It’s Thursday morning – and arrogant though it seems, I cannot wait for tomorrow’s NFP “employment” report. For the 14 years I have been fully invested in Precious Metals, this increasingly fraudulent report – more so, with each passing month of the U.S. empires’ demise – has been a “key attack event” for Precious Metals; a “key support event” for financial assets; and a rallying cry for Washington, Wall Street, and MSM propagandists alike.
However, the rubber is about to hit the road, as the propaganda “can” has been kicked to the wall, with not an inch to progress. Regarding the “nuts and bolts” of the dying American economy’s – the manufacturing sector that is permanently dead and buried – this picture, of 300 idled Union Pacific locomotives in the Arizona desert, tells you all you need to know. As, care of collapsing economic activity – U.S. rail freight is down 12% from a year ago, whilst durable goods and factory orders have declined for 14 and 17 straight months, respectively. Thus, particularly in light of the massive overcapacity financed by six years of zero cost “money,” the trend of expanding layoffs will unquestionably continue, ad infinitum.
Even the vaunted “service sector” – as discussed in last year’s “mythical services boom” – is grinding to a halt, per yesterday’s barely expansionary (after data goosing) PMI service print, depicting the ninth consecutive monthly decline in order backlogs, the longest continuous plunge since the data series commenced in 2009. According to its publisher, the newly public (talk about conflict of interest!), Markit, “the fragility of growth is highlighted by inflows of new business rising at a rate only marginally above the post-recession low.”
On Wednesday – as in, yesterday – the equally cooked ADP employment report was not only, at +156,000, way below the consensus +193,000, but represented its weakest print in nearly three years. Throw in today’s largest weekly jobless claims spike in 16 months, and accompanying surge in the Challenger’s April mass layoffs report – depicting the largest January to April job cuts since the height of the financial crisis, in 2009; and clearly, Obama’s last vestige of purporting economic naysayers like the Miles Franklin Blog as “fiction peddlers” is about to go up in smoke. Likely, permanently, starting with tomorrow’s NFP “jobs” report; which comically, is again forecast by Wall Street to be +200,000, with a plunge in the “unemployment rate” to a new post-recession low of 4.9%, despite across-the-board declines in essentially all April economic data.
Honestly, even I’m at a loss for words in trying to explain how anyone – even those with a vested interest in feigning “recovering” – can with a straight face pretend the service sector is expanding, when even America’s largest companies, like Apple, are experiencing plunging earnings, despite EPS being “financially engineered” higher with record levels of debt-financed stock buybacks. Oil and gas, which has been the only sector to report net job growth since the 2008 crisis, is amidst an all-out depression – as capital expenditures in this industry, which typically accounts for roughly a third of all U.S. industrial spending, are projected to be down 20%-70% this year, depending on where oil and gas prices ultimately trade. And as for “waiters and bartenders” – the part-time, minimum-wage-paying, non-benefits-earning positions that have accounted for the vast majority of “growth” since the BLS started counting part-time jobs as the equivalent of full-time jobs, the National Restaurant Association’s “performance index” has plummeted since the start of the year, to a level last seen 2½ years ago.
But hey, with 90% of American households having lower real net worth than in the 1970s – as the Federal Reserve and U.S. regulatory environment relentlessly inflate the cost of living – more and more people are going to be forced to join the part-time, pathetically low-paying “gig economy” in the coming years, in a desperate attempt to pay off record amounts of debt, put increasingly expensive food on the table, and pay gargantuan health insurance bills. So perhaps, the BLS will figure out a way to “adjust” the collapsing labor market into “growth” – though it will be increasingly difficult to so with its archaic, fallaciously constructed “birth-death model,” given that the number of private companies “birthed,” has been swamped by those “deathed” since the 2008 financial crisis, when America’s reign as the global economic leader ended.
Conversely, the “powers that be’s”’ ability to hold down the burgeoning worldwide Precious Metal bull market is getting extremely long in the tooth. In all currencies, gold, silver, and platinum prices are now surging – as demand explodes, supply plunges, and above-ground inventories vanish. And this, amidst the most blatant, and heavy-handed daily manipulations yet. Headlines like skyrocketing Chinese silver imports; the upcoming “liberalization” of the Chinese gold market; the soon-to-be-dominant Shanghai price fix; the realization, care of Deutsche Bank’s admission, that prices have been artificially suppressed for years; and countless others; will cumulatively destroy what’s left of the “New York Gold Pool” in the coming years, in my very strong view. Perhaps, completely and totally, by this time next year.
Regarding tomorrow’s NFP report, my bold, cocky guess is that by the weekend, either the U.S. “recovery” propaganda will be dead and buried (and with it, the Fed’s ability to pretend it plans to raise rates); or the fraud that is the BLS’ “jobs” report will be, once and for all, completely and utterly discredited. See you tomorrow!