Someone Caught The BLS, Red Handed!

* Payrolls fall 33,000!
* German IP beats expectations!
* Gold has two good days going for it!


Good day, and a Marvelous Monday to you… The Gulf Coast is getting hit again with yet another hurricane. I sure hope this one doesn’t turn out to be as bad as Katrina was. ? We sure had our fill of playoff baseball this past weekend, which means I was in seventh heaven! I’ve got a lot to talk about today, so let’s not dawdle around here… Chicago greets me this morning with their song: Make Me Smile… A great song from an even greater album!

Well, I guess you read the title and are waiting patiently for me to tell you all about the latest trick the BLS (bureau of labor statistics) tried to get past us on Friday… First of all, the country lost 33,000 jobs in September, and the hurricanes were quickly to blame. But there were some other things in the labor report that were questionable. The BLS decided to show an increase in the Avg. Hourly Earnings… Of course this is what the Fed has been waiting for, and would be great in their quiver of reasons to hike rates… My spider sense is tingling… You don’t think that the BLS reported in increase in earnings because the Fed asked them to, do you? Nah… That can’t happen in the land of the free and the home of the brave! Or could it? Hmmm… Well, besides that question, there’s this one that the BLS needs to answer…

How did the BLS show an increase in the Avg. Hourly Earnings, when the 2 components of the data showed a decline? This is a question that only the BLS can answer… Hello? BLS? Is anyone there? They’ve all left the building? Figures! Oh well, I turn to the boys at, for an explanation… they can show you the math… And even using the kind of math they teach these days, it still doesn’t add up!

· Goods-Producing Weekly Earnings declined -0.8% from $1,118.68 to $1,109.92
· Private Service-Providing Weekly Earnings declined -0.1% from $868.80 to $868.18
· And yet, Total Private Hourly Earnings rose 0.2% from $907.82 to $909.19

What the above shows is, in a word, impossible: one can not have the two subcomponents of a sum-total decline, while the total increases. The math does not work. –

Chuck again… You know, I’ve pointed out the stupid hedonic adjustments that the BLS uses each month, as basically fraudulent, but yet, the markets still wait with great anticipation for the BLS report each month to give them direction… I shake my head in wonderment, that these guys and girls that have these trader positions that trade off the BLS report even have jobs! But I digress there… What I want to point out is simply that this lie that the BLS tried to put past us, raises the question as to the validity of any data that the BLS puts out…

Well, I knew it was just a matter of time before the BLS got so brazen that they didn’t care if the markets called them out or not… All thieves get cocky at some point, right? I know, you’re saying to yourself, Chuck you’ve really stepped over the “be nice at all times line” this morning… Well, I was taught to call a liar a liar, and not to sugarcoat it!
Oh! And the currencies and metals traded as if nothing bad happened in the U.S. Data cupboard on Friday! UGH! What does it take (Jr. Walker and the All-Stars) to get the markets to see that the BLS data is nothing but a bunch of lies, and probably politically, or fed motivated?

And one more thing before I move on regarding the BLS’s jobs data… In the past few years, the majority of jobs that have been created has been in the services area, of bartenders, waiters and waitresses, hotel desk people, etc. these are very low paying jobs, depending greatly on tips to supplement their pay. So, if what the pundits quickly rushed to on Friday, that being the hurricanes caused the negative job creation in September, then I would say, fine, but if the number was as you say it should be, wouldn’t there have been thousands of these low paying jobs created, thus causing the Avg. Hourly Earnings to drop, even more? (that is if you use real math, and not the math the BLS uses!) I’m just saying…

And then, there was this regarding the Jobs number on Friday… Let’s just use simple math here… So, let’s just say that the hurricanes did cause the payrolls in September to fall 33,000, that would mean that since the forecast for jobs was 185,000 that 218,000 jobs were not added because of the hurricanes… Seems a little far-fetched, doesn’t it? Well, it does to me, but then I’m just a country boy out here in what used to be the countryside of St. Louis. Give that some deep, Jack Handy, thoughts, folks…

