The Peter Schiff Show Podcast

* I am recording this podcast from New Orleans, where I am attending the Investment Conference

* Today, I am going to talk predominantly is the FOMC statement that came out yesterday following the conclusion of their 2-day October meeting

* It was largely expected that the Fed would not raise interest rates in October and that's exactly what happened

* I predicted this a long time ago

* What is amazing is that, as a result of this announcement, more people expect the Fed to raise rates in December

* Going into this announcement, the dollar was on the defensive, silver was up about .50, gold was up $15.00

* It sure looked like people were expecting a more dovish tone from the Fed

* After all, a lot of bad economic news has come out since the September meeting

* When the Fed statement was released, there was no such change in language

* This now leads people to believe that the statement was hawkish

* They still don't understand the game: Nothing has changed.

* the Fed has to pretend that a rate hike is right around the corner in order to pretend that the recovery is real

* They can't admit that the economy is weak because they want to take credit for saving the economy

* They have to keep pretending, and they have to keep making up excuses

* Steve Leesman was asking why we need emergency rates when the emergency is over

* The emergency is not over, as far as the Fed is concerned because there is no real recovery

* If we had a legitimate recovery, of course the Fed could raise rates

* Thus the game: they continue to talk as if they might raise rates, and the markets buy it

* As soon as their statement came out, gold tanked, it ended up down about $10, silver gave up most of its gains, and the dollar was broadly higher

* If you actually read the statement, there is nothing hawkish about it

* It is basically the same as the September

* The only thing that stands out is an absence of concern

* The FOMC is not worried about all the bad news

* "In determining whether it will be appropriate to raise the target range at its next meeting, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term. "

* None of that is going to happen. The labor market is deteriorated - the labor force participation rate is still shrinking

* These are metrics Janet Yellen needs to see improve

* The Fed knows that these minutes will be misinterpreted

* They want to preserve the illusion that a rate hike is possible so they can preserve the illusion that this is a legitimate recovery and not a gigantic bubble

* But, what's going to happen when the Fed doesn't raise rates and ends up launching QE4 the Fed is going to have zero credibility

* The U.S. economy is in worse shape now than it was leading into the 2008 financial crisis

* Now everybody is talking about how important the jobs number will be - the Fed has not raised rates in 7 years. How can one jobs report make the difference?

* Meanwhile we've had months of stronger jobs numbers and the Fed did not raise rates

* I think the truth is the Fed has decided not to raise rates

* But they still need to maintain the perception that they might raise rates and that'...

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I am recording this podcast from New Orleans, where I am attending the Investment Conference

Today, I am going to talk predominantly is the FOMC statement that came out yesterday following the conclusion of their 2-day October meeting

It was largely expected that the Fed would not raise interest rates in October and that's exactly what happened

I predicted this a long time ago

What is amazing is that, as a result of this announcement, more people expect the Fed to raise rates in December

Going into this announcement, the dollar was on the defensive, silver was up about .50, gold was up $15.00

It sure looked like people were expecting a more dovish tone from the Fed

After all, a lot of bad economic news has come out since the September meeting

When the Fed statement was released, there was no such change in language

This now leads people to believe that the statement was hawkish

They still don't understand the game: Nothing has changed.

the Fed has to pretend that a rate hike is right around the corner in order to pretend that the recovery is real

They can't admit that the economy is weak because they want to take credit for saving the economy

They have to keep pretending, and they have to keep making up excuses

Steve Leesman was asking why we need emergency rates when the emergency is over

The emergency is not over, as far as the Fed is concerned because there is no real recovery

If we had a legitimate recovery, of course the Fed could raise rates

Thus the game: they continue to talk as if they might raise rates, and the markets buy it

As soon as their statement came out, gold tanked, it ended up down about $10, silver gave up most of its gains, and the dollar was broadly higher

If you actually read the statement, there is nothing hawkish about it

It is basically the same as the September

The only thing that stands out is an absence of concern

The FOMC is not worried about all the bad news

"In determining whether it will be appropriate to raise the target range at its next meeting, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term. "

None of that is going to happen. The labor market is deteriorated - the labor force participation rate is still shrinking

These are metrics Janet Yellen needs to see improve

The Fed knows that these minutes will be misinterpreted

They want to preserve the illusion that a rate hike is possible so they can preserve the illusion that this is a legitimate recovery and not a gigantic bubble

But, what's going to happen when the Fed doesn't raise rates and ends up launching QE4 the Fed is going to have zero credibility

The U.S. economy is in worse shape now than it was leading into the 2008 financial crisis

Now everybody is talking about how important the jobs number will be - the Fed has not raised rates in 7 years. How can one jobs report make the difference?

