It’s time to sit back, relax and enjoy a little joe …
And away we go …
Credits and Debits
Credit: This week the media were celebrating the best employment figures of the year, thanks to a nonfarm payrolls report that showed 271,000 new jobs were created in October. Apparently, the economy is booming! Or maybe not.
Debit: Unfortunately, not many people are buying into the media euphoria. A closer look at the Bureau of Labor’s Household Survey reveals a disturbing statistic: more than 9 in 10 new jobs last month went to workers older than 54. Even worse, there was a loss of 35,000 net jobs for those between 25 and 54.
Debit: No matter how you spin it, that’s not the sign of a vibrant economy. As Paul Craig Roberts points out, none of those new jobs were in the manufacturing sector. Does anybody wonder why the mainstream media refuses to point this out?
Debit: Roberts also asks: “If the US was in the middle of an economic recovery, would half of all 25-year olds be living with their parents like they are today?” No. They wouldn’t, Mr. Roberts. But why spoil the narrative by getting tangled up in the dirty details?
Debit: You’d think with continuing falling factory orders and rising inventories, employers wouldn’t be in a rush to hire. Then again, I suspect most of those new jobs are the now-ubiquitous low-paying part-time service sector positions.
Debit: The dirty details would certainly help explain why the current share of first-time homebuyers is now at a 28-year low. Still, for too long now, the government economic data continues to be at odds with rotten performance data from the private sector. Something is amiss. Somewhere.
Credit: Speaking of homebuyers, the latest data shows that 30% of all US homes lost value over the past year. Of course, if you need to sell, that’s not so good news.
Debit: And while the government insists inflation is low, beef prices are so high now that supermarkets are seeing more people trying to steal it. That won’t change anytime soon because, unlike the housing market, the outlook suggests it will be another year before beef prices finally drop. Sorry.
Debit: By the way, the confusion that’s all around us isn’t limited to data coming from Washington D.C. Earlier this week, David Stockman warned that we’re headed for “monetary mayhem” because the soaring markets now trade on central bank announcements rather than the fundamentals.
Debit: It’s too bad that most Americans aren’t even paying enough attention to see the system is hopelessly broken.
Debit: Meanwhile, Bloomberg put out a piece this week that shows how the Fed’s quantitative easing (QE) campaign helped Wall St. “steamroll” everyone who lives on Main Street. Yet more evidence of the disturbing divergence in economic reality.
Credit: There are so many conflicting signals that many people feel as if they’re losing their marbles. For example, how else can you explain gold and silver falling to 5-year lows during the same week Congress uncapped the federal debt limit, which will hit $20 trillion by the end of next year?
Credit: Franklin Sanders summed the current situation up perfectly: “Friends, we live in a world of seeming; a world where spin, illusion, deceit, and appearance count for more than being. It’s annoying, irritating, and plumb exasperating sometimes, but it’s worth waiting and wading through the lies just to get to watch the truth avenge itself one time.” Someday, Franklin. Someday.
By the Numbers
Here are a few fun facts about the world’s most remarkable metal — gold!
170,000 Total tons of gold ever mined by humans.
3 Number of olympic-sized swimming pools needed to hold all of the gold ever mined.
551 Weight, in pounds, of the world’s largest gold bar.
46 Tons of gold used annually for dental applications such as fillings and crowns.
0.2 Milligrams of gold in the average human body.
$0.01 Approximate value of 0.2 milligrams of gold at current market prices.
11 Percentage of the world’s gold owned by Indian housewives.
0 Counterparty risk borne by those who choose to hold physical gold.
25 According to metals executive Peter Hug, the percentage of gold owners who are crazy.
100 Percentage of physical gold owners who think Peter Hug is crazy.
Sources: Resource Investor; CNN; Fact Slides
Last Week’s Poll Results
Which of these supernatural abilities would you rather have?
- See the future. (41%)
- Invisibility. (32%)
- Read minds. (20%)
- Control the weather. (7%)
More than 1100 (!) Len Penzo dot Com readers responded to last week’s question and, when it comes to supernatural powers, slightly more than two in five of them would choose the ability to see the future. While I think being able to see the future would prove to be more financially lucrative, I think invisibility would be much more fun. Don’t you?
The Question of the Week
[poll id="87"]
Insider Notes: Exter’s Pyramid and Why It’s So Important
Hey! You need to be an Insider to view this section! If you’d like to join, please click “Insider Membership” at the top of my blog page.
Other Useless News
Programming note: Unlike most blogs, I’m always open for the weekend here at Len Penzo dot Com. There’s a fresh new article waiting for you every Saturday afternoon. At least there should be. If not, somebody call 9-1-1.
Hey! If you happen to enjoy what you’re reading — or not — please don’t forget to:
1. Click on that Like button in the sidebar to your right and become a fan of Len Penzo dot Com on Facebook!
2. Make sure you follow me on Twitter!
3. Don’t forget to subscribe via email too! Thank you.
And last, but not least …
4. Consider becoming a Len Penzo dot Com Insider!
Letters, I Get Letters
Every week I feature the most interesting question or comment — assuming I get one, that is. And folks who are lucky enough to have the only question in the mailbag get their letter highlighted here whether it’s interesting or not! You can reach out to me at: Len@LenPenzo.com
After reading my article on how to get credit card interest charges waived, Vicky S. left this comment:
Im still not sure how I ended up here, but I thought this post was REALLY good. Cheers!
