Friday, August 5, 2011

Learning And Labor

That's the school motto of my alma mater, Oberlin College.  Everyone has seen the headline jobs report number, which looked just peachy on the surface.  But I thought I would highlight a couple of data points which show the horrifying golden Truth lurking beneath the shiny albeit highly manipulated headline number that Obama will no doubt do an endzone dance over later on t.v. that would make Terrell Owens blush.  Also, I had an interesting conversation yesterday at the tennis club with a partner at a major law firm here in Denver who was asking me why gold didn't move up higher yesterday as a flight-to-safety harbor during the stock market storm.

On an aside, before I get to the jobs report and gold, I see Fannie Mae is back asking the Taxpayers for ANOTHER $5 billion in Government subsidy.  THIS after Tim Geithner said a few months ago that Fannie Mae and Freddie Mac were no longer a burden on the Treasury.  Geithner is not only a tax-dodging idiot, he's a liar.  Obama is now a worse President than Bush in my mind since he won't fire Geithner, who should've never been appointed in the first place.  By the way, the FNM/FRE bailout plan was brought to you, the Taxpayer, courtesy of Tiny-brain Tim.  If there's a hell, Geithner will burn there after he dies.

Everyone now knows that the mainstream media just loves the jobs report today.  But here's some statistics that most Americans will not see (not to mention the fact that Government headline number itself is highly manipulated):  Although the unemployment rate was reported as "dropping" to 9.1%, the Labor Force Participation Rate dropped to 63.9%, which is the lowest it's been since 1984;  the average length of unemployment jumped to over 40 weeks, a new all-time high.

Recall that those who have dropped off unemployment benefits and those who have given up looking for a job are no longer counted in the Government's definition of Labor Force.  So not only is the total size of the workforce declining, thereby significantly undermining the accuracy of the actual rate of joblessness, but those still looking for a job are finding it even more difficult and taking a record amount of time.  In short, there are a LOT more unemployed than is being counted by the Government AND the unemployment rate is a substantially higher than is being reported in the headlines.

Now for the kicker:  There are 3.7 million "workers" who are on the 99 week jobless benefits bandwagon who will be losing those benefits over the next couple of months.  Here's the report:  LINK   What this means is that either Obama tries to get Congress to extend the benefits again or expect to see rising unemployment and a lower jobless rate - lower because the Labor Force could decline as those millions drop off the jobless welfare program.   Good work Obama!

Now for gold.  Is gold, or is it not, delivering it's flight-to-safety characteristics this year?  Here's a series of three charts that show gold is indeed shining (you can click on each chart to enlarge):




As you can see, not only is gold up this year while the Dow Jones Industrial index is down, when you express the level the Dow index using the dollar price of gold, the Dow is down a whopping 28.6%.  Another way of looking at this is if you started with $100,000 invested in both the Dow and Gold, your Dow investment would be worth $71,400 while your gold maintained it's $100k value. 

To circle back to my conversation with this white-shoe law firm partner, with markets you can't look at one day and use that as your barometer for whether or not something is doing what you think it should be doing.  As my charts show, gold is not only sparkling, it is functioning perfectly as an investment that's designed to preserve your wealth.


  1. BTW, new record in food stamps... $6.12B for May.

    From Paper Economy:
    The latest data released by the Department of Agriculture shows that in May, a whopping 1,105,217 new recipients were added to the food stamps program, an increase of 12.14% on a year-over-year basis, while household participation increased 14.22%.
    Participation continues to increase with nominal benefit costs climbing a lofty 12.32% on a year-over-year basis to $6.12 billion for the month.

    Food Stamp Participation
    Food Stamp Cost

  2. So, a downgrade occurs on the great teleprompter, blamer Presidents watch. I wonder what he says now. Or does he just go on his bus campaign tour, because campaigning obviously is his strong suite.

  3. After listening to Rickards - how the hell can anyone leave their gold at banks?

  4. 5280 The Denver Magazine

    Power Play

    A Front Range M.D. has developed a potentially revolutionary treatment for orthopedic injuries. So why is the FDA trying to stop him?

    Centeno has wondered if the government has bottom-line reasons for wanting to shut him down. Regenexx has the potential to eliminate the need for steroid injections and pain medication, and Centeno estimates that if people used their own stem cells to repair orthopedic ailments, it could reduce Americans’ reliance on prescription pain medication by two-thirds—and jeopardize the FDA’s control of a more than $300 billion market. “With this type of medicine, we can move from managing pain to actually curing the injured tissue,” Centeno says. “Imagine knees, hips, backs, all fixed. No more pain. No more surgery. No more meds. All you need are your own stem cells. Doctors would start actually curing disease instead of prescribing drugs to manage disease, and that’s a groundbreaking paradigm shift.”

  5. Yes, Rickards spells out how gold leasing CB gold leasing creates a charge over the gold assets.

  6. I hate what these fucks get away with in the name of smarts...I must be very naive how things work.

    Goldman Got Billions From AIG For Its Own Account
    By Shahien Nasiripour - The Daily Bail

    Goldman Got Billions From AIG For It's Own Account

    Goldman Sachs collected $2.9 billion from the American International Group as payout on a speculative trade it placed for the benefit of its own account, receiving the bulk of those funds after AIG received an enormous taxpayer rescue, according to the final report of an investigative panel appointed by Congress.

    The fact that a significant slice of the proceeds secured by Goldman through the AIG bailout landed in its own account--as opposed to those of its clients or business partners-- has not been previously disclosed.

  7. Sunday, August 7, 2011
    James Galbraith on How Fraud and Bad Economic Thinking Got Us in This Mess

    I strongly urge you to read the entire piece; non-economists may want to skim the first third and focus on the crisis material and what follows. This is the key paragraph:

    This is the diagnosis of an irreversible disease. The corruption and collapse of the rule of law, in the financial sphere, is basically irreparable. It’s not just that restoring trust takes a long time. It’s that under the new technological order in this field, it can not be done. The technologies are designed to sow and foster distrust and that is the consequence of using them. The recent experience proves this, it seems to me. And therefore there can be no return to the way things were before. In other words, we are at the end of the illusion of a market place in the financial sphere.