The Dollar Gets Ambushed Overnight…

February 25, 2021

* Currencies have another nothing day on Wednesday

* Gold stages a huge comeback on Wed. & will have to do another today… 

Good Day… And a Tub Thumpin’ Thursday to you! It’s been quite a week for yours truly, and I’ll finish it with a bang, as I’m grilling steak tonight for a dinner with friends, and then tomorrow friends from St. Louis will be arriving… An old drinking buddy, Gus and his beautiful bride will be with us for a few days, which includes going to the baseball games… I was going down some steps yesterday, and noticed a sharp pain in my right knee… when I got to the deck I looked down and my knee was swollen big time! I has surgery on that knee about 18 years ago…  I’m hoping that’s not required once again! One of my fave Steely Dan songs greets me this morning.. The song?   FM…   “Give her some funked up muzak, she treats you nice… Feed her some hungry reggae, she’ll love you twice”

Well, Wednesday was another nothing day for the currencies…  The Dollar Index was 90.10 yesterday morning, and at the end of the day it was 90.11…  That marked two consecutive days when currency traders couldn’t decide which way to go with the dollar… Like I’ve said before, I know that in their heart of hearts the currency traders want to sell dollars… But are fearful of the PPT ruining their positions…

Gold traded down immediately yesterday, and at one point in the day it was down $17…  But… at the end of the day it only down $1.70, to close at $1,805.80, completing a nice strong comeback for the day… Silver was in positive territory from the get-go yesterday, and ended up 30-cents to close at $28.05…  I have to say that there are so many pundits out there singing the praises of Silver, that their singing alone should be enough oomph Silver would need to move higher in price VS the dollar..

In the overnight markets… the dollar has gotten ambushed! The Dollar Index is 89.80, down form 90.11 at the close yesterday.  I want to point out that the two currencies that outperformed all other currencies in the last weak dollar trend, The Aussie dollar (A$) and New Zealand dollar (kiwi) are doing it again… These two currencies have been very stealthlike, but not to me! I see what you’re doing… for I see all! HAHAHAHA! 

Gold, on the other hand is not participating in the ambush on the dollar overnight. In the early trading this morning Gold is down $19… Why? Because that’s what the price manipulators deem Gold to be…  So, will Gold stage another comeback today? Now THAT would be something, wouldn’t it?  We can only hope…  Silver is basically flat this morning as it is down 2-cents, so basically flat in my book… 

The price of Oil has climbed another buck and this morning trades with a $63 handle…  And Treasuries got whacked good yesterday, with the yield on the 10-year Treasury rising to 1.44%… (remember in bonds, as the yield rises the price of the bond goes down)  The Bond Boys keep throwing us bones (hints) and the markets are ignoring them… 

Maybe it’s built up frustration by the currency traders overseas last night, as they’ve been wanting to sell dollars badly, and just decided to hell with it and go for it! 

OK… well, longtime readers will recall me going the full nine yards a few months ago, when I talked about what I saw coming for the U.S. citizens… Spoiler alert for those that don’t recall or are new to class… I talked about the folding currency/ dollar, being replaced by digits… And everything you buy, sell or steal, would be on record, and eventually someone in power would be dictating to you how to spend your money, and could get so bad that they deny the withdrawal of the digits to pay for something that you want…  I know, I know, I’ll take my tin foil hat off now…

Or… maybe I won’t…  Yesterday, Cartel, I mean Fed Chairman, Powell talked to Congress, and well, I’ll let the Business Insider tell you the rest. “Federal Reserve Chairman Jerome Powell told Congress on Tuesday that the Fed is “looking carefully” at whether it should issue a digital US dollar.”

“A digital currency developed by the fed is a “high priority project for us,” Powell told Congress, but he added that there are “significant technical and policy questions” related to a digital US dollar.”

“We are committed to solving the technology problems, and consulting very broadly with the public and very transparently with all interested constituencies as to whether we should do this,” Powell said.”

Chuck again…  Ok, remember earlier this week when I offered to be a writer for Janet Yellen and finished her statement? Well, here I am, ready, willing and able to do the same for Mr. Powell… So here goes… “ basically we don’t care what the constituencies say, we’re going ahead with this digital currency, so you all had better get ready for the digits to show up in your bank account one day in the near future… “

I don’t know about you, but I’m the kind of person that absolutely loves having a pocket full of folding currency / dollars… I started my first job while I was in 7th grade… I went door to door selling subscriptions to the now defunct Globe Democrat newspaper… I was so good at it, I won a trip to Daytona Beach all expenses paid!  Any way… what I was getting at, was at an early age, I leaned about having money in my pocket, and I’ve held that thing of having money in my pocket in my mind ever since…  And I will be so lost when the day comes that we no longer can have folding currency/ dollars in my pocket…

And I don’t believe it will do you any good, to bury some folding currency / dollars, in your back yard, or stuff them in coffee cans… That is unless there’s a black market that deals in folding currency…

Did you know that China’s version of a digital currency has already been tested in 3 different Chinese markets/ cities?  Well, it has and I would think that the Chinese will be ready to issue it nationally soon…  Nearly every Central Bank in the World is working on or have already worked on the development of a digital currency… So for now, I’ll keep my tin foil hat on top of my bald head! 