Meanwhile we've had months of stronger jobs numbers and the Fed did not raise rates

I think the truth is the Fed has decided not to raise rates

But they still need to maintain the perception that they might raise rates and that's the only explanation for the Fed's rhetoric

Now let's get into this week's data, including today's release of Q3 GDP numbers

They were looking for 1.7%, which is a sharp slowdown from the Q2 3.9% GDP number

This one came out at 1.5%, slightly below estimates

* This is the first podcast I've been able to record since the death of my father, Irwin Schiff, who passed away on Friday

* If you're interested in learning more about him and the circumstances surrounding his death, I would encourage you to read my commentary, "The Death of a Patriot"

* There also links to many other articles written about him on my Facebook page

* You can also find on my YouTube channel, my father's debate for the 1996 Libertarian Nomination for President

* You can also find on the internet a video he created called, "The Secrets of a Tax Free Life"

* He died in jail because of his political beliefs and for standing up for his Constitutional rights

* While in prison, my father got insufficient medical care, he lost all his teeth, lost his eyesight and eventually died of cancer

* In my father's case, even if he were wrong, the penalty should have been a civil case

* My father was steadfast in his beliefs, and did not want to be released unless he won his appeals

* The Dow was up more than 300 points today

* The strength came from the ECB, as Draghi suggested that the ECB was considering expanding QE

* The ECB is trying to talk the euro down

* The ECB did not actually do anything, they just jaw-boned the markets with the idea of more QE

* This was a euro story - the dollar was only up against the euro

* The New Zealand dollar was up 1.3% against the U.S. dollar

* Gold was up 2% in terms of euros

* Silver was up .15 in dollars despite the big jump in the dollar index

* This lays more foundation for the Fed not to raise rates

* At some point, I think the Fed will another round of QE

* The reason Draghi suggested QE was over fears that inflation is too low

* It is running at .9%, but according the ECB, the holy grail is 1.9%

* Draghi was asked why he is spending so much money to raise inflation when he earlier said that low inflation is good for purchasing power

* How does the ECB think they can pinpoint inflation to exactly 1.9%?

* Draghi's answer was that low inflation makes debt harder to repay

* What Draghi is saying is that it doesn't reduce debt enough

* Why is it good to transfer wealth from creditors to debtors?

* He also said that with low inflation, real wages will rise

* Why is this a problem? Because the government artificially boosted wages in the first place expecting inflation to mitigate their true effect in the economy

* What's really too high is not so much wages as labor costs, due to government mandates

* We want workers to have higher wages in a free market based on their productivity

* All that is undermined in the ECB's quest to generate inflation

* Draghi also questions the accuracy of is numbers

* Central bankers are trying to prop up the stock market and the government

* The real debt the central banks want to wipe out is government debt

* This is not what central banks are supposed t do, they're supposed to be independent

* Another reason the U.S. market might have been strong is because of all the weak economic data that came out

* Housing was stronger than expected, but everything else was pretty weak

* The Chicago Fed National Activity Index, which was -.41 came in at -.37 - back to back bad months

* Also leading economic indicators experience their biggest drop in almost 3 years to -.2

* Last month was also revised down

* Also the Kansas City Fed Manufacturing Index negative again

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This is the first podcast I've been able to record since the death of my father, Irwin Schiff, who passed away on Friday

If you're interested in learning more about him and the circumstances surrounding his death, I would encourage you to read my commentary, "The Death of a Patriot"

There also links to many other articles written about him on my Facebook page

You can also find on my YouTube channel, my father's debate for the 1996 Libertarian Nomination for President

You can also find on the internet a video he created called, "The Secrets of a Tax Free Life"

He died in jail because of his political beliefs and for standing up for his Constitutional rights

