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Enrolled Members: There is a new feature available at the site. I am now placing my daily observations and important articles in a running thread called "In Session".
As a normal part of every day, I regularly collect and read lots and lots of information and compose short snippets explaining what I think. Instead of saving them all up and finding that only a portion of them ever make it into a Martenson Report, it occurs to me that posting them as I go might be valuable to you.
I expect to update this thread nearly every day with whatever I've found. Please feel free to join in and comment on whatever strikes your fancy. If you want me to comment on a particular news item, this is the place to do that. If the item deserves it's own thread, it may get moved out to its own location.
Here are two postings from yesterday:
I now want to riff on something that has REALLY caught my eye this week. As longtime readers know, one of the data pairs upon which I place much emphasis is the US Treasury interest rate and US dollar index pair.
In particular, a rising interest rate and a falling dollar index will indicate to me that the game has changed. Should this pair suddenly begin a sharp countermove, I would consider several outcomes likely, including (but not limited to) a sudden spike in the price of oil, a sudden rise in the price of gold, chaotic stock markets, massive bond market losses, extreme moves in all derivatives that use the US dollar as the unit of account (that's most of them), a steep rise in commodity prices in general (only in US dollar terms), and a US government funding crisis (within 1-6 months of a really pronounced break).
For these reasons, I keep a very close eye on this pair.
These past few weeks, but especially today, I saw some moves that have made my eyebrows elevate.
First, here's the bond data. I am going to use the 30-year bond as my illustrating case, but I could just as easily use the 10- or 20-year bonds. In the chart below, there are three things I want to draw your attention to, which I will explain below:
The green lines show that the 30-year bond has broken back into a trading range that extends back to 2007. This is not necessarily big news, because there have been periods of history where the long bond has spent decades in a trading range. However, these are not normal times.
Let me explain.
The blue text and arrow indicates the moment when the Federal Reserve, on top of its numerous other "thin-air money" programs, announced that it would begin also purchasing US Treasury bonds, specifically long bonds, to the tune of $300 billion in 2009.
This is gigantic, game-changing news. This should have ripped the top off the Treasury market and driven bonds to new heights. Instead, what happened was the now-anemic-looking white candle, marked by the blue arrow. In fact, it looks tawdry; cheap, even.
Since that initial bump, the 30-year bond spent the next 7 weeks sliding inexorably down a slope, as marked by the purple text and arrow.
This is simply not a very good sign and indicates that the bond market may be overwhelming the pace at which the Fed feels comfortable buying bonds with thin-air money. If the Fed goes too quickly on this program, it risks losing the entire market, which, truth be told, is MUCH larger than the Fed itself. Remember, the Fed's only "product" is a slip of paper that has its name printed on it.
These slips of paper have value because the US citizens and corporations work hard to produce things denominated in these bits of paper AND because the US government collects taxes in the same units. And that's about it. If the financial and world markets lose their faith in this chain of value extraction, then the bits of paper have value in proportion to how many of them happen to be in existence at the moment that such faith is lost. It is a delicate balance, and I do not envy the job before Bernanke, et al.
Observation: Bond yields are rising
Now let's look at the dollar. It did not do particularly poorly today, but it did not do well either. What concerns me is looking at the behavior of the dollar over the same time frame as the Fed Treasury purchase announcement:
I see that the dollar has been pretty much in lock-step, declining with the long-bond.
Observation: The dollar is falling
This, coupled with the earlier (above) observation that the Fed stepped in and took a big portion of today's 30-year bond auction, is enough to not only have my antennae up, but quivering.
I'll be keeping an eye on this.
For now, bonds yields are rising and the dollar is falling.
Thank you, Erik (and others!), for the support and the idea to publicize. I think I will send out a short message and link to it by newsletter AND do a blog post.
Meanwhile, I am finding myself quite amused by the payroll numbers released this morning at 8:30:
Payrolls drop by 539,000; jobless rate jumps to 8.9%
By Rex Nutting, MarketWatch
Last update: 8:36 a.m. EDT May 8, 2009WASHINGTON (MarketWatch) - The U.S. economy continued to shred jobs at a horrendous pace in April, with nonfarm payrolls falling by 539,000 and the unemployment rate jumping to a 26-year high of 8.9%, the Department of Labor reported Friday.
The report was largely as expected, reflecting an easing in the pace of massive job destruction from the previous five months. Since the recession began in December 2007, payrolls have fallen by 5.7 million, or 4.1% of payrolls, the largest percentage decline since the 1958 recession.
April's loss of 539,000 jobs was the smallest decline since October's 380,000. Job losses in February and March were revised higher by 66,000.
The article goes on in great depth to parse out the numbers, but mysteriously makes no mention of the the birth-death model, the most important number of them all.
Here it is:
Wow! The government's model managed to crank out 226,000 additional "thin-air" jobs to add back into the mix. For the record, this is 50,000 MORE jobs than were added by the model last April.
What sort of a model do they have that assesses the current hiring conditions to be 30% better than last year? What model could possibly be adding construction and finance jobs at this time? What do they use for inputs? How come these modelers still have jobs?
At any rate, if the B-D model had not added the 226,000 jobs, the report would have come in at -765,000, which is FAR worse than expected.
Really, this is just getting silly at this point. The US government is losing all credibility at a quite rapid pace, and more and more people are catching on. But in all seriousness, I fear the backlash that could result from the populace when the collective weight of all these insults to our intelligence finally boil over into some sort of a response.
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Chris, Thanks for this new feature. It is great to feel like we are in touch with what is catching your attention on a more daily basis. One more thing to look forward to each day I turn my eyes to CM.com!