OK, let’s talk about something else as that discussion was really depressing me…  Let’s talk about Going Big… There’s a new TV show called the Go Big Show and I’m wondering if Treasury Sec. Janet Yellen is auditioning for the show?  Let’s listen in to here latest thoughts…

“Janet Yellen, the economist picked by Joe Biden to run the US Treasury, has said America needs to “act big” to revive its flagging economy and protect itself against long-term scarring with a major stimulus package.”

Chuck again… Yeah, let’s just keep going bigger all the time, Janet…  That is until you cause hyperinflation that wrecks the remaining value of the dollar!

It’s all a mystery to me, how traders can hear this stuff, and that stuff about stimmy checks, and the daily reminders of the rot on the economy’s vine, and not sell dollars until the cows come home! What on earth are they waiting for?  Are they waiting for confirmation that hyperinflation is among us?  You know, we may not ever really reach the 50% inflation rate rise in one month, that would qualify as hyperinflation, but what difference would it make if we only got to 35%?   

Just for grins… In 1919 the German mark was 48 marks per dollar, and inflation was rising rapidly, six month later the mark traded at 320 marks per dollar…  And with inflation rapidly increasing, the mark fell to 7,400 marks per dollar by Dec. 1922…  And the cost-of-living index, for Germany was 41 in June 1922 and 685 in December, a nearly 17-fold increase.

The strategy that Germany had been using to pay war reparations was the mass printing of bank notes to buy foreign currency, which was then used to pay reparations, but this strategy greatly exacerbated the inflation of the paper mark.. Sound familiar?

And the key here is that there is no Ronald Reagan and Paul Volcker to fight the rising inflation this time… All we have are some knuckleheads who think that you just print your problems away…  Inflation will weaken a currency, strong inflation will hurt a currency, and hyperinflation will render the currency worthless… As it did in Germany 100 years ago…

The U.S. Data Cupboard will finally get its act together, and have some real economic data for us to view today, starting with, The Weekly Initial Jobless Claims for last week… The thing to keep in mind here is that last week was one day shorter due to the holiday on Monday, so the numbers might be lower, but you’ll know why…  In addition to the jobless claims, we’ll also see the color of  January Durable Goods and Capital Goods Orders…  And finally today, there will be a 1st revision of 4th QTR GDP….  Remember what I told you when the original GDP figure of 4% showed up… That if you took out Government spending, the number would be very low…

I used to have friendly arguments with an economics professor who would explain that when consumer spending weakens, the Gov’t’ spending needs to ramp up to fill the void…  And I would argue, why does the Gov’t spending need to be a part of GDP?   Even more so now it gets ridiculous with all gov’t’s printing presses working overtime, and their new Magic Money Tree, they could make GDP be whatever number they wished for!  Want 10% GDP?  Well, it will be gotten in the future, if those in power begin to use the Magic Money Tree like an ATM…  I’m just saying…

To recap… it was another nothing day for the currencies, and Chuck still believes that traders want to sell dollars, but are afraid of the PPT…  Gold had a nice comeback on Wednesday, after falling by $17 it ended the day only down $1.70… Silver climbed back above the $28 handle…  In the overnight markets the dollar has gotten ambushed, and the Dollar Index is trading this morning at 89.80…  And there was no data to speak of Wednesday, with Jerome Powell telling Congress about the digital currency the Cartel, I mean the Fed heads are working on… And Chuck gives us something to think about regarding inflation…

For What’ It’s Worth…. Well, I’ve been talking about Russia’s desire to dedollarize and how they’ve recruited China to join them for some time, but this morning I found this on Bloomberg.com and it stuck out like a man with a hatchet in his forehead, that this should be today’s FWIW… And so it is..  And it can be found here: Russia Must ‘Barricade’ Itself Vs. Dollar, Senior Diplomat Says – Bloomberg

Or, here’s your snippet: “Russia must take urgent steps to cut its use of the dollar to a minimum as the new U.S. administration of Joe Biden signals it will ramp up sanctions, a top diplomat said.

We need to barricade ourselves against the U.S. financial and economic system to eliminate dependence on this toxic source of permanent hostile actions,” Deputy Foreign Minister Sergei Ryabkov said in an interview today in Moscow. “We need to cut back the role of the dollar in any operations.”