While in prison, my father got insufficient medical care, he lost all his teeth, lost his eyesight and eventually died of cancer

In my father's case, even if he were wrong, the penalty should have been a civil case

My father was steadfast in his beliefs, and did not want to be released unless he won his appeals

The Dow was up more than 300 points today

The strength came from the ECB, as Draghi suggested that the ECB was considering expanding QE

The ECB is trying to talk the euro down

The ECB did not actually do anything, they just jaw-boned the markets with the idea of more QE

This was a euro story - the dollar was only up against the euro

The New Zealand dollar was up 1.3% against the U.S. dollar

Gold was up 2% in terms of euros

Silver was up .15 in dollars despite the big jump in the dollar index

This lays more foundation for the Fed not to raise rates

At some point, I think the Fed will another round of QE

The reason Draghi suggested QE was over fears that inflation is too low

It is running at .9%, but according the ECB, the holy grail is 1.9%

Draghi was asked why he is spending so much money to raise inflation when he earlier said that low inflation is good for purchasing power

How does the ECB think they can pinpoint inflation to exactly 1.9%?

Draghi's answer was that low inflation makes debt harder to repay

What Draghi is saying is that it doesn't reduce debt enough

Why is it good to transfer wealth from creditors to debtors?

He also said that with low inflation, real wages will rise

Why is this a problem? Because the government artificially boosted wages in the first place expecting inflation to mitigate their true effect in the economy

What's really too high is not so much wages as labor costs, due to government mandates

We want workers to have higher wages in a free market based on their productivity

All that is undermined in the ECB's quest to generate inflation

Draghi also questions the accuracy of is numbers

Central bankers are trying to prop up the stock market and the government

The real debt the central banks want to wipe out is government debt

This is not what central banks are supposed t do, they're supposed to be independent

Another reason the U.S. market might have been strong is because of all the weak economic data that came out

Housing was stronger than expected, but everything else was pretty weak

The Chicago Fed National Activity Index, which was -.41 came in at -.37 - back to back bad months

Also leading economic indicators experience their biggest drop in almost 3 years to -.2

Last month was also revised down

Also the Kansas City Fed Manufacturing Index negative again

Bloomberg's economic expectations index is at its lowest level since 2013

All these indicators suggest recession on the horizon

This is music to the ears of Wall Street traders because it means the Fed will continue to play the cheap money tune

I don't think the smaller countries that don't have debt problem will follow the Pied Pipers of inflation down the primrose path

I think you are going to see a big drop in the dollar

There are currencies that are gaining strength and will continue to gain strength especially with the Fed has to come clean

* We finally got some economic news today, all of it bad

* All of it "unexpected"...

* Hope springs eternal on Wall Street

* That's why the Federal Reserve can maintain its forecast of an interest rate hike before the end of the year

* Although now a second Fed official has come out saying he doesn't think a rate hike will be appropriate this year

* All this was forecasted by me; there was a method to their madness to maintain the theater that a rate hike is even possible

* When is the Fed going to admit that their earlier forecast of a big recovery and liftoff is wrong?

* CNBC finally admitted they do not want me on because I correctly predicted that the Fed would not raise rates

* The same is true for Bloomberg

* However,  the last time I was on Fox Business, that video on my YouTube Channel got over 80,000 views

* That is probably more people who viewed the live show!

* By the way, don't forget to like me on Facebook follow me on Twitter and and subscribe to my YouTube Channel

* It's not going to be too much longer before more and more people will agree the Fed is not going to raise rates

* If I am right and the Fed launches QE4, it will be hard for the conventional media to ignore me - I am not saying it will be impossible, though

* These podcasts are developing a greater and greater audience, and you can help spread the word by sharing them, to get the word out

* Let's get to the economic data, starting with the Weekly Mortgage Applications

* This number was significant in the precipitous 27.6% drop in the composite index with purchased mortgages dropping 34%

* Part of this was due to last week's big jump as mortgage applicants tried to get ahead of new government rules

* But the drop is much bigger than the pop - this is a bad sign

* The consensus forecast for the Producer Price Index was for month over month prices to drop .2% instead they dropped .5%

