Money Flow Trading Method along with Risk Management

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The Bilderberg 2017 Agenda: "The Trump Administration - A Progress Report"
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by Tyler Durden
Jun 1, 2017 5:41 PM



Every year, the world's richest and most powerful business executives, bankers, media heads and politicians sit down in some luxurious and heavily guarded venue, and discuss how to shape the world in a way that maximizes profits for all involved, while perpetuating a status quo that has been highly beneficial for a select few, even if it means the ongoing destruction of the middle class. We are talking, of course, about the annual, and always secretive, Bilderberg meeting.


And just like last year's meeting in Dresden, the primary topic on the agenda of this year's 65th Bilderberg Meeting which starts today and ends on Sunday, is one: Donald Trump.


Ironically, this year "the storm around Donald Trump" as the SCMP puts it, is not half way around the world, but just a few miles west of the White House, in a conference centre in Chantilly, Virginia, where the embattled president will be getting his end-of-term grades from the people whose opinion actually matters: some 130 participating "Bilderbergs".


The secretive three-day summit of the political and economic elite kicks off Thursday in heavily guarded seclusion at the Westfields Marriot, a luxury hotel a short distance from the Oval Office.

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As of Wednesday, the hotel was already on lockdown and an army of landscapers have been busy planting fir trees around the perimeter, to try protect "coy billionaires and bashful bank bosses" from prying lenses and/or projectiles. Perched ominously at the top of the conference agenda this year are these words: “The Trump Administration: A progress report”.


So is the president going to be put in detention for tweeting in class? Held back a year? Or told to empty his locker and leave? If ever there’s a place where a president could hear the words “you’re fired!”, it’s Bilderberg.


Sarcasm aside, the White House was taking no chances, sending along some big hitters from Team Trump to defend their boss: national security adviser, HR McMaster; the commerce secretary, Wilbur Ross; and Trump’s new strategist, Chris Liddell (curiously, neither Gary Cohn nor Steven Mnuchin will be there although the controversial new Chairman of Goldman Sachs International, Jose Barroso will be present). Could Trump himself show up to receive his report card in person: we are confident he will tweet all about it... which is probably why he will never be invited.


Stil, none other than Henry Kissinger, the gravel-throated kingpin of Bilderberg, visited the White House a few weeks ago to discuss “Russia and other things”, and certainly, the Bilderberg conference would be the perfect opportunity for the most powerful man in the world to discuss important global issues with Trump.

Sarcasm aside, what are among the "Trump agenda" items to be discussed? The publicly list is as follows:

1. The Trump Administration: A progress report
2. Trans-Atlantic relations: options and scenarios
3. The Trans-Atlantic defence alliance: bullets, bytes and bucks
4. The direction of the EU
5. Can globalisation be slowed down?
6. Jobs, income and unrealised expectations
7. The war on information
8. Why is populism growing?
9. Russia in the international order
10. The Near East
11. Nuclear proliferation
12. China
13. Current events

The US president’s extraordinary chiding of NATO leaders in Brussels is sure to be first and foremost on the Bilderberg discussing panel.

The Bilderbergers have summoned the head of Nato, Jens Stoltenberg, to give feedback. Stoltenberg will be leading the snappily titled session on “The Transatlantic defence alliance: bullets, bytes and bucks”. He’ll be joined by the Dutch minister of defence and a clutch of senior European politicians and party leaders, all hoping to reset the traumatised transatlantic relationship after Trump’s galumphing visit.


As the Guardian puts it, the guest list for this year’s conference is a veritable “covfefe” of big-hitters from geopolitics, from the head of the IMF, Christine Lagarde, to the king of Holland, but perhaps the most significant name on the list is Cui Tiankai, China’s ambassador to the US.


According to the meeting’s agenda, “China” will also be discussed at a summit attended by Cui, the US commerce secretary, the US national security adviser, two US senators, the governor of Virginia, two former CIA chiefs and any number of giant US investors in China, including the heads of the financial services firms the Carlyle Group and KKR. And for good reason: as last night's PMI numbers showed, the Chinese economy - the global growth dynamo - is finally contracting. If China goes, the rest of the world will follow.


Additionally, the boss of Google Eric Schmidt, who warned in January that Trump’s administration will do “evil things”, is expected to attend, too. The executive chairman of Alphabet, Google’s holding company, has just come back from a trip to Beijing, where he was overseeing Google AI’s latest game of Go against humans. He declared it “a pleasure to be back in China, a country that I admire a great deal”. It’s possible three days spent chatting to the Chinese ambassador could even be good for business.

Several journalists are participating in this year’s forum, including London Evening Standard editor George Osborne and Cansu Camlibel, the Washington bureau chief for Turkey’s Hurriyet newspaper. But per convention, news outlets are not invited to cover the event.


“There is no desired outcome, no minutes are taken and no report is written,” the group stated. “Furthermore, no resolutions are proposed, no votes are taken, and no policy statements are issued.”


Ex-deputy secretary of state William Burns and former deputy assistant secretary of defence Elaine Bunn, both Obama-era officials, will also attend. Burns, the current president of the Carnegie Endowment for International Peace, has warned that Trump “risks hollowing out the ideas, initiative and institutions on which US leadership and international order rest.”


With one of the agenda items titled simply enough "can globalisation be slowed down?" it is no surprise that anti-globalisation protesters have already descended on the location of the meeting.


* * *
Below is a full list of this year's participants:
CHAIRMAN

1. Castries, Henri de (FRA), Former Chairman and CEO, AXA; President of Institut Montaigne

PARTICIPANTS

1. Achleitner, Paul M. (DEU), Chairman of the Supervisory Board, Deutsche Bank AG
2. Adonis, Andrew (GBR), Chair, National Infrastructure Commission
3. Agius, Marcus (GBR), Chairman, PA Consulting Group
4. Akyol, Mustafa (TUR), Senior Visiting Fellow, Freedom Project at Wellesley College
5. Alstadheim, Kjetil B. (NOR), Political Editor, Dagens Næringsliv
6. Altman, Roger C. (USA), Founder and Senior Chairman, Evercore
7. Arnaut, José Luis (PRT), Managing Partner, CMS Rui Pena & Arnaut
8. Barroso, José M. Durão (PRT), Chairman, Goldman Sachs International
9. Bäte, Oliver (DEU), CEO, Allianz SE
10. Baumann, Werner (DEU), Chairman, Bayer AG
11. Baverez, Nicolas (FRA), Partner, Gibson, Dunn & Crutcher
12. Benko, René (AUT), Founder and Chairman of the Advisory Board, SIGNA Holding GmbH
13. Berner, Anne-Catherine (FIN), Minister of Transport and Communications
14. Botín, Ana P. (ESP), Executive Chairman, Banco Santander
15. Brandtzæg, Svein Richard (NOR), President and CEO, Norsk Hydro ASA
16. Brennan, John O. (USA), Senior Advisor, Kissinger Associates Inc.
17. Bsirske, Frank (DEU), Chairman, United Services Union
18. Buberl, Thomas (FRA), CEO, AXA
19. Bunn, M. Elaine (USA), Former Deputy Assistant Secretary of Defense
20. Burns, William J. (USA), President, Carnegie Endowment for International Peace
21. Çakiroglu, Levent (TUR), CEO, Koç Holding A.S.
22. Çamlibel, Cansu (TUR), Washington DC Bureau Chief, Hürriyet Newspaper
23. Cebrián, Juan Luis (ESP), Executive Chairman, PRISA and El País
24. Clemet, Kristin (NOR), CEO, Civita
25. Cohen, David S. (USA), Former Deputy Director, CIA
26. Collison, Patrick (USA), CEO, Stripe
27. Cotton, Tom (USA), Senator
28. Cui, Tiankai (CHN), Ambassador to the United States
29. Döpfner, Mathias (DEU), CEO, Axel Springer SE
30. Elkann, John (ITA), Chairman, Fiat Chrysler Automobiles
31. Enders, Thomas (DEU), CEO, Airbus SE
32. Federspiel, Ulrik (DNK), Group Executive, Haldor Topsøe Holding A/S
33. Ferguson, Jr., Roger W. (USA), President and CEO, TIAA
34. Ferguson, Niall (USA), Senior Fellow, Hoover Institution, Stanford University
35. Gianotti, Fabiola (ITA), Director General, CERN
36. Gozi, Sandro (ITA), State Secretary for European Affairs
37. Graham, Lindsey (USA), Senator
38. Greenberg, Evan G. (USA), Chairman and CEO, Chubb Group
39. Griffin, Kenneth (USA), Founder and CEO, Citadel Investment Group, LLC
40. Gruber, Lilli (ITA), Editor-in-Chief and Anchor "Otto e mezzo", La7 TV
41. Guindos, Luis de (ESP), Minister of Economy, Industry and Competiveness
42. Haines, Avril D. (USA), Former Deputy National Security Advisor
43. Halberstadt, Victor (NLD), Professor of Economics, Leiden University
44. Hamers, Ralph (NLD), Chairman, ING Group
45. Hedegaard, Connie (DNK), Chair, KR Foundation
46. Hennis-Plasschaert, Jeanine (NLD), Minister of Defence, The Netherlands
47. Hobson, Mellody (USA), President, Ariel Investments LLC
48. Hoffman, Reid (USA), Co-Founder, LinkedIn and Partner, Greylock
49. Houghton, Nicholas (GBR), Former Chief of Defence
50. Ischinger, Wolfgang (INT), Chairman, Munich Security Conference
51. Jacobs, Kenneth M. (USA), Chairman and CEO, Lazard
52. Johnson, James A. (USA), Chairman, Johnson Capital Partners
53. Jordan, Jr., Vernon E. (USA), Senior Managing Director, Lazard Frères & Co. LLC
54. Karp, Alex (USA), CEO, Palantir Technologies
55. Kengeter, Carsten (DEU), CEO, Deutsche Börse AG
56. Kissinger, Henry A. (USA), Chairman, Kissinger Associates Inc.
57. Klatten, Susanne (DEU), Managing Director, SKion GmbH
58. Kleinfeld, Klaus (USA), Former Chairman and CEO, Arconic
59. Knot, Klaas H.W. (NLD), President, De Nederlandsche Bank
60. Koç, Ömer M. (TUR), Chairman, Koç Holding A.S.
61. Kotkin, Stephen (USA), Professor in History and International Affairs, Princeton University
62. Kravis, Henry R. (USA), Co-Chairman and Co-CEO, KKR
63. Kravis, Marie-Josée (USA), Senior Fellow, Hudson Institute
64. Kudelski, André (CHE), Chairman and CEO, Kudelski Group
65. Lagarde, Christine (INT), Managing Director, International Monetary Fund
66. Lenglet, François (FRA), Chief Economics Commentator, France 2
67. Leysen, Thomas (BEL), Chairman, KBC Group
68. Liddell, Christopher (USA), Assistant to the President and Director of Strategic Initiatives
69. Lööf, Annie (SWE), Party Leader, Centre Party
70. Mathews, Jessica T. (USA), Distinguished Fellow, Carnegie Endowment for International Peace
71. McAuliffe, Terence (USA), Governor of Virginia
72. McKay, David I. (CAN), President and CEO, Royal Bank of Canada
73. McMaster, H.R. (USA), National Security Advisor
74. Micklethwait, John (INT), Editor-in-Chief, Bloomberg LP
75. Minton Beddoes, Zanny (INT), Editor-in-Chief, The Economist
76. Molinari, Maurizio (ITA), Editor-in-Chief, La Stampa
77. Monaco, Lisa (USA), Former Homeland Security Officer
78. Morneau, Bill (CAN), Minister of Finance
79. Mundie, Craig J. (USA), President, Mundie & Associates
80. Murtagh, Gene M. (IRL), CEO, Kingspan Group plc
81. Netherlands, H.M. the King of the (NLD)
82. Noonan, Peggy (USA), Author and Columnist, The Wall Street Journal
83. O'Leary, Michael (IRL), CEO, Ryanair D.A.C.
84. Osborne, George (GBR), Editor, London Evening Standard
85. Papahelas, Alexis (GRC), Executive Editor, Kathimerini Newspaper
86. Papalexopoulos, Dimitri (GRC), CEO, Titan Cement Co.
87. Petraeus, David H. (USA), Chairman, KKR Global Institute
88. Pind, Søren (DNK), Minister for Higher Education and Science
89. Puga, Benoît (FRA), Grand Chancellor of the Legion of Honor and Chancellor of the National Order of Merit
90. Rachman, Gideon (GBR), Chief Foreign Affairs Commentator, The Financial Times
91. Reisman, Heather M. (CAN), Chair and CEO, Indigo Books & Music Inc.
92. Rivera Díaz, Albert (ESP), President, Ciudadanos Party
93. Rosén, Johanna (SWE), Professor in Materials Physics, Linköping University
94. Ross, Wilbur L. (USA), Secretary of Commerce
95. Rubenstein, David M. (USA), Co-Founder and Co-CEO, The Carlyle Group
96. Rubin, Robert E. (USA), Co-Chair, Council on Foreign Relations and Former Treasury Secretary
97. Ruoff, Susanne (CHE), CEO, Swiss Post
98. Rutten, Gwendolyn (BEL), Chair, Open VLD
99. Sabia, Michael (CAN), CEO, Caisse de dépôt et placement du Québec
100. Sawers, John (GBR), Chairman and Partner, Macro Advisory Partners
101. Schadlow, Nadia (USA), Deputy Assistant to the President, National Security Council
102. Schmidt, Eric E. (USA), Executive Chairman, Alphabet Inc.
103. Schneider-Ammann, Johann N. (CHE), Federal Councillor, Swiss Confederation
104. Scholten, Rudolf (AUT), President, Bruno Kreisky Forum for International Dialogue
105. Severgnini, Beppe (ITA), Editor-in-Chief, 7-Corriere della Sera
106. Sikorski, Radoslaw (POL), Senior Fellow, Harvard University
107. Slat, Boyan (NLD), CEO and Founder, The Ocean Cleanup
108. Spahn, Jens (DEU), Parliamentary State Secretary and Federal Ministry of Finance
109. Stephenson, Randall L. (USA), Chairman and CEO, AT&T
110. Stern, Andrew (USA), President Emeritus, SEIU and Senior Fellow, Economic Security Project
111. Stoltenberg, Jens (INT), Secretary General, NATO
112. Summers, Lawrence H. (USA), Charles W. Eliot University Professor, Harvard University
113. Tertrais, Bruno (FRA), Deputy Director, Fondation pour la recherche stratégique
114. Thiel, Peter (USA), President, Thiel Capital
115. Topsøe, Jakob Haldor (DNK), Chairman, Haldor Topsøe Holding A/S
116. Ülgen, Sinan (TUR), Founding and Partner, Istanbul Economics
117. Vance, J.D. (USA), Author and Partner, Mithril
118. Wahlroos, Björn (FIN), Chairman, Sampo Group, Nordea Bank, UPM-Kymmene Corporation
119. Wallenberg, Marcus (SWE), Chairman, Skandinaviska Enskilda Banken AB
120. Walter, Amy (USA), Editor, The Cook Political Report
121. Weston, Galen G. (CAN), CEO and Executive Chairman, Loblaw Companies Ltd and George Weston Companies
122. White, Sharon (GBR), Chief Executive, Ofcom
123. Wieseltier, Leon (USA), Isaiah Berlin Senior Fellow in Culture and Policy, The Brookings Institution
124. Wolf, Martin H. (INT), Chief Economics Commentator, Financial Times
125. Wolfensohn, James D. (USA), Chairman and CEO, Wolfensohn & Company
126. Wunsch, Pierre (BEL), Vice-Governor, National Bank of Belgium
127. Zeiler, Gerhard (AUT), President, Turner International
128. Zients, Jeffrey D. (USA), Former Director, National Economic Council
129. Zoellick, Robert B. (USA), Non-Executive Chairman, AllianceBernstein L.P.

