Ho hum. Another first Friday of the month, and another fabricated “jobs” report with not a shred of correlation to real economic activity. Like, for instance, the completely ignored fact that – as I have discussed ad nauseum – the BLS’ “birth-death model”; which as we recently learned, accounts for 93% of all new “jobs” since the 2008 crisis; is based on the creation of unreported jobs at small businesses. This, despite the “inconvenient truth” that more small businesses have “died” since 2008 been “birthed.”
Thus, if you believe the 209,000 jobs supposedly created in July is true – when 158,000 such “jobs” were fabricated by the birth/death model’s fabricated, goal-seeking algorithms – I have a bridge in Brooklyn to sell you. Or, for that, the post-2008 low “unemployment rate”; which, when Trump was on the campaign trail, claimed to be a lie – as opposed to today, in true politician fashion, when it has magically turned “true.” This, amidst the weakest economic data since said Financial Crisis – atop surging loan defaults, record debt accumulation, and an exploding “Retail Armageddon.”
I’m not even going to wait for said “details,” as I know exactly what they’ll say. Which is, the vast majority of such “jobs” were low-paying, minimum-wage, part-time “gigs”; principally, in non-productive sectors like healthcare and education; and paradoxically, the same retail sector where sales have all but died, and Amazon.com is, all by itself, causing thousands of store closings. As quite obviously, the increasingly ignored jobs report is becoming the biggest joke in the financial world. That is, besides the credibility of the Central banks descrying “deflation,” as they print and pump “markets” to all-time highs – amidst the worst economic Depression in generations, fueled by history’s largest-ever, and parabolically-rising, debt edifice.
I mean geez, we just learned that the Bank of Japan owns 71% of all equity ETFs on the Nikkei exchange, whilst the Swiss National Bank owns $80 billion of U.S. stocks alone – led by Apple, which “coincidentally” has been the single biggest contributor to the “markets”’ recent gains. Which itself, owns $51 billion of Treasuries – i.e., more than most sovereign nations; which of course, it wouldn’t dream of doing if it didn’t know the “Yellen Put” was sitting below it. That said, of all the lunatic; hyper-inflationary; politically, economically, and socially destructive ramifications of QE – be it overt or covert – the “icing on the cake” is this damning chart; of how, following $1.3 trillion of ECB QE – which earlier this year, was extended from the sovereign to the corporate realm; and three years of negative interest rates; European “high-yield” – i.e., junk bond – yields are about to fall below that of 10-year U.S. Treasury bonds! I mean, what could possibly go wrong?
A LOT! As in, the explosion of money printing that hasn’t yet occurred; at least, compared to today’s “piddling,” all-time high level of $200 billion/month from the ECB and Bank of Japan alone. As, per what I have discussed in equally ad nauseum fashion since January 2014’s “direst prediction of all,” the deflation caused by years of money printing, financial engineering, economic propaganda, and market manipulation will drive Central bankers to relentlessly expand history’s largest, most destructive fiat Ponzi scheme. This, and historically ominous secular factors like demographics, automation, and the explosion of crypto-currency; the latter of which, will drive more of the economy away from desperate governments’ coffers with each passing day.
As, despite the exploding cost of living everyone on the planet is experiencing – for the most part, in “need versus want” items like housing, education, healthcare, and daycare; the way conniving, thieving governments measure “inflation,” it will NEVER achieve the arbitrary 2% rate they all seem to target. Except the Bank of Japan, that is; which, as of yesterday, after two decades of predictive failure, is no longer targeting any specific time frame to achieve it. In fact, per the below, Central-bank-damning chart, government-measured “inflation” just hit, on a worldwide basis, its lowest level since the tail end of the largest financial crisis of our lifetimes.