* Year over year, down 1.1%; last month it was down .8%

* This is bad news to the Fed, which is looking for higher inflation

* The real negative news was the September Retail Sales Number

* It was expected to be weak, up only .1 and that's what we got, but last month's .2 number was revised down to flat

* Now we're up .1 from zero, meaning August and September Retail Sales missed expectations

* This will pull numbers away from Q3 GDP

* I think we will get Q3 GDP below 1%

* It might be below zero, which will be the first half of a recession

* We also got Business inventories, which were unchanged, but the inventory ot sales ration popped up to 1.37 - that ties the high for the move

* This glut of product is bad news for the economy

* The last 2 times we had inventory to sales ration this high, we were already in recession - 2001 and 2008

* The worst news was Walmart's bombshell announcement that profits are suffering due to labor costs

* Their sales are suffering, too

* 75% of the losses are due to higher wages and the balance came from lower sales

* Walmart is the nation's biggest retailer and should benefit most from a stronger dollar and cheap gas

* Walmart's stock was down 10% on the day, one of the worst days in the history of Walmart

* YTD, it is down 33% from its highs - a super bear market for Walmart

* The Left proclaims that Walmart is getting rich on the backs of the workers - a collapse in Walmart stock price is not good for workers because profits are what creates the jobs

Our Sponsors:
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We finally got some economic news today, all of it bad

All of it "unexpected"...

Hope springs eternal on Wall Street

That's why the Federal Reserve can maintain its forecast of an interest rate hike before the end of the year

Although now a second Fed official has come out saying he doesn't think a rate hike will be appropriate this year

All this was forecasted by me; there was a method to their madness to maintain the theater that a rate hike is even possible

When is the Fed going to admit that their earlier forecast of a big recovery and liftoff is wrong?

CNBC finally admitted they do not want me on because I correctly predicted that the Fed would not raise rates

The same is true for Bloomberg

However,  the last time I was on Fox Business, that video on my YouTube Channel got over 80,000 views

That is probably more people who viewed the live show!

By the way, don't forget to like me on Facebook follow me on Twitter and and subscribe to my YouTube Channel

It's not going to be too much longer before more and more people will agree the Fed is not going to raise rates

If I am right and the Fed launches QE4, it will be hard for the conventional media to ignore me - I am not saying it will be impossible, though

These podcasts are developing a greater and greater audience, and you can help spread the word by sharing them, to get the word out

Let's get to the economic data, starting with the Weekly Mortgage Applications

This number was significant in the precipitous 27.6% drop in the composite index with purchased mortgages dropping 34%

Part of this was due to last week's big jump as mortgage applicants tried to get ahead of new government rules

But the drop is much bigger than the pop - this is a bad sign

The consensus forecast for the Producer Price Index was for month over month prices to drop .2% instead they dropped .5%

Year over year, down 1.1%; last month it was down .8%

This is bad news to the Fed, which is looking for higher inflation

The real negative news was the September Retail Sales Number

It was expected to be weak, up only .1 and that's what we got, but last month's .2 number was revised down to flat

Now we're up .1 from zero, meaning August and September Retail Sales missed expectations

This will pull numbers away from Q3 GDP

I think we will get Q3 GDP below 1%

It might be below zero, which will be the first half of a recession

We also got Business inventories, which were unchanged, but the inventory ot sales ration popped up to 1.37 - that ties the high for the move

This glut of product is bad news for the economy

The last 2 times we had inventory to sales ration this high, we were already in recession - 2001 and 2008

The worst news was Walmart's bombshell announcement that profits are suffering due to labor costs

Their sales are suffering, too

75% of the losses are due to higher wages and the balance came from lower sales

Walmart is the nation's biggest retailer and should benefit most from a stronger dollar and cheap gas

Walmart's stock was down 10% on the day, one of the worst days in the history of Walmart

YTD, it is down 33% from its highs - a super bear market for Walmart

The Left proclaims that Walmart is getting rich on the backs of the workers - a collapse in Walmart stock price is not good for workers because profits are what creates the jobs

This is a sign - Walmart is where America shops - if Walmart is having a problem, other retailers are having problems

I predicted that we would get a pop in the market out of the jobs number but I did not think it would make a new high - that's what happened