This time, like all times, is a very good one, if we but know what to do with it. --Ralph Waldo Emerson
For those of you who are not enrolled members and cannot see the In Session material, I wanted to let you know there are at least 20 responses thanking Chris for this new feature.
Chris works hard to educate all of us. The Crash Course and the abundant free material provided on this site are due in part to Chris and his generosity. He has used his own financial resources, he has not taken one cent from the site. There are very few who have not been affected by the economy, this site is not immune.
If you have the financial resources to help support this site and are not yet an enrolled member, please consider an enrollment membership now. For those of you who may need to "sacrifice" a few trips to Starbucks, or a meal dining out once a month, please help support Chris and this site with an enrolled membership.
Chris and his staff need support. I am asking all of you who can help elevate some of the financial strains to please help with your enrollment membership. I personally consider this site an investment in my future, the returns are seen now through Chris' work... His knowledge that he shares.
The In Session material alone is worth your support and investment in Chris.
Thank you Chris, thank you staff, thank you all who contribute to this site in any form.
Cat
You may enroll here...
www.chrismartenson.com/product/chrismartensoncom-enrollment
I contribute because...
I believe in what Chris and his team are doing and seeing someone live what they speak stamps an additional legitimacy on the message in my opinion.
This message needs to continue getting out because the majority of people are still in ignorance and don't even know the freight train in coming and they are in the path. I too was numbered in that collective but thankfully someone showed me how to pull the track change lever for myself and helped me change onto a different path that doesn't end in the washed out bridge up ahead.
It's out of the sense of appreciation and gratitude that I wish to contribute and the benefits listed are a secondary item for me (at least in terms of convincing me to contribute that is).
Nice to be part of a group that's helping people prepare.
The information gleaned from the knowledgeable people on this site is paramount to me. The links, the discussions, feedback as to how they are changing their lives speaks volumes.
The ability to glean from those further down the process of change means an quicker switching time for others following as the hard work of smoothing the ground has already been largely accomplished - in a period where the world is strapped for time this is absolutely vital - ANY process that expediates the change for others is more valuable than Gold itself.
Just as a magnifying glass focuses parallel streams of light and bends them to a focal point, so I find the people on this site - the vast flow of information out there zooms past us all each and every day but people here bend it together and bring it to a focal point so that the many can see what's really going on despite vested interests out there that want to filter that light or disperse it to keep people in the dark. So many times over the years I've thought about many of the things people bring clarity to on this site but never seemed to take that thought process one step further to see what the focus really revealed.
Thanks ALL - I appreciate the work ALL of you do
:-)
Quote: Information is not knowledge --Albert Einstein
Note:*Avatar Picture is the Hadron Particle Accelerator ( That's not me standing there either - sadly )
Excellent new feature. Someone HAS to do a full article about government number-bending. I have found it so frustrating to see all the news about the Stress Tests with no mention of the facts so well pointed out by this Website that there was indeed no Stress in the Tests. Maybe a "Frontline" or Moyers interview with Chris. Let's start writing Moyers to have Chris on.
Jamie A
Cat,
I noticed your post and it pushed me to create a thread along lines that work in symmetry.
An outline to some personal thoughts I've been having lately :-
The Chris Martenson Advertising Drivehttp://www.chrismartenson.com/forum/chris-martenson-advertising-drive/18590
I think it was the last line where you wrote :-
"...thank you all who contribute to this site in any form."
I personally can't afford to access the Martenson Reports but do all I can to advertise this site. You'll find a rash of me everywhere on You Tube if you fish...
Paul
I read at this forum every day. What has surprised me is a lack of full awareness toward real facts that could well help support an undeniable reality of what the future is becoming for the United States. Below you'll find a link to The Hirsch Report. You may not like all you find within it, but all the better than choosing denial ...
Click and Read :-
http://www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf
"Critical thinking" is a term we hear frequently these days as a form of training which will herald a new day in mass schooling. It certainly will, if it ever happens. No common school that actually dared teach the use of dialectic, heuristic, and other tools of free minds could last a year without being torn to pieces.
- John Taylor Gatto, New York State Teacher of the Year, 1991
Click and Read :-
http://www.cantrip.org/gatto.html?seenIEPage=1
.....................
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time
-T. S. Eliot
It's out of the sense of appreciation and gratitude that I wish to contribute and the benefits listed are a secondary item for me (at least in terms of convincing me to contribute that is).
Not me. I contribute for purely selfish reasons. If your goal is to stay ahead of the curve and be able to get a sense of what's over the horizon, access to the Martenson Reports and the In Session material is well worth the cost of enrolling.
kinda reminds me of the old days when there was more chris and less joe2baba.............boy i needed some time off
Wow, super feature Chris! Like getting the Crash Course behind the daily news. THANK YOU!!!
Take care
Chris M.
I find that your untiring efforts and clarity of thought helps bring order to my own thinking. I find myself reflecting "Oh, I knew that" - but in the scramble of data, I had lost track of some of the pieces. A big THANKS.
I look forward to meeting you one day.
My question of the moment has to do with a comment on another thread about "when the electronic currency system shuts down" I take this to mean debit/credit cards and the like cease to function. How do you see that all playing out. Is the overhanging debt problem of the credit card industry likely to cause the whole industry to cease operating or? I suspect that it will happen over time bit by bit (lowering credit limits, requiring deposits etc) rather than a catastrophic shut down one day, but then ............
Personally I/we have some cash and gold (probably not enough) set aside to bridge a few months or more of system failure - and I'm counting on some specific warning of that happening as we get closer
Jim
Jim,
You may want to post your question directly on the "In Session" thread. This would allow Chris to quickly see it as he offers feedback. http://www.chrismartenson.com/forum/session-week-may-6th/18485
Ron