Friday, June 03, 2011 

Chinese President Hu Jintao and President Barack Obama of the United States
President Barack Obama and President Hu Jintao of China toast during the State Dinner in State Dining Room of the White House, Jan. 19, 2011. (Official White House Photo by Lawrence Jackson)
(CNSNews.com) - China has dropped 97 percent of its holdings in U.S. Treasury bills, decreasing its ownership of the short-term U.S. government securities from a peak of $210.4 billion in May 2009 to $5.69 billion in March 2011, the most recent month reported by the U.S. Treasury.
Treasury bills are securities that mature in one year or less that are sold by the U.S. Treasury Department to fund the nation’s debt.
Mainland Chinese holdings of U.S. Treasury bills are reported in column 9 of the Treasury report linked here.
Until October, the Chinese were generally making up for their decreasing holdings in Treasury bills by increasing their holdings of longer-term U.S. Treasury securities. Thus, until October, China’s overall holdings of U.S. debt continued to increase.
Since October, however, China has also started to divest from longer-term U.S. Treasury securities. Thus, as reported by the Treasury Department, China’s ownership of the U.S. national debt has decreased in each of the last five months on record, including November, December, January, February and March.  
Prior to the fall of 2008, acccording to Treasury Department data, Chinese ownership of short-term Treasury bills was modest, standing at only $19.8 billion in August of that year. But when President George W. Bush signed legislation to authorize a $700-billion bailout of the U.S. financial industry in October 2008 and President Barack Obama signed a $787-billion economic stimulus law in February 2009, Chinese ownership of short-term U.S. Treasury bills skyrocketed.
By December 2008, China owned $165.2 billion in U.S. Treasury bills, according to the Treasury Department. By March 2009, Chinese Treasury bill holdings were at $191.1 billion. By May 2009, Chinese holdings of Treasury bills were peaking at $210.4 billion.
However, China’s overall appetite for U.S. debt increased over a longer span than did its appetite for short-term U.S. Treasury bills.
In August 2008, before the bank bailout and the stimulus law, overall Chinese holdings of U.S. debt stood at $573.7 billion. That number continued to escalate past May 2009-- when China started to reduce its holdings in short-term Treasury bills--and ultimately peaked at $1.1753 trillion last October.
As of March 2011, overall Chinese holdings of U.S. debt had decreased to 1.1449 trillion.
Most of the U.S. national debt is made up of publicly marketable securities sold by the Treasury Department and I.O.U.s called “intragovernmental” bonds that the Treasury has given to so-called government trust funds—such as the Social Security trust funds—when it has spent the trust funds’ money on other government expenses.
The publicly marketable segment of the national debt includes Treasury bills, which (as defined by the Treasury) mature in terms of one-year or less; Treasury notes, which mature in terms of 2 to 10 years; Treasury Inflation-Protected Securities (TIPS), which mature in terms of 5, 10 and 30 years; and Treasury bonds, which mature in terms of 30 years.
At the end of August 2008, before the financial bailout and the stimulus, the publicly marketable segment of the U.S. national debt was 4.88 trillion. Of that, $2.56 trillion was in the intermediate-term Treasury notes, $1.22 trillion was in short-term Treasury bills, $582.8 billion was in long-term Treasury bonds, and $521.3 billion was in TIPS.
At the end of March 2011, by which time the Chinese had dropped their Treasury bill holdings 97 percent from their peak, the publicly marketable segment of the U.S. national debt had almost doubled from August 2008, hitting $9.11 trillion. Of that $9.11 trillion, $5.8 trillion was in intermediate-term Treasury notes, $1.7 trillion was in short-term Treasury bills; $931.5 billion was in long-term Treasury bonds, and $640.7 billion was in TIPS.
Before the end of March 2012, the Treasury must redeem all of the $1.7 trillion in Treasury bills that were extant as of March 2011 and find new or old buyers who will continue to invest in U.S. debt. But, for now, the Chinese at least do not appear to be bullish customers of short-term U.S. debt.
Treasury bills carry lower interest rates than longer-term Treasury notes and bonds, but the longer term notes and bonds are exposed to a greater risk of losing their value to inflation. To the degree that the $1.7 trillion in short-term U.S. Treasury bills extant as of March must be converted into longer-term U.S. Treasury securities, the U.S. government will be forced to pay a higher annual interest rate on the national debt.
As of the close of business on Thursday, the total U.S. debt was $14.34 trillion, according to the Daily Treasury Statement. Of that, approximately $9.74 trillion was debt held by the public and approximately $4.61 trillion was “intragovernmental” debt.
end.