In order for the market to reach a new high, it needs QE4

As a result of this bad news, we got a decline in the market

The Dow was down 160 points, but gold had a great day

Gold was up about $20 Silver was up above $16

The Gold Stocks Index (GDX) was up 7% on the day

Oil stocks were higher

* The Dow Jones finished up almost 140 points - back over 17000

* The Dow has now rallied 1,000 points since its lows on Friday following the lower than expected Non-Farm Payroll number

* The market originally sold off until traders realized that bad news is good news and they bought the dip

* The buying intensified today following the release of the FOMC minutes from the last meeting

* I predicted the markets would experience a rally based on the weak Non-Farm Payrol number

* The U.S. market looks like it's standing still compared to the markets overseas

* Now that so many traders are starting to connect the dots and realize that a rate hike is not around the corner we've seen a huge rally in overseas stocks, particularly in emerging markets

* All currencies continue to gain against the dollar

* Silver prices earlier in the week hit a 3-1/2 month high

* Gold got back above 1150

* Oil prices are close to $50/barrel

* All of this is happening because traders are beginning to pare back their rate hike bets

* In light of today's release of the dovish September FOMC meeting minutes the trend will intensify

* Why were people surprised by the dovish minutes?

* If you read the minutes, the real reason the Fed did not raise rates is because inflation is too low

* They also said they would risk credibility raising rates below 2%

* Lose credibility with whom?

* If they are afraid to raise rates with inflation below 2%, they why have they been bluffing that they are about to raise rates?

* The official inflation number has been below 2% the entire time they have been talking about a rate hike

* I have been saying that they will continue to pretend to raise rates, but they won't

* I thought it was funny that Netflix raised their rates 11% - the Fed must have thought this was good news

* The real reason the Fed won't rais rates is that they don't want to prick the bubbles

* We have a bubble in the stock market

* A bubble in the real estate market

* A bubble in the bond market

* Auto loans, student loans, consumer credit, art - you name it

* The Fed doesn't want the government to deal with higher interest rates

* Look at the headline in the Wall Street Journal about foreign central banks beginning to dump treasuries

* Look at how many treasuries China has sold

* This is the tip of a huge iceberg

* How is the Fed going to end QE when it has to take the other side of the mother of all trades?

* CNBC cited overseas problems washing up on our shore as the reason why the Fed won't be raising rates - these are not overseas problems

* The problems started here - they're just coming back

* The overseas markets were reacting to higher interest rates and a strong dollar

* This game is going to end - the next time the dollar goes down, it's down for the count

* Rather than having foreign central banks coming to its rescue, they are going to be joining in the dollar selloff just like everybody else

* I wanted to comment on an Robert Wenzel's article in the Economic Policy Journal

* Wenzel appears to be referring to me but does not mention my name

* Here's the title of his piece, dated September 18, following the most recent Fed meeting:

* "The Absurd Idea That The Fed is Not Going to Raise Rates"

* Wenzel refers to "certain so-called Austrians out cheering that they were proven correct in their view that the Fed will not raise rates..."

* Many people commented that he must be referring to Peter Schiff, but he denied this

* Wenzel seems to believe I do not think the Fed should raise rates

* I am not saying what I think the Fed should do, I'm saying what I think they will do

Our Sponsors:
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The Dow Jones finished up almost 140 points - back over 17000

The Dow has now rallied 1,000 points since its lows on Friday following the lower than expected Non-Farm Payroll number

The market originally sold off until traders realized that bad news is good news and they bought the dip

The buying intensified today following the release of the FOMC minutes from the last meeting

I predicted the markets would experience a rally based on the weak Non-Farm Payrol number

The U.S. market looks like it's standing still compared to the markets overseas

Now that so many traders are starting to connect the dots and realize that a rate hike is not around the corner we've seen a huge rally in overseas stocks, particularly in emerging markets

All currencies continue to gain against the dollar

Silver prices earlier in the week hit a 3-1/2 month high

Gold got back above 1150

Oil prices are close to $50/barrel

All of this is happening because traders are beginning to pare back their rate hike bets

In light of today's release of the dovish September FOMC meeting minutes the trend will intensify

Why were people surprised by the dovish minutes?

