August Jobs Tumble To Only 142K, Lowest Monthly Print Of 2014 And Below Lowest Forecast; Unemployment Rate 6.1%

So much for the latest recovery: with not a single analyst expecting a NFP print below 190K, the BLS just reported that August payrolls tumbled from a revised 212K to only 142K, which was not only below the lowest Wall Street estimate of 190K, but it was also the the lowest monthly jobs print in all of 2014 and the biggest miss to expectations since the “polar vortex”! The Unemployment rate dripped modestly from 6.2% to 6.1% confirming yet again it has become a completely meaningless metric.

This post was published at Zero Hedge on 09/05/2014.

Goldman Sachs is the world’s worst gold forecaster so go long when they say short

Thank you to our friends in the London gold trading community for reminding us this summer that Goldman Sachs has one of the worst records as a forecaster of the gold price, so when they say to short gold like today it is almost always a time to go long.
The Ukraine-Russia crisis and economic weakness in Europe and Japan have been supporting gold somewhat, but prices are being pressured by Federal Reserve policy, said Jeffrey Currie, head of commodities research at Goldman Sachs. That’s why he sees the precious metal falling 17 per cent from current levels by year end.

This post was published at Arabian Money on 04 September 2014.

The Truth About Where Gold Price Is Headed

I will be honest, it has been a long time since I have been excited about gold, but I am starting to like gold once again. I had grown too bored to care what gold did. With the bull market top in 2011, and four years later price continues to founder can you blame me?
Let me start out by painting a picture for you. This is my technical analysis overlaid on the price of gold. This simply gives you a visual of were the price of gold is trading.
But first, if you have not yet seen this ‘Gold in the USA’ infographic you must check it out… it shows the history of gold in a visual format, and you will likely learn something from it – Click Here
GOLD HOLDS LONG-TERM BEARISH PATTERN Gold peaked around 1900 in September 2011 and quickly fell to the 1550 area. The metal then consolidated for 18 months before it broke support. The sharp decline triggered a drop in price to $1200 in April 2013. Since then gold has been in another consolidation, which is a bearish continuation pattern.
The lower highs in 2013 and 2014 reflect weakening demand and increasing selling pressure at lower price levels. A break down in price below support would trigger further weakness and a drop to roughly $900 oz. If you want more of a bearish visual; see my August gold report – Click Here

This post was published at Gold-Eagle on September 4, 2014.

A difficult question

In a radio interview recently* I was asked a question to which I could not easily give a satisfactory reply: if the gold market is rigged, why does it matter? I have no problem delivering a comprehensive answer based on a sound aprioristic analysis of how rigging markets distorts the basis of economic calculation and why a properly functioning gold market is central to all other financial prices. The difficulty is in answering the question in terms the listeners understand, bearing in mind I was told to assume they have very little comprehension of finance or economics.
I did not as they say, want to go there. But it behoves those of us who argue the economics of sound money to try to make the answer as intelligible as possible without sounding like a committed capitalist and a conspiracy theorist to boot, so here goes.
Manipulating the price of gold ultimately destabilises the financial system because it is the highest form of money. This is why nearly all central banks retain a holding. The fact we don’t use it as money in our daily business does not invalidate its status. Rather, gold is subject to Gresham’s Law, which famously states bad money drives out the good. We would rather pay for things in government-issue paper currency and hang on to gold for a rainy day.

This post was published at GoldMoney on 05 September 2014.

Labor Participation Rate Drops To Lowest Since 1978; People Not In Labor Force Rise To Record 92.3 Million

It is almost as if the Fed warned us this would happen. In a note released yesterday, a Fed working paper titled “Labor Force Participation: Recent Developments and Future Prospects“, looked at the US labor force and concluded that “while we see some of the current low level of the participation rate as indicative of labor market slack, we do not expect the participation rate to show a substantial increase from current levels as labor market conditions continue to improve.” But don’t blame it on the greatest recession/depression since 1929: “our overall assessment is that much – but not all – of the decline in the labor force participation rate since 2007 is structural in nature.”
Well that’s very odd, because it was only two months ago that the Census wrote the following: “Many older workers managed to stay employed during the recession; in fact, the population in age groups 65 and over were the only ones not to see a decline in the employment share from 2005 to 2010 (Figure 3-25)… Remaining employed and delaying retirement was one way of lessening the impact of the stock market decline and subsequent loss in retirement savings.”