Russia is bracing itself for the latest U.S. punitive measures over the nerve-agent poisoning and imprisonment of opposition leader Alexey Navalny. In a speech to the Munich security conference last week, Biden said that addressing “Russian recklessness and hacking into computer networks in the United States and across Europe and the world has become critical to protecting our collective security.”

The U.S. has imposed more than 90 rounds of sanctions in recent years targeting state banks and corporations, the oil and gas sector, top officials, and business tycoons and is likely to add more restrictive measures, Ryabkov said.

Chuck Again… I have an idea for you Mr. Deputy Foreign Minister, please whisper in Mr. Putin’s ear that he should be using the selling of dollars to buy more physical Gold…   

Market Prices  2/25/21: American Style: A$ .7984,  kiwi .7455,  C$ .8013, euro 1.2232, sterling 1.4149, Swiss $1.1035, European Style: rand 14.7578, krone 8.3423, SEK 8.2217,  forint 294.30,  zloty 3.6870,  koruna 21.3299, RUB 73.74, yen 106.12, sing 1.3181, HKD 7.7539, INR 72.49, China 6.4547, peso 20.65, BRL 5.4281,  Dollar Index 89.80,  Oil $63.42,  10-year 1.44%, Silver $28.03, Platinum $1,255.00, Palladium $2,454.00, Copper $4.19, and Gold… $1,786.80

That’s it for today and this week… It’s a froggy morning here, but a truly expect it to burn off soon to reveal another beautiful day…  So, spring training games will begin this weekend! I really don’t like the new way tickets are dispersed. They show up on your smart phone, no more saving ticket stubs from memorable games!  And, I’m not even your last choice for a tech-savvy person, so there’s that…   The great Al Stewart takes us to the finish line this morning with his song: The Year of The Cat…  I just love the melodic music that he plays…  Ok… I hope you have a Tub Thumpin’ Thursday, and a Fantastico Friday tomorrow, and will promise to Be Good To Yourself all weekend long! 

Chuck Butler

Copper Continues To Climb Higher…

February 23, 2021

* Currencies see little to no movement on Tuesday

* Chuck brings The 5 to the Pfennig… 

Good day… And a Wonderful Wednesday to you! Well, I spent another afternoon out on the deck reading with the sun coming down on me, and blue umbrella skies above… The beach restoration that has been going on for a month here is completed, and I have to say that this is the best I’ve seen the beach look here in the over 12 years we’ve been coming here… Chuck & Kathy sat out on the balcony a couple of nights ago, watching the beach restoration team work under the lights!  I have to knock on wood before I say this last piece…  Man, have I been feeling pretty good lately! Stronger, and not as fatigued as usual… This is when something happens that sets me back usually… So, let’s hope that isn’t in the cards this time!  The late great, Otis Redding greets me this morning with his song: Can’t Turn You Loose…  It’s from his recording at the Whiskey A-Go-Go back in the day…  Many years later I met some dealers from New Zealand in the Whiskey A-Go-Go and kept thinking that this was the place that Otis Redding performed…

Talk about a nothing day in the currencies! The Dollar Index yesterday morning was 90.10, and at the end of the day it was still 90.10…  One of the currencies not included in the basket of currencies that make up the Dollar Index, the Aussie dollar (A$) has very quietly, and stealthlike, moved higher nearly every day… The A$ yesterday morning was .7907, and at the end of the day it was .7945… So, moving higher day by day… And it gets me wondering what this is all about… Back in the day, you could count on a nice interest rate differential between the U.S., euro, or yen and the A$… With the A$ holding the advantage, and attracting investments all over the world… But in today’s world of zero interest rates, the interest rate differential for the A$, just isn’t there… So… What is it that is garnering such interest to the A$ these days?

The Aussie have the front seat to the economic growth in China…  And for that, I believe they are being rewarded with a stronger currency…  See? It’s not often that you get the answer to your question so quickly! HA!

Gold & Silver didn’t fare as well as they did the previous day… Gold lost $4 to close at $1,807.50, and Silver lost 46-cents to close at $27.75… And I was just commenting yesterday that the $28 handle that Silver had risen to looked good… And then the $28 handle was lost! Don’t worry, for it is my belief that because of the shortage of Silver supply, and the demand for physical Silver, that it won’t take long for Silver to regain the $28 handle and as Buzz Lightyear says, “to infinity and beyond!”

And just like Silver, the price of Oil couldn’t hold its newly found $62 handle yesterday… Back and forth the price of Oil goes… Have you experienced gas price shock?   The price of regular gas has moved steadily higher as the Texas freeze plays a part of that… Refineries were shut down and no oil has been refined to gas in over a week, so even with the demand still not what it once was, it is still stronger than 6-months ago, and with supply problems… voila! Gas price shock!

