Whopping 932,000 Americans Drop Out of Labor Force in October; Participation Rate Drops to Fresh 35-Year Low
The only two charts that matter from today's distorted non-farm payrolls report. First, the labor force participation rate, which plunged from 63.2% to 62.8%—the lowest since 1978!
But more importantly, the number of people not in the labor force exploded by nearly 1 million, or 932,000 to be exact, in just the month of October, to a record 91.5 million Americans! This was the third-highest monthly increase in people falling out of the labor force in US history.
At this pace the people out of the labor force will surpass the working Americans in about four years.
The numbers actually illustrate that the percentage of the unemployed has now surpassed 25% despite the illusion that government is trying to conjure. We are in very thin air now and it certainly coincides with domestic armament. Things could happen very rapidly now and possibly leave the realm of "under control".
History clearly indicates that hungry people, those with nothing left to lose, have served as the vanguard in a number of revolts. Knowing that we now have a growing proportion of the American people on the dole, especially those on SNAP, the situation grows quite tenuous.
Fed Economists: Central Bank Should Raise Threshold for Increasing Rates
Two new papers by Federal Reserve economists argue that the central bank should lift the bar for raising interest rates.
The Fed has pledged to keep the federal funds rate target at its record low of zero to 0.25 percent until the unemployment rate drops to 6.5 percent as long as inflation is no higher than 2.5 percent.
But the six Fed economists say the central bank may have to lower the target to 6.0 or 5.5 percent before making any move to raise rates.
The problem is that while unemployment has dropped to 7.2 percent, the employment participation rate has dropped to a 35-year low. "The recession and slow recovery may impair job matching and other aspects of labor market functioning for quite a few years," one of the Fed papers says.
There is no hope that this recession will end until the excess debt that has built up over the last thirty is purged from the system. This is precisely what the world's central banks are fighting to avoid
If we have a bottom in, and I think we do, The JP Morg will have to "buy to cover" its shorts before the end of the month. So silver and SLW up until first week of Dec, 28.00 / 29.00 is a quick guess. Ed Steer Comments below. . . . . . .
Undoubtedly, JPMorgan will try to exploit the role it plays in market making as justification for its holdings being way above proposed position limits. The crooked bank will try to convince the CFTC that it is providing necessary liquidity to silver and gold; in essence, claiming that without JPM’s buying on sell offs and selling on rallies, silver and gold prices would be disorderly. This is rich – JPMorgan manipulates prices and then claims that if they stop their manipulation, prices would go crazy. I can’t help but think of the guy who kills his parents and then pleads for mercy because he’s an orphan. Will the CFTC buy JPMorgan’s bologna? - Silver analyst Ted Butler: 06 November 2013
Today's pop "blast from the past" dates from 1971, and is another tune I remember playing on radio station CHAR-FM in Alert, N.W.T. way back then. If you're of that vintage, you should remember it as well. The link is here.
Ralph Vaughan Williams was an English composer of some note, and was just as famous as his fellow countryman, composer Sir Edward Elgar. His composition Fantasia on a Theme by Thomas Tallis for string orchestra was an instant hit at its premiere when it was performed in Gloucester Cathedral in September 1910.
The work takes its name from the original composer of the melody, Thomas Tallis (c.1505–1585). Vaughan Williams took much inspiration from music of the English Renaissance, and many of his works are associated with or inspired by the music of this period. Here is the London Philharmonic Orchestra doing the honours, and the link is here.
You don't need me to fill in the blanks as to what happened to precious metal prices yesterday. It was the high-frequency traders doing their thing when the jobs numbers came out. I hope you're not surprised, as this happens pretty much all the time when this event occurs, or when the FOMC minutes are released, or when some other precious metal-positive news comes out.
Where we go from here is the big unknown. Can JPMorgan et al., along with their associated high-frequency trader buddies, wring more blood out of this stone by rigging prices lower? I suppose, but as Ted says, we won't know it's over until we're looking at the bottom through the rear-view mirror of the subsequent rally.
Of course when that rally occurs, will JPMorgan et al. be there as not-for-profit sellers/short sellers of last resort once again? Beats the hell out of me, but as I mentioned yesterday, all we can do is wait it out.
December is probably the biggest delivery month for gold and silver for the year, and the lead-up to that is the roll-overs out of that delivery month and into various delivery months in the new year. There's a lot of outstanding open interest that has to dealt with between now and First Day Notice, and as I've said before, if you're holding a December contract [either long, short, or a spread trade] you only have three choices before the end of the month.
You can either sell, roll it over into a future delivery month, or stand for delivery on First Notice Day. Every contract of open interest, except for those standing for physical delivery, has to be out by the end of the month, and there's lots of open interest left to go, so guessing what happens price-wise between now and the end of the month is really a mug's game, and entirely up to JPMorgan et al
Gold Could Find a Floor with China's Economic Reforms
With China expected to unveil some of its biggest economic reforms in 35 years following a meeting of its ruling Communist Party, many analysts have speculated that the price of gold could benefit from this weekend's summit.
Meaningful reform will be painful and disruptive, and I suspect a lot of Chinese will seek the perceived safety and portability of gold," Patrick Chovanec, the managing director and chief strategist at Silvercrest Asset Management, told CNBC.
"That will be particularly true if the bubble in China's property market pops. For the Chinese, buying and stockpiling empty properties serves much the same function as investing in gold, since they are both unproductive stores of value, so if real estate sees a major correction, many Chinese will turn to gold."
[But] "the expansion of the property tax may make people less willing to invest in property and gold would be an obvious alternative
Barrick Chairman Munk to Retire as New Share Issue Falters
Barrick Gold Corp. publicly announced the pending retirement of chairman Peter Munk on Friday, after a week in which bankers faced a tepid response to the company’s $3-billion (US) share sale.
Barrick said Friday that it expected to update investors before year-end on various initiatives to renew its board, following discussions this year between directors and institutional shareholders regarding compensation practices and governance. The initiatives include “succession in the chairman role at the company, consistent with Mr. Munk’s desire to retire as chairman,” Barrick said.
The message that Mr. Munk would announce his retirement by year-end had been quietly conveyed by some bankers working on Barrick’s big share sale over the past week, according to sources familiar with the situation. Some investors had indicated they wanted more clarity on the board revamp before agreeing to buy any stock.
Barrick had for some time internally laid out a succession plan for Mr. Munk as well as that of another long-term board member, former Prime Minister Brian Mulroney. This person also said that at least one large investor was given notice prior to the official announcement.
I was wondering as I began to read this Globe and Mail story from yesterday, if Brian Mulroney's name was going to come up in this article, and I wasn't disappointed. I've been a Brian Mulroney watcher since he ran for the leadership of Canada's Progressive Conservative Party...and right up until the time that he was appointed to Barrick's board of directors.
Marc Faber: We're in a Worse Position Than in 2008
A credit boom in countries such as China means that the world is in a worse position than it was in 2008 when a global financial crisis tipped the world into recession, Marc Faber, editor and publisher of The Gloom, Boom & Doom Report, told CNBC Asia.
"If I am telling you that we had a credit crisis in 2008 because we had too much credit in the economy, then there is that much more credit as a percent of the economy now," Faber said.
"It will end badly and the question is whether we will have a minor economic crisis...and then huge money printing, or get into an inflationary spiral first," Faber added.