* Earlier today we released the most important Non-Farm Payroll report ever, at least according to the media * A WSJ article stated that this report could "seal the deal" on rate hikes * Interest rates have been at zero for 7 years as the Fed contemplated lift-off * It all boiled down to one jobs report? * If the Fed were going to raise interest rates in 2 weeks, how can it count on its accuracy or the fact that numbers will change next month? * Let's get into the numbers: * The number we got was 173,000 - well below the consensus forecast * One of the weaker components was private payrolls, which only grew by 140,000 vs and expected 211,000 * The headline number is the unemployment drop to 5.1% - the lowest in the Obama presidency * Once again, the devil is in the details * The unemployment rate is falling because of the mass exodus from the labor force * Another 261,000 Americans left the labor force this month * The participation rate held steady at 62.6% * The lowest rate since 1977 * I think it's heading lower * The total number of persons not in the labor force rose to a new record: 94,031,000 * Also this month another 158,000 Americans find themselves involuntarily employed part-time * That's what's responsible for the "improvement" in the labor numbers * Janet Yellen specifically wanted to an increase in labor force participation and more full-time jobs before contemplating raising rates * Those numbers have gone in the wrong direction * Why is nobody pointing this out? * This is the 9th month in a row that year-over-year factory orders have declined * The only other time that has happened is during recession * Every time we've seen a sharp decline in the market accompanied by an increase in the volatility index, the Fed has responded with Quantitative Easing * More and more people now do not believe the Fed will raise rates in September * If the Fed raises interest rates and the market keeps falling and the economy rolls over, the Fed loses a lot of credibility * This is affecting global markets * The Dow is now in correction * I pointed out in my last video blog that: a) the Fed has never raised interest rates from zero and b)normally the Fed raises interest rates into an accelerating economy * This time the Fed is raising interest rates when the economy is weakening * This time a rate hike will prick a much larger bubble * Even if the Fed raised rates to a quarter of a percent, that is still cheap money * The markets are forward-looking and they are not going to like what they see * The dollar strengthened on anticipation that the Fed will raise rates * America cannot afford higher interest rates on the debt we have now * One of the things most people overlook is the huge stockpile of U.Ss treasuries that are held abroad * Why do the emerging markets have so may dollars? * In the aftermath of the 1997 Asian economic crisis, they bought dollars as a reserve to defend their currency if it started to fall * That is happening * So now, foreign governments are going to start drawing on their reserves, selling treasuries to shore up their currencies * The vast majority of the accumulation happened after QE1, when we had a currency war * The media has labeled this sell-off "Quantitative Tightening" * China has already started to gradually sell treasuries * The Fed has promised not to roll over maturing treasuries and to shrink the $4.5 trillion balance sheet to about a trillion * That's $3.5 trillion of Quantitative Tightening * Interest rates would have to rise dramatically to attract real buyers to U.S. treasuries * No one can afford higher rates,Our Sponsors:* Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD* Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.comPrivacy & Opt-Out: https://redcircle.com/privacy

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“What did the council decide on item 42?” — answered with the speaker and the moment.

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