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, though

The Fed is not about to embark on rate-tightening now

How long is this game of chicken going to go on?

The market will continue to fall until the Fed admits it cannot raise rates

The inventory to sales ratio continues to climb, but declining manufacturing jobs is an indication that the sales are not there

Talk of rate hikes will go away and the reality of anot...