Natrually, the secretive nature of the group has given birth to conspiracy theories. Some have claimed that the Bilderberg is a group of rich and powerful kingmakers seeking to impose a one world government. Whether that is true remains in the eye of the beholder, however one thing is clear: as the graph below shows, the members are connected to virtually every important and relevant organization, media outlet, company and political entity in the world.
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NOW YOU KNOW THE WEB OF SECRECY THAT ALL WORK TOGETHER AGAINST US - Benjaminis

https://www.theburningplatform.com/2...k/#more-151616

Federal legislators are on the hunt for new revenue to offset their planned tax cuts, and some recent reports indicate that they might ransack 401(k) benefits to get it. If Congress gets its way, some employer-sponsored tax-advantaged retirement accounts could be in for a serious haircut.


Let’s take a look at what some in Congress are proposing, why their plans are such an affront to the American people, and what options you may have to keep them from touching your retirement dollars.


401(k)’s on the Chopping Block

About 54% of Americans hold a retirement plan through their employer, most often a 401(k). And the Federal government has given workers an incentive to encourage them to save through those accounts: a tax deduction every year on whatever folks put in.

The only time the money inside the account is taxed is when it gets withdrawn. When that happens during retirement, the withdrawals are normally treated as standard income, and even the gains accumulated in the account are not taxed until withdrawal — at least according to current tax laws.

But now members of Congress are looking to slash those tax breaks, effectively turning all traditional 401(k)’s into Roth 401(k)’s. That would mean you’d pay full taxes on any money going into your retirement account. Inversely, you wouldn’t be taxed as heavily on the money when you withdraw for retirement, but you’d lose a huge tax advantage by paying on any funds you deposit today.


Essentially, this would be a new tax on saving, making it less incentivizing and advantageous for American workers to put away money for retirement.


Legislators first got the idea back in 2014 when researchers calculated that, if the tax break on deposits into 401(k)’s got the axe, they could generate upwards of $144 billion in new government revenue over 10 years. (Don’t forget, the only deductions Trump has vowed to protect are for charitable donations and home mortgages. Apparently, retirement accounts are still fair game.)


The Employee Benefit Research Institute already estimates workers between ages 35 and 64 are approximately $4 trillion behind on saving for a safe retirement. On top of that, another recent survey shows only 39% of Americans are confident in their ability to retire comfortably.


If Congress decides to push these new measures through — and Americans are deterred from saving as a result — it could cause millions to fall painfully short of a secure retirement.


Blatant Hypocrisy
U.S. lawmakers participate in one of the most secure and generous retirement plans in the world. They have access to both a traditional 401(k) and a taxpayer funded pension plan. They also pay a fraction of the average American in account management fees, and they receive a whopping 5% matching plan, dollar-for-dollar.


Most Americans couldn’t dream of having such a cushy setup as U.S. representatives. Yet it’s those same politicians that are now eyeing average Americans’ retirement accounts as an easy target for new government revenue.


So, is there a way to circumvent this possible money grab from Congress?

How to Protect Your Savings from Whatever Congress Has Planned
If legislators start moving forward to slash current 401(k) tax benefits, Americans should be ready to protect their hard-earned nest egg.

For those who can rollover their 401(k), one logical option is to move into a Precious Metals IRA. Unlike the money you put into your 401(k), the physical gold and silver that you can own through a self-directed IRA is much harder for the Federal government to manipulate. Plus, unlike the stocks or mutual funds that you likely have in your 401(k) today, precious metals carry permanent value that’s indisputable.

If you’re ready to pull your retirement from the watching eyes of greedy government bureaucrats, this may be the time to move into gold.


Birch Gold Group helps Americans protect their savings with physical gold and silver. Clients can purchase precious metals for physical possession, or move their IRA or 401(k) into a Precious Metals IRA. To learn more, request a free Info Kit on Gold – there is zero cost and zero obligation to you. All you need to do is enter your details at www.birchgold.com

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Gold: Whoever Has the Gold, Makes The Rules
John Ing

June 1, 2017


http://www.gold-eagle.com/sites/defa...ng060117-1.pngLeaked memos, recorded conversations, impeachment talk and a plunging stock market. Trump and his White House problems? No. Brazil. The Brazilian stock market took a nose dive wiping out this year’s gains on newspaper reports that Brazilian President Michel Temer, installed only last August after the impeachment of his predecessor Rouseff, is involved in a cover-up and bribery scheme. It seems that Washington is not the only swamp to drain.


Amid the controversy over yet another firing, the Washington circus is again caught up in another dysfunctional gridlock. As he careens from one controversy to another, Mr. Trump is determined on fixing America- his way. Lost in the hysteria is his economy-boosting agenda is divided along party lines. Washington is intensely polarised and the American system is undergoing yet another stress test, with echoes of Watergate. Donald Trump’s impulsiveness and distaste for orthodoxy, Congress, the media and even his own party, is at the root of this political turmoil. As a result, the Trump bump has turned into the Trump slump and while the dollar slips to six month lows, business is concerned that his plan to overhaul healthcare, the federal budget and tax code will be sidelined by his antics.

However, impeaching Donald Trump requires two things. The first, the Republican controlled House of Representatives would need to vote for impeachment by two-thirds and then the Republican controlledSenate would have to ratify impeachment by a two-third majority. Thus, impeaching Trump becomes a political, not a legal question, difficult when polls show that likely
US voters approve of his job performance (Rasmussen Reports) by a 48 percent margin. Everyone should take a deep breath – four more years.

The Trump Card
But true to his word, the Trump administration focuses on the biggest wholesale changes to the tax code since the Reagan era. While laudable and ambitious, the plan is to reduce seven tax brackets to three and slash the corporate tax rate to 15 percent from 35 percent. While the tax cuts are at the centre of his economic agenda, they require congressional cooperation, not an easy task today. Yet all this will cost trillions with the ratio of public debt to GDP already at 100 percent, set to soar again.

To be sure his cabinet has loads of business experience but their cultural DNA consists largely of financial experience and transactional relationships, particularly in distress debt rather than the operation of a big company. Some are a coterie of tycoons whose wealth came from risky bets and reward, taking advantage of the cheap prices following the global crisis of 2008. That explains the potential mess up over trade with their instinct to use brinksmanship or a zero-sum view as part of the negotiations, led by the master negotiator, Donald Trump. Give a little and instead of diplomacy, stick to generalities, obfuscate and if the deal, goes badly, just walk away. No nuance here. In Mr. Trump's first hundred days, pulling out of TPP, challenging NATO, the threat to tear up NAFTA are good examples of the cut and thrust of his “take no prisoners” negotiations. America’s enemies should be so lucky.

Honey, I Shrunk the……
Last year, the Fed financed roughly 40 percent of America’s budget deficit. The risk is that if the Fed advances plans to unwind its massive $4.5 trillion balance sheet, amassed during the crisis, the supply could destabilize the market just at the same time as Mr. Trump attempts to finance his huge deficits. Most likely the Fed will allow the securities to mature, minimizing the impact but problematic, since the Fed is the biggest buyer of its securities. There is even concern that the balance sheet which has grown fivefold since the crisis could actually be used as a piggy bank to finance Trump’s programs, simply because Americans have few savings. The crowding out effect last occurred in the 2007 – 2009 recession when the deficit last hit $1 trillion. Ironically Mr. Trump’s portfolio of spending plans is to cost over $1.1 trillion so his deficits are set to soar, and not only roar. So without the obvious tax increases, how to fund the deficits?

Worrisome is that in the face of those numbers, the “exit strategy” coincides with a deterioration in relations with America’s so-called trading allies he is bashing today, at a time when their capital is most needed to fund Trump’s programmes.

History illustrates that unfunded deficits are unsustainable and there is a cost. Timing this time is a factor since Congress must pass Trump’s reforms before next year’s mid-term congressional elections in 2018, when his party could lose seats and control of the House. Also Congress and Trump must lift or suspend the debt ceiling since the spending limit extension expires this September. As Trump’s predecessors from Reagan to Bush learned, tax cuts that are to be revenue neutral, instead blew large holes in the federal budget and always, were paid with more borrowings. The hard truth is that politicians and Mr. Trump find it easier to spend and for that reason, deficits are set to soar. The other, of course is that despite plans to lower the rates of tax, America’s tax code continues to encourage businesses and consumers to borrow, because interest remains tax-deductible.

Let’s Do The Time Warp, Again
Central banks have become the world’s largest buyer of government bonds, in an incestuous arrangement to lower rates to revive the global economy. The world’s central banks have manufactured some $20 trillion of liquidity as part of a global quantitative easing binge that caused an explosion in bank reserves which has not yet filtered into the economy in the form of increased money supply. Central banks believe they should keep their feet on the monetary pedal because core inflation, which excludes volatile energy and food remains stuck at only one percent.

Nonetheless, we would argue that there has been an inflation in asset prices, not in services. The lack of headline inflation is because trillions of printed money, remains on the balance sheets of the central bankers’ surrogates, in the form of higher reserves as a knee jerk reaction to the 2008 financial crisis. That cheap money has driven up a series of risky credit bubbles in stock markets, real estate, and even art ($110 million for a black skull) last seen before the financial crisis of 2008. Simply borrowers are artificially subsidised and every bubble-like asset class has become dependant upon this addiction to cheap money, driving down risk premiums.

Today, the average age of the baby boomers is about 62 and rather than a surge in consumer spending, boomers instead are saving for their retirement. Consequently, lagging retail sales, car purchases and mall vacancies are not surprising. For the past couple decades, consumer spending made up about two-thirds of the economy as those boomers bought cars and houses. Worrisome is that retail accounts for about a tenth of US jobs and since the beginning of this year, the US retail sector has lost some 89,000 jobs – more than America’s total employment in either coal or steel. In addition, the much bally-hooed manufacturing sector which actually employs less than 9 percent of America’s workers, represents some 12 percent of GDP, but receives about 100 percent of Mr. Trump’s “America First” obsession.

Unfortunately, he, our politicians and central bankers are still stuck in a Rocky Horror show time warp and their ready-made solutions are for another dose of money and credit creation which is not surprisingly, ineffective. And now, President Trump is looking for expensive tax cuts to make America great again. What ageing boomers really need is better healthcare, more retirement savings and not more debt. With subprime auto loans and credit card debt at record levels, boomers are encouraged to pile on yet more debt, initially for schools, houses and today for more of the same consumption with borrowing costs so cheap. Let’s do the time warp, again.

The Consequence Of Fiscal Irresponsibility
We believe the dollar standard is the Achilles heel to America’s greatness. The US government has incurred a record amount of debt for more than half a century and is a beneficiary of the dollar dominance. The Federal Reserve has become the world’s central bank. Also American imports caused a tide of dollars to go overseas. And then, quantitative easing resulted in another flood of dollars. We believe Trump’s threats to fix the soaring current account deficit will only exacerbate the problem. Already, German chancellor Merkel has warned about relying on US economic hegemony. She is right.

The White House may be in turmoil today but that also undermines America’s profligacy and power. America is the world’s biggest borrower. Since yearend the dollar has fallen 5 percent dropping to pre-election levels as the Trump administration suffers legislative and legal setbacks. The dollar has recently met competition as America’s trading partners seek to end their monetary hegemony and vulnerability to the whims of a president.

Gold Is Alternative Money For The World’s Central Bankers
Lately, the US dollar has swooned, bitcoin has soared and gold has reversed as a consequence of global quantitative easing. If central bankers can seemingly print money with impunity, the value of money eventually erodes. After all, the only thing underpinning this fiat currency is the faith and credit of the US government and that faith is testing its limits. Under the classic gold standard, countries accumulated gold in order to conduct their business and backed their respective currencies with gold. Exchange rates were fixed against gold just as they are fixed against the dollar today. Then countries could not print their way nor pay their bills with paper obligations to conduct business. The strongest currencies reflected the strongest economies.

Today, the main argument against reverting to a gold standard is because there's not enough gold in their world, which overlooks the fact that most central banks already hold gold in their reserves. The European Central Bank (ECB) for example was set up with contributions of gold from its member countries. Ironically. America today is the largest holder at 8,100 tonnes but is also the world's largest debtor. Canada unfortunately sold its gold and their cupboard is bare.

Nonetheless, in the past few years, some nineteen central banks continue to be net buyers of gold. Russia has made monthly purchases. China regularly accumulates gold, and officially holds over 2,000 tonnes making it the fifth largest holder in the world, up from only 600 tonnes a few years ago. We believe China’s purchases are a hedge against their huge $3 trillion dollar of reserves and is a step towards the realignment of the global monetary order which will see a gold backed renminbi.

One Belt, One Road, One Ambition
China is rebuilding the Silk Road that underpinned its golden age over a thousand years ago. The scheme is to bring about a new “golden age” of globalisation as President Xi Jinping recreates the Silk Road in a trillion-dollar massive infrastructure initiative to strengthen trade links between China, Russia, and Europe. China’s new Silk Road involves huge investments in infrastructure, energy and includes building deep water ports in Pakistan, new rail links, new maritime routes, and highways along the trade corridors to Europe. China’s One Belt, One Road will be financed by various state run banking entities cementing China’s trade, development and influence. Meantime, its private sector companies such as HNA are making ambitious bets acquiring an almost 10% stake in Deutsche Bank.

We believe China has taken these important steps to reduce the dollar’s hegemony. In contrast, China has strengthened its domestic currency role as a trading currency with swaps for oil with Russia and bilateral trade deals in Africa and Latin America. Deliveries from the Shanghai Gold Exchange (SGE) were a whopping 2,000 tonnes in contrast to Comex’s paltry 50 tonnes last year. Volumes surged 43 percent reflecting strong demand. China remains the world’s largest consumer of gold and its largest producer but that production remains within China’s borders because demand exceeds supply. While hedge funds in the west have been dumping gold, China has been purchasing massive amounts, as gold moves from the west to the east. It is believed that soon, China will have more gold than the Americans. Remember the golden rule, whoever has the gold, makes the rules.

The Eye Of The Storm
Overlooked is that historically low rates have lowered the discount that investors put on future cash flows which in turn, debases returns and risk. The VIX index often called the “fear index” measures the implied volatility of the market, recently reached the lowest level in more than 25 years. Is this the eye of the hurricane or the continuation of an ageing bull market which has bred a complacency that has ignored Trump’s tweets, Middle East uncertainties or even a Brexit? We believe the bastardization of our capital markets by algo and high frequency trading is behind the dampened activity. Our belief is that credit markets are simply addicted to low rates becoming overly complacent to both geopolitical and financial risks. Many are surprised that faith in the status quo remains which is as big a risk as the low rates themselves. This is not healthy, normal and unsustainable.

Another reason for the lack of volatility is the development of derivatives that were supposed to hedge risk which caused an explosion in algorithmic trading following the collapse of 2008. In fact, the value of the VIX relates to the cost of insuring against price changes via the derivative market. The price is set by supply and demand.

Today, the number of market indices now exceeds the number of US stocks. As opposed to popular indices, like the Dow Jones or Standard & Poors (S&P 500), the new indices are based on baskets of investment tactics or strategies which are tracked by derivatives or structured products. Rather than pay the hefty fees of an actively managed fund, a fund manager today can easily buy an ETF and, to make matters worse, Wall Street created a derivative on the indices (bull or bear) which tracks the ETF, itself a derivative. To no surprise then, Harvard University Endowment’s largest holding is a high-yield bond ETF. Many have forgotten Warren Buffett warnings over derivatives who called them “financial weapons of mass destruction” in 2003. In not following his own advice, it cost him almost $200 million to close his derivative position last year.

Trump Is Good For Gold
We believe that Trump’s deficits, the decline in civility and the lack of funding will fuel rates and that in turn will increase risk, causing a global demand for safe assets. Financial crises ten year ago still casts long shadows. The biggest question remains how to pay for America’s debts? Debasement led to the worst financial crisis since the 1930s. The problem is that there are too many different instruments that are the equivalent of money. While, monetary policy rather than fiscal policy has helped the recovery, the exponential build-up of debt is unsustainable. Consequently, we believe that gold is the ultimate hedge against the risk that the government's fiscal plans will run against the funding problems mentioned earlier. Unlike the “weapons of mass financial destruction”, there is no counterparty risk with gold.

