The How and The Why

In a stunning development, much to the surprise of The Shill, The Coug and LIESman, today's job report was "weaker than expected". Surprisingly, the only mouthpiece that came close to predicting the actual number was former O'Bomney hack, Austin Goonsby. What does that tell you?

So here's the deal. Though I firmly believe that political pressure sways the calculative ability of those within the BLS, it's also possible that, because we are truly in a new paradigm, the current BLS methodology is simply outdated. 

From 1982 to 2007, the U.S. economy was measured as expanding. Those who didn't have jobs often found jobs. Those who still couldn't find jobs, applied for unemployment "insurance". This transfer payment program provided some welfare to those in need of it until they could secure employment and, since the economy was "growing", most found work before the government checks ran out. And that's the key...the program has an expiration date for those on the dole. 

The current expiration date is 99 weeks. This means that anyone receiving unemployment insurance will only receive checks for about 2 years before the government cuts them off. Now, as this pertains to today's jobs number is important. You see the BLS counts those receiving checks as part of the unemployed base. As part of the calculation, when someone stops receiving checks, they are no longer considered to be unemployed. For the 25-year period of 1982-2007, this was an OK way to do things as it was statistically correct to assume that someone no longer collecting unemployment insurance had now found a job. Now, however, that's not the case.

Instead, many folks are "long-term unemployed". They lost their job and applied for unemployment insurance and, after 99 weeks, the checks stopped coming. These folks are now considered by the BLS to have found a job but have they? Maybe a few have but just because the checks ran out does not mean that you are no longer unemployed. However, to the BLS, this is exactly what it means. So, payrolls can only increase by 115,000 and the labor force participation rate can fall to 64.3% but the stated "rate of unemployment" can also fall to 8.1%. TA-DAH!!! Barack The Magnificent can again proclaim at today's press appearance that the economy is strong and he should be re-elected.

More details can be found by reading these excellent, brief summations from ZH:

http://www.zerohedge.com/news/people-not-labor-force-soar-522000-labor-force-participation-rate-lowest-1981

http://www.zerohedge.com/news/real-u-3-unemployment-rate-116

Again, many of the people not in the measured "labor force" have simply given up. Their unemployment checks have run out and the BLS simply ignores them and fails to count them as if they don't exist at all. And this is how things work in the good ole U.S.A.

Ignoring and manipulating facts and data is also how things work in the gold and silver markets. Look, here's the deal. Everything...and I mean everything...points to a bottom here that will lead to a very strong rebound, particularly in silver. But it's a little like the BLSBS. Post-MFG, we may be in all new paradigm where the only entities left trading paper metal are Cartel Monkeys and HFT WOPRs. Under those conditions, it's going to be very difficult for the metals to surge without some type of "flipping" event which causes the algos to by tilted positively instead of negatively. A sustained short squeeze that drives price back through the 200-day MA would do the trick but can we get that to happen absent news of impending QE? More importantly, will The Gold Cartel allow that to happen ​absent the imminent appearance of overt QE3 or a Cartel switch to net long?

So, just as every traditional indicator I follow screams BUY right here, in this post-MFG world we have to remain cautious. Not so much cautious from a risk perspective, just cautious from a timing and frustration perspective. 

Hang in there. Let this nonsense play out. The American economy is moribund. Europe is an economic disaster. Global demand for physical precious metal is only going to increase. Do not let the minute-by-minute, hour-by-hour shenanigans of the Comex scare you. Your silver and gold will have a higher fiat-conversion price 6 months from now. They will have a higher fiat-conversion price 12 months from now. And, if there are still traditional fiat to which you can convert 24 months from now, the price of gold and silver will be higher still.

OK, that's all for now. As I've typed, I see that we've begun to squeeze the smarty-pant shorts a bit. This is encouraging. In gold, a move abive 1650 will intensify the pressure. Silver needs to crawl back above $31 before anything other than weak hands begin to get squeezed. Keep your fingers crossed and look for a new thread after I've had an opportunity to review what should be a very interesting CoT later this afternoon.

TF

254 Comments

Fulgurite's picture

Nothing to see here folks, just move on...

Amazing how the MSM is ignoring the latest BLS jobs report!

Thank God for riots in Egypt and a lone dissident in China! Not that either the western governments nor the MSM really give a f*ck about these issues anyway, but it gives CNN, BBC World and all the other channels something to talk about and pull the wool over our eyes a bit more.

p.s. Made my monthly stacking purchase today: 25 silver Maples and one Gold Aussie Nugget.