The USA must continue with QEIII in some clandestine manner.  If they do not then a massive depression will be upon us.  If QEIII will start then the seeds of hyperinflation will certainly be sown. 

 I would like to announce that one bank entered the banking morgue, Atlantic Bank and Trust of Charleston South Carolina.

Gold closed Friday night up $9.70 to $1541.70.  Silver fell by one cent to $36.19.
The bankers were all over these two metals starting late Thursday night and well into Friday morning.
It is a common occurrence to see the bashing of these metals prior to the release of the jobs number and yesterday was no different. The upper echelon knew the number was bad so they had to pound the paper gold and paper silver markets.  With the release of the awful numbers gold advanced then was knocked down again only to regain its composure finishing with its high gain for the day. 
Paper silver was fiercely punished but it too gained strength and almost made it to the positive side of things.  It is still reeling from the "drive my shooting" on May 1.  It will take a few more weeks to repair the damage done by the crooked short bankers.

Let us head over to the comex and see how things fared over there.  First gold:

I would like to comment first on the fact that gold is now in record territory with respect to British sterling:
(courtesy Reuters)

Gold priced in sterling hits record high


LONDON, June 3 (Reuters) - Gold priced in sterling hit a record high of 946.79 pounds an ounce on buying triggered by a weaker dollar across a basket of currencies.
Gold in dollars hit a session high of $1,546.39 an ounce compared with $1,532.55 an ounce late in New York on Thursday as the U.S. currency tumbled after a disappointing monthly jobs report from the United States.


The total gold comex open interest fell by 7118 contracts to 503,511 from 510,628.  I guess we lost a few long speculators on the raid.  Even Dennis Gartman, sold 2 of his gold units.  This well informed buffoon
generally gets the "sell" correctly but never gets the buy side correct.  He has not made any money in gold or silver during the run up in the precious metals prices as he sat on the sidelines having liquidated his gold positions.  Yet CNBC invites this clown to explain the gold market.

The front delivery month of June saw its OI fall from 5792 to 5442 for a loss of 350 contracts. We had 149 deliveries so only half of those deliveries accounted for the loss, the other half was cash settlements as Blythe is getting nervous supplying massive fiat to buy out gold and silver delivery longs.  The next deliver month of August saw its OI falter from 340,243 to 331,378 as the raid on Thursday did its toll.
The estimated volume at the gold comex yesterday was pretty good at 159,833.  The confirmed volume on Thursday was also in the same neighbourhood at 160,845.

And now for silver:

The total silver comex OI went in opposite direction to gold.  It rose by 1587 contracts from 121,702 to 123,289 having broken out of the narrow range (120,000-121,000) this past week. Strangely the front options expiry month of June saw its OI fall from 187 to 157 for a loss of 30 contracts and yet we had no deliveries in silver.  Either we had 30 contracts of cash settlements or the posted entry of 187 on Thursday was in error. The next big delivery month in silver is July and the open interest fell slightly from 57,741 to 57,094.  We are still weeks away from first day notice. The estimated volume at the silver comex on Friday was very good at 84,445.  The confirmed volume on Thursday was excellent at 95,986.


Here is the chart for 6/4/2011 regarding deliveries and inventory changes at the comex. This is for the June delivery month in gold. 