In sum, gold will continue to rise as long as the US budget remains in deficit, the US trade account is in deficit and Donald Trump is in the White House. Trust in Trump has disappeared both at home and now abroad. Ironically, Mr. Trump will be very reliable as an agent of dollar devaluation, which is good for gold.
Gold’s new bull market has just begun.

Recommendation
After five years of belt-tightening, the gold miners have started to loosen their purse strings making new acquisitions, joint ventures or dusting off old plans. In response to a second year of declining production, some miners have acquired stakes in development projects. Newmont recently acquired an almost 20 percent stake in Continental Gold’s Buritica deposit in Columbia. Eldorado grabbed Integra Gold for its resurrected Lamaque play in Quebec which gives it a better geographic spread. Although, in both cases the acquisitions were bite sized, the companies had to pay up and neither project will be in production until early 2020. Meantime Goldcorp spent nearly $1 billion to develop the huge Cerro Casale project in Chile. Goldcorp acquired a 25 percent stake in Cerro Casale from Barrick and another 25 percent stake from Kinross which gives it a big slice of the Maricuna gold belt. However the project will still require sizable dollars to put in production and despite Cerro Casales being a huge 23 million ounce deposit with a long life, the price tag is in the billions and at least six years away from production. Technical and water issues remain.


Within the group we like Barrick and Agnico Eagle among the seniors, B2Gold among the intermediates and McEwen Mining among the growing junior space. A realignment of the junior ETF GDXJ ironically favouring more established players, presents an opportunity to begin to invest in more junior exploration players. We favour and helped finance Dr. Keith Barron’s Aurania which has the largest land position in Ecuador with which he hopes to discover another monster Fruta del Norte, that Lundin Gold will bring into production late 2019.


Agnico Eagle Mines Limited
Agnico Eagle reported excellent results and increased their full year guidance to 1.57 million ounces with a 2 million ounce target by 2020 from the LaRonde Complex, Canadian Malartic, Meliadine and Amaruq (Meadowbank). The company has grown its eight mines organically as well as growing opportunistic acquisitions like Kittlila and Meadowbank. Amaruq itself will extend the life of its Nunavut operations. Agnico’s cash position remains strong and sustaining capital this year is only about $850 million. Reserves increased last year to almost 20 million ounces. We like the shares for its rising reserve and production profile. Agnico has paid a dividend every year since 1983.

B2Gold Corp.
B2Gold delivered excellent results from its four producing mines, two in Nicaragua, one in the Philippines and one in Namibia. Construction at Fekola is one quarter ahead of schedule and will be the third largest producer in Africa. With an October start, Fekola in Mali is fully funded and will contribute free cash flow next year enabling the funding of the Kiaka project in Burkina Faso, one of the largest undeveloped gold resource in West Africa. To date the Masbate Mine in the Philippines and the Otjikoto mine in Namibia performed well. We like B2Gold for its execution and above average growth profile which will see B2Gold produce some 950,000 ounces next year.

Barrick Gold Corp.
The world’s largest producer is stymied by a Tanzanian ban on concentrate exports following the release of a report investigating gold exports which impacted. Barrick’s 64 percent owned Acacia. The miner thus stored a month’s production in 277 containers. The lost output however only accounts for roughly 10 percent of Barrick’s annual production of 5,400,000 ounces and the company has not adjusted guidance. We believe that since the two mines are important to the Tanzanian economy and the mine minster was axed following the report, the disruption is not expected to last. We would take advantage of Barrick’s share weakness and purchases are recommended.

Centerra Gold Inc.
Centerra shares are cheap here despite hopes for a rerating on turning around the Mount Milligan acquisition in BC. Centerra’s improved results from the Kumtor mine in the Kyrgyz Republic produced a strong quarter producing 127,000 ounces at a very low cost. Grade improved. The company has $277 million of restricted cash at Kumtor which is in dispute with the government. Importantly negotiations continue and all permits have been granted on an annual basis.

Nonetheless government negotiations are difficult such that Centerra’s recent acquisition of Mount Milligan, geographically diversified the company's assets. However, Mount Milligan’s mill throughput was below plan and grades were also poor. Centerra is an intermediate gold producer with a low cost asset base. Oksut in Turkey should be started this year. Cash and cash equivalents declined to $357 million including restricted cash.

Eldorado Gold Corp.
Eldorado expanded to Canada acquiring Integra Gold in Quebec for a whopping $600 million. Integra is a junior, developing Lamaque and the $590 million acquisition was paid in cash and shares. Eldorado had available liquidity of $1.1 billion so the acquisition was easily handled. Lamaque was a key part of the old Sigma assets. Recent drilling has increased the resource. Although, there are no reserves yet, grades have been better than 9 gpt. Integra had a prefeasibility study with a four-year payback but Eldorado's people will have to go in and refine that. Eldorado recently shelved plans to expand its Turkey operations, so this deal offers Eldorado a third leg, after Greece and Turkey. We like Eldorado here.

Detour Gold Corporation
Detour had a disappointing quarter reflecting the difficulty of making money at its flagship Detour Lake open pit mine, the largest gold mine in Canada. The company is attempting to secure a $400 million debt facility to refinance $300 million of obligations this year. Detour Gold has shelved West Detour Lake’s development plans which flattens their production profile. We believe without clarity on the second phase, together with a tight balance sheet, the company's prospects are constrained near term. Nonetheless Detour has a long mine life with reserves of over 16 million ounces and is a good option on higher gold prices. Hold.

Kinross Gold Corp.
Kinross had a good quarter with a solid contribution from Bald Mountain and Round Mountain in Nevada. The Tasiast mine in Mauritania produced 64,000 ounces but the company seems to be trading dollars here until the Tasiast Phase 1 expansion is complete. Major cash contributor Paracatu in Brazil had a weak quarter producing about 108,000 ounces. Kinross has steadily improved each of their operations in the US, Brazil, Russia and West Africa. Kinross will produce 2.6 million ounces this year at a cash cost of about $700 per ounce. Pro forma after the sale of the 25 percent interest in Cerro Casales project, cash and equivalents leaves Kinross a healthy cash balance $819 million. With available credit, total liquidity is $2.3 billion adequate to fund Kinross’ emphasis on organic growth. Kupol in Russia remains a geographic risk however. We prefer Agnico-Eagle here.

John R. Ing
[email protected]

http://www.collective-evolution.com/...-you-vote-for/

THE DEEP STATE INSTITUTIONS THAT CONTROL AMERICA – THEY DON’T CARE WHO YOU VOTE FOR


ARJUN WALIAJUNE 1, 2017



http://cdn1.collective-evolution.com...DEEP-STATE.jpg

The Deep State refers to a coordinated effort by career government employees and others to influence state policy without regard for democratically elected leadership.


“Democracy is popular because of the illusion of choice and participation it provides, but when you live in a society in which most people’s knowledge of the world extends as far as sports, sitcoms, reality shows, and celebrity gossip, democracy becomes a very dangerous idea. Until people are properly educated and informed, instead of indoctrinated to be ignorant mindless consumers, democracy is nothing more than a clever tool used by the ruling class to subjugate the rest of of us.”
– Gavin Nascimento



When Eisenhower coined the term “Military Industrial Complex,” his main concern was the potential for the “disastrous rise of misplaced power.” After him, John F Kennedy (JFK) warned the citizenry that we are living in “a system which has conscripted vast human and material resources into the building of a tightly knit, highly efficient machine that combines military, diplomatic, intelligence, economic, scientific and political operations.” He went on to state that “its preparations are concealed, not published. Its mistakes are buried, not headlined. Its dissenters are silenced, not praised. No expenditure is questioned, no rumor is printed, no secret is revealed.”

Before both of these two, 28th President of the United States Woodrow Wilson revealed:
Since I entered politics, I have chiefly had men’s views confided to me privately. Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it. (source)



Perhaps one of the most revealing statements from modern history by a president comes from the 26th president of the United States, Theodore Roosevelt, when he explained how little people know of how government really operates:
Political parties exist to secure responsible government and to execute the will of the people.


From these great tasks both of the old parties have turned aside. Instead of instruments to promote the general welfare, they have become the tools of corrupt interests which use them impartially to serve their selfish purposes. Behind the ostensible government sits enthroned an invisible government owing no allegiance and acknowledging no responsibility to the people.


To destroy this invisible government, to dissolve the unholy alliance between corrupt business and corrupt politics is the first task of the statesmanship of the day. (source)

What these presidents did, as many others have done, is reveal the existence of a government within the government that has infiltrated the United States. To see some similar quotes as the ones above, you can refer to this article we published a couple of years ago.

It’s no secret that government policy is largely dictated by corporations, and the financial institutions that sit above them. We no longer live in a democracy, but rather, a “corporatocracy.” This is easy to see if you simply follow the money.



“As difficult as it was for me, I’ve come to an inescapable and profoundly disturbing conclusion. I believe that an elite group of people and the corporations they run have gained control over not just our energy, food supply, education, and healthcare, but over virtually every aspect of our lives; and they do it by controlling the world of finance. Not by creating more value, but by actually controlling the source of money.”

– Foster Gamble

Below is a great clip from the Thrive documentary that explains the modern day banking industry perfectly.


The Deep State
The military industrial complex, the Deep State, those who the presidents above are referring to, is comprised of a small group of people and the corporations/institutions they run. It has been this way for many years, as so many presidential candidates, like Dr. Ron Paul and Bernie Sanders, have exposed. This organized power completely controls politics, and they do not care who you vote for.

Regardless of who is elected president, this hidden power has an agenda, and they use politics to justify it. Just look at the destabilization of the Middle East.

Our perception of politicians and presidents largely comes from mainstream media, not our ability to think critically about what is going on. If mainstream media praises a candidate, like Hillary Clinton, that’s who the masses prefer. Their power to influence the minds of the masses is tremendous.

Despite the fact that Donald Trump has been vilified, he’s actually taken more action against this powerful group of elite and their interests than most, but it’s hard for people to see this because these corporations (who own the mainstream media, incidentally) continue to slander him — not that he hasn’t made it easy for them.


1. The Terror War Industry
One great example is the terror war industry, and the presence of a supposed “Islamic Threat.” This perceived threat is maintained through false flag terrorism, a concept that even the mainstream has acknowledged, particularly since multiple politicians and academics have revealed it to the world. Vladimir Putin, for example, recently said the attack in Syria was a false flag, and the globate elite use “imaginary” and “mythical” threats to push forth their agenda.


He, along with many others, also called out the United States and their allies for funding terrorists organizations. In his recent visit to Saudi Arabia, Donald Trump did the same.

The term “terror war industry” comes from FBI whistleblower Sibel Edmonds, who referenced it during an appearance on RT news. She is a former FBI translator and the founder of the National Security Whistleblowers Coalition (NSWBC). She gained a lot of attention in 2002 after she accused a colleague of covering up illicit activity involving Turkish nationals, which included serious security breaches and cover-ups, alluding to intelligence that was deliberately suppressed.

The Deep State institutions involved with this would be the arms industry and the oil industry, among others.


2. The Federal Reserve
The federal reserve is a privately owned central bank system in the United States disguised as a government owned system.
“The federal reserve is an independent agency and that means basically that, there is no other agency of government which can overrule actions that we take.”

– Alan Greenspan, former Chairman of the Federal Reserve (source)

Henry Ford said that, “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”


No matter who you vote for, the banking system doesn’t change. These people have the ability to print money in a way that keeps them protected, and bleeds everybody else dry. As the quote above from Alan Greenspan illustrates, it’s an independent agency that can make decisions no other branches of government can oppose. The people that control the money control the government, and the presidency. If an institution like the federal reserve isn’t considered a deep state institution, I don’t know what is.


Every four years we look to somebody to spark change, but perhaps that whole process is meant to distract us. Perhaps we are looking in the wrong places.


3. The Military Industrial Complex
Former Republican U.S. congressional aide Mike Lofgren, who retired in 2011 after 28 years as a congressional staffer, defines the Deep State as follows:
It is a hybrid of national security and law enforcement agencies: the Department of Defense, the Department of State, the Department of Homeland Security, the Central Intelligence Agency and the Justice Department. I also include the Department of the Treasury because of its jurisdiction over financial flows, its enforcement of international sanctions and its organic symbiosis with Wall Street.


The military industrial complex is huge, and full of private contractors, intelligence agencies, and other defence agencies that have, just as Eisenhower warned us, amassed a great deal of power. The crazy thing about it is, nobody knows what’s going on in here, not even the President. If the President and the United States Congress doesn’t even have access to this information, just ask yourself, who does?


We’re talking about Special Access Programs (SAPs), in which we have unacknowledged and waived SAPs. These programs do not exist publicly, but they do indeed exist. They are better known as “Deep Black programs.” A 1997 US Senate report described them as “so sensitive that they are exempt from standard reporting requirements to the Congress.” Welcome to the world of secrecy. You can read more about the Black Budget in detail here.


These programs don’t change, regardless of who you vote for. These are the institutions, agencies, and ongoing programs that are above the law, beyond scrutiny, and operating in near total secrecy.

Business Insider reports that the U.S. intelligence community consists of 17 discreet agencies that operate with enormous budgets and incredible secrecy, bringing total surveillance and total information awareness to bear on the people of Earth.
The United States has a history of government agencies existing in secret for years. The National Security Agency (NSA) was founded in 1952, its existence was hidden until the mid 1960’s. Even more secretive is the National Reconnaissance Office, which was founded in 1960 but remained completely secret for 30 years.

If Voting Doesn’t Make A Difference, What Will?
“This is the way the system works, it’s a rotten system, and I see elections as so much of a charade. So much deceit goes on. . . . whether it’s a Republican or a Democrat president, the people who want to keep the status quo seems to have their finger in the pot and can control things. They just get so nervous so, if they have an independent thinker out there, whether it’s Sanders, or Trump, or Ron Paul, they’re going to be very desperate to try to change things. . . . More people are discovering that the system is all rigged, and that voting is just pacification for the voters and it really doesn’t count.”

– Dr. Ron Paul, three time presidential candidate (source)

Voting is simply the illusion of choice. As former New York City Mayor John F. Hylan stated:
The real menace of our Republic is the invisible government, which like a giant octopus sprawls its slimy legs over our cities, states and nation . . . The little coterie of powerful international bankers virtually run the United States government for their own selfish purposes. They practically control both parties. . . . (source)(source)


These Deep State institutions have been in place for a long time, and remain in place regardless of who votes. So what changes things? Let’s take a look at some examples. Take Genetically Modified Foods, for instance, an issue for which activism and awareness alone have created groundbreaking change. One example would be the fact that a federal lawsuit forced the U.S. government to share disturbing facts about genetically engineered foods. You can read more about that here.


As a result, a number of countries have since completely banned GMOs and the pesticides that go with them. This is where change comes from: us, not them. If we constantly look to one person, who is usually part of the “1 percent,” to make significant changes, nothing will ever change. Politics seems like one big distraction, a place for powerful people to play games with the population and keep our attention. It’s become more of an entertainment platform as opposed to a real platform for change.


But there is a massive shift in consciousness occurring. The veil that blinds the masses in so many ways is becoming transparent. Our thoughts and feelings about our world are changing, and as a result, we are beginning to manifest a new world. We are definitely living in a time where new information and evidence will conflict with long-held belief systems


Seeing through this Deep State and the institutions that really call the shots is a key step. We must create more awareness of these issues and speak up about them instead of just giving all of our power over to one individual, hoping that they can make some sort of change for us. We have to do it.

COMMENTS FROM BENJAMINIS: For anyone that has been reading my thread especially in the last two weeks now can see so very clearly what a corrupt manipulated world WE all live in. This relates directly to trading currencies. You are not trading in FREE MARKETS so unless you understand and realize that you are at a tremendous disadvantage. You actually can make tremendous profits as a Forex trader however if you trade using whatever you have learned without knowing that the environment for trading Forex today has changed drastically since the election of President Trump on November 8, 2016.

My own Forex trading skills have improved since I started this thread on December 3, 2016 which was 6 months ago.

I will post today during NON FARM PAYROLL day and it will be my last time posting about this monthly event on Forex Factory in a free forum.

