As David Stockman brilliant writes, there is not even a remote mathematical chance of economic recovery, particularly as 10,000 baby boomers will be retiring each day for the next 16 years. A figure, by the way, that would be far higher if not for the rocketing amount of potential retirees taking part-time jobs due to their lack of savings. We have long documented this ugly – and sad – aspect of the NFP employment internals; and this morning’s report was no different, as 159,000 of July’s 209,000 newly created “jobs” were in the 55+ age category; i.e., the only category with net positive job gains since the 2008 financial crisis. Conversely, the 25-54 segment lost 142,000 jobs, which is probably why home ownership is at a 20-year low, and government entitlements an all-time high. Moreover, as 80,000 phantom “birth/death” jobs were part of the 209,000, the implication is that many of the 159,000 new jobs in the 55+ category were such, exposing just how fraudulent the birth/death model is. In other words, the BLS wants us to believe 55+ workers that just lost their jobs started their own businesses in a horrible economy when they’re nearing (or at) retirement age. Yeah, right. Heck, even MSM cheerleader Yahoo! Finance gets it, per its “top story” of the day.
And by the way, remember yesterday’s excitement about “wage growth” – care of the slightly higher than expected “employer cost index?” Well, guess what, NFP wages were flat as a board in July – proving the employment cost index data, which anecdotally possesses not a shred of semblance to reality – was a blatant fraud.
With that ugly introduction, recall that this week was unquestionably the gold bugs’ “hell week.” With COMEX options expiration on Monday, the ADP employment, GDP output and FOMC policy statement reports on Wednesday; Chicago PMI on Thursday, and NFP employment Friday, the odds of PMs ending higher were nearly zero. This was TPTB’s time to shine as every imaginable manipulative tool was at their disposal. And yet, now that the week’s over, it’s quite clear their efforts were an “unmitigated disaster.”
Not only was the jobs number another ugly validation of just how weak the U.S. labor sector is, but yesterday’s catastrophic Chicago PMI “diffusion index” was followed up by a weak PMI manufacturing diffusion index as well. Comically, the permanently tainted ISM manufacturing diffusion index rose in direct conflict to the PMI index. However, as was the case last month, when it was re-released twice in the same morning, the only reason the ISM was (barely) higher was due to the “yes/no” questions it posed being “seasonally adjusted” higher. Oh, and did I mention the real economic data released simultaneously; i.e., construction spending? As we have been shouting for some time now, this is the data you should be looking at; NOT the fraudulent meaningless, arbitrary “diffusion indices” that even Wall Street largely ignores. And how did construction spending do? Well, after rising a measly 0.1% in June, it plummeted 1.8% in July. Last but not least, all of the measly 0.4% increase in July income was promptly spent; sadly, entirely due to higher gasoline prices. I know Janet, the higher energy prices we have experienced for the past six years are just “noise.”
Given this horrible economic backdrop which wasn’t helped by Portugal’s collapsing, decidedly not “contained” banking crisis, TPTB were so desperate to prove “all’s well,” one would have to be blind not to see their transparent machinations. Most importantly, their frantic selling of Treasury bonds to avoid worldwide recognition of the “most damning proof yet of QE failure”; i.e., plunging Treasury yields amidst the so-called “recovery” they purport. Starting with Wednesday’s comically fraudulent “4.0%” GDP print, they did everything in their manipulative power to push the benchmark 10-year yield above the 2.6% “line in the sand” we wrote of in May – but decidedly failed. Not that Whirlybird Janet’s wildly dovish comments Wednesday – highlighting the “significant underutilization of labor resources” plaguing the economy like the current record outbreak of the Ebola virus. Anyhow, the 10-year Treasury yield peaked within a few ticks of 2.6% early this morning; but after the aforementioned horrifying economic data, the best they could do was “un-taper” for the rest of the day – desperately trying to prevent a close below the key round number of 2.5%.
Whilst this was ongoing, the “Dow Jones Propaganda Average” was following up yesterday’s ugly 316-point decline with a plunge of just above 100 points – i.e., “PPT down limit #2.” Consequently, the PPT attempted a prototypical “dead ringer” algorithm to prove “all’s well – at one point almost turning the Dow positive! – before miserably failing in the day’s final hours.
Clearly, history’s largest fiat Ponzi scheme is commencing its terminal stage; and ominously, the most vulnerable overvalued assets are leading the way down. Junk bond yields, for example, are exploding higher and the plunge in Fannie Mae bonds (yes, they still trade) portends an accelerating collapse of the Fed-inspired real estate “echo-bubble.” Hence, the all-out attempt, patently obvious attempt to cap precious metals’ rise, which also decidedly failed. Sure, gold’s gains were capped at the typical 1.0% level at exactly the 10:00 AM EST “key attack time,” via a prototypical “Cartel Herald” algorithm. And sure, the Cartel leaned hard on silver to “prove” it’s “just an industrial metal;” but in the end game, both metals ended said “hell week” above their 50 DMA’s of $1,294 and $20.28, respectively, and 200 DMA’s of $1,287 and $20.30.
In silver, such attacks were particularly transparent especially when one views the dichotomy between what is occurring on the essentially paper-only COMEX and nearly physical-only Shanghai silver exchange. As you can see, since last April’s “Alternative Currencies Destruction” raids, government-backed “commercials” (like JP Morgan) have naked shorted more than 50,000 silver paper contracts – worth more than $6 billion – whilst nearly 90% of the entire Shanghai physical inventory has been depleted. Use your own judgment, and guess how this ugly manipulation will end in the coming months. And when doing your due diligence, we suggest you recall the fate of the 1960s’ “London Gold Pool.”
In our view, the past week’s economic data – and FOMC commentary – were an “unmitigated disaster” for TPTB’s ill-fated scheme of whitewashing reality with unprecedented levels of money printing, market manipulation and propaganda. It shouldn’t be long before the entire global fiat Ponzi scheme collapses; and when it does, if you haven’t already protected your net worth with physical precious metals it will already be too late.