By Patrick A. Heller
Commentary on Precious Metals Prepared for CoinWeek.com
According to the US Census Bureau as of 9 AM Eastern on October 2, 2012, the estimated population of the US was 314,544,755. As of January 1, 2009, the Census Bureau estimated that the US population was 305,529,237. So, since Barack Obama became president on January 20, 2009 the American population has grown by about 9 million.
The 2010 Census showed that about 59.8% of the population was between the ages of 18 and 61. Using that percentage as representing a conservative approximation of the available work force indicates that the number of potential US workers grew by about 5.4 million thus far in President Obama’s term.
According to the US Bureau of Labor Statistics (BLS), in September 2012, there were 4.5 million fewer civilian non-farm jobs in the US than there were in January 2009. Combining that with the increase in the work force population over the same time period, that means that about 10 million more potential workers did not have jobs last month than when Obama began serving as president.
Yet, for September 2012, the U-3 unemployment rate reported by the BLS was 7.8%, which was lower than the 7.9% for January 2009.
The September 2012 non-farm payroll and unemployment data took almost all analysts by surprise. The consensus of experts was that the U-3 unemployment rate would rise from 8.1% in August to 8.2% in September. It seems more than obvious to me that the actual rate should be far higher than any of these numbers.
Neither the huge one-month decline in the unemployment rate nor the decline in the unemployment rate since January 2009 makes sense.
However, such a government report could make sense if taken in the context of US elections coming up in four weeks. No US incumbent president in the past 60 years has won re-election if the reported unemployment rate was higher than 8%. Therefore, the incumbent has a huge incentive to “influence” last week’s BLS unemployment report to come in at a lower number than that.
If you dig into the underlying numbers, there are some interesting anomalies. For instance, look at the non-seasonally adjusted figures for the number of jobs held by those ranging in age from 20 through 24. There had been a consistent decrease in employment each August to September for 32 consecutive years, from 1980 through 2011, with the declines ranging from 90,000 to more than 600,000. Yet, in September 2012, magically there were 101,000 more employed than there were the month before. The BLS provided no data to explain this miraculous turnaround. No other employment data confirmed this trend reversal.
Another curious bit of data was that the number of part-time jobs soared in September while the number of full-time jobs declined. The overall impact is that there were fewer full-time equivalent jobs in September, but the BLS was able to report that unemployment declined.
I expect more chicanery of this nature in the jobs and unemployment report coming out four days before the election.
I also expect the Dow Jones Industrial Average to magically sustain near its current levels until after the elections, despite the flood of US and foreign investors fleeing the US stock market. The same goes for interest rates being suppressed at rates so low that they are crippling the income of retirees.
So what does all this manipulation in other economic markets have to do with suppression of gold and silver prices? Plenty.
The price of gold (and, to a lesser extent, silver) represents a report card on the US government, the US economy, and the US dollar. The recently announced plan by the Federal Reserve to inflate the US money supply by more than one trillion dollars per year for an indefinite period of time would normally have the price of gold and silver soaring.
But this is election season. No incumbent politician wants to run for re-election and have the electorate paying attention to how much the value of the US dollar has collapsed since January 20, 2009. At the COMEX close on January 20, 2009, gold settled $858.50 and silver at $11.36. Through the COMEX close on October 8, the US dollar has fallen 51.6% against gold and 66.6% against silver since President Obama took office. How much further would the dollar have fallen if the US government wasn’t so active at suppressing the rise in gold and silver prices?
Slowing the rise of gold and silver prices is just part of the overall manipulation of data and markets used by politicians seeking to keep their power. I submit that the decline of the US dollar since January 20, 2009 goes hand in hand with the disappearance of millions of US jobs, the flight of investors from US stock markets, and is the reason why the Federal Reserve is now forced to purchase the majority of new US Treasury debt issues. Instead of thinking of last Friday’s jobs report as a single suspicious event, realize that it is part of an overall effort by politicians to deceive the voters, including the manipulation of gold and silver prices.
Patrick A. Heller was honored with the American Numismatic Association 2012 Harry J. Forman Numismatic Dealer of the Year Award. He owns Liberty Coin Service in Lansing, Michigan and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at Numismaster (under “News & Articles) . His award-winning radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com.