This post was published at Zero Hedge on 09/05/2014.

Gold Monetisation Scheme Aims to Treat Gold as Currency in India

Gold should be treated as a currency, according to India's top gold refiner, MMTC-Pamp. The organisation is working on a gold metal account scheme that would help small retail gold consumers deposit their gold, melt and earn interest on it. 
In a move aimed at mitigating the meagre gold supply situation across the country, which has led to a high current account deficit (CAD) and leading to high imports, the organisation has proposed a Gold Monetisation Scheme (GMS).
The scheme will ensure that gold deposits will be treated just as currency deposited in a bank and earn interest.

This post was published at Mineweb

Hugo Salinas Price: How the Dollar Will Die

The existence of fiat currencies depends on their ability to acquire dollars. In the case of the fiat dollar, the dollar will continue to exist as long as dollars can be used to acquire gold.
The condition under which no quantity of dollars can acquire a gram of gold, is known as “permanent backwardation”. (There will always be individuals who will be disposed to part with a small quantity of gold, in exchange for dollars or other fiat currencies. But the purchase of gold in quantity can only be done on world markets, and while “backwardation” is temporary. This possibility disappears when “backwardation” becomes permanent).
In “backwardation” – which has presented itself momentarily, in recent times – gold goes into hiding (its owners do not wish to part with it) and in the markets there has been no one willing to purchase gold for future delivery, even though its future price is lower than the price of physical gold for immediate delivery. So far, this condition has been temporary and not permanent.

This post was published at Plata.com.mx

Canadian Banks Got $114 Billion from Governments During Recession

Canada's biggest banks accepted tens of billions in government funds during the recession, according to a report released today by the Canadian Centre for Policy Alternatives.
Canada's banking system is often lauded for being one of the world's safest. But an analysis by CCPA senior economist David Macdonald concluded that Canada's major lenders were in a far worse position during the downturn than previously believed.
Macdonald examined data provided by the Canada Mortgage and Housing Corporation, the Office of the Superintendent of Financial Institutions and the big banks themselves for his report published Monday.

This post was published at CBC News

Why You Might Be Saving Too Much for Retirement

As I approached the final life-cycle stage of retirement, I naturally began to think back to the retirement of my parents and marveled about how well they did without much retirement income.
With little more than 40% or 50% of their pre-retirement income, largely from Social Security, they lived well and even managed to multiply their net worth in retirement. This seemed to fly in the face of much of the fear promoted by the financial services industry that retirement isn't possible unless people could generate 75% or even more of what they earned in their last years of work.
Something didn't jibe.

This post was published at Market Watch

Jim Rickards: 3 ‘Snowflakes’ that Could Trigger Financial Collapse

As you probably recall, Mr. Rickards anticipates a financial crisis worse than 2008. The possible catalysts are many, but the outcome is certain. The analogy he makes in his book The Death of Money is to an avalanche: “The climbers and skiers at risk can never know when an avalanche will start or which snowflake will cause it.”

This post was published at Daily Reckoning

How the Dollar’s Reserve Status Hurts America

“The dollar is the world's reserve currency,” is a statement as American as apple pie. But in a new op-ed for the New York Times, Jared Bernstein, a former economic adviser to Vice President Joe Biden, says that has got to change.
“The problems that having the dollar as the primary reserve currency are causing in our economy and have been causing for years, I think, are deeply under appreciated,” said Bernstein, now senior fellow at the Center on Budget and Policy Priorities. “They include a large and persistent trade deficit, so we’re exporting millions of good jobs overseas… We’ve ended up with asset bubbles, and a marked budget deficit, high unemployment.”