Gold
Ounces
Withdrawals from Dealers Inventory
 nil
Withdrawals fromCustomer Inventory
450 (Manfra)
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
 13,104 (Brinks,Scotia)

No of oz served (contracts)  today
98000 (980)
No of oz to be served  (notices)
 446200 oz (4462)
Total monthly oz gold served (contracts) so far this month
 338,800  (3388)
Total accumulative withdrawal of gold from the Dealers inventory this month
nil
Total accumulative withdrawal of gold from the Customer inventory this month
10,205


On Friday, again for some strange reason we see no gold being deposited by the dealer.
The dealer also did not withdraw any gold.

The customer received two lots of gold:

1.  3700 oz of gold  (Brinks)
2. 9404 oz of gold (Scotia)

total deposit:  13,104 oz.
notice the nice round number of 3700 oz to Brinks.

There was a tiny 450 oz withdrawal by the customer from a Manfra vault.

There were 3 adjustments and all of them had gold lent to them by the customer:

1. 3700 oz of gold lent from the customer to the dealer at Brinks. (Note the same 3700 oz of gold above)
2.  A huge 89,493 oz of gold was lent by the customer at Scotia Mocatta to a dealer.
3. 868 oz of gold lent by the customer at Manfra to a dealer.

Total gold lent: 94,061 oz.  This gold will be used in the delivery process.

The comex folk notified us that 980 notices for delivery were sent down for servicing totalling 98,000 oz.
Notice please the closeness of the adjustments  (94,061 oz ) to the delivery notices ( 98,000 oz).
Looks like the bankers are having an awful time trying to locate gold. The total number of gold notices sent down so far this month total 3388 or 338,800 oz of gold. To obtain what is left to be served upon, I take the OI standing for June (5442) and subtract out Friday deliveries ( 980) which leaves me with 4462 notices or 446200 oz left to be served upon.

Thus the total number of gold oz standing in this delivery month of June is as follows:

338800 (oz already served) +  446,200 oz (to be served) =  785,000 oz or 24.41 tonnes of gold.
On Thursday we had a reading of: 805,100 oz so we lost 15,100 oz of gold to cash settlements.

Late Friday night, the comex notified us of the intent to deliver 154 gold notices for Monday.

And now for silver:










Silver
Ounces
Withdrawals from Dealers Inventory
nil
Withdrawals from Customer Inventory
133,902 (Brinks, Scotia)
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
621,411 (Brinks,Scotia)
No of oz served (contracts)  today
nil  (0)
No of oz to be served  (notices)
785,000  (157)
Total monthly oz silver served (contracts) so far this month
915,000  (183)
Total accumulative withdrawal of silver from the Dealers inventory this month
nil
Total accumulative withdrawal of silver from the Customer Inventory this month.
1,211,690



In silver we had quite a bit of activity into and out of vaults.
However there was no deposit nor was their any withdrawal by the dealer.
The only activity was by the customer:

Deposit of silver by the customer:

We had two big deposits:

1. 571,601 oz into a customer's vault over at Brinks.
2. 49,810 oz into a customer's vault over at Scotia.

total deposit:  621,411 oz

Withdrawal by customer:

1. 90,654 oz from Brinks
2. 43,248 oz from Scotia.

total withdrawal  133,902 oz.
Thus the net customer addition of silver metal:  487,509 oz.

There were no adjustments.

The comex folk notified us that zero notices were filed for Friday so the total number of notices for delivery served remain at 183 or 915,000 oz. Late Friday night, the comex also notified us that no silver notices will be served on Monday.  I guess they are having trouble locating any silver. To obtain what is left to be served upon, I take the OI standing for June (157) and subtract out Friday deliveries (0) which leaves me with 157 notices or 785,000 oz left to be served upon.

Thus the total number of silver oz standing in this non delivery month is as follows;
915,000 oz (served)  +  785,000 (oz to be served) =  1,700,000
We had a reading of:  1,840,000 on Thursday so we either lost some silver to cash settlements or the OI reading on Thursday was faulty. I believe it is the latter.
However please note the huge number of oz standing in this non delivery month compared to May which is a delivery month. There is no doubt that Blythe is certainly lurking into the silver minefield.

end


Let us now proceed to our ETF's SLV and GLD and then our physical gold and silver funds:
Sprott and Central Fund of Canada.

