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We all know that numbers don’t lie. Numbers
are objective. There is nothing that numbers do except represent some value.
In this sense, mathematics is pure, and therefore reliable and repeatable.
Mathematics is one of the foundations of science. Physics is nature expressed
in numbers. The world has come to respect numbers. From ancient weights and
measurements, to architecture, chemistry, astronomy, agriculture,
engineering, trade and commerce, and many other human endeavors, numbers
provide universal understanding of every aspect our existence on the planet.
The Federal government, however, has trouble with
some numbers. When numbers don’t represent its policy, agenda or
campaign strategy, then the administration changes the numbers. They
manipulate the numbers. They “smooth” the numbers. They ignore
the offensive numbers. They even make up their own numbers. They outright lie
about the numbers.
This is the case of the most recent US unemployment
numbers.
Friday, the stock market jumped and gold declined on
the release of January jobs and unemployment data from the US Labor
Department’s Bureau of Labor Statistics (BLS). The government reported
that 234,000 new jobs were added in January, bringing down the national
unemployment rate to 8.3%.
This would be great news...if it were true. But the
BLS is not reporting the actual unemployment rate. If the BLS reported
truthfully, the headline unemployment rate would be 11% for January, much
worse than the number reported, and certainly not a continuing upward trend.
This is an intentional deception, motivated by the administration’s
re-election campaign strategy.
Here’s why the true unemployment rate is
grossly understated. The January data does not account for 1.2 million
qualified workers who dropped out of the job market last month. This is the
largest monthly reduction in the available workforce by the dropout of “discouraged” workers ever. The
labor participation rate declined to 63.7% in January, down from 65.7% when
the president took office. Many qualified workers have simply quit looking
for jobs. When the BLS ignores them, the U-3 unemployment rate appears to
improve. The broader, U-6 measure of unemployment which includes the
discouraged plus underemployed part-time workers is 15.1%. Quite a difference.
 
We have not seen US unemployment at these high rates
since the Great Depression.
It is clear from the U-6 numbers that the employment
situation is declining, not improving. It’s fair to say that based on
the high unemployment rate, the administration’s economic policies have
clearly failed. It’s no wonder that the economy continues to lag. US
GDP growth is forecast to decline further in 2012. Clearly, the US has not
turned the corner in its economic recovery. The BLS uses the
“discouraged worker” data in a deceptive way in an attempt to
paint a rosy picture of an improving economic recovery. This is not the first
deceptive BLS report. The BLS has been understating unemployment since the
president was inaugurated. So the BLS reports are fake-a snare and a
delusion. The mainstream media picked up on the January bogus report as if it
were real; stocks jumped and the president took immediate credit over the
airways. What a travesty!
Well, not everyone is fooled by the bogus BLS
report. Several knowledgeable sources have spoken out including the editorial
staff of the Washington Times, FOX News and Larry Kudlow, to name a few. The Congressional Budget Office
also sees things differently than the administration’s spin machine.
The non-partisan CBO is forecasting unemployment at 8.3% for 2012 and 9.2%
for 2013. That’s not a positive trend.
Bogus BLS unemployment reports affect the markets.
They give an artificial boost to stocks, and impact gold and silver prices.
Because the truth will eventually emerge, and because there remain
fundamental risks in the European debt crisis and increasing threats to
stability from Iran and Syria, gold and silver have not collapsed. In fact,
the pullbacks in gold and silver present new buying opportunities.
Today, gold is telling us that it is not fooled by
the bogus jobs report. Gold is headed up again, continuing its breakout from
a bullish falling wedge chart pattern. There are several technical indicators
that we see calling for gold to retest the $1900/oz
level over the next few months.
The price of gold is one of the numbers we can appreciate.
Investors from around the world benefit from timely
market analysis on gold and silver and portfolio recommendations contained in
The
Gold Speculator investment newsletter, which is based on the
principles of free markets, private property, sound money and Austrian School
economics.
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