ReachWest's picture

Silly Algo

Oh - Silly me - now I see why things dropped - the same algo is running today as was running on Wednesday. Clear as day. Should get a little bounce, next.

Xty's picture

unthought known

Welcome as well.  Lots of new faces lately.  Do you honestly believe that gold will get back down to 1200?

Somebody bite me, but seems the new faces are mostly very negative in their sentiment, and offering unfounded, but discouraging, predictions.  Didn't someone important get pissed off about this kind of crap.

I would hate to have to be the focus and bait of the troll-haters-haters club, but my skin is getting incredibly thick at this point.

Bugzy's picture

You got it straight

Wow look at all those new straight lines. An impressive new "ruler" must have drawn them. Hail the TURD!

Bugzy's picture

If you would only stop wriggling

Perhaps you might need to be tenderized before one sinks ones teeth in. Thick skin and all. Morning by the way

Marinated in wine overnight perhaps?

beinki's picture

The Turning point is NOW

The criminal Banking cartel members are resigning/arrested the gig is up.

Bank of New York Mellon’s chief executive and chairman, Robert P. Kelly, stepped down late Wednesday because of accusations that it and other custody banks shortchanged clients when executing currency trades for foreign transactions. LIKE I HAVE BEEN SAYING THE CRIMINALS ARE BEING TAKEN DOWN!!!!!!!!! http://dealbook.nytimes.com/2011/08/31/kelly-steps-down-at-bank-of-new-york-mellon/

And a few days ago  Chief Executive Officer Craig Donohue retired effective yesterday, leaving the world’s largest futures market ahead of schedule, the company said today in a regulatory filing.

Donohue, 50, said last week on a conference call with analysts that the transition to promote President Phupinder Gill to the CEO role was going faster than planned, with a formal hand-off possible by the May 23 annual shareholder meeting.

Donohue, who has run the Chicago-based company for the past eight years, announced last month his plan to retire in December when his contract expires. http://www.bloomberg.com/news/2012-05-02/cme-s-donohue-retires-ahead-of-schedule-according-to-filing-1-.html

Groaner's picture

RGLD is holding up well.. Anyone know about that one?

its a royalty stock.. was $80 short time ago.

ink's picture

Slow pop, followed by a real

Slow pop, followed by a real pop up. Then a fizzle and reverse FUBM. And now halfway into a real FUBM? Glad i'm not a trader.

Pining 4 the Fjords's picture

Excellent article from a real economist

If you are not familiar with her, prominent economic historian Amity Shales wrote the book "The Forgotton Man", which is probably the preeminent treatment of the consequences of FDR's New Deal, detailing in great depth how (contrary to the mythos of the Keynsian crowd) it was an abject economic failure.

This is her new article on rumblings about a possible return of the Gold Standard-  in mainstream Bloomberg, no less!  Worth your time: http://www.bloomberg.com/news/2012-05-02/gold-standard-for-all-from-nuts-to-paul-krugman.html

Groaner's picture

notice how things turned just after 10am?

10am seems to be their favorite time, it gives them enough time to suck everyone in, then bamm.

mymotherskeeper's picture

a touchstone to today's

a touchstone to today's manipulated market is the presidential election.   i try to remind myself of that every time things don't make sense (which is every day).

the negativity is a human being letting off steam because of what is perceived to have been a dumb decision (buying high).  a lot of people bought during the most recent run-up and are now angry with themselves.  they have not yet experienced the relief of seeing the price they paid sink below the current price.

we've been through a couple of these pullbacks, and we've learned that we just ignore the noise and wait, because the outcome is pre-ordained (barring some planet-engulfing cataclysm), and the price will continue to rise.

i'm kind of enjoying the negativism, just because that's how it always feels before lift-off...! 

Doc Scurlock's picture

Veritas liberabit vos

I really enjoy this site also, but the trolls/naysayers do not particularly bother me.  I have my BS detector operating here just as much as I do reading the paper, watching CNN, or Fox News.  Critical thinking skills are a must, and  sorting through to fact and truth are the only way to successfully navigate this world.  My opinion of gold could be wrong, but Turd's laundry list a couple days ago is accurate, and the facts are what they are.  Let the naysayers and weak hands have their opinion, but the truth is physical gold is no one's liability, and cannot go to zero.  It's price can be manipulated, but the truth in the physical market will always win in the end.  Invest prudently, BTFD, keep stacking. (this line of thinking also applies to some of the ridiculous undervaluation in the PM miners)

Big Buffalo's picture

Metals market

I think I see some shiny stuff at the bottom of this here lake. . .