 The two ETF's that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.




First GLD inventory changes:  June 4.2011 : 


Total Gold in Trust

Tonnes: 1,212.87
Ounces:38,994,859.03
Value US$:
60,028,109,525.60

June 2.2011:

Total Gold in Trust

Tonnes: 1,212.87
Ounces:38,994,859.03
Value US$:
59,785,707,149.22



Total Gold in Trust;June 1.2011:



Tonnes: 1,212.87
Ounces:38,994,859.03
Value US$:
59,785,707,149.22


We neither gained nor lost any gold in the GLD ETF's.









Now let us see inventory movements in the SLV:

June 4.2011:


Ounces of Silver in Trust317,822,982.300
Tonnes of Silver in Trust Tonnes of Silver in Trust9,885.40
June 2.2011: 




Ounces of Silver in Trust319,480,801.900
Tonnes of Silver in Trust Tonnes of Silver in Trust9,936.96
  
June 1: 2011

Ounces of Silver in Trust319,621,250.900
Tonnes of Silver in Trust Tonnes of Silver in Trust9,941.33
 We lost a rather large 1.658 million oz of silver. We do not know if this was real silver leaving to put out a fire or paper silver.  We do know that the SLV is short of 30 million oz of metal ie. they are short 30 million oz of metal that they should have with the number of shares issued.  As I state above, please stay away from this fraudulent vehicle.




Let us head over to our closed physical funds that we follow: the Central Fund of Canada and Sprott's gold and silver funds:




1. Central Fund of Canada: it is trading at a negative  0.1 in usa funds and par for Cdn funds.
    June 4.2011
2. Sprott silver fund  (PSLV):  Premium to NAV rose   to 17.02% positive NAV (June 2 .2011
3. Sprott gold fund (PHYS): premium to NAV rose to a positive 3.66% to NAV  (June2.2011)

I have been commenting to you on the strange negative  or discount to NAV on the Central Fund of Canada.  GATA member Ed Wener from New Zealand states my position perfectly on this matter:




(courtesy Ed Wener)

Central Fund of Canada





The Central Fund of Canada (CEF) is still selling at a slight discount to NAV. Yesterday it closed at a discount of 3.3% based on London Fixes of $1539.50 (Gold) and $37.22(Silver). However since both metals fell in New York after the London Fix the real closing discount was 1.4% based on $1532.50(Gold) and $36.00(Silver).
However a discount is a discount and except for a brief period in 2005 The Central Fund has not traded at a discount during the current bull market. See chart below
Why is the Central Fund trading at a discount now? And why are the Sprott Funds both trading at a premium, the Silver fund at a healthy 16.75% premium and the Gold fund at a 2.3% premium? It seems pretty obvious that arbitrageurs could quickly close the gaps between these Sprott funds and CEF for a substantial profit and yet they do not. Why?
Over the past year CEF has traded at an average premium of about 7% (the high over 13%). All that changed after the Fund announced a new $360m share offering on Mar 29/11. The drop in the premium is quite normal after a share offering. Typically the new offering is priced at a premium slightly below the average premium for a period immediately preceding the offer. This allows the fund to pay the normal commission fees and still add enough gold and silver to the fund to be accretive to existing shareholders. This concept of accretion does not make sense at first glance. Why sacrifice a nice 10+% premium to get 1% or 2% accretion. In fact Sprott announced that he would not make this sacrifice. No new offers if the shareholder premium had to be sacrificed. However if one thinks longer term the notion does make sense. If one does only one offering the accretion is hardly worthwhile. But consider ten offerings with 1% accretion each. That means a total of 10% extra bullion in the fund than it would otherwise have. That's what accretion does. The fund is backed by more bullion that the buyers of the new offerings pay to existing long term shareholders in order to get in.
In the past the CEF premium would recover fairly quickly after an offering and it would hardly ever fall to a discount. And because of the accretion the new NAV is higher than it would otherwise be. Yet this time seems different. Is someone out there (guess who) angry at CEF for the recent offering at a time when the silver market is so tight? Are they rewarding the Sprott Silver Fund for agreeing not to add silver to its holdings. We know these folks go to great lengths to control prices. It would be easy for them to set up a desk to control the price of CEF. After all by keeping CEF at a discount they virtually guarantee no more new offerings.
Cheers from Auckland, Ed Wener
ed.na@xtra.co.nz

end.