If you read the minutes, the real reason the Fed did not raise rates is because inflation is too low

They also said they would risk credibility raising rates below 2%

Lose credibility with whom?

If they are afraid to raise rates with inflation below 2%, they why have they been bluffing that they are about to raise rates?

The official inflation number has been below 2% the entire time they have been talking about a rate hike

I have been saying that they will continue to pretend to raise rates, but they won't

I thought it was funny that Netflix raised their rates 11% - the Fed must have thought this was good news

The real reason the Fed won't rais rates is that they don't want to prick the bubbles

We have a bubble in the stock market

A bubble in the real estate market

A bubble in the bond market

Auto loans, student loans, consumer credit, art - you name it

The Fed doesn't want the government to deal with higher interest rates

Look at the headline in the Wall Street Journal about foreign central banks beginning to dump treasuries

Look at how many treasuries China has sold

This is the tip of a huge iceberg

How is the Fed going to end QE when it has to take the other side of the mother of all trades?

CNBC cited overseas problems washing up on our shore as the reason why the Fed won't be raising rates - these are not overseas problems

The problems started here - they're just coming back

The overseas markets were reacting to higher interest rates and a strong dollar

This game is going to end - the next time the dollar goes down, it's down for the count

Rather than having foreign central banks coming to its rescue, they are going to be joining in the dollar selloff just like everybody else

I wanted to comment on an Robert Wenzel's article in the Economic Policy Journal

Wenzel appears to be referring to me but does not mention my name

Here's the title of his piece, dated September 18, following the most recent Fed meeting:

"The Absurd Idea That The Fed is Not Going to Raise Rates"

Wenzel refers to "certain so-called Austrians out cheering that they were proven correct in their view that the Fed will not raise rates..."

Many people commented that he must be referring to Peter Schiff, but he denied this

Wenzel seems to believe I do not think the Fed should raise rates

I am not saying what I think the Fed should do, I'm saying what I think they will do

I don't think zero percent interest rates and QE is good for the economy - of course not!

I also know if they do raise rates now, we are going to have a recession

If Wenzel is an Austrian, he knows the economy is in terrible shape

Ultimately this article will look absurd because the Fed is not going to raise rates until the market forces them, and not before

* It is the first Friday of the month, and that means that this morning we got the September Non-Farm Payroll number

* Anyone who has listened to my podcasts and video blogs knows that for months I have criticized these so-called strong jobs reports

* I think what's going on is a transformation of the economy from full-time jobs to part-time jobs and that necessitates creating more jobs that you destroy, but the real story is beneath the surface

* The report we got today was one of the weakest reports relative to expectations than we've had in years

* This may be the final missing piece to the economic puzzle that shows that the economy is not as strong as everybody, including the Fed pretends it to be

* And that the rate hikes expected to be around the corner are a distant blur on the horizon

* Soon more will join me in recognizing the more QE is coming

* Of course QE is not medicine; it is toxic

* Let's get down to the tale of the tape with the jobs numbers

* First, the bigger number is the August number, which was expected to be revised up, was revised down to 136,000 jobs

* July was also revised down

* The September number was expected to be 203,000 and actually came in at 142,000

* This is an average of 163,000 jobs for the last 3 months

* Six of the last 8 jobs numbers have been revised downward

* The August labor force participation rate was 62.6, which was the lowest of the "recovery"

* The September rate dropped another .2 to 62.4, which is the lowest since 1977

* Another 579,000 left the labor force in September - now there are 94.6 million Americans not working

* Average hourly earnings, expected to rise .2, remained flat

* In fact, the average work week declined from 34.6 to 34.5

* If you remember, what has Janet Yellen stated as a requirement for a Fed rate hike? - An improvement in the labor market.

