe.  If unemployment is this dire and the replacement jobs are part-time, low pay then where is the income coming from to support the “consumer-driven” economy?

Jobless picture is worse than you think: Gallup

While the government next week is expected to say the unemployment picture continues its gradual improvement, one indicator shows this jobs market is the worst in a year and a half.

Widely followed pollster Gallup puts the nation’s unemployment rate at an ugly 8.6 percent in August, a startling jump from the 7.8 percent the organization recorded for July. When counting the underemployed, the rate zooms to 17.7 percent, off its 2013 high of 18.2 percent.

The government puts the jobless figure at 7.4 percent, and 14 percent when including the underemployed and those who have quit looking.

This article appeared on the CNBC website late yesterday morning EDT.

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