My, oh, my… What a tangled web you weave, BLS, eh? So, as I just said, the markets took the line about the hurricanes causing a 33,000 drop in payrolls, hook, line and sinker on Friday, but the overnight markets last night, seem to be willing to push the currency envelope to higher ground, to get out of all this muck! Well, at least the euro, has carved out a smallish gain, and Gold got on the good foot on Friday, and is already booking gains in the early morning trading. The Petrol Currencies are getting sold off because the price of Oil has slipped through the $50 handle and stayed there. Recall last Thursday, I told you that the price of Oil had slipped through the $50 handle, briefly, but has settled above the figure? Well, this time there was no rally to bring black Gold, Texas Tea, back…

Our friends over at OPEC, NOT! Issued a statement saying that “extraordinary measures” are going to be needed to stabilize the Oil Market in 2018… Yeah, I would say that’s true, given that their plan to cut production, hasn’t brought the price of Oil back to $60 like they thought it would… What’s an Oil well owner to do? You own Oil, but so does every Tom, Dick and Harry of the world, which means the supply of Oil is much greater than the demand, and you foresee the future not being that great, given the electric cars, etc. I guess I would just punt!

Earlier this morning, Germany printed their Industrial Production for August numbers, and they were quite strong, as they beat the expectations (3%) and gained 4.7% VS 4.2% in July… As I’ve said for many years, now… Gee, if you could just buy Germany’s currency… And in China overnight, the Chinese reserves for September showed that they increased to $3.1 Trillion VS $3.092 in August… I do believe that most of that increase came vis-à-vis an increase in the value of the currencies that China hold as reserves… But it’s still important to think about how all the Chicken Littles were pointing to the Chinese reserves as a sign of China’s collapse… And once again, they were wrong…

I just realized that today is Canada’s Thanksgiving… And it’s also the day here in the U.S. that we celebrate Columbus Day, which means the banks are all closed for the holiday… the stock market will remain open, but without the boys and girls on the bank trading desks, how will any thing get done? HA! Happy Thanksgiving to our friends in Canada! And for those of you who celebrate Columbus Day, isn’t it great that you get a day off to celebrate a myth? Don’t get me wrong here, I think traditions are important, and it’s traditional to think Columbus discovered America… I’ve always wondered why we didn’t celebrate Leif Erickson Day…
So… Gold saw some love on Friday, and gained $8.30 to close at $1,276. At one point in the day Gold was $1,279 but “the boys in the band” saw to it that it got no stronger than that… A Monstrous 352,000 contracts were traded in Gold on Friday… And Gold has gained another $9 in the early morning trading this morning to move up to $1,284.20 as I write… I guess Gold traders weren’t fooled by the BLS head fake with the jobs report on Friday! And if they weren’t, then it would also be cause to rally, given that stronger wages means inflation is on its way, and if inflation is on its way, then investors tend to move to Gold…

As I think of it, I don’t know if I can say that Gold traders didn’t get fooled, maybe they were and they took the inflation rising story as their reason to push the price of Gold higher.. Hmmm… Oh, well, it proves a point, that Gold is a good buy no matter what the circumstances are! HA!

I have no idea when this letter will get posted today, as the template won’t work correctly today, but I think I have another thought as to how to get the email letter out, at least… As far as the website, well, I have no idea..

Thoughts go out to everyone in the path of the Hurricane Nate in the Gulf region… The wonderful people at the Aden Research, which is located in Costa Rica, sent out an email on Friday saying that the email could be their last communique for a few days, with all the flooding going on from the hurricane. I have a nephew that lives just north of New Orleans, and I sent him an email on Friday, reminding him to be safe… Not that he needed to be reminded…

With the U.S. banks closed today, there are no data reports from the U.S. Data Cupboard for us to view… So, the dollar is on its own today, in thinly traded markets… This could end up being a doozy of a day, or it could be a real dud…

To recap… The BLS jobs report showed a negative 33,000 jobs created in September, and immediately blamed it on the rain, I mean the Hurricanes… I point out a discrepancy in the BLS accounting of the wage increase, and even have a thought about how this could have been a directive to the BLS to make it happen… The currencies, for the most part, are stable, with the euro carving out a small gain, and the Petrol Currencies getting sold on the drop in the price of Oil below $50. Gold has a good day on Friday, and is off on the good foot in the early morning trading today. It’s Thanksgiving in Canada today, along with a U.S. bank holiday for Columbus Day… And Chuck wonders why we don’t have a Leif Erickson day?