When you have to shell out more each week for gas than you used to have to shell out, that increase in gas prices reduces your overall disposable income…

In the overnight markets… There was a definite quiet to the overnight markets as if they didn’t want to wake anyone up! The Dollar Index is trading at 90.09, so there’s been little movement in the currencies overnight.  Gold & Silver are trying to erase the bad taste of yesterday’s selling, and are up marginally in the early trading today.  The Price of Oil is back above $62, and the 10-year Treasury’s yield is steady Eddie at 1.36%

And nothing seems to standing in the way of the rise in the price in Copper these days…  Copper is a good inflation indicator folks… And the base metal is trading with $4.16 price per pound this morning…  

I had a dear reader send me a note yesterday, after the FWIW article with Michael Burry talking about hyperinflation, and asked me to go deeper into how  investors can protect themselves from such hyperinflation… And that got me thinking… Hadn’t I already told you dear readers over and over again that having up to 20% of your investment portfolio allocated to Gold & Silver to hedge against dollar weakness and inflation?   And apparently Copper should be added to the portfolio allocation…  So, there you have it! 

In Agora’s 5 Minute Focus or The Five, yesterday, editor Greg Gonigam, featured some thoughts from James Rickards about the issuance of SDR’s (Special Drawing Rights)… This is very important folks, and so I’m going to borrow some of The Five and bring it to you here…

“But whatever the source of the panic, we know this: “The next panic will be bigger than the central banks’ ability to put out the fire,” as Jim explained here in 2015. “The only source of bailout cash will be the SDR.”

Result?

“The SDR has the power to reduce the dollar to the status of a local currency no different than the Mexican peso.”

Again, you and I will still use dollars. But they’ll no longer be the world’s go-to currency. That will be the SDR’s function in the aftermath of the present crisis — whatever it is.

The genius of the scheme is that SDRs would create inflation… but everyday folks would have no idea SDRs were the cause.

“Any inflation caused by massive SDR issuance would not be immediately apparent to citizens,” Jim wrote. “The inflation would show up eventually in dollars, yen and euros at the gas pump or the grocery, but national central banks could deny responsibility with ease and point a finger at the IMF.”

Chuck again… Thank you Dave for allowing me to share the 5 with my readers…  The other thing that this would do is devalue the dollar… And you can refer to my Pfennig yesterday, when I explained how the dollar didn’t have value any longer… A devaluation of the dollar would be the end game for the dollar, in my opinion…

OK… Well that’s a lot to take in on a morning with your coffee… So, I’ll move along here for now…  But you, dear reader, know all too well, that I won’t allow that discussion to end there, and there will be more on that in the future!

Before I go on… Got Gold?

The U.S. Data Cupboard is still lacking today, with only Jerome Powell, Cartel, I mean Fed Chairman testimony on the docket…  We’ll have to wait until tomorrow for any real economic data, which will come our way on Thursday with the Weekly Initial Jobless Claims, Durable and Capital Goods Orders will print for our review…

To recap… The Currencies basically traded in the same clothes as Monday, with the Dollar Index not changing on the day at 90.10…   Gold lost $4, and Silver lost 46-cents  on the day, with Silver losing the $28 handle. Chuck doesn’t believe that it will be lost too long…  In the overnight markets there was little movement in the currencies, and Gold & Silver are trying to remove the bad taste of yesterday’s trading this morning… And Chuck brings the Five Minute Forecast to the Pfennig this morning…

For What It’s Worth… OK, the good folks at GATA sent me the link to this article about how to achieve price discovery again in Silver… And it can be found here: A Modest Proposal For Price Discovery In The Silver Market | Investment Research Dynamics

Or, here’s your snippet: “Price discovery is the process by which a free market uses price to balance supply and demand. But price discovery has been absent from the gold and silver markets for decades. This is why a shortage in physical gold developed in March 2020 and why an even more severe shortage in silver has developed currently.

I believe a push to impose price discovery on the entire market will come from the authorized purchasers pushing the various mints to raise significantly the price the mints will pay the refiners for silver.

Refiners can then turn around and give purchase orders to mining companies at much higher prices. This will require a very aggressive push from the APs to hammer on the mints. Perhaps even cc:’ing the refiners in the effort to make refiners aware that the market will bear a much higher price for silver.

If mints offer refiners considerably more than the current “market” price, refiners will divert production to the higher bidding mints and away from selling production of bars to the Comex and LBMA. This will force the players on each exchange to at least match the new market price for silver.

At the very least, the current holders of silver will sell some or all of their holdings if the price rises enough to induce selling. Proper price discovery will find the level that creates enough supply to fill demand.”

