It’s Friday morning, just after publication of the June NFP jobs report, and I’m going to write today’s article in real-time – as following publication of the “most important jobs report ever,” a title I write with violently dripping sarcasm, the data, financial markets, and media spin are rapidly evolving. To wit, the start of the day may have gone according to the powers that be’s plan; but who knows, in today’s environment of, putting it mildly, “exceptional circumstances,” how it will end?
The NFP, or non-farm payrolls employment report, published by the Bureau of Labor Services, or BLS, has been the government’s top propaganda statistic for as long as I can remember; but particularly since the 2008 crisis, as it’s “improvement” has been used to validate the insane fiscal and monetary policies utilized to kick the can this far. Or, more broadly, since the turn of the century, when the exodus of high-paying manufacturing jobs to points overseas commenced.
To that end, the long, sordid history of blatant data manipulation is documented not only on the Miles Franklin Blog, but countless other places in the economic blogosphere. Heck, even Janet Yellen admits the data leaves much to be desired – which is probably why the Fed long ago abandoned its 6.5% unemployment rate threshold for raising rates. Frankly, the only economic data on the planet as pathetically, and blatantly, rigged is Chinese GDP – which currently purports nearly 7% “growth,” when the true number is closer to negative 7%. To that end, John Williams of ShadowStats calculates the true U.S. unemployment rate to be closer to 25%, just like it was in the Great Depression. But don’t let that get in the way of a good propaganda meme – like “recovery.”
From a financial markets perspective, NFP report dissemination have been second only to FOMC meetings in the Cartel’s “key attack events” playbook. To that end, NFP reports have essentially become synonymous with COMEX raids, to the point that Precious Metal investors, paper and physical alike, cringe when the calendar approaches the first Friday of the month; just as they do when COMEX option expirations, Fed meetings, or “significant events” like BrExit referendums approach.
In recent years, in the government’s desperation to “prove” its, and the Fed’s, actions have produced a sustainable “recovery,” the BLS book cookers have been under tremendous pressure to not only produce “better than expected” reports, but ones that can actually be believed. In other words, if the “jobs” they fabricate are undesirable, or the methods of calculating them questionable, it’s worse than simply reporting the truth. As that way, the public – and investors – don’t think they are being deceived. Which is why, seemingly each month, the NFP report is mockingly – and sometimes, not so mockingly – referred to by Wall Street and the MSM as the “most important jobs report ever.”
For several years – as stock markets rose, and crisis fears subsided – the BLS got away with publishing outright lies and fabrications, as the more questionable aspects of such reports were typically ignored. However, now that the global economy – including the U.S. – is in freefall, it’s impossible to claim with a straight face that the unemployment rate is at multi-year lows; which of course, is only the case due to blatant statistical fabrication – like not including those that have left the labor force as unemployed; or that the BLS now counts 10-hour-a-week fast food workers as equal to a 40-hour-per-week engineers. Or that “adjustments” account for essentially all new jobs – like the “birth-death” model, which assumes hundreds of thousands of new jobs from small companies each year, despite more small companies “deathed” than “birthed” since 2008.
Actually, I believe today’s NFP report may well be the “most important ever,” for several reasons. For one, with the odds of a Fed rate hike down to ZERO – and conversely, the odds of rate cuts soaring – a “bad” report would have essentially guaranteed calls for rate cuts and QE4 would explode, right before the election. And trust me, if Hillary Clinton loses (which she will anyway), Janet Yellen will be out of a job as soon as Trump can fire her. Moreover, with currencies, commodities, and the entire European banking system collapsing – whilst the “Dow Jones Propaganda Average” is blissfully propped with “dead ringer” and “hail mary” algorithms – a “bad” report could prove the final straw for global financial markets.
Last, but most, with COMEX “commercials” holding massive, record, heavily underwater short positions in both gold and silver, the necessity of catalyzing a major, sustainable PM plunge – enabling them to extricate themselves from said shorts – was paramount. Particularly as later today – at 3:30 PM EST – the COMEX’s weekly COT, or Commitment of Traders report, is likely to show the Cartel – er, “commercials” – further expanded their record short positions; as following Monday’s “holiday Precious Metals explosion,” I can only imagine how much paper supply was thrown at gold and silver to cap them. To aid this “plan,” both gold and silver margins were raised at the COMEX yesterday – which “coincidentally” avoided such actions when prices were rising; as that would have hurt said “commercials,” as opposed to the speculators that get destroyed by margin increases when prices are falling.