I am going out for awhile and if KeepCalmfx is available our daily charts will be produced.

This should be a very fascinating event for many reasons. The FED will cause President Trump many problems meeting his agenda if they raise rates on June 14, 2017 however that appears to be their agenda. Therefore I would GUESS that the NFP number will be over 200,000 and if that happens there will be a raising of rates.

How the markets react will be very revealing whatever number is printed. All the DATA is FAKE NEWS and now perhaps you understand what trading must be about. LEARNED KNOWLEDGE and TRADING EXPERIENCE.

http://news.goldseek.com/GoldenJackass/1495656000.php

[SIZE=1.5] Published: Wednesday, 24 May 2017[/size]

THE US-SAUDI ARMS DEAL
THE SAUDI ARMS DEAL SUDDENLY TRIPLED IN SIZE WITH LONG TIME SCHEDULE WITHIN THE AGREEMENT… TRUMP COMPLETED THE SINGLE LARGEST ARMS DEAL IN US-HISTORY, DONE WITH SAUDI ARABIA… IT EXCEEDED THE PREVIOUS COMMITMENT FROM TWO WEEKS AGO, NOW WORTH $350 BILLION… WITNESS US-STYLE ECONOMIC STIMULUS, THE TOXIC WAY… THE USGOVT SUPPORTS THE FADING SAUDI KINGDOM, SUPPORTS THEIR VICIOUS YEMEN WAR, AND APPLAUDS THEIR SUPPORT OF ISIS TERROR… THE USGOVT IS ENCOURAGING THE FORMATION OF A GULF REGION NATO, SURELY DEDICATED TO US-ARMS SUPPLY… CURIOUS THE PAYMENT METHOD TO COME, WITH CONJECTURE.

The USMilitary-industrial complex has come to the rescue of USEconomy with the massive arms sale to the world's biggest purchaser of weapons, namely Saudi Arabia. Beyond the glitz and royal pageantry, President Trump's visit to Saudi Arabia in all likelihood had a main purpose to sell weapons, and to complete a gigantic $350 billion over the next decade. It will have weapon orders filled over time. In turn, the Saudi Royals have promised to invest $billions in the United States as well and to make other commitments designed to placate Trump. The pablum on the official line is that the first phase, with $109.7bn in weapons purchases, will boost Saudi Arabia's defense capabilities, bolstering their security services in the face of extreme terrorist groups, and the new threats from Iran.

The White House added that the deal will create defense jobs while also reaffirming America's commitment to Saudi Arabia. What a load of rubbish! The Saudis created the Yemen War in order to steal their neighbor’s energy deposits, thus creating a critical situation with consequent certain backfire. The USGovt support of Saudi Arabia goes hand in hand with desperate clinging to the Petro-Dollar. The defacto standard is in its final phase of demise. So the USGovt pledges support to the entire Gulf set of partners, which means the oil monarchies. If the kings and princes do not respond with overt support, they risk being murdered, or having untold terrorism unleashed on their people.


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The deal will provide Saudi Arabia, the world's largest importer of weapons with high quality equipment and services including missiles, bombs, armored personnel carriers, Littoral Combat Ships, THAAD missile defense systems, and munitions. The Trump economic advisor Gary Cohn said that Saudi Arabia would hire US companies as a result of the defense deal, and make significant investments in the US. The other side of the deal would lead to many US companies invest and build things in Saudi-land. The Saudis are expected to provide back support for certain USMilitary operations on an unspecified nature.

Saudi Crown Prince Mohammed bin Salman conducted negotiations on this deal shortly after the 2016 US election when he sent a delegation to Trump Tower to meet with the Jared Kushner, the liaison of dubious variety. The prince is the regular actor on the Saudi stage, since King Salman is senile, suffering from dementia, and cannot hold a conversation or a pen.

Curiously, the lapdog Washington Post (owned by Amazon CEO Bezos) called the deal a cornerstone which further encourages the Gulf states to form its own Gulf State Alliance like the North Atlantic Treaty Organization (NATO) military alliance. WaPo dubbed the alliance the Arab NATO. Naturally they would call for all the Arab oil monarchies to be armed to the teeth, supplied by US arms dealers, and promote war economy rather than healthy balanced economies.

The deal extended beyond weapons. Saudi ARAMCO will sign initial accords and joint venture agreements valued at about $50 billion with companies including General Electric, Schlumberger, and Halliburton, according to the petro conglomerate CEO Amin Nasser. GE Plastics is also involved. Expect their attempt to expand trade to be 80% weapons, 20% oil services and others. In addition, ARAMCO plans to sign accords with Baker Hughes, KBR, Jacobs Engineering Group, Nabors Industries, Weatherford Intl, McDermott Intl, and Rowan Companies, claim insider sources.

The industrial sector of the USEconomy is in bad decline. Much capital spending has been delayed and put on hold. The US Neocons are very happy indeed for the war spending, war footing, and war emphasis. The chief exports from the United States remain toxic bonds, military weapons, laced vaccines, tainted agri-seeds, prescription drugs, and obesity.

The Deep State celebrates. Their captains, barons, and henchmen should be very happy. It is said that the Trump Admin has now sold more arms to KSA than the last two presidents combined.This direction is his version of Making America great again. Behold the swamp still present in its full glory. See Zero Hedge (HERE).

HIDDEN ANGLES TO THE ARMS DEAL
SAUDI ARMS DEAL HAS A FEW POSSIBLE HIDDEN ANGLES… THE SAUDIS MIGHT BE FORCED TO SPEND THEIR USTBONDS STUCK IN THE EXCHANGE STABILIZATION FUND, SERVING AS ITS CORE… THE SAUDIS MIGHT BE USED AS CONDUIT BY THE LANGLEY CREW TO FUNNEL ARMS TO THE ISIS GUERRILLAS, ALL DONE VIA ARAB INTERMEDIARY… THINK A PORTION FOR THE YEMEN WAR, AND A PORTION FOR ISIS UNDER USGOVT DIRECTION… LASTLY, THE SAUDIS MIGHT BE SELLING THE USGOVT A STAKE IN ARAMCO, PAID IN US-MADE WEAPONS… THE PAYMENT COULD COME FROM US-BASED PRIVATE FUNDS… IT WOULD MEAN THE US-PUBLIC IS FINANCING THE MIDDLE EAST WARS WITH THEIR HOUSEHOLD FUNDS, SOLD FOR BADLY OVER-PRICED ARAMCO FRAUDULENT PAPER… THE LAST TWO SCENARIOS COULD BE AT WORK TOGETHER.

A hidden angle on the financial trail. The Saudis might be compelled to use their tightly held USTreasury Bond assets for payment in the huge arms deals. They USTBonds might be the core to the USDept of Treasury’s critically important elite Exchange Stabilization Fund. It is rumored to be valued in the multiple $trillions.

The Saudi stake is believed to be around $3 to $5 trillion, the bulk of four decades in Petro-Dollar surplus profits. The scummy deal might have been struck in the mid-1970 decade for the basis of the Petro-Dollar Standard. The Saudis sell oil in USD terms. The US buys primarily from Saudis and other cooperating Gulf Arab oil monarchies. The Saudis recycle profits into USTBonds. But the Saudis also are bound to make very large purchases of US-made weapons on a regular basis. The conclusion of this sordid deal, as in the last stage in the demise of the Petro-Dollar defacto Standard, calls for the Saudis to deplete their USTBonds stuck in the ESFund, and to use the funds for grand weapons deals. This is theory #1.

Another hidden angle. The Saudis are in a position to receive discount weapons from the US. It is doubtful that full price is paid, since both nations are in a certain degree of desperation. Watch the Saudis sell those same weapons to other counties, that the USGovt and USMilitary directs as destination, for a profit. Furthermore, expect that the Saudis will become the primary supplier of weapons to ISIS via other channels. The United States clearly has been using Saudi Arabia as a front for supplying ISIS and the terrorist guerrilla organizations. The connections to Langley and to the US Senate are well established. Senator John McCain is their main agent in the USGovt. The rub in this theory #2 is that ISIS has increasingly been a ISIS target for terror.

Save the best for last, a theory by EuroRaj. Consider the big deals and the numbers involved. Now that the Saudis have $110bn in new toys for war, some of those will be put to good use. Very few $billion coincidences ever occur, an old adage. Difficult to call it pure coincidence that the Saudi ARAMCO IPO deal was priced at $100bn, but it is stalled on confirmation of value. The US arm sales to Saudi Arabia was priced at $110bn, close enough. Think the process and pathway through.

The Saudis might not have sold to the USGovt actually, but perhaps to US-based funds stuck with USTreasurys and looking eagerly to unload them. The Saudis might have sold a $100bn stake in ARAMCO to the US public via the tarnished back door, like to pension funds, insurance companies, and mutual funds. Funds like Vanguard are as dirty as the sewer is deep. The dirty Royals do not take USTreasurys as payment but instead request payment in arms. It is their option, and the Pentagon might have brokered the deal from the fund managers. This is possibly barter on a grand scale.

rony is thick, since the Saudis might have rejected the USD and preferred something more tangible, the hard asset of war materiel. Double the irony, as the US public might unknowingly be funding a $100bn war in the Middle East, with locations both in Yemen and Syria. To be sure, 90% of the people in US households could not identify Yemen on a map. Again the bagholder, the US public receives worthless paper in return, equity in ARAMCO, which is possibly over-priced by at least four-fold. The Saudis have lied bigtime on their oil reserves. They are selling drained deposits in a massive con scheme. The deal might just be a giant win-win deal for the warmongers. This is theory #3.

Consider finally a fine rebuttal by Jackass colleague London Paul. He always sees through the muddle. His words, my minor edits and a few additions in the same line of thought. The House of Saud have far more issues to worry about internally than financing ISIS or providing ISIS weapons. They are now in the crosshairs of the very same guerrilla outfit. The Kingdom of Saudi Arabia will go up in flames soon enough. The Saudi Royals are terrified of enemies internally and externally. They have a useless military and they are buying a barrel full of second-tier quality weapons in the process. The THAAD missile defense system is not state of the art, with exaggerated effectiveness, as is just about everything else the USMilitary produces. No doubt they could pay for these second-rate toys using the ARAMCO IPO. However they are being screwed over, and being played by the Pentagon.

Like always, Russia holds the whip hand. The Saudis had been well along in talks about buying the S-400 missile system and other arms from Russia. Moronically, they backed the wrong horse as US influence in the region is on the wane.Next watch as the Saudi kingdom disintegrates into fragments via internal combustion, reckless insolvency, and external attacks. Given their war crimes with neighbor Yemen, their ruin would come as justice.

RUSSIANS & SAUDIS AGREE TO OUTPUT CUTS
SAUDI ARABIA AND RUSSIA HAVE AGREED TO EXTEND OIL CUTS TO MARCH 2018 AT A MEETING IN BEIJING… THE CARROT TO DRAW SAUDIS UNDER THE EASTERN UMBRELLA CLEARLY IS OIL OUTPUT CUTS, INTENDED TO SUSTAIN THE OIL PRICE… NEXT COMES OIL PAID BY CHINA TO SAUDIS IN RMB TERMS, A LONG AWAITED EVENT… THE LAST DAYS OF THE PETRO-DOLLAR ARE UPON US… RUSSIA IS PLAYING WITH THE OPEC LEADER, AN ACT ON THE WORLD STAGE… RUSSIA HAS HIDDEN PLANS.

Saudi Arabia and Russia will work together to prolong crude oil cuts by global producers through the first quarter of 2018, setting a firmer timeframe for a likely extension of the curbs. Crude prices responded with a slight jump on the news.

Further work must come to reduce global inventories to the five-year average. The energy ministers of the world’s biggest crude producers held a press conference to announce the accord between Russia and the Saudis. The more important aspect was the location of the meeting, in Beijing. Russia and Saudi Arabia, the largest of the 24 producers that agreed to cut output for six months starting in January, are reaffirming their commitment to the deal amidst growing doubts about its effectiveness. Surging US production has raised concern among OPEC members that their members are failing to reduce an oversupply. Oil has surrendered about half its gains since their accord late last year. OPEC is without teeth, but Russia has chosen to align with the Saudis toward their own goals. The Jackass conjecture is that Russia is using the Saudis with their own motives.

Russian President Vladimir Putin commented. “It is right that the decision was made not for two, three, four months but for nine months. That is the most important condition for stability.” The strategy appears to have Russia, a non-OPEC nation, extending its cooperation with leading OPEC player because Saudi Arabia wants price stability and is complying with its obligations in the deal, so believes King Vlad. The energy summit was held between Russian energy minister Alexander Novak and Saudi oil minister Khalid Al-Falih.

OPEC members agreed in November to cut 1.2 million barrels a day of oil production. Several non-members, including Russia, agreed in December to contribute a combined 600,000 barrels a day of output reductions. In contrast lies the United States which is not part of the agreement. During the cutbacks, production in the US has risen to the highest level since August 2015. Notwithstanding, American crude inventories have fallen for the past five weeks from record levels at the end of March. Kazakhstan, the biggest producer among the former Soviet Republics, disclosed they are not ready to join an extended accord automatically, so claimed its Energy Minister Kanat Bozumbayev. The Central Asian nation will discuss its level of participation at the Vienna gatherings for OPEC on May 24 and 25. The Russian camp reported that from preliminary consultations, almost all parties are committed, such as the large Russian energy firms.

Despite some progress on oil output reductions, Saudi Energy Minister Al-Falih believes more progress must come to bring global inventories down gently below the five-year average. Al-Falih said. “We have, before coming to this announcement today, reached out to many of our colleagues within and outside OPEC, and I think there is general consensus that this is the right approach. The agreement needs to be extended, as we will not reach the desired inventory level by end of June. Therefore, we came to the conclusion that ending will probably be better by the end of first quarter 2018.”

The deliberations come as two OPEC members remain exempt from the cuts have strived to increase their nation’s output. The output by Libya has risen to more than 800,000 barrels per day, the most since 2014. In the meantime, Nigeria has succeeded in bringing its Forcados pipeline online. It will direct flow of 200,000 barrels per day, ready to export again after almost continuous halts since February 2016. Iran has special status afforded from the signed nuclear deal, as its output is up significantly. It is unclear whether the countries would still be exempt if the deal is prolonged. See Bloomberg (HERE) and Financial Times (HERE).

EuroRaj made some key comments. “The location to announce this in Beijing is interesting. Soon they will both agree to price oil in Chinese Yuan terms, effective at a future date. The two nations might have already agreed to price oil in CNY. With Turkey leaning East, the Saudis are seeing the writing on the wall, for negotiating with Russia rather than the United States under the Chinese umbrella. The last thing the US consumer needs this summer is an oil price increase.”

The Jackass adds that maybe Russia & China have a plan with the Saudis, to exploit them, to use them, and then to ditch them. They might make agreements which accelerate death of the Petro-Dollar. They might work to advance the Eurasian Trade Zone with wider Chinese RMB currency usage in trade payments. Then later, the two Eastern superpowers might betray and discard the Saudis as partners. The entire ARAMCO deal remains of special interest. The Russians might expose the IPO stock equity deal as overpriced by factor of 4x, as per Western oil sector analysts. On the other hand, the Chinese might pledge an overpriced amount in the giant Saudi petro business in return for an agreement that China would pay for Saudi oil in RMB terms, no longer in USDollar terms, a Jackass theory.

*** The Voice has his strong doubts on agreed oil output cuts, but his comments are saved for the May Gold & Currency Report.

CONFLICTING BATTLES WITHIN YEMEN
THE BATTLE FOR YEMEN HAS BECOME A QUAGMIRE FOR SAUDI ARABIA AND THE UAE… ALREADY SUFFERING FROM NATIONAL DEFICITS, THEIR COSTS ARE AMPLIFIED BY THE YEMEN WAR… COMPLEXITY ABOUNDS AS THE SAUDI-LED FACTION IS IN EXTREME OPPOSITION VERSUS THE UAE-LED FACTION, THEIR CONFLICT HAVING TURNED VIOLENT IN THE ADEN AREA… EXTREME COSTS, CHAOS, AND DISUNITY ARE KEY.