Let's head over to the COT report released Friday night:  First gold COT

Gold COT Report - Futures
Large Speculators
Commercial
Total
Long
Short
Spreading
Long
Short
Long
Short
247,185
55,411
15,917
170,783
411,291
433,885
482,619
Change from Prior Reporting Period
6,724
-12,656
-22,248
-14,476
8,795
-30,000
-26,109
Traders
199
51
60
48
50
269
142


Small Speculators




Long
Short
Open Interest



67,515
18,781
501,400



220
-3,671
-29,780



non reportable positions
Change from the previous reporting period

COT Gold Report - Positions as of
Tuesday, May 31, 2011




Those large speculators that have long gold continue to add to their positions to the tune of 6724 contracts.  They are happy campers this weekend (and Dennis Gartman got taken to the cleaners again)

Those large speculators that have been short gold saw the light and covered a huge 12,656 contracts from their short side.

Those commercials that are long gold took some positions off the table as they are not too happy this weekend. They covered a massive 14,476 contracts.

And now for our famous commercials that are perennially short:  they added 8795 contracts to their gold shorts and this weekend they are starting to worry.

The small specs that have been long added 220 positions to their longs and those small specs that were short covered 3671 positions from their shorts and this weekend they are somewhat happy of their choice to remove some of their short positions.

And now for silver:



Silver COT Report - Futures
Large Speculators
Commercial
Total
Long
Short
Spreading
Long
Short
Long
Short
28,870
11,288
27,241
36,702
71,025
92,813
109,554
-2,884
-2,883
-139
3,039
2,403
16
-619
Traders
78
33
50
39
44
143
109

Small Speculators




Long
Short
Open Interest



28,040
11,299
120,853



-558
77
-542



non reportable positions
Change from the previous reporting period

COT Silver Report - Positions as of
Tuesday, May 31, 2011



In silver, our large specs that have been long silver pitched 2884 contracts from their longs apparently miffed at the huge intervention by the bankers in early May.
Those large specs that have been short covered another 2883 contracts of their short positions.
Those commercials that have been long added 3039 positions to their longs.
And now JPMorgan and friends:  those perennial shorters added another 2403 contracts to their short positions.

The small specs are just not in the game having been blown out in early May.

Summary;  In gold the COT report remains quite bullish  as many are covering.
In silver:  the bankers are still supplying un-backed paper.  However the report is still quite bullish for silver.

end.

Let us now head over to see the big economic stories of the day.
The first Friday of every month we see the release of the non-farm payrolls and yesterday the number was just plain awful.

Here is the official release from the Bureau of Labour Statistics.
They were expecting a gain of 151,000 and instead got a "gain" of 54000.
If you incorporate many of the plug number they lost jobs. The unemployment rate went us to 9.1%

8:30 May US Non-farm payrolls +54K vs. consensus +151K 


* Unemployment rate 9.1% vs. SA consensus 9.0%
Apr rate was 9.0%

end.

