American Worker Productivity Worsens (Again) – Biggest Decline Since 1993

As expected Q2 US worker productivity slowed from its initial -0.5% to a final -0.6%. This is the 3rd quarterly decline – the first instance since 1979…
And the last 3 quarters are the biggest plunge in productvity since 1993 (thanks to a doubling of unit labor costs from expectations of 2.1% to 4.3%).
Any way you look at it – this is not good – no matter how many times the mainstream tries to explain why “we just don’t understand the new economy.”

This post was published at Zero Hedge on Sep 1, 2016.

Stock touting may be a lot easier when “nobody knows anything” — Chris Powell

Mining stock promoter Bob Moriarty, proprietor of 321Gold.com and author of the new book “Nobody Knows Anything,” was at least speaking for himself the other day when he claimed that central banks care a lot about interest rates but not at all about gold.
In commentary headlined “A Zombie Financial System, Black Swans, and a Gold Share Correction” — Moriarty wrote: “As a measure of just how important gold is to the world financial system in comparison to interest rates, interest rate derivatives are about 1,300 times greater than gold derivatives. We have a lot of me-too parrot websites talking about manipulation and conspiracies but logic tells us central banks worry about interest rates and couldn’t care less about the price of gold.”
But central banks care about gold precisely because its price has a long historical correlation with interest rates and government bond prices, a correlation studied and documented by central bankers and economists alike, including, in their 1988 study, “Gibson’s Paradox and the Gold Standard,” Harvard economics professor Lawrence Summers, who went on to become U.S. treasury secretary, and University of Michigan economics professor Robert Barsky
If central banks “couldn’t care less about the price of gold,” why are they trading it “nearly on a daily basis” and why is the BIS arranging gold swaps?
Of course GATA has compiled an enormous amount of official documentation showing that central banks care desperately about the gold price and about concealing their intervention in the gold market, and always will care as long as gold is considered money, a form of money competing with central bank currencies.
So why does Moriarty insist that there is nothing to this even as he fails to address even one document? Why does he constantly misinform his readers? Is it because the stock-touting business is a lot easier when nobody knows anything?

This post was published at GATA

Japan’s Household Spending and Unemployment Fall in July

Japan’s household spending fell for a fifth straight month and retail sales also dropped, underscoring the weakness in domestic demand. The jobless rate was the lowest since 1995.
Japan’s economy is struggling to gain momentum, evidenced by slower expansion in gross domestic product than economists forecast in the second quarter. Even as the job market remains tight, the yen’s gains since the start of 2016 are hurting exports, making businesses more reluctant to invest. Meanwhile, consumers are wary of spending because wages are barely rising. This is putting pressure on the Bank of Japan to consider more monetary stimulus at its meeting on Sept. 20-21.

This post was published at bloomberg

Gold Sector Correction – What Happens Next?

The Long Awaited Correction is Underway The gathering of central planners at Jackson Hole was widely expected to bring some clarity regarding the Fed’s policy intentions. This is of course a ridiculous assumption, since these people have not the foggiest idea what they are doing or what they are going to do next. Like all central planners, they are forever groping in the dark.
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Nevertheless, financial markets keep reacting to their words as if they actually meant something – and of course we have to deal with that reaction, regardless of how irrational it is.
As we have mentioned many times during the gold bear market from 2011 to 2015, it was primarily the threat of a rate hike that put pressure on gold and supported the US dollar. We argued that once the Fed finally dared to implement a baby step rate hike, gold would very likely rally in a ‘buy the news’ type response – which indeed happened.
Ms. Yellen’s speech at Jackson Hole (we will post a little post mortem on that gathering of interventionists soon) was still deemed non-committal enough by the markets. Her deputy Stanley Fischer attended the event as well though, and he started mumbling something about rate hikes.

This post was published at Acting-Man on September 1, 2016.

The Rise of a Third Party – Polls Show a Historical High of 37%

This is the most interesting presidential election in American history. It obviously reflects precisely what our computer projected for 2016 back in 1985 based solely off of economic trends. However, the polls view Hillary as the most dishonest candidate in history and Trump as a hothead. What they do not understand is that Hillary is the one with a violent streak in her. She gave Bill a black eye. She certainly does not have the temperament to be a president.
However, Americans are actually considering supporting a third party. Quinnipiac University conducted a poll asking that very question: Would you vote for a third-party candidate? The response was a shocking 37% said they would consider voting for a third-party candidate. Gary Johnson is the Libertarian candidate. Here is our original forecast that showed 2016 could be the biggest spike in third-party votes in American history.

This post was published at Armstrong Economics on Sep 1, 2016.