Chuck again… Now wouldn’t it be nice to see price discovery return to the markets?  (Bet you thought I would break into the lyrics of the Beach Boys song Wouldn’t it be nice)

Market  prices 2/24/21: American Style: A$ .7930, Kiwi .7390,  C$ .7965, euro 1.2165, sterling 1.4138, Swiss $1.1020, European Style: rand 14.4634, krone 8.4239, SEK 8.2919,  forint 295.59,  zloty 3.7143,   koruna 21.3283, RUB 74.06, yen 105.80, sing 1.3201, HKD 7.7545, INR 72.31, China 6.4616, peso 20.38,  BRL 5.4531,  Dollar Index 90.09,  Oil $62.23,  10-year 1.36%, Silver $27.88, Platinum $1,267.00, Palladium $2,402.00, Copper $4.16, and Gold… $1,809.60

That’s it for today… I was looking at the calendar yesterday, and realized I had not given any notice that I’ll be taking my traditional spring vacation starting March 18, and returning March 30th…  And then it will be time to get ready to head home for Easter! Only 5 more days until my first baseball game of the year… I’m psyched! And  we’ll have guests this weekend too! YAHOO! Man, did my St. Louis U. Billikens get homered last night at VCU! That was an absolute homer call at the end of the game that cost the Billikens a chance at the win…  I was very disgusted with the refs last night… My beloved Mizzou Tigers also played last night,  and the outcome of that game was not any better, as the Tigers couldn’t keep from turning the ball over… They didn’t “value the ball”!  The NCAA Tournament, that hopefully won’t be cancelled this year, will have their Selection Sunday March 14, and then the March Madness begins!  Paul Revere and the Raiders take us to the finish line today with their song: Kicks…   “Kicks just keep gettin’ harder to find. And all your kicks ain’t bringin’ you peace of mind.”  I hope you have a Wonderful Wednesday, and please Be Good to Yourself!  

Chuck Butler

 

Yellen Disses Bitcoin…

February 23, 2021

* Currencies & metals rally on Monday… 

* Chuck talks about “valuing the ball”… 

Good Day… And a Tom Terrific Tuesday to you! What a day yesterday! I sat out on the deck that overlooks the beach/ ocean, and read for nearly 3 hours! I wore a baseball cap most of the time out there in the sun, as my bald head has gotten enough sun this winter already! The “thaw” has arrived back home in St. Louis, and now they’ll have a couple of warmer days, followed by more cold, etc. That’s February in the Mid West! But down here in S. Florida? Well, how does sunny and 80 sound until the end of the month? I’m amped up for that! Our Blues can’t win when they wear those red jerseys… I’m just saying…  James Taylor greets me this morning with his song: Shower The People… “Shower the people you love with love, show them the way that you feel”…

Well, the currencies and metals did see some follow up of their Friday gains yesterday, as the dollar bugs have crawled back into the wall boards where they came from, and that allowed the currencies the freedom to move about the country!  The Dollar Index, which yesterday morning was 90.25, ended the day at 90.00. A few weeks ago the Dollar Index was below 90, and it appeared that it would fall further from there, and then along came a reversal of sentiment that lasted 10 days, and now the currencies are back to pushing the Dollar Index back below 90.

Gold was back on everyone’s minds yesterday, and for once in a blue moon, which we will see this Saturday! But back to Gold for a moment before I show my expertise in Blue Moons… Gold gained $25.90 yesterday to close at $1,810.50, and Silver rose 84-cents to close at $28.20…  Now that looks better than a $26 handle, doesn’t for Silver?  And Copper is kicking tail and taking names later these days… Apparently there is a current shortage in Copper to meet the demand, and thus the price rises…  And this is where I tell you something that I’ve told you 100 times during the life of the Pfennig, and that is my dad taught me this… There’s no such thing as a shortage of something, it’s merely a case of a price adjustment needed for that something…  And Copper is proving that right now!

In the overnight markets…   there’s been a little slippage in the currencies, as the Dollar Index is 90.10 this morning.  Gold & Silver are mixed in the early trading with Gold up 60-cents and Silver down 16-cents…      Well, after sliding backward one day, the price of Oil surges higher on Monday, returning to the $62 handle in doing so…  The 10-year Treasury’s yield slipped a tiny bit, on the day, but no biggie…

The Petrol Currencies aren’t feeling the love from the $62 price of Oil this morning… There’s something a little strange about this rise in the price of Oil, and I’m pretty sure the Petrol Currency traders are waiting to see if it can hold…   Since when are currency traders “patient”?  This whole relationship is interesting, and the rise in the price of Oil is very suspicious to me… I’m just saying… 

Ok, back to the Blue Moon…  There are actually two types of Blue Moons… The first is the one we’ll see this Saturday, and it will be a Blue Moon because it will be the 2nd full moon of the month… The second type of Blue Moon comes when in an astronomical season (the period between an equinox, and solstice, or vice versa) that contains 4 full moons…  We’ll see this happen in August of this year…

Ever since we began to spend our winters down here and could watch the full moon rise out of the ocean each month, I’ve taken on educating myself about full moons, tides, etc. 