Thank you, Vicky! And thank you, Google. Again.
I’m Len Penzo and I approved this message.
Photo Credit: brendan-c
Len,
I think we are getting close to things coming unglued! The last two weeks have been hell on metals, the Banksters are attacking them hard for some reason. Perhaps it’s because Crimex only has about 5 tons of gold left according to Mr. Holter. He says once the gold is gone the Chinese will pull the plug and it will be checkmate! I want the reset to hurry up and begin, but I am afraid it will be scary times.
Jared
You would think so, Jared. But never underestimate the power of the Fed and the US government and their ability to control the financial markets. You’ve got to give them credit, they’ve been doing a masterful job to keep the big day of reckoning from finally getting here. The mainstream financial media has helped, running cover for them by ignoring the manipulation.
I do agree they are beginning to lose at least some control. Their manipulations are no longer covert; in fact, they are blatantly done in the open now, with increasing frequency — but with each passing day it takes more intervention to get the same results (just like drugs to a drug addict). Also, the economic data is becoming more and more detached from reality — so much so that there is now a growing din of people questioning it. Sunlight is truly the best disinfectant.
I agree about the Chinese. They hold the bulk of the world’s gold now and he who has the gold makes the rules. They know the current dollar-based system has run its course and are just waiting for the right moment to make their move. Will it be before the end of the year? I used to think so, but now I am not so sure. I do know this game (Ponzi scheme, actually) cannot go on for too much longer — the math won’t allow it.
Aside: There is a reason why Obama doubled the National Debt to $20 trillion in eight years. Assuming we get that far, you can bet the next president will have to double it again to $40T over the next eight — just as G.W. Bush doubled it in the 8 years he was in office. (And those numbers ignore US unfunded liabilities are approximately $220 trillion). Has the nation’s GDP been growing at the same rate? No; not even close. Have American incomes? Of course not. This is why the game cannot continue for too much longer.
I knew when I purchased 1/10th eagles at spot last week, we we headed for another nose dive. Oh well, time to buy more.
Ha ha. I have the same effect on the precious metals markets! Thanks, Ed, for the sale on gold and silver this week. I’m also taking advantage of it to increase my stack.
Nice facts on gold. Now I know why Indian women wear gold accessories more than any other race. I used to be curious about this practice of these women in Bollywood movies.
More than any other investment, gold seems to be the investment of the Armageddon set. A certain type of gold investor thinks the economic sky is falling and their only protection, other than guns and canned goods, is gold. And they dont like it when you disagree with them.
Other, more sanguine investors, including yours truly, leave the judgment and emotion out of the equation and see gold for what it is: an non-interest-bearing, non-dividend-paying insurance policy against runaway inflation, geopolitical crisis and the erosion of the dollar.
As an investment, however, gold has little glitter. Unlike companies like Apple or GE, gold doesnt innovate, create and sell products or grow its market share. Nor does it pay dividends. There are only two ways to make money from gold: speculation or major economic crisis.
Im not smart enough to speculate. And if the world is coming to an end, Id rather own guns and canned food.
Interesting, Jaime — but I see it the other way: Those who choose to buy gold as insurance — not as an investment — are the ones who are logical and unemotional. I find it is those who prefer to put their faith in the continuation of the current fiat regime who get angry and flustered when their normalcy bias is challenged with the mathematics that prove the inevitable end of the current fiat system is a 100% certainty.
And, yes, of course gold is non-interest bearing — something has to carry counterparty risk to offer interest. Even cash pays no interest unless you deposit it in a bank or turn it into some other paper instrument — which exposes the depositor to all kinds of risk. That being said, with today’s low interest rates (on a real basis) gold is now a better deal than cash, since cash’s returns are negative — despite the counterparty risk! And, no, interest rates will never return to normal — the current system will no longer allow that to happen.
Coincidentally, I am posting an excellent article tomorrow by Keith Weiner that explains seven lies about gold that that Wall St. doesn’t want you to know. I hope you’ll read it.
Thanks for your comments.
Thanks Len. I read your blog every week and while I might not agree with everything that is posted, I certainly respect your opinion and how well-read you are on the subject. You bring some great and important issues on what is happening with the economy, our monetary system etc. And of course you are always very respectful. Thank you and you have a loyal reader….
Thank you, Jaime. Trust me, you’re not alone — I have lots of regular readers who don’t agree with everything I say!
Len,
The main reason I am leaning so heavily toward precious metals is that I am a devout history nut. I know throughout history no and I mean NO fiat currency has ever survived and with today’s current events the Dollar being the world reserve currency is at major risk of falling out of that position with the up and coming Renimbi from China, which if they must will back the currency with Gold! Don’t believe for a minute China only has 1600 tons of gold, it’s most likely at least 10,000. There are going to be so many lost to what is coming because of the media propaganda of our government, it is indeed very sad!
Looking forward to your next black coffee article Len.
Jared
Thank you, Jared. Speaking of propaganda, the most delusional — and dangerous — financial propagandist out there will have a lot of explaining to do when this whole charade finally comes to its inevitable end. I give you, Paul Krugman’s latest New York Times op-ed piece:
Republicans’ Lust for Gold