Going into the report, the same trading pattern as always occurred; i.e., stock futures gradually rising, and PM prices “walked down.” Again, as always, gold and silver prices surged in the minutes leading up to the report – before BAM! The lunatic BLS was actually stupid enough to not only publish a “better than expected” number, but in its infinite wisdom, decided the best way to manipulate markets would be to publish a much better than expected report – which as it turns out, was 287,000 “jobs,” versus the “expected” 180,000 (how anyone could have expected 180,000 jobs in the first place is beyond me; but that’s another story, which I wrote four years ago).
As you can imagine, precious metal prices were annihilated – as they are in the immediate aftermath of 90% of all NFP report disseminations, no matter what the numbers are. However, stock futures only rose modestly, and when the knee-jerk rise in interest rates quickly reversed, so did Precious Metal prices – which then soared, with gold rising from a decline of $23/oz to an increase of $10; whilst silver surged from an initial, Cartel-orchestrated plunge of $0.40/oz, to an increase of $0.30/oz – where “coincidentally,” it’s rise was halted at exactly the key round number of $20/oz. It’s now 9:45 AM EST, and both metals, and interest rates, are not far from unchanged – but I’ll get back to them later on in this article, after I read the reports’ fine print, which is guaranteed to be ugly.
For one, last month’s horrific 32,000 job increase was revised downward, to just 11,000. Thus, we’re to believe that somehow, despite essentially all economic data, both here and overseas, being horrible, there was an explosion of hiring in the “Isolated States of America.” Next, the “unemployment” rate actually rose from 4.7% to 4.9%, despite the Labor Participation Rate barely budging from 40-year lows. Moreover, average hourly earnings barely rose, by 0.1%, just half of the expected 0.2%. And of course, 94,000 of said “jobs” were due to the aforementioned “birth/death model.”
I haven’t yet seen the age category data, which surely is the same as it has been for years – i.e., all the jobs accrued to 55+ baby boomers that can’t afford to retire, because they have no savings. As for the “job” breakdown – if one were to actually believe 287,000 jobs were created amidst the worst global economic environment of our lifetimes, well more than half were of the minimum wage variety. Etc., etc., etc. In other words, a typically ridiculous report, from a blatantly conflicted agency, who at any costs must depict “recovery” – particularly as the Central bank that supposedly orchestrated it is at the end of its credibility lifeline, whilst the Administration that issues its orders is trying to win an election.
Honestly, covering NFP reports has become as tedious as FOMC meetings – as it’s the same meaningless lies, propaganda, and claptrap each month, to the point that it’s difficult to believe anyone is listening anymore. I mean, does anyone really think Jon Hilsenrath of the Wall Street Journal – who now says a September rate hike is “possible,” has a clue what he’s talking about? Or for that matter, that he even has credible sources at the Fed anymore? Or that today’s increase in money market “odds” of September and December rate hikes – from 5% and 6%, respectively, to 11% and 25% – have the slightest bit of meaning in such a terrifyingly uncertain world? Let alone, that “post-BrExit,” pre-election, and pre- dozens of other potentially cataclysmic 2016 events, the Fed has even a clue what’s coming next? Or LOL, that the Fed would actually raise rates when global yields are at all-time lows (in many cases below zero) – including U.S. Treasuries, which as I write at 10:30 AM EST, are down from yesterday’s close? Or better yet, that anyone believes a shred of the “bullish” content of this farce of a report?
As I finalize editing at 10:30 AM EST, the PPT is doing just fine. However, oil is plunging to a new multi-month low; interest rates are down three basis points, to nearly an al-time low; gold is down just $3/oz from yesterday’s NYSE close, and silver is up $0.15/oz. Honestly, even for a desperate Cartel, how ridiculously obvious is the manipulation shown below – which in the big picture, is miserably failing?
Yep, it now appears that $1,350/oz gold is no longer resistance, but support; whilst $20/oz silver looks more and more likely to be taken out imminently – enroute to the Cartel’s “greatest fear,” of silver breaching is 50-week-moving-average of $20.50/oz. In other words, the “most important jobs report ever” not only has permanently destroyed BLS credibility; but ironically, may prove to be the catalyst to launch the next phase of the powers-that-be-killing PM bull market!