Every good lie has to retain an element of truth. If today’s non-farm payroll report is the best possible lie, how bad is the truth? – Investment Research Dynamics
Well, now we know why they aggressively and blatantly tried to push gold as low as possible this week. Is this the best they got?
I am not going to discuss the actual details of what was reported in today’s NFP (non-farm payroll report). This serves no purpose other than to imbue the numbers that were reported with some sense of legitimacy. The numbers are a fairytale and I’m not in the business of engaging in a debate over the “finer points” of fantasy-derived fiction.
Having said that, and given that the August lie was revised lower by 21%…think about that for a moment: the stock market screamed higher on a number originally reported in September that they decided was incorrect by twenty-one percent…let that sink in for a moment…one has to wonder just how bad the truth is that lies beneath the carefully constructed fiction.
If you take a paint-scraper to the heavy latex paint applied on top of the facade, just how badly damaged is the underlying structure?
Again, without giving any assent to the validity of the number that was reported, the Government is telling us that the percentage of the population that is “participating” in the labor force is at its lowest rate since 1977. That is a staggering statistic because in 1977 this country was largely still a one-income producing household. So how catastrophic is the real number?
Interestingly, after the “number” was reported, the S&P 500 futures embarked on a 40 point reversal from the 10 point gain that the Fed had managed to achieve overnight. A 40 point reversal that was not just a “flash crash” because it took several minutes to transpire. Conversely, gold had been pushed lower by Yellen’s gang and it embarked on a $33 dollar upward reversal.
The reason this is interesting is that if this “miss” by a major “economic” report had occurred 3 months ago, the S&P 500 would have spiked up 30-40 points on the “renewed” indication that the Fed would not raise interest rates at the next meeting. Conversely, gold would have been slaughtered because the only way to smear the lipstick of legitimacy on ZIRP is to make sure gold stays in a dungeon.
Something has changed in the complete character of the market and the Fed’s ability to manipulate it. We saw this a couple weeks ago when the stock market behaved scatologically – and gold shot higher – after the Fed deferred (predictably by me) on hiking Fed funds by even a tiny amount.
The Fed is losing control of a system that is rapidly collapsing from countless skeletons in the closet that have come to life. Too much debt in every nook and cranny of the U.S. system; hidden OTC derivatives bombs with lit fuses; impending emerging market sovereign bankruptcies; declining tax revenues and State/local Governments on the verge of insolvency; a real economy that is in a frenetic downward spiral; the most overvalued stock market in history (when you strip out all the accounting gimmicks piled into what is being reported by S&P 500 America).
Perhaps most frightening is a political system with the wheels coming off. A good friend and colleague of mine – and someone who was actively involved in politics at one time – commented, after Boehner announced that he was quitting the job he was elected and paid well to do, that he couldn’t recall ever seeing so many “insiders” voluntarily leaving the system (Congressmen, Bernanke, high profile hedge fund managers) as we’ve seen the past couple years.
And now guys like Carl Icahn are openly stating that the system is fake and will sooner or later crash. This is the guy who got rich off of exploiting and front-running waves of dumb money piling into the the markets (he was an original beneficiary of Drexel Burnham’s junk bond odyssey).
Something really devastating is coming at us in the system. The insiders see it but we can only see and interpret the smoke signals that are leaking out from the cracks in the Orwellian wall that has been built over the last 40 years which has prevented the herd from seeing the truth.
The best we can hope for now is that the insane neocons running the Department of Defense do not start pushing the wrong buttons as a means of deflecting our attention from a system that is economically, financially, politically and socially collapsing…