The monthly non-farm payroll report has become a fraud of epic proportions. The Government is claiming that 215k new jobs were created in March. In the goods producing category it claims that 37k jobs were created in construction. But there’s a problem with this – it doesn’t correlate with construction spending and housing starts:
Anyone who follows the housing market knows that for the last year that new housing starts – notwithstanding the conspicuous manipulation embedded in the Government’s reporting methodologies – have been largely driven by multi-family dwellings (big apartment buildings). But the graph on the right shows that multi-family dwelling “starts” have been declining as well.
In other words, the Government would have us believe that 37k jobs in construction were created in March despite the fact that construction spending is in a downturn. It’s laughable. Keep in mind that the Census Bureau collects the data for the employment report, construction spending and housing starts. It’s no surprise that even its own data is inconsistent.
The same idea applies to all of the areas in which the Government is reporting there to be new jobs created except maybe healthcare. Healthcare has indeed been the one area of growth in the economy because Obamacare has triggered a massive increase in Government-backed healthcare spending which is being financed by additional Treasury issuance and a massive transfer of wealth from the middle class to the disadvantaged class and to all of the private companies associated with healthcare (big pharma, hospitals incorporated, insurance, etc).
I turned up the volume – regrettably – on Fox Business this morning after the jobs report because I wanted to get some amusement from listening to the so-called “experts” explain why the economy was supposedly producing an unbelievable number of jobs. Interestingly, Maria “Money Honey” Bartiromo was unable to disguise the look of total disbelief on her face in response to the employment report. Some dope by the name of Steve Moore tried to justify the data by claiming that the big reduction in the cost of gasoline has created higher disposable income for consumers to spend in discretionary areas – he specifically cited restaurants – which has offset the jobs loss in energy and mining.
Steve, where are you getting your views? The facts, unfortunately for you, do not support your thesis. For instance, retailers have been laying off thousands and closing down stores en masse since the end of December. As you can see from the graph to the left, the restaurant industry, like the retail industry, is shedding jobs hand over fist.
Steve, I would suggest that next time you spew your garbage on a public forum, you better do some fact-checking in case there’s some viewers who know the facts.
Then there’s financial services, which the Government claims added 15k jobs. Tell that to the several thousand who were fired last month from big Wall Street firms. Not sure where the Census Bureau found the 15k new jobs. I suspect that the data collectors turned over some rocks and made up the numbers.
And then there’s the biggest problem. The Government produces several different versions of the employment situation in one report. There’s the Household Survey and the Establishment Survey. Then there’s the U-3 report and the U-6 report, each of which shows substantially different unemployment rates. U-3 shows 5% unemployment and U-6 shows 9.8% unemployment. Which one is it? John Williams of Shadowstats.com has tracked the employment reports for many years. His work shows that the true unemployment rate is well north of 20%. This is validated in the context of the massive number of people who are no longer considered to be part of the labor force.
Most of those close 100 million not in the labor force are the ones who “fell off” unemployment insurance and stopped looking for work. Many are now on welfare of some type. Since 2001, the number of people who “qualify” for Social Security Disability Insurance has more than doubled to nearly 9 million. They are considered not part of the labor force and there’s law firms who have built their practice around getting people qualified. Then there’s the student loan factor. If you can’t find a job, apply to an online university and get a student loan. Since Obama took office the amount of student loans outstanding nearly doubled from $700 billion to $1.3 trillion. Once you get approve for that loan, the Government does not have to count you as being unemployed.
The market response to the employment report is just as absurd as the report itself. The stock and the precious metals were slammed initially. If stocks and metals were hit because the employment report implies that the Fed will raise rates this year, then why has the S&P 500 and Dow rallied to go green on the day and gold and silver are still down $16 and 53 cents respectively?
Corporate revenues are showing no growth and GAAP net income has declined four quarters in a row. I’ve got news for the Government, when companies are not producing revenue growth and their net income declines, they get rid of workers, not hire them.
Gold has been hit for as much as $23 today and silver for 66 cents (over 3%). Currently silver is down about 51 cents to $14.94. The bullion banks have been having a lot of trouble getting silver to cooperate with their manipulative efforts. On many days when gold is being hit, silver will trade higher on the day. I suggested at the beginning of the year that buying silver now would prove to be the trade of the decade. I maintain that call and silver currently is up over 8% YTD. I would suggest that all sell-offs in silver should be bought. You can leverage your trade in silver with mining stocks. The latest issue of the Mining Stock Journal is now out and my current idea is what I believe to the best idea I’ve come across in 15 years (it’s gold exploration junior). You can subscribe to the MSJ by clicking on this LINK or on the graphic to the left.
You subscription will include the latest issue, the first two issues published – the March 4th debut issue features an emerging silver producing company and includes call option recommendations – plus a glossary of mining industry terms to help you better understand the research presented.
“I suggested at the beginning of the year that buying silver now would prove to be the trade of the decade. I maintain that call and currently is up over 8% YTD. I would suggest that all sell-offs in silver should be bought. ”
Of the decade I can believe. Maybe not this year. It is up for the year but a big smack down today. Maybe it rebounds soon. Hard for amateur [small time] stackers to “maintain the faith”. Some that believe the stock markets are at the top of this cycle are selling…and holding digits or physical cash. The buying power may edge downward, but they feel safer holding that than seeing an approximately 3% drop in one day.
Dave, what’s happening right now, WTF? the fake NFP data indicating a Fed rate hike that will never happen and then a SPIKE in stawks? Well it’s convinced me that not even my gold mining stocks can be trusted to have any connection to reality. I’m cashing out and going totally into physical silver.