It is important to review some details on the faceless violent distant war in Yemen, a very poor nation with many tribal lords and some warlords. The US public is intentionally kept unaware and uninformed, easily made gullible to believe that the battles are sectarian and involve the tired line of terrorists. Instead, the deep underlying motive for the war is the gradual depletion of Saudi oil reserves over the last two decades. The smaller numerous Saudi oil fields do not compensate well for the near total (like over 98%) depletion of the giant Ghawar field. The Saudis wish to steal the plentiful extensive untapped oil & gas reserves from neighbor Yemen, with whom is shared the Arabian peninsula.

The Yemen War has endured for 26 months. Its campaign is led by both the Saudis and UAEmirati. The war, which began in March 2015 and was ambitiously named Operation Decisive Storm, has pursued a plan to install once more its highly unpopular president, Abd Raboo Mansur Hadi. Many Yemenis view as him as a traitor. He remains in exile in Saudi Arabia along with most of his government.

The other goal for the Yemen War was to defeat the Houthis in Yemen, a Zaidi Shia organization that is now allied with many of the most capable units of what was the Yemeni Army. While the Houthis and their allies were pushed out of the port city of Aden and, most recently, the small Red Sea port of al-Mocha, the Houthis have retained control of the capital of Sanaa and most of northwest Yemen (re: Gulf News, February 10th). For months, the frontlines in what is a complex multi-actor civil war have remained fixed. This is despite the fact that both Saudi Arabia and the Emirates have spent $billions on persistent and devastating airstrikes, and backed a disparate mix of anti-Houthi forces and ground forces made up primarily of mercenaries, like from Sudan. The Yemeni civilians have taken the brunt, with many thousand dead and more wounded.

Rather than the short decisive intervention envisioned by Saudi Arabia’s princes and generals, the war is a quagmire with no military solution. The physical and political terrains of Yemen are unkind to outsiders, hilly and mountainous and exposed. Even a cursory reading of Yemen’s history shows that both have proven fatal for invaders, ironically much like Afghanistan. Yet rather than reevaluating their intervention in this complex civil war, both Saudi Arabia and the Emirates seem poised not only to continue the enduring war, but also to enhance their involvement with further weapons shipments to dubious forces. It also seems likely that they will launch a possible offensive on the port of Hodeidah (seen by the red marker), currently under control by both Houthi forces and their allies.


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Neither of these tactics is likely to succeed in defeating the Houthis. Instead, both the United Arab Emirates (UAE) and Saudi Arabia risk being drawn deeper into a war that cannot be won. The only certainty is that ongoing involvement in Yemen’s civil war will prolong the conflict and drain their treasuries of more $billions. Ultimately the Saudi and Emirati deepening involvement in Yemen’s civil war may pose more of threat to their own governments and ties within the Gulf Cooperation Council (GCC) than to the Houthis. There are already signs that the Emirates and Saudi Arabia are in conflict over how to continue prosecuting the war, and even how to divide Yemen for their own future control.

Behold the war within a war. Consider one hotzone under dispute with intense battles. In February 2017, Aden’s international airport was the scene of a short but bloody battle between two rival factions: the Saudi-backed Presidential Guards led by Abd Raboo Mansur al-Hadi’s son, and Emirate-backed factions that already controlled the facility. The Emirati-backed forces refused to relinquish control of the airport and a grand battle ensued. A Saudi operated Apache helicopter fired missiles at several armored personnel carriers, which instigated the battle. The fighting temporarily ceased when Hadi purportedly ordered his men to stand down. Then later the fighting resumed in March when Sudanese forces, paid for by Saudi Arabia, attempted to wrest control of the airport once more (re: Middle East Monitor, March 7th). The Sudanese mercenary forces were obliged to back down. They are the newest element in the deadly mix.

The battle over the Aden Airport is being waged against a much larger and far more complex fight for Aden and southern Yemen. The fighting between rival factions backed by Saudi Arabia and the United Arab Emirates clearly shows that Yemen’s already complicated civil war is being made worse by conflict between the two external groups funding the warfare. It has essentially become a war within a war: the fight of Saudi Arabia versus the UAE and their largely Sudanese proxies. While the initial decision to intervene in Yemen was largely made by Saudi Arabia’s Crown Prince Muhammad bin Salman, Saudi Arabia has limited its involvement in Yemen to an aerial campaign. The Royal Saudi Land Forces (RSLF) and the relatively more capable Saudi National Guard have been notably absent from the war. Refer to the Saudi Army. By contrast, the much smaller but moderately more capable UAE army has led the efforts on the ground in Yemen. The UAE has deployed its forces to three areas. Escalation has been attempted by means of new mercenaries, as the UAE presidential guard is commanded by a retired Major General from Australia. The targeted areas are the central Yemeni governorate of Marib, and also smaller contingents of soldiers in al-Mukalla and the Hadramawt. See Jamestown (HERE).

The upshot is that not only the Saudi oil reserves might be depleted, but much of the UAE oil reserves also. And lately, the two main Arab external players are fighting between themselves over unrealized spoils, in typical Arab fashion. Adding Sudanese merks to the mix can only result in more chaos, more costs, and more problems later.

SAUDIS WITH DRUG CONNECTIONS
ANOTHER SAUDI PRINCE WAS CAUGHT SUPPLYING $30 MILLION (2 TONS) OF CAPTAGON DRUGS TO ISIS TERRORISTS… THE DRUG IS USED FOR ILLUSION OF INVINCIBILITY AND TO STAY ULTRA-ALERT… THE SYRIAN WAR IS FULL OF AMPHETAMINES ON THE BATTLEFIELD, JUST LIKE THE MAIDAN COUP IN KIEV UKRAINE WAS FULL OF AMPHETAMINES ALSO… THE EFFECT OF CAPTAGON IS LACK OF FEELING, BUT ULTRA-STRENGTH AND ENDURANCE.

On a weekend in mid-May, Turkish anti-narcotics police seized 11 million Captagon pills in a haul that weighed almost two tons. It was en route to Gulf countries. Widely banned since the mid-eighties, these amphetamines provide a cheap long-lasting high but are highly addictive, used to keeps fighters awake over long durations. They also are known for potential to cause psychosis and brain damage. The production of the drug provides income for all factions involved in the Syrian war. Other seizures have occurred. During the last year, shipments of Captagon have been seized en route to the West Bank, Jordan, Sudan, Syria, and the Gulf States. In October, Anti-Media reported on a Saudi prince who was arrested for trying to smuggle two tons of the drug onto a plane. Yet more Saudi prince criminal actions in the drug arena. Another Saudi prince was caught in Lebanon shipping heroin several months ago, but he bought his way to freedom. As Syria has been engulfed in war, smugglers of the amphetamines have been forced to find alternate routes through Lebanon.

Lebanese journalist Radwan Mortada has spent ten years investigating crime, corruption, and the war in Syria. He produced a documentary for Journeyman Pictures entitled The Drug Fueling Conflict in Syria. In it, Mortada follows the Captagon trail from users on the battlefields to traffickers on Lebanese smuggling routes, all the way to the kingpins at the top of the supply chain. Lebanon’s biggest seizure to date, the recent haul, was a whopping 50 million tablets with a street value of $300 million, weighing over 4 tons, en route to Dubai.

In Mortada’s documentary, men in Beirut are shown crushing the pills and chopping them into lines much like with cocaine. They describe the effects as better than cocaine and really strong, whereas like morphine for really strong pains. Their experience points to why Captagon has become the drug of choice for some Syrian fighters. One ex-guerrilla reported having no fear when acting on the amphetamine. It curtails all feelings, making the fighters numb. It gives an illusion of feeling powerful and fit. See Anti-Media (HERE & HERE) and UK Independent (HERE). See also YouTube (HERE).

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https://dweaay7e22a7h.cloudfront.net...achScheidt.jpg
BY ZACH SCHEIDT
POSTED

JUNE 2, 2017


Government Jobs Numbers Fudged Again? Here’s the Real Story...
The Bureau of Labor Statistics is about to release its monthly report on new U.S. jobs from last month.
But while economists, analysts, and those annoying talking head reporters on CNBC debate the numbers, I want to urge you to tune them out.


That’s because the government data is inefficient, inaccurate, and highly suspect. What government agency do you know of that really operates cleanly and efficiently? So why would the jobs data gathered by the government be any better?
Fortunately, there’s a much better measure of job growth in our country. And that measure is highlighting some tremendous opportunities…

Private ADP Report Shows U.S. Hiring is Strong
Yesterday, the ADP Research Institute released its monthly private payroll report for May.

The data showed that private companies created 253,000 new jobs last month. This was well ahead of the 185,000 jobs that analysts were expecting, and significantly better than the 174,000 jobs added during the month of April.1
https://dailyreckoning.com/wp-conten...pany_chart.png
In short, the report showed that U.S. companies are hiring at a very healthy clip. And that’s a sign that the U.S. economy is steadily growing.

Now Wall Street often overlooks the ADP report in favor of the government report — which is being released right now. But there are two reasons why you should pay much more attention to this “secondary” report, than you do to the government statistics.

First, ADP is a private research company with excellent data. If ADP as a company is familiar to you, it’s probably because at some point in your career, you’ve received a pay stub from ADP. After all, the company processes payrolls for more than 10 million employees in the U.S.

As a private (not government-sponsored) company with its finger on the pulse of American industry, I trust ADP’s reports to be much more comprehensive and accurate than the jobs reports issued by the government.

After all, we know that government data can be manipulated, or simply fraught with error. ADP on the other hand has a strong incentive to issue accurate reports. If the company’s accuracy is in question, the company will no longer be able to sell its analytic reports and stay in business. (I wish I could say the same for the Bureau of Labor Statistics.)

A second reason to consider the ADP report is because the company reports on private — or non-government — job statistics. In other words, the ADP report tells us what is really happening in the U.S. economy, without taking into account all of the government hiring and firings.


Economists might argue that government jobs are just as important as private jobs. Government employees spend money that they’re paid, they buy houses and cars. And they pay taxes.

But I still prefer to look specifically at how many private industry jobs are being created. Because these jobs are based on whether the economy is growing. After all, businesses will only hire when they believe that new employees will help to grow profits. (Governments will hire for many reasons. Not many of which are tied directly to economic growth.)

So regardless of what the Bureau of Labor Statistics is reporting as you read this alert, I encourage you to consider the strong ADP report for the month of May — and what it means for your investment opportunities…

A Strong Job Market Supports Key Investment Opportunities.

Whenever I see a surprising economic report like the strong ADP payroll report from yesterday, I ask myself one simple question:


Who does this help?
In other words, which sectors, companies and specific stocks will benefit from this information?
Today, I’ve got a few areas in mind that should do very well as the job market picks up.

Earlier this week, we talked about home construction companies and how the millennial generation is finally starting to buy houses. This creates a very exciting opportunity because there is a lot of demand for homes, and not enough supply.

Just this week, the National Association of Realtors announced that pending home sales dropped in April.2 And while this may sound bearish for home construction companies, it’s actually quite the opposite. Sales were low because inventories are tight. Demand for homes is still very strong which means home builders can quickly sell newly built homes and turn a nice profit on each transaction.
Another investment area benefiting from the strong job market is retail. But you need to be careful where you invest in this industry.
It’s true that Amazon is creating stiff competition for many traditional retailers. And I wouldn’t suggest buying AMZN at today’s inflated prices. But there are still retail companies that are largely immune to Amazon’s empire.

Think about retail locations you visit that simply can’t be replaced by online commerce. Convenience stores, fitness gyms, auto repair shops, and casual dining restaurants come to mind. Many of these retail companies are trading at low valuations because investors are so afraid of Amazon. But the truth is that these companies are still in great shape. So investors who buy today are getting a great deal.
One final group to consider is auto manufacturers. Again, I wouldn’t go with the “sexy” name in the industry. Tesla shares are too expensive and the company has some serious risks. But Ford and GM should do very well in this environment.

That’s because as more Americans are employed, the number of potential car buyers goes up. These employees will need transportation to and from work. And their paystubs make them much more likely to receive financing. Interest rates are still very low (and projected to stay that way), making car buying even more affordable.

The strong jobs market will continue to drive economic growth in the U.S. And that means there will be plenty of opportunities for investors who know how to take advantage of this trend.

We’ll stay on top of the job stats as we move through the summer, and keep you posted on the ripple effects these jobs have for the U.S. economy.

Here’s to growing and protecting your wealth!
https://duip7hn7nchpo.cloudfront.net...ch-scheidt.jpg
Zach Scheidt
Editor, The Daily Edge
[email protected]
1U.S. factory activity edges up; private payrolls surge, Reuters, Lucia Mutikani
2The Daily Shot, Wall Street Journal, Lev Borodovsky
Ed. Note: Get daily insight, insider scoops and actionable investment tips six times a week with The Daily Edge! Just click here for a FREE subscription!

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

Huge Miss: Only 138K Payrolls Added In May; April Revised Much Lower As Wages Disappoint
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by Tyler Durden
Jun 2, 2017 8:35 AM


As previewed last night, the jobs "whisper" risk was to the downside, and in what was a very disappointing print released moments ago by the BLS, the whisper was spot on with only 138K jobs added in May, far below the 185K estimate, and below the lowest estimate of 140K. Additionally, April's big beat of 211K was revised substantially lower to only 174K, suggesting that any expectation the Fed may have had of "evidence" the recent economic slowdown was transitory was just crushed.
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COMMENTS FROM BENJAMINIS: There you go.... THE HIDDEN AGENDA and now watch what the MARKETS DO....More reports to follow once the MONEY FLOW STARTS...

5 Minute Chart From Finviz - US 30

http://finviz.com/futures_charts.ashx?t=YM&p=m5

5 Minute Chart From Finviz - USD/JPY

http://finviz.com/forex_charts.ashx?t=USDJPY&tf=m5

5 Minute Chart From Finviz - US Dollar Index

http://finviz.com/futures_charts.ashx?t=DX&p=m5

5 Minute Chart From Finviz - EUR/USD

http://finviz.com/futures_charts.ashx?t=6E&p=m5

5 Minute Chart From Finviz - Gold

http://finviz.com/futures_charts.ashx?t=GC&p=m5

5 Minute Chart From Finviz - Silver

http://finviz.com/futures_charts.ashx?t=SI&p=m5

5 Minute Chart From Finviz - 10 Year US Bonds

http://finviz.com/futures_charts.ashx?t=ZN&p=m5

Comments from Benjaminis: Now you can see it is all about RISK ON or RISK OFF and that determines the MONEY FLOW.

More comments later after the Equity Markets OPEN at 9:30 AM (New York Time)

1. Post 3,612
2. Cleanup
3. Quote
4. May 24, 2017 8:15pm

1. BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 2,873 Posts | Online Now

COMMENTS FROM BENJAMINIS: Let us review what we teach and why it works if YOU WORK.

Without your WORK then you are just wasting your time and probably your money.

There is no such thing as Political Correctness here because we are here to teach and share our knowledge ALL FOR FREE until May 31, 2017 and then if you have subscribed to this thread before May 31, 2017, then you will get a FREE LIFETIME PASS to our company website.

SO.... going back to our winning FORMULA for FOREX SUCCESS.

20% of the SUCCESS is yourself the Forex Trader.

20% of the SUCCESS is your EDGE which we teach you and that is Money Flow Trading.

20% of the SUCCESS is control of your RISK (Your hard earned money) Our UNIQUE RISK MANAGEMENT allows you to trade without worry, fear and greed. Of course we want to make sure that you have the right qualities to be a winning Forex Trader so our course is for a period of three months, so we can teach you the right trading methods and we can see your results and make adjustments without your FEAR OF LOSS of Real Money.

20% of the SUCCESS is using and understanding the USE of Technical Indicators which include not only the common ones. It includes the understanding of Supply and Demand. Support and Resistance and the use of Pivot Points which you can see each day on our daily charts that cover ALL our Trade Plans which we also help you develop and explain WHY. These are our Winning Trade Plans that we review every three months or earlier if circumstances in the markets require that.