ReachWest's picture

Infiltration and Thought Manipulation

Xty wrote:
Somebody bite me, but seems the new faces are mostly very negative in their sentiment, and offering unfounded, but discouraging, predictions.  Didn't someone important get pissed off about this kind of crap.

This is to be expected - it is Cass Sunstein who penned the strategy of infiltrating "Conspiracy Sites". Sadly, here in Turdville, we fall into that category (certainly from the perspective of the Fed and no doubt the current administration). We talk openly about "sound money", "free thinking", "ending the Fed", "Market manipulation", etc.

Cass Sunstein is the Administrator of the "Office of Information and Regulatory Affairs" [a creepy sounding department name] and he authored a paper in 2008 that indicated the Govt should fund or work with groups to "Cognitively Infiltrate" online sites and adjust the thinking of the participants by demotivating and undermining.

Here is a quote from the Sunstein paper: "Government agents (and their allies) might enter chat rooms, online social networks, or even real-space groups and attempt to undermine percolating conspiracy theories by raising doubts about their factual premises, causal logic or implications for political action."

Here is a download Link to the Cass Sunstein Paper. You really have to read this for yourself to understand the rabbit hole we are in.

johnboatcat's picture

I will post this again to remind some people why this is

happening.  Well it has been happening in Presidential election years since 1933 so why would it not happen this year?  If this is correct, and so far it is playing out, we have about three more weeks of pain before we start to see the gain into the election.  Yes this market is manipulated as it has been for a long time.

http://stockmarketadvantage.com/mark-leibovits-analysis-of-average-election-year-performance/#more-5436

Turd Ferguson's picture

Hmmm..

MODERATOR

Here is a quote from the Sunstein paper: "Government agents (and their allies) might enter chat rooms, online social networks, or even real-space groups and attempt to undermine percolating conspiracy theories by raising doubts about their factual premises, causal logic or implications for political action."

​Hmmm. This doesn't sound like anyone around here, does it???

Xty's picture

Bugzy

more like smoked than marinated, but it does help make me tender.

Abraxas's picture

My two cents

I was actually contacted and encouraged by several of guests here to post again. I'd like to thank these individuals. It might be that not everybody is just eagerly waiting for the punch bawl, but are open for a spectrum of opinions.

My views are not unlike views of many people here. I do like the opportunities that PMs can offer, I hate the manipulators just as much as the next guy, I don't like where this is all going, etc. However, I do not subscribe to this idea that there's 100% chance that one day we will wake up, and Comex will be broke, Fed capitulated, gold at $12000 and rising, and people with a few ounces and some mining shares take over the world. I wish the gold and silver start their unstoppable ascend as soon as tomorrow, but I fear it will be yet several years of pain, manipulation, and Cartel gang-rape before we see this happen (if it ever does). I also fear that even if all this materializes, the same people that are screwing with our savings now, will reach for the rest of it through coercion, taxation, confiscation, and any other means imaginable. If you think your gun will protect you from this, than you obviously watched too many Charles Bronson movies. Now, I hope I'm just being paranoid and they will let us keep our gains, but it's worth mentioning it.

Invest in PMs - yes, perhaps even in some good miners - (reluctantly) yes, but please be careful (especially with the juniors). No matter what Sprott's and Embry's of this world are saying, this stuff can hurt you so quickly and so badly it'll make your head spin.

I can appreciate the fundamentals as well as anybody here, but remember that timing is everything. Just because the fundamentals are great, it does not mean you should borrow money in order to invest. This will not be over soon and the rewards for patience and pain are probably not around the corner. As for the Technical Analysis, it's in my mind is akin to Alchemy and witchcraft and I'm yet to see any proof that it actually works (if it did TA guys would not spend their time on the web, but being busy getting real rich.

unthought known's picture

xty

I honestly dont know.. I am not a troll..have bought gold and silver for the past 3 years.. first purchases were at 920 and 13 dollars so I have done well so far.. i have also bought at 1600 and high 40s...All I am saying is the powers that be have a shitload of power and I wouldnt be surprised if ANYTHING happened.. the endgame is still gold and silver but these bastards will hold off the endgame for probably longer than we would have hoped for....what happens in between is anybody's guess.. IF it does go down that low, I hope I have the balls and the funds to buy..

Bugzy's picture

Nurse Nurse!!!!

Groaner has stopped taking his Prozac again and is out of bed.

Just hold on to 1oz piece of Silver or Gold and repeat several times. "I am in my happy place"

pforth's picture

Questions for soldiers in Turd's army...