Here is the official release from Reuters:
Employment growth brakes sharply in May


WASHINGTON (Reuters) - Employment rose far less than expected in May to record its weakest reading since September, while the jobless rate rose to 9.1 percent as high energy prices and the effects of Japan's earthquake bogged down the economy.
Nonfarm payrolls increased 54,000 last month, the Labor Department said on Friday, with private employment rising 83,000, the least amount since June. Government payrolls dropped 29,000.
Economists polled by Reuters had expected payrolls to rise 150,000 and private hiring to increase 175,000 in May. The government revised employment figures for March and April to show 39,000 fewer jobs created than previously estimated.
The job creation slowdown confirmed the economic weakness already flagged by other data from consumer spending to manufacturing. It could stoke fears about the depth and duration of a slowdown that started early in the year.
The Labor Department said severe weather last month, including tornadoes and flooding, in the Midwest and the South did not materially affect data collection.
It also said that while some workers in those regions may have been temporarily displaced from their jobs, it found "no clear impact of the disasters on the national employment and unemployment data for May."
Economists still believe the lull in activity will be temporary. They cite high gasoline prices, bad weather and disruptions to motor vehicle production because of a shortage of parts from Japan as factors weighing on growth.
"It is clear we have temporarily entered a soft patch," said Christopher Probyn, chief economist at State Street Global Advisors in Boston, before the report.
"Nobody knows how soft and how long, but the best case view is that the fundamentals of the recovery remain intact and the economy will re-accelerate in the second half of the year."
The report provides one of the best early reads on the health of the U.S. economy and it regularly sets the tone for global financial markets. Worries about the pace of the U.S. economic recovery weighed on stocks on Thursday.
While the recent string of weak data has sparked talk about the need for the Federal Reserve to extend its asset purchasing program when it expires this month, analysts believe policymakers will take a soft payrolls report in stride.
Officials at the U.S. central bank regard the current downshift in the economy as temporary.
The Fed has been mapping out a strategy on how to start removing some of the massive stimulus it has lent the economy, and officials have made clear the bar for a further easing in monetary policy is high.
TEMPORARY FACTORS AT PLAY
"We should keep in mind that we have seen a lot of factors weighing on the U.S. economy in April and May, and should take this report with a pinch of salt," said Harm Bandolz, chief U.S. economist at UniCredit Research in New York.
"We may see some positive surprises in the second half of the year once the impact fades."
High gasoline prices hurt consumer spending in the first quarter, restricting economic growth to a 1.8 percent annual pace after expanding at a 3.1 percent rate in the October-December period.
The economy has regained only a fraction of the more than 8 million jobs lost during the recession. Economists say payrolls growth above 300,000 a month is needed to make significant progress in shrinking the pool of 13.9 million unemployed Americans.
The unemployment rate rose to 9.1 percent last month from 9.0 percent in April as some discouraged workers who had been inspired by the pick-up in hiring in April re-entered the labor market.
"There is so much slack in the labor market it's going to take a long time to get the unemployment rate down to between 6 and 7 percent. That's going to take years," said Stephen Bronars, a senior economist at Welch Consulting in Washington.
That could be bad news for President Barack Obama, whose chances of re-election next year could hinge on the health of the economy, particularly the labor market.
The employment report showed weakness across the board, with the private services sector adding 80,000 jobs last month after increasing payrolls by 213,000 in April.
Within the private services sector, leisure and hospitality fell, showing no boost from McDonald's recruitment of about 50,000 new staff in April, which was after the survey period for that month's payrolls. Spring is traditionally a strong hiring period for McDonald's.
Retail employment, which recorded its largest increase in 10 years in April, fell 8,500 last month. Manufacturing payrolls growth contracted 5,000 last month, while construction employment rose 2,000.
The report showed the average work week steady at 34.4 hours and few signs of wage inflation, with average hourly earnings rising 6 cents.
-END-




John Williams weighs in on the number.  Please note that John had raised his
SGS unemployment/underemployment number to 22.6%.  The USA is in serious trouble:

im Sinclair’s Commentary
Here is the latest from John Williams’ ShadowStats.com.
- Softer Employment Picture Reflected Minor Catch Up In Distorted Data  Much Weaker Data Loom Despite Ongoing Reporting Quality Issues
- Annual Growth in May Payrolls Slowed Anew
- May Unemployment Rates: 9.1% (U.3), 15.8% (U.6), 22.3% (SGS)
- Broad Money Supply Growth Jumps Again
"No. 371: May Employment and Unemployment"
http://www.shadowstats.com

end.