Ok, back to normal programming!  Well, you can count Janet Yellen along those that don’t appreciate Bitcoin…  Yesterday, in a speech to some folks at a virtual conference, Yellen dissed Bitcoin, saying, that, “Bitcoin is an extremely inefficient way of conducting transactions and the amount of energy that’s consumed in processing those transactions is staggering,” said Yellen.

“I don’t think that Bitcoin is widely used as a transaction mechanism,” she added.

OK, so here’s Chuck’s addition to what Yellen wanted to say, after dissing Bitcoin… “But our new government issued cryptocurrency will meet all requirements for ease of use in transactions, so get out of Bitcoin now while you still can, before there’s a mass exodus for the door.” 

Now, wouldn’t that have been better if Yellen just spoke the truth, and didn’t hold back?  But hey, she’s a Gov’t official, why would we expect better from her?

Oh, BTW, Bitcoin sold off by 17% but the Bitcoiners all believe that Yellen’s words didn’t have anything to do with the selloff… According to the Bitcoiners the virtual coin needed a correction, after a nonstop run up to $51,000…   Whatever… (did you get my exasperation there?)

Yesterday and today, Cartel, and I mean Fed Chairman, Powell, will speak to the House and Senate on different days… Yesterday, this is what Powell had to say , “There’s nothing more important to the economy right now than people getting vaccinated,” He went on to talk about how the Cartel, I mean the Fed has provided much needed fiscal policy… 

So, what’s holding up the 3rd round of stimmy checks?  The Gov’t has proposed a $1.9 Trillion deficit spending program and it is dragging its proverbial feet before getting passed…  I wonder what the holdup could be? Could it be that some representatives are having second thoughts about the size of this relief package?  Nah…  These people are as cold hearted as the Grinch, before he meets Cindy Lou! I doubt they ever have second thoughts on their deficit spending!

And that in a nutshell should be the reason currency traders begin selling dollars…  On Friday last week, I was treated with a visit from a friend that lives down here about 45 minutes north of me. We take turns visiting each other, and this year, it was Walt’s turn to come to Juno Beach!  I had a long discussion with him that I’ve not had with you, so here goes…  better grab a new cup of coffee…

When I played basketball, the coach would always be yelling at us to “value the ball”… In other words, don’t turn it over, by making silly mistakes…  We had the responsibility of keeping the ball and valuing the possession.  These days, no one values the dollar…  Ok, stay with me on this…

If the dollar was valuable, we wouldn’t be printing it by the trillions to dilute the current outstanding stock, right?  If the dollar was valuable, it would have an interest rate that paid people for holding the currency… But if it pays no interest, apparently the powers that be don’t care if you hold the dollar or not, right? If the dollar was valuable, we wouldn’t give people loans that we know good and well they aren’t going to pay back, right?  Think about that one for a minute… Banks make loans, and give out dollars to borrowers, who may or many not pay it back, but the key here is that if the dollar were valuable, it would charge a higher rate on loans (you must be able to pay to receive this valuable currency)  and they wouldn’t give it out nilly willy to anyone that breaths or fogs a glass!

There are so many dollars floating around that everyone has a wad of them in their pockets (except millennials, they never have cash!) But there was a time when you would be the only one at the table that could pull out a Benjamin Franklin and pay the tab… Nowadays everyone can do that! That’s because dollars aren’t worth what they once were, and everyone has them!

And this is all a result of not valuing the dollar… need some more dollars? We’ll just fire up the printing press here and see!   Foreigners don’t covet owning dollars in their foreign exchange reserves like they once did, getting foreigners to show up at the Treasury Auction window is like getting people to show up for a root canal without Novocain!

Value the ball…  Because the dollar is the reserve currency of the world, we as its handlers, are supposed to value the currency, and preserve the value of the currency, and we don’t…  I could go on for hours on this, just ask Walt! HA!  But, I think you get the point I’m making… The dollar is valued any longer… 

The U.S. Data Cupboard today will see the second phase of Cartel, I mean Fed Chairman Powell’s testimony on the economy to Congress…  We’ll also see the stupid Consumer Confidence Index for this month…  I call this data “stupid” because in reality it’s nothing more than a pulse on what the stock market is doing…  I always kid, and say, “They never ask me if I’m confident!”