20% of the SUCCESS is the FUNDAMENTALS, which are much more than Data Releases each day around the world. It includes reports and articles extremely well researched as you can clearly see from this article that explains why the TREND in the Equity Markets especially in North America is DOWN. By understanding the difference between PERCEPTIONS (MARKETS) and REALITY, you then have a good handle on REALITY before the MASSES do and you are not surprised when events eventually unfold.

In order to be able to help you better it is VERY IMPORTANT that you share your thoughts and your QUESTIONS here on our thread.


Benjaminis

http://www.learntotradethemarket.com...y-your-account

Why Trading Against the Trend Will Destroy Your Account
By Nial Fuller in Forex Trading Strategies | No Comments
http://bfbddad795fe6760de935eb7.lttt...end.jpg?x13614In light of the current market conditions which consist of some very strong one-way trends in the U.S. dollar pairs, I wanted to write a lesson not just about the advantages of trend-trading, but also about how trading against the trend can and will destroy your trading account, if you let it.


Simply put, the easiest way to make money as a trader or investor, is trading with the dominant daily chart trend. However, during my time teaching people how to trade, I have found that it almost seems to be human nature to want to trade against the trend, at least in the early-stages of ones trading journey. So, I hope todays lesson will help you avoid making this gigantic mistake that so many beginning traders make, by showing you tangible proof of why the trend is definitely your friend and why you should not trade against it most of the time.


Dont fight the path of least resistance


When markets are trending, they want to move in the direction of the trend because thats the path of least resistance. As I teach more in-depth in my course and members area, when a market is trending it will make a strong move in the direction of the trend and then it will typically pullback or revert to the mean. That basically just means price will rotate back to its recent average price, also sometimes called the value price.


Knowing this, we can look to trade from value in trending markets, because at the point of value in a market, the trend has the biggest chance of resuming. By looking for price action entry opportunities that have the confluence of the trend and the value area behind them, we can significantly improve our chances of trading success. Lets take a look at some examples of recent trades where we could have traded from value within a trend and how we would have lost money trading against the trend:
In the AUDUSD daily chart below, we can see that the path of least resistance was clearly down. Note, the red and blue lines are the 8 and 21 day exponential moving averages (EMAs), remember above when I discussed the average price? These moving averages show the recent average prices going back 8 and 21 periods respectively, this provides us with a value area to look for price action selling opportunities to re-join the downtrend:
http://bfbddad795fe6760de935eb7.lttt...lue.png?x13614
Notice there was one good pin bar sell signal in the chart above as well as multiple other opportunities to sell at the moving averages as price rotated higher. Price wont always respect the moving averages this well, but in strong-trends like the current AUDUSD chart above, we do often see it doing just that.


The point of the above example is this: in strong trends, you need to only look to trade with the path of least resistance, i.e., WITH the dominant daily chart trend. Lets look at the same chart above from the viewpoint of a trader trying to trade against it

In the same AUDUSD chart that we looked at above, we can see what the experience might have been like for the bottom picker trying to trade against the strong downtrend. Clearly, he or she would have lost money on any one of the three pin bars shown below. Some people get so obsessed with trying to pick the bottom (or top) in a market like this that they would have taken all three of these counter-trend buy signals. You can easily see now why counter-trend trading will destroy your trading account!
http://bfbddad795fe6760de935eb7.lttt...end.png?x13614
In the USDCAD chart below, we see a clear uptrend has been in place in this market since about the beginning of August 2014. The blue line is the 21 day EMA and it shows us the trend direction as well as a value area that we can look to buy from in order to trade in-line with the uptrend from value.

Note, there have been multiple price action buying opportunities from value near the 21 day EMA in the form of pin bars and inside bars over the course of this uptrend. We can clearly see that the path of least resistance has been to the upside in this market and so looking for buy signals was the obvious choice over the last five months
http://bfbddad795fe6760de935eb7.lttt...2-1.png?x13614
In the same USDCAD chart we looked at above, we can see that the experience would have been totally different if you were trying to pick the top of this market by looking for a counter-trend sell signal. Even a long-tailed bearish double pin bar setup like we see below probably would have been a loss or breakeven at best, as we can see in the chart below. When theres a clear path of least resistance in a market, dont fight it!
http://bfbddad795fe6760de935eb7.lttt...nd2.png?x13614
In the next chart below, we can see the daily spot Gold market earlier this year. There was a nice downtrend in place and so the path of least resistance was clearly down. Therefore, we were looking for price action sell signals on retraces back to value / resistance in order to trade in-line with the downtrend. We can see a nice pin bar sell signal a coiling inside bar strategy that formed following retraces higher within this falling market, both setups led to the resumption of the downtrend and big down moves
http://bfbddad795fe6760de935eb7.lttt...ue3.png?x13614
Finally, we are looking at the same spot Gold chart as above, except this time we are looking at it from the viewpoint of an unfortunately lost trader who is trying to trade against the trend. Note, in the chart below we can see multiple failed counter-trend pin bars that would have resulted in losses if a trader took them against the trend.
http://bfbddad795fe6760de935eb7.lttt...nd3.png?x13614



Conclusion


I hope its becoming more obvious to you just how dangerous trading against the trend is. Traders also tend to try and trade both sides of a trend, both with it and against it, and in doing so they typically give back most or all of the profits they made on the trades with the trend.

This is one of the biggest mistakes I see traders make that prevents them from achieving real success in the market. During your career, you should make it one of your biggest trading goals to stick with the dominant market trends and avoid trading against them at all costs. Your trading account will thank you later. To learn more about trading with the trend, checkout my all new updated price action trading mastery course and members area.


PLEASE LEAVE A COMMENT BELOW I WOULD LIKE TO HEAR YOUR FEEDBACK
QUESTIONS ? CONTACT ME HERE

http://bfbddad795fe6760de935eb7.lttt...er1.png?x13614
About Nial Fuller
Nial Fuller is a Professional Trader & Author who is considered The Authority on Price Action Trading. He has a monthly readership of 250,000+ traders and has taught 15,000+ students since 2008.

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1. http://bfbddad795fe6760de935eb7.lttt...100.jpg?x13614How To Trade Trends In Forex A Complete Guide
2. http://bfbddad795fe6760de935eb7.lttt...100.jpg?x13614Find Your Forex Trading MOJO

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COMMENTS FROM BENJAMINIS: Nial Fuller is one of the most knowledgeable and successful Forex traders and teachers. His way of trading works very well for him and those that he teaches. However there is a COMMON ASPECT in both of our Forex Trading Styles.

They are as follows;

(1) Trade with the Trend.
(2) Do Not TRADE against the Trend.
(3) Do not TRADE in Both Directions.

In his own words...


Conclusion


I hope its becoming more obvious to you just how dangerous trading against the trend is. Traders also tend to try and trade both sides of a trend, both with it and against it, and in doing so they typically give back most or all of the profits they made on the trades with the trend.

This is one of the biggest mistakes I see traders make that prevents them from achieving real success in the market. During your career, you should make it one of your biggest trading goals to stick with the dominant market trends and avoid trading against them at all costs. Your trading account will thank you later. To learn more about trading with the trend, checkout my all new updated price action trading mastery course and members area.

MORE COMMENTS FROM BENJAMINIS: AS we have seen this morning the MISS of 138,000 New Jobs ONCE AGAIN CHANGED FALSE PERCEPTIONS So.... NO CHART or PRICE ACTION or SUPPLY and DEMAND or SUPPORT AND RESISTANCE CAN HELP YOU...

What can HELP YOU IS WHAT I TEACH...

MONEY FLOW and Fundamental Information....

Look at the 5 Minute Charts From Finviz that I posted earlier this morning.

 

1. Post 3,668
2. Cleanup
3. Quote
4. Merge
5. Edit
6. Jun 2, 9:02am (47 min ago)

1. BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 2,876 Posts | Online Now

5 Minute Chart From Finviz - US 30

http://finviz.com/futures_charts.ashx?t=YM&p=m5

5 Minute Chart From Finviz - USD/JPY

http://finviz.com/forex_charts.ashx?t=USDJPY&tf=m5

5 Minute Chart From Finviz - US Dollar Index

http://finviz.com/futures_charts.ashx?t=DX&p=m5

5 Minute Chart From Finviz - EUR/USD

http://finviz.com/futures_charts.ashx?t=6E&p=m5

5 Minute Chart From Finviz - Gold

http://finviz.com/futures_charts.ashx?t=GC&p=m5

5 Minute Chart From Finviz - Silver

http://finviz.com/futures_charts.ashx?t=SI&p=m5

5 Minute Chart From Finviz - 10 Year US Bonds

http://finviz.com/futures_charts.ashx?t=ZN&p=m5

Comments from Benjaminis: Now you can see it is all about RISK ON or RISK OFF and that determines the MONEY FLOW.

More comments later after the Equity Markets OPEN at 9:30 AM (New York Time)



Conclusion


I hope its becoming more obvious to you just how dangerous trading against the trend is. Traders also tend to try and trade both sides of a trend, both with it and against it, and in doing so they typically give back most or all of the profits they made on the trades with the trend.

This is one of the biggest mistakes I see traders make that prevents them from achieving real success in the market. During your career, you should make it one of your biggest trading goals to stick with the dominant market trends and avoid trading against them at all costs. Your trading account will thank you later. To learn more about trading with the trend, checkout my all new updated price action trading mastery course and members area.

Once again the Good Ship Lollypop floats on the back of its Services sectors. Except that in May the ship listed a bit at only 138,000 jobs created. It’s backward looking data that I am sure the mainstream will make a big deal about, but suffice it to say it reflects an okay economy that could be subject to being not okay (per some of our macro indicators, anyway) in the coming months.


Anyway, you can click on this graphic for the full report from BLS →
https://nftrh.files.wordpress.com/20...bls2.png?w=840
Here is the sector breakdown showing a manufacturing contraction (despite the ongoing weakness in the USD, no less… hmmm) and the heavy lifting done by Professional services, Education & Health services and Leisure & Hospitality services… as the economy services itself once again.
https://nftrh.files.wordpress.com/20...bls1.png?w=840
So is Trump still on the agenda of vacuuming up immigrants, criminal and non criminal alike? If not, you know who will need to come out of retirement. Once he sees Hazel’s demands and those of her contemporaries, adjusted for inflation after all these years…
https://nftrh.files.wordpress.com/20...zel1.png?w=840

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

Full-Time Jobs Tumble By 367,000, Biggest Drop In Three Years
http://www.zerohedge.com/sites/defau.../picture-5.jpg
by Tyler Durden
Jun 2, 2017 9:38 AM



While on the surface, the payrolls report, the wage growth and the unemployment rate (which dropped for all the wrong reasons) were disappointing, a quick look inside the underlying data reveals even more troubling trends, such as that in addition to the number of employed workers dropping by 233K according to the household survey, the composition of these jobs raised even more red flags because in May the US lost 367,000 full time jobs offset by the gain of 133,000 part time jobs.
http://www.zerohedge.com/sites/defau...y%202017_0.jpg
Putting this number in context, it was the biggest drop in full-time jobs going back to June 2014.


http://www.zerohedge.com/sites/defau...y%202017_0.jpg
And in this context, we are happy to announce that while manufacturing jobs once again declined by 1,000, the waiter and bartender recovery continues to hum along, with 30,000 workers added in "food services and drinking places."

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

Where The May Jobs Were: It Was All About Minimum Wage Again
http://www.zerohedge.com/sites/defau.../picture-5.jpg
by Tyler Durden
Jun 2, 2017 10:17 AM



If May was supposed to be the "tiebreaker" month, after a disastrous March and a solid (if now downward revised) April, then the US economy is not doing well: with only 138K jobs added in the past month, while over 200K actual jobs were lost (per the Household Survey), it was no surprise that the biggest missing link of the so-called recovery, wage growth, was simply not there again.


How is it that with the labor market supposedly near full employment, and the unemployment rate sliding to a post 2001 low of 4.3%, wages simply can not rise?


The answer was once again to be found in the quality of jobs added because in addition to the previously noted plunge in full-time jobs, the biggest in three years, the granular detail from the BLS revealed that all the jobs growth was again in low or minimum-wage sectors such as education and health, which added 47,000, leisure and hospitality up 31,000 jobs of which food services and drinking places workers, aka waiters and bartenders, added another +30,300. Temp help services, by definition the lowest paying job category, added another 12,900 jobs. Combined, these three minimum-wage categories accounted for two-thirds of all April job gains.


Looking at retail workers, which have suffered steep job losses recently as a result of the widespread shuttering of bricks-and-morter outlets, the BLS revised the reported rebound in the last two months, converting it into a job loss. As a result, retail workers have dropped for 4 consecutive months, and at 15.836 million, have dropped to 11 month lows.


http://www.zerohedge.com/sites/defau...y%202017_0.jpg
Another notable observation: after rising by 11,000 last month, manufacturing workers declined once again, down 1,000 jobs, the first drop in the sector since last October.

Some further observations on the job breakdown, courtesy of Southbay Research:

1. Healthcare (+32K): As expected, with ACA repeal dead, Healthcare hiring returns
2. Leisure/Hospitality (+31K): As expected, restaurant demand kicks in
3. Professional Services ex temp (+25K): As expected, relatively mild Temp worker demand
4. Construction (+11K): Mild weather pulled in payrolls, leaving little for May
5. Financial (+11K): Housing boom continues to drive financial payrolls
6. Transportation (+4K): Supply chain pressure and manufacturing pause slowed demand for trucking
7. Manufacturing (-1K): Factories hit the pause button (Trump rhetoric not yet translating into actual activity boost)
8. Wholesale (-2K): Consistent with general macro trends (lack of inflation, retail supply chain pressure, inventory pressure)
9. Retail (-6K): Grocery store and brick-and-mortar store pressure

The complete breakdown of changes in key job categories in April and May is shown below.

http://www.zerohedge.com/sites/defau...y%202017_0.jpg


COMMENTS FROM BENJAMINIS: Fundamental Research such as this lets you KNOW the DIFFERENCE between FAKE NEWS and REAL FACTS... Once more people know it then PERCEPTIONS change again to REALITY...

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

Bond Yields Plunge Through Key Technical Level As Dismal Jobs Data Sinks Stocks, Dollar
http://www.zerohedge.com/sites/defau.../picture-5.jpg
by Tyler Durden
Jun 2, 2017 9:56 AM



The market's reaction to the dismal jobs data was uniform in its disappointment - while June rate-hike odds remain near 100%, September dipped a little (at just 30%), the dollar dropped, stocks fell, and bond yields tumbled.
'Hard' datas is collapsing again to 13 month lows as soft data catches down...

http://www.zerohedge.com/sites/defau...602_10Y3_0.jpg



And September rate hike odds are stuck around 30%...
http://www.zerohedge.com/sites/defau...02_wirp1_0.jpg
10Y Yields tumbled to 2.15 intraday - the lowest level since November 10th 2016... and broke below the key 200-day moving average
http://www.zerohedge.com/sites/defau...0602_10Y_0.jpg


The Dollar Index tumbled, testing the 2017 lows...
http://www.zerohedge.com/sites/defau...602_10Y1_0.jpg


Gold jumped to 6-week highs, bouncing off its 50dma...
http://www.zerohedge.com/sites/defau...602_10Y4_0.jpg

And stocks double-dipped back into the red...
http://www.zerohedge.com/sites/defau...602_10Y2_0.jpg


COMMENTS FROM BENJAMINIS: MONEY FLOW - 10 Year US Bonds - US Dollar Index - Gold - MONEY FLOW

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

Goldman Pushes Back Rate Hike Forecast Citing Slowing Job Growth And Weak Inflation
http://www.zerohedge.com/sites/defau.../picture-5.jpg
by Tyler Durden
Jun 2, 2017 10:27 AM



After last month's "much stronger than expected" jobs report, Goldman was convinced that the Fed would hike in June and September, while disclosing its balance sheet tapering announcement in December. However, after today's disappointing jobs report, Jan Hatzius has flipped the last two, and says that he "now expects the third hike of 2017 to occur at the December meeting (we previously expected a hike in September and a balance sheet in announcement in December)."