The White House responded with this comment on the lousy number  (courtesy  Reuters)
White House puts brave face on rough May jobs report
WASHINGTON, June 3 (Reuters) - The White House said on Friday the U.S. unemployment rate was unacceptably high while trying to put a brave face on a report that showed employers hired far fewer workers than expected in May.
"There are always bumps on the road to recovery, but the overall trajectory of the economy has improved dramatically over the past two years," top White House economist Austan Goolsbee said in a statement.
"While the private sector has added more than 2.1 million jobs over the past 15 months, the unemployment rate is unacceptably high and faster growth is needed to replace the jobs lost in the downturn."


end.

Then we heard from the important NFIB on the jobs creation front in the uSA:
NFIB Jobs Statement: On Main Street, Job Creation is Collapsing

www.NFIB.com
For Immediate Release
Contact: Cynthia Magnuson,             202-314-2036       or cynthia.magnuson@nfib.org 


WASHINGTON, D.C., June 2, 2011
 — Chief economist for the National Federation of Independent Business (NFIB) William C. Dunkelberg, issued the following statement on May job numbers, based on NFIB’s monthly economic survey that will be released on Tuesday, June 7, 2011. The survey was conducted in May and reflects 733 randomly-sampled small-business owner respondents: 

"After solid job gains early in the year, progress has slowed to a trickle. The two NFIB indicators—job openings and hiring plans—that predict the unemployment rate both fell, suggesting that the rate itself will rise.

"May’s job numbers will disappoint; meaningful job creation on Main Street has collapsed.

"Twelve percent (seasonally adjusted) of small-business owners reported unfilled job openings (down 2 points). Further indications of minimal future growth include the fact that in the next three months, 13 percent plan to increase employment (down 3 points), and 8 percent plan to reduce their workforce (up 2 points). That yields a seasonally adjusted net negative 1 percent of owners planning to create new jobs, a 3 point loss from April.

"Overall, reports of job reductions have returned to historically normal levels. However, the percent of owners hiring has not recovered to levels historically observed after two years of expansion. With one in four owners still reporting ‘weak sales’ as their No. 1 business problem, there is little need to add employees, especially with the uncertainty about future labor costs arising from new regulation and legislation. And, if Congress doesn’t deal effectively with the trillion dollar deficit, we’ve got plenty to keep us worried." 

end.

This is a must see interview on KingWorld news where John Embry states quite categorically:  pick your poison either we have hyperinflation or a massive depression.
If the governments print massive dollars to buy bonds as nobody else will buy the crap then we will get hyperinflation.  If the governments do nothing and protect the dollar, then economic activity comes to a halt and we have a massive depression.
courtesy of GATA and King World News and John Embry:
Hyperinflation or depression, Embry tells King World News
Submitted by cpowell on 01:03PM ET Friday, June 3, 2011. Section: Daily Dispatches
12:50p PT Friday, June 3, 2011
Dear Friend of GATA and Gold:
Sprott Asset Management's John Embry tells King World News that the only options for Western economies are now hyperinflation or depression. You can find an excerpt from the interview at the King World News blog here:
Meanwhile, audio of the King World News recent interview with GoldMoney's James Turk has been posted here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
World economic news:

end.

Jessie, at his Cafe American site talks about the massive drain of silver from the comex vaults.
He particularly targets the Scotia vaults where they have lost 60% of their silver in the past few days.

02 JUNE 2011




Over in Greece, the Troika (EU, ECB, IMF ) made the following announcement on how Greece was coping with their huge shortfall.  Expect massive protest from the Greeks. Also remember
that the Greek citizens have a long memory with respect to the German invasion on Greece in World War II and the atrocities there.  And you expect German bankers to land on Greek soil?
Not in your lifetime:   (courtesy zero hedge)

Troica Demands Deep Public Sector Cuts, Higher Taxes As Part Of Greek Bailout #2, Or My Big Fat Greek Anschluss