* The labor market was singled out as a reason why rates remained at zero in September

* While others speculated that rates might hike in October or December, I said the labor market is not going to improve, so the Fed will not raise rates

* Janet Yellen is looking at labor force participation, which has declined to a new low

* Yellen is also looking for an improvement in wages - that is going the other way

* If you also look at the details of this jobs report, you'll see that jobs created are low-paying jobs and jobs lost are higher-paying jobs

* For example, we lost jobs in wholesale trade, manufacturing and logging - those are good-paying blue collar jobs

* We gained jobs in leisure and hospitality, education and healthcare, retail trade - and a lot of these jobs are temporary or part time

* This is why there is not real recovery, why people can't save or buy houses

* This weak jobs number is another excuse for the Fed not to raise rates

* Some are pointing to this jobs number as proof of the Fed's wisdom in not raising rates in September

* However, Yellen stated that rates would go up if the economy continues to improve as the Fed expects - but the economy is getting worse

* I've always said that the Fed does not want to raise rates because it does not want to look foolish if it has to back down from a rate hike

* We got more economic data today: factory orders wer down 1.7% worse than the expected number of -1.3%

* Also, last month's number was revised down, making this the tenth month in a row that factory orders have been down, year over year

* This only happens in a recession

* Maybe we are in a recession

* We don't have Q3 GDP numbers yet, but yesterday the Atlanta Fed reduced its Q3 estimate to .9

* The consensus on Wall Street and at the Fed is still 2.5

* I think that given this jobs number,

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It is the first Friday of the month, and that means that this morning we got the September Non-Farm Payroll number

Anyone who has listened to my podcasts and video blogs knows that for months I have criticized these so-called strong jobs reports

I think what's going on is a transformation of the economy from full-time jobs to part-time jobs and that necessitates creating more jobs that you destroy, but the real story is beneath the surface

The report we got today was one of the weakest reports relative to expectations than we've had in years

This may be the final missing piece to the economic puzzle that shows that the economy is not as strong as everybody, including the Fed pretends it to be

And that the rate hikes expected to be around the corner are a distant blur on the horizon

Soon more will join me in recognizing the more QE is coming

Of course QE is not medicine; it is toxic

Let's get down to the tale of the tape with the jobs numbers

First, the bigger number is the August number, which was expected to be revised up, was revised down to 136,000 jobs

July was also revised down

The September number was expected to be 203,000 and actually came in at 142,000

This is an average of 163,000 jobs for the last 3 months

Six of the last 8 jobs numbers have been revised downward

The August labor force participation rate was 62.6, which was the lowest of the "recovery"

The September rate dropped another .2 to 62.4, which is the lowest since 1977

Another 579,000 left the labor force in September - now there are 94.6 million Americans not working

Average hourly earnings, expected to rise .2, remained flat

In fact, the average work week declined from 34.6 to 34.5

If you remember, what has Janet Yellen stated as a requirement for a Fed rate hike? - An improvement in the labor market.

The labor market was singled out as a reason why rates remained at zero in September

While others speculated that rates might hike in October or December, I said the labor market is not going to improve, so the Fed will not raise rates

Janet Yellen is looking at labor force participation, which has declined to a new low

Yellen is also looking for an improvement in wages - that is going the other way

If you also look at the details of this jobs report, you'll see that jobs created are low-paying jobs and jobs lost are higher-paying jobs

For example, we lost jobs in wholesale trade, manufacturing and logging - those are good-paying blue collar jobs

We gained jobs in leisure and hospitality, education and healthcare, retail trade - and a lot of these jobs are temporary or part time

This is why there is not real recovery, why people can't save or buy houses

This weak jobs number is another excuse for the Fed not to raise rates

Some are pointing to this jobs number as proof of the Fed's wisdom in not raising rates in September

However, Yellen stated that rates would go up if the economy continues to improve as the Fed expects - but the economy is getting worse

I've always said that the Fed does not want to raise rates because it does not want to look foolish if it has to back down from a rate hike

We got more economic data today: factory orders wer down 1.7% worse than the expected number of -1.3%

Also, last month's number was revised down, making this the tenth month in a row that factory orders have been down, year over year

This only happens in a recession

Maybe we are in a recession

We don't have Q3 GDP numbers yet, but yesterday the Atlanta Fed reduced its Q3 estimate to .9

The consensus on Wall Street and at the Fed is still 2.5

I think that given this jobs number, the downward revision of the previous month and the factory orders number in addition to economic data we're likely to get next week, the Atlanta Fed may reflect a negative estimate for Q3 GDP

If we get a negative number for Q3, I think we'll get an even larger negative number for Q4

If you look at the trend,