The reason for the switch is that "the committee will prefer to wait for clarity on the outlook before implementing a third hike this year – particularly given signs of slowing job growth and the recent drop in core inflation."

Key excerpt:
Given the drop in the U3 and U6 unemployment rates and the lack of additional catalysts between now and the June meeting, we are increasing our subjective probability of a hike at that meeting from 80% to 90%. We are also moving forward our forecast for balance sheet normalization. We now expect the committee to announce a tapering of maturity reinvestments in September, and we now expect the third hike of 2017 to occur at the December meeting (we previously expected a hike in September and a balance sheet in announcement in December). This change reflects recent detailed discussion of the balance sheet among committee members, as well as our view that the committee will prefer to wait for clarity on the outlook before implementing a third hike this year – particularly given signs of slowing job growth and the recent drop in core inflation.

Expect the rest of Wall Street to jump on the bandwagon shortly,

COMMENTS FROM BENJAMINIS: Is it logical to imagine that the FED did not know a few days ago that today's number would be 138,000 ? That being the case why did they lead the Markets to believe that it is almost 100% that they would raise rates at 2:00 PM on June 14, 2017. They have little credibility now so we will see if they raise rates. I still think they will no matter what in order to harm President Trump who needs a WEAK DOLLAR...

Important Update in the Dow
By: Marty Armstrong
Friday, June 2, 2017
https://ask-socrates.com/Blog/Image/...cd1509e0b53f24


The Dow has finally exceeded the May high. This still gives us some warning here for we are not out of the woods just yet. June is still a turning point. In the weeks to come, we are going to be reading more and more speculation about President Donald Trumps possible impeachment. I am preparing a special report on this topic for it will dominate the political scene for years to come. Impeachment is a political decision and politicians have routinely ignored the rule of law. They have even had impeachment trials on people who are no longer in office, when there is absolutely no basis for impeachment, They wanted to make a case just for the upcoming election.
The Republicans are playing with fire. The elite think this "populism" is over after Macron. They talk to themselves and that is why every mainstream candidate was still defeated in France by Le Pen and by Trump in the Republican primary. They do not get that they are the problem. There simply are no mirrors in Washington.


We can be looking at the complete collapse in public confidence ahead of schedule. The two weeks ahead are those of June 12th and 26th.The target resistance for June is 21961. Keep in mind that for a breakout, we much exceed the top on this channel, fall back to retest it as it becomes support, and then blast upward.


So for now we have reached 21176.3. Our Phase Transition Point still does not coming into play until we cross 23000.

An Important Update in Gold
By: Marty Armstrong
Friday, June 2, 2017
https://ask-socrates.com/Blog/Image/...cd1509e0b53ca8
For the first time gold has closed technically above the Downtrend Line on the monthly chart settling at 1274.40 when the line stood at 1266.72. However, the Breakout Line from the 1999 low is now coming into play. This stands at 1284.43 now during June and the Downtrend Line now provides some support at 1257.05.

We are still not in a breakout mode for Technical Resistance remains at 1381.80 for June and we still have 1362 and the Monthly Bullish Reversal. We still have resistance at 1306 but support is now firming up at 1257 to 1261.

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

Jobs Report Should Cause Pain for Overpriced Bond Markets - Michael Carino, Greenwich Endeavors
http://www.zerohedge.com/sites/defau...ure-239916.jpg
by Greenwich Endeavors
Jun 2, 2017 9:08 AM



After 10 years of manipulating the bond market, the Federal
Reserve has overstayed its monetary policy welcome and created systemic
conditions that will have high costs for everyone. There is a place for depressionary and
recessionary monetary policies, but that was almost a decade ago. With GDP approaching 3% and inflation running
above 2%, do we really need policies and statements that keep unwitting
investors in a perpetual state of fear reflected in bond market yields that are
usually reserved for severe recessions and depressions?

There is no question that this hyperactive Fed knows how to
throw every monetary policy tool at economic problems stemming from a dysfunctional
government that creates poor polarized policies. Yes, the Fed feels compelled
to correct these politically driven negative impacts and in the process
subsidize and fund them.



Political and egotistical reasons have limited the Fed’s
reversal of such policies. The Fed knows
the catastrophic financial impact of reversing a decade of market manipulation
in the bond market. Bond yields are
lower and prices higher than the overpriced conditions of 2006-2007 that lead
to the 2008 bond market crisis. If
conditions are worse now than then, need I say more on market embedded risk due
to mispricing? But the Fed knew the
conditions in 2006 and 2007 as well. That
is why they went on a 25bp rate rise campaign on their last tightening cycle. They feared excessive volatility would lead to
a quick repricing in the bond market and the uncertain economic and market
reactions.

Wash, rinse and repeat. The Fed has followed the exact play book – and
yes, you should expect the same results. However, investors do not have to come along
for the same ride. They can open their
eyes and acknowledge what is going on. A
decade seems like a long time ago. The
Fed is hoping short memories and the annihilation of any trader that focuses on
value in the bond market can assist in the slow unwind of this mispricing. But just like the 2006-2007 period, the slow
unwind didn’t lead to an unwind of the mispricing. Instead, it led to the addition of risk to
make up for lower net income and higher funding costs.


Today’s bond market reflects an eerily similar environment. As short term rates are adjusted higher on a
slow, highly expected path, traders and significantly invested participants are
squeezing the market through various techniques and bond prices are not
adjusting lower. With the Fed trying to keep
volatility out of the bond market, it creates an environment for oligopolistic bond
investors to limit losses through various manipulative and market squeezing
strategies.

Higher short term rates leave limited to no yield differential
to compensate for the risks embedded in longer term bonds. Some argue as the Fed raises rates, longer
term bonds should outperform due to a restrictive Fed. Wrong!
If the Fed was to have a restrictive policy, then yes, long term bonds
should outperform and be priced for a restrictive policy. But first and foremost, Fed policy will not be
restrictive until they unwind their balance sheet of over 4 trillion. Every trillion they own can be estimated up to
1% of easing. So rates should be 4% just
to have a neutral impact on monetary policy. Ignoring this minor impact, Fed
policy is not considered restrictive until the Fed Funds rate is 1% to 2% above
the level of inflation – currently running around 2.5%. So if Fed Funds were 4% to 6%, and longer term
bond yields 1% to 2% higher for an adequate risk premium, yes, you could argue
the bond market should be flattening – or longer term bonds outperforming.


Unfortunately, longer term bonds yield 2% to 2.5%. This is why the current mispricing is so potentially
devastating. Not only is the Fed raising
rates, but they are going to shrink its balance sheet as government bond
issuance is expected to surge. The Fed
has manipulated long term rates lower by focusing on longer term bonds and
removing duration from the market place. The government as well is looking at issuing
long term bonds, or add duration to the market place. The point is just like 2006-2007, the risks
continue to build in the market place, but prices and yields have not adjusted.
The crisis of 2008 would not have been a
crisis if yields reflected reality and were high enough to justify the risk
embedded in the market place. The same
is true today. Too much risk embedded in
a market place with not even close to enough yield to offset it. With a nod and a wink, the Fed helped manipulate
rates by saying they will keep rates lower for longer. The large investors took this and ran. Some of these investors now have hundreds of
billions stuck at low yields in the bond market. They can’t ever get out of these positions
without hurting themselves through much higher yields. Instead, they bide time manipulating rates
when they can, hoping for headlines or the next recession to contain the
eventual pain or a repricing.

And the manipulation is glaring. Going into the July Treasury auctions, it was apparent
there is limited appetite for purchasing bonds at these prices. Yields have been rising as auctions get
closer. The last auction, the long bond
rose to 3.05% yield to attract enough buyers. But once the supply is out, those that had to
buy it use high volume trading tactics during low volume periods to pop the
prices of bonds back up. Within days,
these traders were able to reprice a 3.05% yielding auction down to 2.86%. Make sense? No. But
this is where risk comes from. Those
that have mammoth bond positions that are cemented in will pursue whatever
strategy necessary, squeezing out those with opposing views to maintain current
yield levels. How did that work for the
Hunt brothers in the oil market?

Nothing holds a mispriced market together better than a diminishment
of volatility. Higher volatility makes
it visibly clear to all that there is too much risk for not enough yield. There is an asymmetric skew in current
economic data (topic of the next article) where growth, jobs and inflation are
all at the higher end of the range, yet bonds are still priced as if in a
recession or worse. Current employment based statistics and antidotal
information forecasts the payroll report should have been a monster number. Sure, the BLS has a knack to diminish volatility
in this number by coming out with one number then months later having
significant revisions. They justify this
by taking a symmetric approach to their volatility diminishing adjustments. At 138k, this number shows a healthy economy
and jobs market before revisions. However, I believe the strength of the jobs
market make this number likely to be eye popping upon revisions. As bond market prices reflect a recession, the
unemployment rate just dropped down to a seldom seen and envied 4.3%!!!

As a few very large balance sheets continue to trade and
support the bond market focused on minutiae such as the latest Trump tweet or
other tertiary information, don’t forget the variables in front of us all. The
economic environment is healthy and normal with a chance of running too hot,
the bond market is still priced for a recession and they Fed is slowly taking
the punch bowl away from the greatest party of all time.



by Michael Carino, 6/2/17

Michael Carino is the CEO of Greenwich Endeavors, a
financial service firm, and has been a fund manager and owner for more than 20
years. He has positions that benefit
from a normalized bond market and higher yields. Do you?

1. Greenwich Endeavors's blog

http://davidstockmanscontracorner.co...ist+AM+Tuesday

From Whence Cometh Our Wealth-----The People's Labor Or The Fed's Printing Press?


By David Stockman. Posted On Tuesday, June 2nd, 2015

It is hard to believe that in these allegedly enlightened times this question even needs to be asked. Are there really educated adults who believe that by dropping helicopter money conjured from thin air, the central bank can actually make society wealthier?


Well, yes there are. They spread this lunacy from the most respectable MSM platforms. And, no, I'm not talking about professor Krugman and his New York Times column. At least, he pontificates from a Keynesian framework that has a respectable, if erroneous, intellectual heritage.


What I am talking about here is the mindless bunkum issued by so-called financial journalists who swish around Wall Street and Washington exchanging knowing tidbits with policy-makers, deal-makers and each other. Call it the bubble finance "narrative", and recognize that its gets more uncoupled from economic facts, logic and plausibility with each passing day in the casino.


The estimable folks at The Automatic Earth put a bright spotlight on this crucial matter this morning, even if not by design. Their trademark daily vintage photo was a 1911 picture of a family including all the kids picking berries in the field; they were making GDP the old fashioned way.


In its usual manner, the site's "debt rattle" list of links to timely reads followed, and the first was a Bloomberg View opinion piece called "QE For The People: Monetary Policy For The Next Recession" by one Clive Crook.

It was actually a case for literally dropping central bank money from the skies to enable policy-makers to better "support demand and keep their economies running".

In thoughtfully supplying a photo of a helicopter in full flight to accompany Crook's discourse, the Bloomberg graphics department crystalized the essential economic issue of our times. Namely, whether wealth is made by the Berrie Pickers or the Money Printers.

Needless to say, The Automatic Earth's vintage photo reminds us how GDP is actually made. And, no, its not about child labor. I grew up in a family farm labor force of five kids and ended up no worse for the wear. But we did produce something---lots of strawberries, raspberries, tomatoes, peaches, grapes and apples.
http://www.theautomaticearth.com/wp-.../Mills1910.jpg
Lewis Wickes Hine Whole family works, Browns Mills, New Jersey 1910
Not surprisingly, the house organ of the Bloomberg empire---the very offspring of bubble finance---- says wealth can be made by dropping trillions of dollars of unearned money from helicopters. Back in the day, even berry-picking kids wouldn't have believed that.
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It used to be that "helicopter money" was a sort of metaphor----certainly the great libertarian, Milton Friedman, did not literally mean that the state should engage in airborne redistribution through the aegis of the central bank when he famously coined the term. No longer. Here is what Bloomberg's apparently lapsed Onion contributor said this morning:
Sooner rather than later, attention therefore needs to turn to a new kind of unconventional monetary policy: helicopter money.... (or) how about “QE for the people” instead? It has a nice populist ring to it — suggesting a convergence of financial excess and the Communist Manifesto...... “Overt monetary financing” is closer to what’s required, but something even duller would be better.


Whatever you call it, the idea is far from crazy. Lately, more economists have been advocating it, and they’re right.
The logic is simple. If central banks need to expand demand — and interest rates can’t be cut any further — let them send a check to every citizen. Much of this money would be spent, boosting demand just as Friedman said.

Uncle Milton must be rolling in his grave. Yet, in a way, he asked for it. He erroneously taught the world that capitalism can catastrophically fail if the central bank allows money and credit to be liquidated too intensively and extensively.

To be sure, he did not believe this was an everyday risk on the free market; he was talking about the Great Depression of 1930-1933, but he had his causative factors upside down. During the period in question, excess bank reserves-----the stuff the Fed creates----soared by 13X, while money market interest rates fell close to zero. So the banking system was actually awash with liquidity, meaning that a Bernanke-style bond-buying spree would have amounted to pushing on a string, exactly as has been the case since the Lehman meltdown.

Instead, the problem in October 1929 was 15 years of massive, Fed-fueled credit creation---first to finance the Great War and then the Wall Street boom in foreign bonds and domestic stocks during the Roaring Twenties. The result of that era's financial bubble was a massive, unsustainable expansion of US export capacity in agriculture and industry alike------along with bloated levels of industrial inventories, capital goods production and big ticket durable goods (autos, radios and refrigerators).


When the music stopped, the washout in these sectors resulted in a $35 billion drop over the next three years---or 75% of the total plunge in nominal GDP during the 1929-1933 period. Not surprisingly, therefore, this contraction of bubble-fueled economic activity triggered massive insolvencies in the export-oriented agricultural and industrial districts and in the speculative precincts of Wall Street and their wire house affiliates all across the country.

In short, the Great Depression did not represent a catastrophic failure of capitalism nor was it the result of a giant error by the central bank. And most assuredly, it was not owing to a deficiency of some mystical economic ether that the Keynesians were subsequently pleased to call "aggregate demand".


Plain and simple, the Great Depression was caused by massive insolvencies of banks, businesses and households in the agricultural hinterlands and the new auto, steel and industrial export belt of the upper Midwest and mid-Atlantic. The four-year decline of nominal GDP from $100 billion to $57 billion did not represent the disappearance of "aggregate demand" that could be reincarnated by the state and its central banking branch.

As I detailed in the Great Deformation, it represented the liquidation of malinvestment and phony GDP, jobs, production and residual war-time inflation that had never represented real wealth in the first place.

Nevertheless, statists have lived off the false proposition that capitalism is catastrophe prone and is chronically lapsing into recessionary slumps and under-performance ever since. But at least until the Greenspan era, the primary tool of state intervention to purportedly keep the macro economy off the shoals and on the path toward "full employment" was fiscal-----that is, deficit spending and tax cuts.


And that kind of state action to improve upon the alleged inferior performance of producers, consumers, investors, entrepreneurs and speculators on the free market entailed at least some outer boundaries. To wit, hereditary fear of too much national debt kept the politicians from outright free lunch economics---even after the Reagan era destroyed the will of the old guard GOP budget balancers.
As it happened, it was Greenspan who confected the bridge from fiscal stimulus by the unruly and inconstant processes of political democracy to central bank based monetary stimulus based on the purported wisdom of an unelected monetary elite. Slowly at first, and then with a rush during his post dotcom interest rate slashing campaign, Greenspan converted the old counter-cyclical doctrines of the first generation Keynesians, who made a stagflationary hash out of the US economy during the late 1960s and 1970s, into the bubble finance economy which prevails today.


Clive Crook is simply the archetype of today's swarm of financial journalists who were house-trained on Dr.Greenspan's doctrine of statist economics. Always and everywhere, both the old-style fiscal Keynesians and the new style Greenspan/Bernanke/Yellen money printers, postulate that the macro-economy suffers from a deficiency of "aggregate demand".