Buy mining stocks, let them triple, cash out into silver and check out of the U.S.
JPM is shorting paper silver and replacing it with physical(since they cannot be busted for buying physical). They now have enough silver to own half of the U.S. once the price doubles.
Going in with both hands and a couple feet is probably a good idea. IF you decide to get in to physical but you want to get rich quick then silver or Gold isn’t for you.
I have been holding since the last sell off and do not even think I would sell all of mine during the next spike up in prices. Soon silver will be impossible to find in the next few years and I think silver could increase 100 fold.
Doesn’t look like the mining stocks agreed with the pm selloff, Dave. Maybe, just maybe, the bullion banksters are in for a surprise.
If you have a lease & you are supplying this market…(on borrowed money) why would you do that? Lock the gates…walk away….let the bankruptcy lawyers’ go their hardest…come back in 2-5 years…the world will be yours’ …i just dont get it why miners would keep supplying this market at these prices….they’ll keep this shit up for ever…WALK AWAY….the mines will be there when you come back….
We are not going to see any change till those crooks are taken down by force , nothing else.
Longer we wait , more painful it will become for us in the future.
Guys , silver market is very tiny and it will not bring fraud system down.
Only China can bring status quo , but only if they don’t play silly games , they wasted 5-6 years and their economy is down , market is 50% down and it’s getting worse , and they printed trillions of yuan.At this time ordinary people can’t challenge system , but country like China can and should challenge crook gold, silver, exchange rate markets and fraudulent rating agencies.
GATA says silver is kryptonite to our fraudulent monetary system, and I agree as silver is constitutional money. This is why there is so much effort to suppress the price as gold rises. Buy as much as you can while you can. China benefits from artificially low prices and has no incentive to see prices rise until their coffers are full…
It is a guarantee that we are entering a new golden age of prosperity. It’s easy to see why — its called trickle up economics.
It goes like this …
Lower gas prices incentivize people to drive more, which adds to the pollution which blots out the sun making it cooler, resulting in more clothing being purchased at retail stores; those rising retail sales drive higher retail wages; this new found wealth makes its way into more restaurant spending; waiters and dishwashers respond to a demand for their services by buying cars to get to their jobs, so car sales skyrocket; cars need garages so car owners buy homes so they have a place to park their cars, which boosts demand for construction, so home builders get loans from banks to build more homes, and the banks collect a percentage of those loans which in-turn gets invested with hedge funds and brokerage houses, increasing fees and commissions on Wall Street. Financial engineering and lax regulation makes possible the invention of new exotic instruments and synthetics that guarantee the virtuous circle of equality, fairness and plenty never comes to an end. Furthermore, bankers take a percentage of their wealth and buy their very own congressman, which in turn does their bidding by crafting legislation favorable to retail clerks, waiters and dishwashers, because the Wall Street banker knows, to ensure the status quo trickle up economic system remains intact, he must take care of the little guy. .
So the next time some gloom and doom pessimist tries to convince you that an economic crash is coming, or that gold is going higher, just share this important critical analysis with them.
too bad all those construction jobs you mentioned are done by illegal labor !!!!!!!
What were you smoking? lol
Who are you?
Are you online somewhere that I could follow you?
I get the feeling you’re quite interesting
Anyone know why the silver stocks are up huge some over 100% over the last several months while the price of silver bullion has pretty much stayed flat?
Jim Rickards :
“..Vladimir Putin has a six thousand-member cyber brigade operating on the outskirts of Moscow, working day and night to be able to hack, disrupt, destroy, delete and otherwise shutdown US exchanges, US financial assets, etc.”
“the gold bugs and the conspiracy theorists say there is no gold in Fort Knox”
“You do not audit things that are unimportant. If the Fed wants you to think that gold is unimportant, it follows that they would not audit it because auditing it pays too much respect to gold.”
What does he smokes ?
Putin Aide Details Russia’s Gameplan Against the Empire
Stanley Druckenmiller: “This Is The Most Unsustainable Situation I Have Seen In My Career”
Dave, I thank you for your above reply to me on April 1:
“Buy mining stocks, let them triple, cash out into silver and check out of the U.S.”…
…which persuaded me to do so – ie, to HOLD my good gold mining stocks for a bit longer! – so that I won’t sell them prematurely out of emotional disgust with the almost science-fiction-like frauds and distortions that are going on now. But meanwhile, presently I’ve got over 1,500 ounces of physical silver in safe places outside the USA, does that sound like a good nest egg to you, Dave?
And then as for your advice to “check out of the US”, DONE! With a new citizenship in a good country!
Your thoughts, if any, Dave? What do you think about 1,500 ounces of physical silver held in secure locations outside the USA? (That would be 400 Pounds Sterling by the standards of Britain and/or America 200 years ago, the net worth of a man of the gentry of considerable means, the net worth of a borderline rich man in year 1816 or so…)
I wouldn’t keep metal stored outside the U.S. unless you plan on moving to wherever you are storing it before the real shit hits and countries close their borders.
My view is that the closer to your own physical possession of the metal, the better.
Great work as usual
What is your opinion on: Is it better to hold physical gold or silver for wealth preservation?
I just heard a couple of interviews that liked gold better than silver. (Pento and Rickards)
Thanks for your help
some gold – lots of silver. fuck Rickards and Pento. Rickards is a crook and Pento is overrated. Silver will be the best performing asset class thru 2020. I emailed Pento in 2008 about the fund I co-manage and he poo-poo’d precious metals
BINGO! Great prediction!
Silver is on a tear, hopefully this is the beginning of a huge run higher, reaching the 2011 highs or perhaps even better!