Yellen’s Confidence Defies Data, Logic, and Common Sense – Ep.122

Yellen’s Confidence Defies Data, Logic, and Common Sense – Ep.122


* The price of gold was down another $15 today, a 6-year low
* Selling began early this morning following a better than expected jobs report from ADP
* This is private payrolls released a couple of days before the official government Non-Farm Payroll number, coming out on Friday
* Last month's ADP report was 182,000 jobs, which was below expectations
* But the government reported better than expected jobs numbers
* Today's number was not significant enough to have triggered a sell-off in gold within seconds of the release of the news
* So far, ADP has missed 8 of the 12 expectations this year
* By the way, hedge funds are the most short they've ever been in gold
* We'll see what happens between now and the end of the year if we get a lot of hedge funds that want to book those profits
* Paper profits may be difficult to realize if everyone needs to take them at the same time
* In the physical world, demand for gold continues to hit records
* 98-99% of the gold market is people selling gold they don't actually have to people who don't actually want it
* It's interesting to me the difference between the market reaction to positive economic news versus negative news
* The November PMI number, although slightly better than expected it is still a 2-year low
* Where the news went from bad to horrific was when we got the November ISM number. Manufacturing is considered insignificant now because it is a smaller part of our economy, but the last time it was almost as low as this, the Fed immediately launched QE3.
* Now with ISM number nearly as weak as it was when we launched QE1, the Fed is hinting at a rate hike, which is absurd if you believe that the Fed is data dependent.
* If the Fed does raise rates in December it proves conclusively that they were never data dependent and that they were using it as a delay tactic
* Had the Fed raised rates years ago, it would have pushed the economy into recession that much sooner, but they've now waited so long, that the economy is already going back into a recession on its own
* If the Fed now raises rates even slightly, we will go into recession that much more quickly, causing credibility loss.
* Also, yesterday we got motor vehicle sales numbers, and we did 18.2 million, beating the expected number of 18.1 million; however this is the second or third month in a row that domestic sales have declined
* This is all a product of the auto bubble. Contrary to comparisons to the housing bubble, where people bought homes for investments, the bubble exists in automobile financing
* Also contributing to the weakness in gold, were Janet Yellen's recent statements containing the strongest indications yet that interest rates may raise in December
* She did, however, go out of her way to insist that the Fed has not made a decision, based on data coming in prior to the December meeting
* Yellen admits to improvements in the labor market, but acknowledges that there is underemployment and low labor force participation
* She did say, however, that she is confident that over the next 1-2 years, the economy will show real improvement in full employment and labor force participation
* She also believes that the economy is indicating enough momentum that inflation will also reach or exceed the 2% benchmark
* Paradoxically, economic data over the last 6 months show no such momentum
* If the manufacturing sector is already in recession, as data indicates, what makes Yellen believe that the service sector, which has shown modest growth, can sustain any growth?
* The only problem Yellen does address is overseas markets
* Ironically the worst thing that can happen to the U.S. economy is for markets to have more confidence in overseas economies, Our Sponsors: * Check out TruDiagnostic and use my code GOLD20 for a great deal: https://www.trudiagnostic.com Privacy & Opt-Out: https://redcircle.com/privacy

Episoder(1094)

Trump Starts the Race to Get Out of the Dollar

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21 Jan 58min

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13 Jan 59min

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10 Jan 58min

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27 Des 202530min

Silver's Epic Rally Signals Bitcoin's Imminent Collapse

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