For What It’s Worth… I’m going to do something that I rarely do today, and bring to you a full article from none other than the Publishing Guru, Bill Bonner… The title of his Bill Bonner’s Diary article is: No Way Out Of This Black Hole of Debt… and can be found here:

Or, here’s your snippet… “Yesterday, we explained that the new fake money… made available at the Fed’s ultra-low rates… meant credit was almost completely elastic.
When it began to get tight – as it did in 1987, 2000, and 2007 – the Fed stretched it out even further.

The U.S. added almost $10 trillion to its debt since 2007. But thanks to the Fed, which provided all the money the system required – and then some – interest rates didn’t go up. Instead, they went down again.

That was former Fed chairman Alan Greenspan’s conundrum.

But here’s the bigger conundrum: How could it be that total outstanding U.S. debt – consumer, government, and business debt – compared to GDP, could go up some $35 trillion since 1980?

That’s $35 trillion of private-sector spending that wouldn’t have happened had the “crowding out effect” – the old connection between real money, output, savings, and debt ¬– been respected.

And how come all this new buying power, based on credit, didn’t send prices soaring?
It has to go somewhere. But where?

Chuck again… This is such a well written article, they I think it would behoove you to stop and click on the link and read it all the way through, it’ll get you thinking for sure! And then all those things that I’ve been telling you about reasons to buy Gold, will come rushing to your brain, and you’ll have a V-8 head slap moment!

Currencies today: 10/9/17… American Style: A$ .7756, kiwi .7085, C$ .7973, euro 1.1740, sterling 1.3150, Swiss $ .9786, … European Style: rand 13.8030, krone 7.9865, SEK 8.1135, forint 265.76, zloty 3.6707, koruna 22.0480, RUB 58.12, yen 112.63, sing 1.3637, HKD 7.8051, INR 65.54, China 6.6534, peso 18.60, BRL 3.1541, Dollar Index 93.68, Oil $49.35, Silver $16.93, Platinum $918.02, Palladium $928.78, and Gold… $1,284.20

That’s it for today… I guess I should slept in this morning, since it was a holiday, but since I got up, I decided to go ahead and write… But then I ran into problems with the template, and my frustration level went to the moon! So, hopefully you get this in somewhat of a timely manner… Boy, my miserable Missouri Tigers came close to winning their football game on Saturday, but close only counts in grenades, and horseshoes! The grandkids were all here yesterday to swim in the pool one more time before we close it up and stop fighting the falling leaves! Delaney Grace came running downstairs to jump in my lap and give me a BIG hug, and tell me that she loves me… I told her I love you to pieces, please stay my little girl forever! I know that won’t happen and just like Puff the Magic Dragon, one day she won’t think that giving me Big hugs and a kiss will be cool, and that will be the end of that! ? But that’s in the future, and we’ll let tomorrow be… Aerosmith takes us to the finish line today with their iconic rock song: Dream On… I hope you have a Marvelous Monday, and Columbus Day! And if you live in Canada… A happy Thanksgiving! Please Be Good To Yourself.

Chuck Butler
Creator & Editor of:
A Pfennig For Your Thoughts


a) The Daily Pfennig is no longer published by EverBank and it is now published by Aden Research Group.

Chuck Butler recently joined the Aden Research Group, a research center led by writers and market analysts Pamela and Mary Anne Aden. The Aden Research Group publishes three newsletters:
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