I have held back from joining Turd's army with Andrew Maguire so far, primarily because according to the information on the website, a lot of the action will be happening before I wake up.  That being said, weeks like this week have me wanting to strike back a bit, so I am reconsidering things.

If you don't mind, I'd love to get some feedback (public forums or private messages) from some people who have already enlisted.  Has it been profitable so far?  What time of day have the trading alerts come in at since you've joined.  Is it worthwhile joining if you don't get up until 8 or 9am EST?

bullwhip29's picture

thoughts

@ Fulgarite RE: Nothing to see here...

Exactly. The only headline I'm seeing is that the unemployment rate dropped. Next up will be reports of how falling commodity prices is actually a good thing. Perhaps the boys on the POMO desk will have to drop by later today to kick the S&P back over it's 50d MA. The game of two steps forward, one step back for stocks (and the exact opposite for the PMs) will have to continue IMHO. No turning back now.

@ Xty RE: $1630 holding so far...

What if we get nothing but "verbal" QE for the remainder of year? I am guessing that the Jim Sinclairs of the world are correct in that we'll get QE to infinity, but we may not see this until conditions deteriorate to the point where the public comes begging for it on their hands and knees. For now, the talking heads are going to give it there all to convince the millions of sheeple that economic conditions are improving and TPTB will do everything (but formally announce QE3) to keep the house of cards from collapsing. Whatever. The way things are unfolding so far this year reminds me very much of 2008. There were numerous warning signs back then and many simply buried their heads in the sand and remained in denial right up until the very moment the SHTF. You could very well be right about $1630 being a bottom of sorts, but the chart "historiography" posted indicates that further downside is still within the realm of possibility if a major market meltdown were to occur.  What unfolds in the coming months is simply in the hands of a few individuals. Who knows what their agendas may or may not be? Until more is known, we are basically a bunch of sitting ducks in many respects.

Keep your chins up and your eyes and ears open everyone.  GLTA

Turd Ferguson's picture

Remember, BoA recently

MODERATOR

Remember, BoA recently repositioned $53T in CDS from their ML subsidiary to their BoA NA sub. In preparation for a default which they can pass along onto the American taxpayer??

http://www.zerohedge.com/news/gift-keeps-taking-bank-america-facing-62-billion-collateral-call

http://www.bloomberg.com/news/2011-10-18/bofa-said-to-split-regulators-over-moving-merrill-derivatives-to-bank-unit.html

Groaner's picture

haha I am one of them..

not

market down 150 points but gold and silver still green. that's something.

What do you say that the PPT comes in about 3:20 and saves the market? They cant let it go down, ever.

Pining 4 the Fjords's picture

Abraxas

I appreciate you taking the time to lay out your thoughts- all legitimate points of view.  Thank you.  

If you don't mind my asking, you write "As for the Technical Analysis, it's in my mind is akin to Alchemy and witchcraft and I'm yet to see any proof that it actually works (if it did TA guys would not spend their time on the web, but being busy getting real rich."  I can understand that some take this position, yet it surprises me that you would then spend your time at a website entirely centered upon Turd's TA...   why do you come here, if this is what you believe?  Thanks in advance.

Desert Fox's picture

Knock-Knock

Re: Trolls and Infilitration

Xty's picture

ReachWest - thank you

I am not crazy - I don't want them banned, but I want them called out.   And they are not always new faces - smart enough to hang around and appear kind of friendly - forum visits, etc.

This really is a battle against the banks - they have convinced an entire generation that 'currency' can be separated from value - just look at victor's arguments.  York Rite thinks it is stupid to own silver - why?  why does he want to make you feel stupid for owning it?  I know I am preaching mostly to the choir, but these guys are good, and not everyone seems to believe in trolls - look how I get flamed for calling out even obvious ones.

ink's picture

STOP THAT

Stop rising your crappy dollar against my lousy euro!

Turd Ferguson's picture

Hmmm..

MODERATOR

Just thinking out loud here...

Maybe the site itself should remain free of charge but members must register and pay a nominal annual fee for the privilege of posting comments? Unfortunately, this would dissuade some of the free exchange of information but it might also dissuade the obvious "plants" from polluting the water.

Thoughts?

Xty's picture

Pining

beat me too it.  I was going to highlight the same last sentence.

Abraxas - yeah, you are a really nice guy, just here to express your opinion that there are years of pain before metals might be a good investment if they ever are, and then you finish with a parting shot at TF.

Do you think I am stupid?

Glad you have a fan club - I am guessing I wasn't one of them.

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