And why wouldn't they argue just so? If the family in the figurative berry patch pictured above is not spending enough to meet the policy-makers' arbitrary growth targets---whether because it does not produce enough income or chooses to save a purportedly "excessive" portion----then what economic agency can pour more spending into the nation's economic bathtub until it is full up to the very brim? Why the state, of course.


But here's the insidious thing. There is no such thing as "aggregate demand" which is separate and apart from production and income. The only way an economy can spend more than it produces is to finance excess consumption from artificially conjured credit.
Now, admittedly, that works------but only so long as balance sheets have available runway and the servicing cost of higher leverage does not overtax the carrying capacity of current incomes. In other words, credit expansion has temporal and economic limits; its not a feature of some mythical, timeless, dynamic stochastic general equilibrium!


Well, those limits have been reached and we are therefore in a new, post-Keynesian ball game. The US economy hit "peak household debt" at the time of the crisis. Accordingly, central bank fueled credit expansion has been exposed as the one-time parlor trick it actually was.

During the decades leading up to the great financial crisis, household leverage levels were ratcheted higher and higher during each stimulus cycle, causing income based household spending to be topped-up with incremental outlays from higher borrowings. But now the process has been reversed: household leverage ratios are falling, even as they remain far above their healthy and sustainable pre-1970 norms.

So household consumption is once again tethered to current income and savings preferences, as it must be on a long-run basis. You couldn't have an economy based on the inevitable normalization of interest rates and, say, 400% debt to wage and salary income ratios, too. So the credit fueled boom of 1970-2008 wasn't the normal capitalist condition; it was a trick of the state.

http://davidstockmanscontracorner.co...16-480x284.png
Household Leverage Ratio - Click to enlarge

To be sure, that monetary financing trick did generate the illusion of growth. But it wasn't sustainable. Accordingly, the tepid growth rate since the pre-crisis peak------that is, just a 1.0% annualized gain in real final sales for the last eight years----simply represents the limits of a production and supply-side constrained economy.


During the 40 years leading up to the year 2000, nominal wages in the private economy grew by 7.5% annually, while CPI inflation averaged 4.5% per annum. So real wages grew by 3.0% and with some help from the ratchet in household leverage and total credit relative to GDP, real GDP growth averaged 3.6%.


By contrast, from December 2007 and up to and including this morning's personal income and spending report for April, private sector wage and salary growth have decelerated sharply----to just 2.5% at an annual rate for the last eight years. Even if you credit the BLS' undercount of actual inflation, which has posted at 1.5% per annum during the same period, real wages have grown at just 1.0% per annum or by one-third of their historic trend. And with a discount for actual real world inflation, real aggregate wages have grown hardly at all.


In short, we now have a 1% growth economy, not the 3.6% economy of the Keynesian yesteryear. Households are spending at levels constrained by the tepid growth of their production and incomes, not because some magic ether called "aggregate demand" has gone missing.


It goes without saying, of course, that if you want to expand a supply constrained economy at a higher rate, the answer is to reduce the state's barriers to enterprise and labor input, not to expand the central bank's balance sheet and further falsify money market prices and inducements for rent-seeking speculation. For instance, abolish the 15% payroll tax barrier to low-skill labor and abolish the FOMC interest rate peg which subsidizes carry trade gamblers.

None of this will happen, of course. So the bubble finance narrative will roll on awhile longer. Indeed, having been house-trained on the Greenspan wealth effects doctrine, financial journalists like Crook are now taking the intellectual dead-end of state sponsored "demand" stimulus to an absurd and dangerous extreme. Namely, to an out-and-out case for anti-democratic governance by a Wall Street-beholden posse of central bankers.


The real objection is political not economic. Sending out checks is a hybrid of monetary and fiscal policy — public spending financed by pure money creation. That’s why it would work. Politically, this is awkward.......The real case for central-bank independence isn’t that monetary policy is non-political; it’s that central banks are better than politicians at economic policy.


There you have it. Start with the sheer Keynesian myth that there is deficient aggregate demand; spend a lifetime in the Wall Street/ Washington corridor drinking the Kool-Aid; and you end up not knowing the difference between Berry Pickers and Money Printers.
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Critical UK and French Elections Approach, Timing for Italy Advances
BILL WITHERELL06/01/2017


The election in the UK is now less than two weeks ahead, on June 8th, followed three days later by the first round of the French parliamentary election on June 11th, with the second and final round on June 18th. An election in Italy, which many did not expect to occur until early 2018, now may well happen as early as September-October this year. Each of these elections has important implications for markets.


The UK election had looked like a sure thing for Prime Minister Theresa May and the Conservatives, who at one point enjoyed a huge lead in the polls. May called for this snap election to strengthen her hand in the Brexit negotiations and enhance the position of the Conservative Party. However, the polls have narrowed considerably in recent days, with measures of the Conservatives lead over the Labour Party and its leader Jeremy Corbyn varying between 5 and 14 percentage points.

May had to make a U-turn on a central element of the Partys manifesto: a poorly constructed and insufficiently vetted proposed reform of the funding system for social care for the elderly, which quickly came to be known as the dementia tax. Labour seems to be getting some traction from its proposals to substantially increase government spending, raise taxes on companies and the rich, and renationalize the railroads, the Royal Mail, and water companies. Also, there has been increased attention on the prime ministers weak understanding of economic and business matters. While the Conservatives still have a lead and may well still achieve a strong victory, investors now have to consider a wider range of possible outcomes, including a weak victory by the Conservatives that does not strengthen the partys present 12-seat majority, a result in which neither main party wins a clear majority, or an upset victory by Labour.


A strong victory for the Conservative Party with a gain of 100 or more seats would give May more leeway to make compromises and negotiate a smooth Brexit. Such a result would probably be the most positive for markets. A lesser victory but one that still strengthens the Conservative majority would also reduce uncertainty risks, but to a lesser degree. A victory with no gains would show that calling the snap election was a mistake and weaken the ability of the Conservatives to move their program through Parliament, including those reforms needed for Brexit and sought by business.

Should neither party win a clear majority, uncertainty risks would surge, as efforts to put together a coalition government could take some time; and Brexit negotiations would be set back. A coalition between Labour and the Liberals might be the most likely eventual result of such an election outcome. An upset victory by Labour would not be well received by markets. Public debt and the government deficit would be likely to surge; government borrowing costs would rise; higher taxes would hit businesses; and sterling would likely tumble. Investor uncertainty would be high. The ability of Corbyn to lead an effective negotiation and achieve a good Brexit result for the United Kingdom looks doubtful to this writer.


The new French President, Emmanuel Macron, is building on his strong May victory. His new party, Republic on the Move (LREM), is now leading the polls for the June 11th first round of the legislative election, with 31% in a Harris Interactive/LCP poll. The far-right Front National was second with 19%, and the conservative Republicans were third with 18%. Macron appears to have helped the LREMs prospects with his selections of ministers for his government. Since his party is new, he needed to achieve a political balance, drawing upon some talent from the right, some from the left where he has his roots as a former Socialist minister, and some from highly competent nonpolitical figures. He also achieved a balance between male and female ministers. Perhaps his wisest move was to appoint douard Philippe, mayor of Le Harve, the center-right former right-hand man to Alain Jupp, a leading member of the Republican Party.

Macron clearly needs to muster support from the Republicans if he is to achieve his ambitious plans for France. Despite the indications of the polls, the election outcome is by no means certain, particularly because the leading party is so new and inexperienced. Markets would welcome a strong result for Macron. A weak result would certainly raise concerns. A Republican victory, while surprising, would also likely be seen as positive by markets. An upset win by the Front National would elicit a very negative market response, not only in France but across Europe and beyond.


Italy, the third largest economy in the Eurozone, with the largest external debt, is suddenly facing the prospect of possible elections as early as September. This is because Matteo Renzi, who leads the center-left Democratic Party, has begun talks with the opposition parties about voting reforms that could make possible an early election. Without election reform, however, the current center-right government would most likely continue until early 2018, when the expiration of the current legislature will necessitate a new election. Investors appear to be concerned about this election, with good reason, particularly in view of the strength of the populist, Eurosceptic Five Star Movement. While a victory for the Five Star Movement would be the most negative result by far for markets, a hung parliament with no clear result would also depress markets.


Markets are relatively relaxed about the outcome of the German federal election on September 24. Angela Merkels Christian Democratic Union Party (CDU) looks to be the very likely winner in September, following strong victories in state elections over the Social Democrats (SPD), led by Merkels main challenger, Martin Schultz. The German economy is strong, with unemployment at just 4.1%. Merkel is seen as a strong leader of Europe and indeed a world leader. It is uncertain whether the CDU will be able to form a government on its own or will have to form another grand coalition with SPD, bringing together Germanys two largest parties. While markets would likely respond most strongly to a center-right CDU victory, a continued coalition with the center-left SPD would not raise concerns. Both parties strongly support Europe and the euro, global trade, and the economic policies that have been so successful for Germany. The far-right populist Alternative for Germany poses no threat.


In sum, the upcoming elections in the UK, France, Germany, and possibly Italy could all result in victories for market-friendly governments that would strengthen prospects for European markets in the remainder of 2017 and beyond. That outcome is the most likely for Germany, still likely for France and the UK, but disturbingly uncertain for Italy.


Sources: Financial Times, New York Times, Reuters, BBC, Deutsche Welle, and The Economist

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About Bill Witherell
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Bill Witherell
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https://mishtalk.com/2017/06/02/payr...ed/#more-46095

Payrolls “Unexpectedly” Weak, Negative Revisions, Earning Poor: What Happened?

02 Friday Jun 2017

Posted by Mish | June 2, 2017 10:33:11 | Economics

Initial Reaction
Today’s establishment survey was a much weaker than expected at 138,000 jobs.
The establishment survey was 47,000 under the Econodsay consensus and 115,000 below the ADP projection. ADP was also wildly off the mark in March, estimating 263,000.
March is now revised at 50,000. BLS revisions took away a net 66,000 jobs in March and April.
The household survey was even worse. Employment fell by 233,000.

What Happened?
The roots of this weakness go back to the April report, for March.
I discussed today’s setup on April 7, in Wild Miss in Expected Jobs: Economists Blame the Weather. Here is the pertinent snip.


Today’s employment report shows a wild miss in the expected number of jobs. The Econoday consensus estimate was 175,000 and ADP expected 263,000.

Instead, the BLS reported an increase of 98,000. Economists did what they usually do in such situations: blame the weather.
“Throw ADP out, it was the weather in March! Or at least the Category 3 storm that swept the Northeast may explain a much weaker-than-expected 98,000 increase in March nonfarm payrolls. This compares with Econoday’s consensus for 175,000 and a low estimate of 125,000” says Econoday.


On May 5, (for April Jobs), I reported April Payrolls Bounce, Revisions Take March Lower: Hiring Increasingly Volatile
Today’s establishment employment report shows a huge, 211,000 jump in reported jobs vs a downward revised March. The BLS revised March even lower, to 79,000 from 98,000. Revisions also took February up to 232,000 from 219,000.


Last month, economists blamed the weather. If so, the correct thing to do is average both months as employees not hired in March due to weather would have been hired in April instead.
The two-month average is 145,000 per month. That’s not a disaster, but it’s not particularly strong either.


Revisions
The change in total nonfarm payroll employment for March was revised down from +79,000 to +50,000, and the change for April was revised down from +211,000 to +174,000. With these revisions, employment gains in March and April combined were 66,000 less than previously reported.


Lesson Probably Not Learned
Economists did not average March and April, as I suggested. Perhaps they learned their lesson, but I doubt it.


With revisions this month, March, April, And May now sit at 50,000 jobs, 174,000 jobs, and 138,000 jobs, respectively. That an average of 120,667 jobs a month.

Let’s dive into the details in the BLS Employment Situation Summary, unofficially called the Jobs Report.

BLS Jobs Statistics at a Glance

1. Nonfarm Payroll: +138,000 – Establishment Survey
2. Employment: -233,000 – Household Survey
3. Unemployment: -195,000 – Household Survey
4. Involuntary Part-Time Work: -53,000 – Household Survey
5. Voluntary Part-Time Work: +320,000 – Household Survey
6. Baseline Unemployment Rate: -0.1 to 4.3% – Household Survey
7. U-6 unemployment: -0.2 to 8.4% – Household Survey
8. Civilian Noninstitutional Population: +179,000
9. Civilian Labor Force: -429,000 – Household Survey
10. Not in Labor Force: +608,000 – Household Survey
11. Participation Rate: -0.2 to 62.7 – Household Survey

Employment Report Statement
Total nonfarm payroll employment increased by 138,000 in May, and the unemployment rate was little changed at 4.3 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care and mining.
Unemployment Rate – Seasonally Adjusted
https://mishgea.files.wordpress.com/...ng?w=529&h=449
The above Unemployment Rate Chart is from the BLS. Click on the link for an interactive chart.
Nonfarm Employment Change from Previous Month
https://mishgea.files.wordpress.com/...ng?w=529&h=391
Nonfarm Employment Change from Previous Month by Job Type
https://mishgea.files.wordpress.com/...ng?w=529&h=353
Hours and Wages
Average weekly hours of all private employees were flat at 34.4 hours. Average weekly hours of all private service-providing employees declined 0.1 hours to 33.2 hours. Average weekly hours of manufacturers were flat at 40.7 hours. All are the same as a year ago.


Average hourly earnings of private workers rose $0.03 to $22.00. Average hourly earnings of private service-providing employees rose $0.04 to $21.79. Average hourly earnings of manufacturers rose $0.02 to $20.79.

For a discussion of income distribution, please see What’s “Really” Behind Gross Inequalities In Income Distribution?

Birth Death Model
Starting January 2014, I dropped the Birth/Death Model charts from this report. For those who follow the numbers, I retain this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid. Should anything interesting arise in the Birth/Death numbers, I will comment further.


Table 15 BLS Alternate Measures of Unemployment
https://mishgea.files.wordpress.com/...ng?w=529&h=277
Table A-15 is where one can find a better approximation of what the unemployment rate really is.
Notice I said “better” approximation not to be confused with “good” approximation.

The official unemployment rate is 4.3%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.


U-6 is much higher at 8.4%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.


Some of those dropping out of the labor force retired because they wanted to retire. The rest is disability fraud, forced retirement, discouraged workers, and kids moving back home because they cannot find a job.

Strength is Relative
It’s important to put the jobs numbers into proper perspective.

1. In the household survey, if you work as little as 1 hour a week, even selling trinkets on eBay, you are considered employed.
2. In the household survey, if you work three part-time jobs, 12 hours each, the BLS considers you a full-time employee.
3. In the payroll survey, three part-time jobs count as three jobs. The BLS attempts to factor this in, but they do not weed out duplicate Social Security numbers. The potential for double-counting jobs in the payroll survey is large.

Household Survey vs. Payroll Survey
The payroll survey (sometimes called the establishment survey) is the headline jobs number, generally released the first Friday of every month. It is based on employer reporting.

The household survey is a phone survey conducted by the BLS. It measures unemployment and many other factors.

If you work one hour, you are employed. If you don’t have a job and fail to look for one, you are not considered unemployed, rather, you drop out of the labor force.

Looking for jobs on Monster does not count as “looking for a job”. You need an actual interview or send out a resume.

These distortions artificially lower the unemployment rate, artificially boost full-time employment, and artificially increase the payroll jobs report every month.


Final Thoughts
Here’s a recap of my final thoughts from last month.

It is difficult to know how best to treat March. If a snowstorm on the East coast disrupted counting in March, then the bounce back today should have been stronger than it was.


If March was just a random fluctuation, then averaging over three or four months might be the correct procedure.


Either way, the second chart shows this is not 2014. Hiring has slowed and is increasingly volatile as well.

The trend to slower and slower hiring is now obvious. The three-month trend is even worse. With home sales weakening, construction spending weakening, auto sales weakening there is no reason to believe hiring is about to soar.


Signs of a weakening economy are nearly everywhere except some soft-data diffusion indexes.

Mike “Mish” Shedlock