Tyler Durden's picture




So here it is:
  • EU, IMF: GREECE NEEDS TO REINVIGORATE STRUCTURAL REFORMS (so, fire more people and generate more GDP with whoever is left?)
  • EU, IMF: GREECE WILL REDUCE PUBLIC SECTOR EMPLOYMENT (so, fire even more peple)
  • EU, IMF: GREECE TO REDUCE TAX EXEMPTIONS, RAISE PROPERTY TAXES (So, generate more GDP by taxing people more?)
  • EU, IMF: `AMBITIOUS' MID-TERM PLAN, WILL MEET 2011-2015 TARGETS (If the targets are all Greek bankruptcy, yes)
  • EU, IMF: OVERALL ASSESSMENT GREEK PROGRAM `SIGNIFICANT PROGRESS (uh, where?)
  • EU, IMF: GREEK ECONOMY TO STABILISE AT TURN OF YEAR (Idiots)
And now, the people get angry. Expect live webcast from Syntagma square shortly.
Full release:

3 June 2011 - Statement by the European Commission, the ECB and the IMF on the Fourth Review Mission to Greece

Staff teams from the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF) have concluded a mission to Greece to discuss recent economic developments and policies needed to keep the country’s economic program on track. The mission has reached staff-level agreement with the authorities on a set of economic and financial policies needed to meet program objectives. Strict implementation of these will help to restore fiscal sustainability, safeguard financial sector stability, and boost competitiveness to create the conditions for sustained growth and employment.
Overall, significant progress, in particular in the area of fiscal consolidation, has been achieved during the first year of the adjustment program. However, reinvigoration of fiscal and broader structural reforms is necessary to further reduce the deficit and achieve the critical mass of reforms needed to improve the business climate and pave the way for sustainable economic recovery.
Regarding the outlook, the recession in 2010 was slightly more pronounced than what was anticipated. But there have been encouraging signs recently, in particular a notable pick-up in exports. Unit labour costs are set to decline further, supporting the strong export dynamics, and inflation is on a declining trend. We expect the economy to stabilize at the turn of the year.
In the fiscal area, further sustained deficit reduction will require comprehensive fiscal structural reforms. The government has committed to an ambitious medium-term fiscal strategy that will enable it to maintain its 2011 and medium-term fiscal targets. This strategy includes a significant downsizing of public sector employment, restructuring or closure of public entities, and rationalization in entitlements, while protecting vulnerable groups. On the revenue side, the government will reduce tax exemptions, raise property taxation, and step up efforts to fight tax evasion.
The government is committed to significantly accelerate its privatization program. To this effect it will create a professionally and independently managed privatization agency, and has drawn up a comprehensive list of assets for privatization with the aim of realizing revenues of EUR 50 billion by the end of 2015. The government will assess progress against intermediate quarterly and annual targets.
In the financial sector, liquidity remains tight, but policies are in place to ensure adequate liquidity provision for the banking system. The banking sector remains fundamentally sound and the authorities are increasing capital requirements to further strengthen capital buffers, giving priority to private market-based solutions. However, the Financial Stability Fund is available as a backstop for viable banks that cannot raise capital in the private market.
Further progress has been made with structural reforms. Legislation to modernize public administration, reform healthcare, improve the functioning of the labor market, remove barriers to setting up and operating a business and liberalize transportation and energy has already been passed or is underway. The government will continue to push ahead in these areas, with a particular emphasis in coming months on growth-drivers such as reviving the tourist industry and removing administrative barriers to exports. To make sure that the reform frameworks are effective as soon as possible, the authorities will strengthen the process of implementation, including through technical assistance from the IMF, EU Member States, and the European Commission, and put monitoring mechanisms in place.
Building on the agreed comprehensive policy package, discussions on the financing modalities for Greece’s economic program are expected to take place over the next few weeks. Once this process is concluded and following approval of the IMF’s Executive Board and the Eurogroup, the next tranche will become available, most likely, in early July.

end.

It is time to say goodbye for now.  I hope you all have a great weekend
and I am now off to see my granddaughter.

all the best
Harvey
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