This post was published at Yahoo

Cleveland Fed’s New Chief Calls for Forward Guidance Change

The Federal Reserve needs to change its forward guidance on interest rates, a top official at the central bank said on Thursday, in order to better reflect the speed of the Fed's progress toward its economic goals.
"I believe it is again time for the Committee to reformulate its forward guidance," said Cleveland Fed President Loretta Mester, referring to the Federal Open Market Committee.
In her first speech since taking the helm at the Cleveland Fed in June, Mester said inflation signs are encouraging, and that the Fed should expect wages to rise with prices, rather than lead price gains.

This post was published at Money News

Of Course The Gold Price Is Manipulated…That’s The Point!

Throughout history, there have been a constant flow of schemes to try to manipulate the gold price and gold itself in terms of paper money. These have come from governments, institutions as well as from individuals. The aim has always been to either establish the value of currencies or enhance that value in terms of gold. The first key to this is to ensure that the gold price is made in the paper currency and not the price of the paper currency in gold.
At school you probably read the book called the Alchemist, where villains tried to invent formulae where they could transform lead to gold. While what they managed to do was a good confidence trick, they could not replicate gold. Today the process continues, but now the boldness of government has gone as far as to say that paper money is better than gold in terms of its value. But gold is gold and for the prudent and those wanting to preserve their wealth over the long term, nothing can replace it.
Experiments using fiat currencies have been carried out since the days of distant Chinese dynasties in attempts to emulate or replace the real money of gold. The reason is simple and explained in a quote I borrow from Mr. Popescu, ‘Aristotle, the Greek philosopher, student of Plato and teacher of Alexander the Great, was mentioning fiat money 2,400 years ago when he said, ‘In effect, there is nothing inherently wrong with fiat money, provided we get perfect authority and godlike intelligence for kings.’ But we can’t, which is why in history, there has never been a ‘money’ that can retain its value or replace gold as real money, in all seasons weathered by economies.

This post was published at Gold-Eagle on Julien Phillips.

Futures Slump Ahead Of Nonfarm Payrolls As ECB QE Euphoria Fades

It has been an odd session: after yesterday’s unexpected late day swoon despite the ECB launch of “Private QE”, late night trading saw a major reversal in USDJPY trading which soared relentlessly until it rose to fresh 6 year highs, briefly printing at 105.70, a level not seen since October 2008, before giving back all gains in overnight trading. It is unclear if it was this drop, or some capital reallocation from the US into Europe, but for whatever reason while Europe has seen a stable – if fading in recent hours – risk bid, and European bonds once again rising and Irish and Italian yields both dropping to record low yield, US equity futures have slumped and are now trading at the lows of the session ahead of a US nonfarm payroll print which is expected to rise and print for the 7th consecutive time above 200K, at 230K to be precise, up from 209K in July (down from 288K in June). It is unclear if the market is in a good news is bad news mood today, but for now the algos are not taking any chances and have exited risky positions, with the ES at the low end of the range the market has been trading in for the past week centered aroun S&P 2000.
In any event, if the equity bid does not recover soon, the ECB’s intervention may be the weakest, or most priced in for, central bank intervention in New Normal history.
On the geopolitical front, there are just two thing to keep track of:
PRO-RUSSIAN REBELS SAY THEY HAVE ENTERED THE CITY OF MARIUPOL IN UKRAINE – RUSSIA’S INTERFAX QUOTES SOURCE AMONG DONETSK SEPARATISTS and
UKRAINE REBEL LEADERS ARRIVE FOR PEACE TALKS IN MINSK So more of the same: peace talks even as the separatists have made their biggest territorial gains since the early summer. Watch the resolution of this carefully as it will likely take place just after NFP when most traders will be on their way out.
Another notable development overnight took place in Japan which announced it is preparing a backup plan for fiscal stimulus. It appears that the BOJ is now fully resolved to not to more QE, which may be what is weighing on the USDJPY.

This post was published at Zero Hedge on 09/05/2014.