To recap… The currencies and Metals did follow up on their Friday gains on Monday, with the euro rising through the 1.21 handle, and Gold adding back $25.90, while Silver rose above $28…  There was some slippage in the currencies and metals overnight, but the move is small… Janet Yellen disses Bitcoin, and Chuck adds words to Yellen’s speech… And Chuck goes all descriptive on us and describes how he views that the dollar has no value any longer…

For What It’s Worth… Well, it’s been a while since I last featured a Wall Street On Parade article in the FWIW section, and that absence stops today! This is an article about how two watchdogs didn’t paint a pretty picture of what’s happening on Wall Street, and it can be found here: How Corrupt Is Wall Street? Two Watchdogs Weigh In (wallstreetonparade.com)

Or, here’s your snippet: “Better Markets and Public Citizen, two of the most informed Wall Street watchdogs, provided written testimony for last Thursday’s hearing before the House Financial Services Committee on the structure of Wall Street. And, to put it mildly, their assessment of the state of affairs on Wall Street does not align with what hedge fund titan Ken Griffin of Citadel told lawmakers at the same hearing. Griffin testified, under oath mind you, that: “The U.S. capital markets are the envy of the world. Our nation’s ability to allocate capital to its best and highest use cr­­­­­eates jobs, drives innovation and fuels our economy.”

In reality, foreign regulators have repeatedly filed enforcement actions against the largest banks on Wall Street for engaging in fraud and rigging markets. As for allocating capital “to its best and highest use, Better Markets describes what’s wrong…

“Market participants at the center of these events have for years taken advantage of market fragmentation, order routing schemes, questionable execution practices, and leveraged trading strategies. And even in the current saga, there are reports that some sophisticated participants made hundreds of millions of dollars momentum trading (exacerbating volatility both as the price went up and as it crashed). And yet, for years, the financial regulators have failed to fully and properly examine, much less remedy and responsibly limit, these questionable if not abusive, predatory or illegal practices.

“Furthermore, for years, a handful of Wall Street’s biggest banks have ‘danced while the music was playing.’ They have facilitated many of the trading practices at the center of the events and bent the rules of the markets to their advantage using their roles in the governance, operation, and resiliency of clearinghouses, exchanges and trading venues, data repositories, and more. Those banks also remain (a) the prime brokers for most sizable hedge funds, including those involved in the GameStop events; (b) the dominant derivatives dealers with 87.3% of U.S. derivatives exposures; and (c) significant lenders in various capacities, including as securities lenders.”

Chuck again… The Fixx sang: One Thing Leads To Another…. And that’s what I’m thinking this morning after reading this article, when it comes down to Wall Street…  I thank Pam & Russ Martens of Wall Street On Paarde.com  They do an awesome job of digging and prying, and uncovering the truth!

Market  Prices  2/23/21: American Style: A$ .7907,  kiwi .7331, C$ .7930, euro 1.2155, sterling 1.4089, Swiss $1.1111, European Style: rand 14.6659, krone 8.4906,  SEK 8.2877,  forint 295.17,  zloty 3.7083,  koruna 21.2931, RUB 74.33, yen 105.23, sing 1.3204, HKD 7.7534, INR 72.45, China 6.4650, peso 20.66, BRL 5.4267,  Dollar Index 90.10,  Oil $62.07,   10-year 1.36%, Silver $28.04, Platinum $1,262.00, Palladium $2,400.00, Copper $4.08, and Gold… $1,812.10

That’s it for today…  What on earth are the Blues management doing with these red jerseys for our Blues? I know that the team name is not a color, but they’ve worn Blue, White, and Gold since they were introduced as a new team in 1967!  I have a difficult time following them in those red jerseys! Come on! Ditch the red jerseys for the true Blues fans, and not the young kids that have jumped on the bandwagon after the Stanley Cup win 2 years ago!  I was reading about the Cardinals practice yesterday, and how Nolan Arenado, Paul Goldschmidt, and Yadi were in a hitting group. Now that’s something that I would have liked to witness in person! But this year, that’s a no-no…  darn pandemic! I know, I know this is not a 3rd world problem, just an inconvenience for Chuck!  Doucette takes us to the finish line today with his song: Mama Let Him Play…  Jerry Doucette really rocks on the guitar in this song…  I hope you have a Tom Terrific Tuesday, and please, pretty please with sugar on top, Be Good To Yourself! 

Chuck Butler

 

 

The Dollar Buyers Have Left The Room!

February 22, 2021   

* Currencies & metals are both back on the rally tracks!

* Sterling outperforming both euros and francs… strange days indeed! 

Good day… And a Marvelous Monday to you! Who’s sneaking around the streets of the city? Everyone knows is Windy…  And that’s what it was here yesterday, gale force winds blew from daylight to moonlight, and oh was the ocean angry yesterday!  The surfers loved it, but to me I look at when it gets all riled up like that and think, of being on a boat in the middle of that, and how I would be hanging on for dear life! It’s pitch dark outside right now, but I don’t believe I hear the wind howling like it was yesterday, so I’m good with that! Just like I was good with my beloved Missouri Tigers putting a halt to their 3-game losing streak on Saturday VS. S. Carolina. And this morning, I’m being treated to one of my all-time favorite Temptations song: I Wish It Would Rain…  “Sunshine, blue skies, please go away, my girl’s found another and gone away.”