Which in turn, is why Whirlybird Janet delivered her “ding dong, the Fed is dead” speech two weeks ago – followed by equally uber-dovish statements from the ECB, BOJ, RBA, RBI, and BOE; all of whom, mere weeks earlier, colluded to put on a false hawkish front. Which in turn, enabled the Cartel to cover COMEX gold and silver paper shorts this month at a record pace – aided by the illiquidity of the July 4th holiday week, when algos like the “7:06 PM” were utilized to push paper gold and silver prices down. Which in turn, failed miserably, when gold again bounced off its 50-month moving average of $1,232/oz. So of course, the “commercials” started shorting again; which is why today’s completely fabricated, blatantly fraudulent “jobs” report was concocted in the first place; i.e., to enable the Cartel’s paper algorithms to run wild; enabling the “specs” to be fleeced again, while inadvertently hastening the physical shortages that must inevitably arrive.
And by the way, I know I said I wouldn’t follow up with the guaranteed-to-be-damning details of said “jobs” report. However, as I write Zero Hedge just published some of them – and man were they ugly. To wit, in the continuation of the “99%-destroying” trend that has been ongoing for years, 393,000 part-time jobs were created in July (if you believe the arbitrarily calculated birth/death model), whilst 54,000 full-time jobs were lost. And who wants to take a guess which categories again produced the most “jobs?” Yep, by the same wide margin as always, “waiters and bartenders” and “education and health.” And oh yeah, in the last year, the only education category to have generated “job” gains is…drum roll please…those with high school diplomas or lower. This, as the U.S. Macroeconomic “hard data” index is hitting its lowest level since the 2008 crisis! I mean, does anyone actually believe a word of these Banana Republic-like “reports?”
All that said, today’s principal topic was inspired by the “deflation” fears Central bankers are clearly obsessed with – notwithstanding today’s fraudulent, NFP-aided “one and done” relief rally in bond yields. This, after closing yesterday mere basis points from the post-Election lows, yielding a ZERO percent expectation of a September rate hike, and barely 40% in December. As clearly, the 7.4-billion-person planetary ecosystem – beset by the historic cyclical and secular headwinds noted above – weren’t magically “saved” by a blatantly rigged BLS jobs report.
In other words, the terminal stage of history’s largest, most destructive fiat Ponzi scheme won’t be slowed one bit; and thus, inflation “measurement” aside, Central banks will be forced to inexorably accelerate their inflationary monetary policies. Let alone if, God forbid, the manipulators lose control for a second, yielding even the most minor of crises. Which is why it’s so interesting – and decidedly NOT “coincidental” – that Bitcoin’s adoption is rising so rapidly. This, and governments’ increasingly draconian responses to plunging economic activity; as in India, where November’s cash ban led to yesterday’s…drum roll please…lowest-ever print, at a massively recessionary 46.0, of its composite PMI index.
This week’s long-feared “hard fork” of “B-Cash” is about to die on the vine – paving the way for next week’s Bitcoin SegWit activation to draw a significant amount of capital out of the dying fiat currency system. Or, as I put it earlier this month, “Bitcoin SegWit Activation – the Gold Cartel’s worst nightmare.” In other words, yielding significant inflation of the crypto sector – simultaneous with the accelerating inflation of fiat-priced assets, care of the aforementioned, inexorable “money” printing. Which in turn, will yield further upward pressure on “need versus want” items; in turn, weakening the economy further, whilst increasing the level of already surging bond defaults. Thus, catalyzing the inevitable awakening of the global “bond vigilantes” – which ultimately, will prove the powers that be’s’; and consequently, the gold Cartel’s; Achilles Heel.
Inevitably – and perhaps, imminently, if the next crypto surge yields significant public and media attention – governments will start to refocus their attention on the “clear and present danger” Bitcoin represents. Which, in a world where economics suggest the ability to hold physical gold and silver is on its last legs, could easily prove the catalyst that breaks the Cartel’s back. Which in a crypto-mania environment, would likely yield few “ramifications’ other than higher gold and silver prices – which is just fine with me.
Ultimately, I believe crypto-currency will draw billions of people from the destructive fiat regime that has ruined “99%-percenters” for generations; and as well, into the few reliable “scarcity assets” available – such as “old, reliable” physical Precious Metals. This is why I believe Precious Metals and Bitcoin will ultimately be the “twin destroyers of the fiat regime”; and why, to follow up my must read article from December, “Bitcoin will make gold and silver go up.” Which, to conclude, is why this is the “most Precious Metal bullish I’ve ever been.”