Gold Stocks And The Price Of Gold

It’s one of those enigmatic moments in history. As economic conditions worsen, and so do socioeconomic conditions in turn, the performance and returns from stabler forms of capital (and the wealth of those who possess them) improve.
Those who have used foresight to get out of collapsing fiat currencies (the minority) will face some frustration from those who did not avoid the inevitable bust of conventional forms of wealth.
Early Indicators
Before dealing with the social reality of what is happening, we should be very clear about reading the winds correctly, of course. What is happening? And why?
Let’s take the question of gold prices in relation to the prices of stocks like mining companies. There could be (and there is) earlier activity and stimulation in the gold stocks well before visible signs of revaluation of gold per se.
We know what is happening by both contemporary markers as well as by historical wisdom. True, these are unprecedented times, in which technological wild cards abound, yet history shows clear patterns when it comes to the results of in-bred economic practices over time.
We can actually start with the plain fact that when fiat currencies, let alone hegemonic currencies like the US Dollar, start faltering because of how they were used, as well as their lack of support in a calculable reserve capital (such as the previous world concorde using the gold standard), there is a domino effect with a late clamour towards stable investments. Gold, silver and other metals will rise in price. This is a fact, observed like recorded weather patterns.

This post was published at Gold-Eagle on September 4, 2014.

Draghi’s War on Savers and the Euro

ECB Cuts Rates From Nada to Zilch (and Less), Announces QE In his Jackson Hole speech, Mario Draghi already hinted at further ECB interventions, pointing out that 5 year forward inflation breakevens indicated that long term inflation expectations had fallen below 2% (i.e., 2% CPI rate of change). Consumers would of course see this as a reason to rejoice, but not our vaunted planners. It was already widely expected than an ABS purchase program would eventually be announced, as preparations for this have been underway for several months.
Frankly, we thought that given that the TLTROs are beginning in September, the ECB would likely wait for their impact before announcing additional interventionist steps. As it turned out, they announced so many things at once on Thursday, they actually managed to surprise not only us, but apparently the great majority of market participants.
The announcement included: further rate cuts; with the repo rate now at 5 basis points, which we might as well call zero, this avenue is now rapidly closing. Since all rates were cut, they also increased the bizarre penalty rate on excess reserves to minus 20 basis points. All this measure achieves is that it costs the banks money. It’s not going to make them more eager to lend, but it will lead to them cutting the paltry interest they pay to savers even further. So the war on savers is continuing at full blast.

This post was published at Acting-Man on September 5, 2014.

The Billionaires Club Is Gloomy About the Stock Market

cahn, Soros, Druckenmiller, And Now Zell: The Billionaires Are All Quietly Preparing For The Plunge … “The stock market is at an all-time, but economic activity is not at an all-time,” explains billionaire investor Sam Zell to CNBC this morning, adding that, “every company that’s missed has missed on the revenue side, which is a reflection that there’s a demand issue; and when you got a demand issue it’s hard to imagine the stock market at an all-time high.” Zell said he is being very cautious adding to stocks and cutting some positions because “I don’t remember any time in my career where there have been as many wildcards floating out there that have the potential to be very significant and alter people’s thinking.” – ZeroHedge
Dominant Social Theme: Something is going to happen in the fall … but what?
Free-Market Analysis: In the other article in today’s issue, we took a look at China’s increasingly wretched economic performance in terms of its upcoming stock market impact.
You’ll see that our view takes into account China’s huge size, which seems to preclude a rapid public unraveling, especially since, in our view, that unraveling has been taking place for at least four years now without having an impact commensurate to its reality.
The media doesn’t cover such things, for the most part; the Chinese government itself will go to any lengths to downplay the current unrolling disaster; the Chinese central bank will print any amount of money (or so it seems) to continue to monetize China’s failing industrial and banking base.
And so China indeed faces a kind of generalized bankruptcy, but there is no reason to think the ramifications will play out this fall just because they exist. They’ve existed a long time and China still staggers forward.
What’s interesting, however, as we can see from this ZeroHedge article, is that some of the US’s top investment minds are certainly expecting that SOMETHING will happen to stocks in autumn. China may or may not be the proximate trigger but there is a growing billionaire’s club with bearish sentiments.

This post was published at The Daily Bell on September 05, 2014.