Well… All the dollar buying in the last 10 days came to an abrupt halt on Friday… The questions about the dollar began on Thursday, when the Weekly Initial Jobless Claims rose to 861,000 the previous week… And when I last talked to you on Thursday morning, I said it would be interesting to see what the Import price data showed us for Jan. And just like I thought, the import prices rose 1.4% in Jan. VS 1% in Dec.  Recall that we had seen dollar weakness earlier this year, before the last 10 days had wiped out all the gains the currencies had booked against the dollar. 

This Import data is an important thing to look at because when there’s dollar weakness, your buying power goes to hell in a hand basket, and inflation is imported into our economy…  But, with the last 10 days of dollar strength, all was forgiven… Until… It wasn’t, and that was Friday…  Of course it would help non-dollar owners if there was follow up to Friday’s dollar selling…  I guess we’ll have to see, eh?

The Dollar Index on Thursday morning was 90.72, and Friday at the close the Index was 90.36 , and the euro had climbed back above 1.21….  I was beginning to think that traders had lost their collective minds, with all that dollar buying the previous 10 days before Friday… How on earth could they believe that will all the currency printing that the dollar’s value wasn’t going to be diluted?  This past weekend good friend Dennis Miller sent me a link to an article that explained that new U.S. Treasury Sec. Janet Yellen was gong to release back to the Fed a ton of cash that the Fed can then use in their programs, which simply means that there will be even more dollars on the streets, diluting the current stock of outstanding dollars…

Dennis asked me if it meant a big dollar selloff, or no? I responded to him, “this should result in dollar weakness, but we do live in an age of opposites, where right is wrong and wrong is right” In case you want to read that article here is the link: https://www.birchgold.com/news/yellen-challenges-powells-control/

Ok, Gold finally put an end to the daily selloffs on Friday too! The shiny metal was able to gain $9.30 to close at $1,785.60… Bitcoin buyers had really taken a bite out of Gold’s value, and the price manipulators piled on, which should be a penalty!  Silver has been the more favored metal in recent days, as I am told by my metals Guru, Tim Smith (1-800-926-4922) that demand for physical Silver is so strong right now, that dealers are having a tough time getting new supply…  Silver was up 27-cents on Friday, to close at $27.36.

In the overnight markets… There’s been more slippage in the Dollar Index, as it has dropped to 90.25, as I write… Gold is pushing higher, with an early morning gain of $13, and is now within spittin’ distance of $1,800 again… Silver is joining in with a gain of 15-cents early today.   Pound sterling has climbed to 1.40 this morning, and there doesn’t seem to be anything to stop this currency that’s rallying on a hopes…  It’s as if Elvis, I mean the dollar buyers have left the room… 

Pound sterling is currently trading with a 1.40 handle, and is outperforming the euro and Swiss franc. This is something that is seldom seen, and these three will normally rise and fall together, with the euro being the Bid Dog on the porch… But in this day of opposites…  I’m just saying. 

The price of Oil which last Friday had reached a price handle of $61, has slipped back down below $60, since that time, as the latest data last week sure didn’t give anyone thinking that the economy was recovering a warm and fuzzy…  And all that talk of inflation rising and so on, really has the yields on Treasuries waking up from their 30 year slumber.. This morning, the 10-year Treasury yield is 1.39%…  The Bond boys are telling the Cartel members to get off their duffs and do something about this rising systemic inflation…  I’m just saying… 

The IMF was full of good news (NOT!)… The IMF believes that we will experience “The Worst Downturn Since The Great Depression”…  So, I guess they aren’t buying the Kool-Aid that some Gov’t economists are pouring, that the U.S. will come roaring back as soon as the virus is contained… 

Of course they didn’t know about the polar vortex that came down on Texas last week… I read this week that vegetables that were growing have frozen in the ground, and that the grocery stores are out of food supplies… The temperature may have returned to normal yesterday (it was 70 in Houston), but the ill-effects of the vortex will last for weeks, thus slowing the economy of Texas… And in case you wonder if Texas is that Big of a Deal, the answer is yes!

So, last week I went on about the Chinese renminbi and how it needed to gain a wider distribution of the renminbi and open up its bond markets to move ahead with their plans to replace the dollar as the reserve currency of the world… And then this weekend I read a report on Bloomberg.com, that said the Chinese were getting ready to check of the first box, as in: “In London — the world’s center of foreign exchange — there’s more yuan changing hands than ever before. Options on the Chinese currency exceed those referencing the Japanese yen, and buying or selling the yuan is now as cheap as trading the British pound.”

And next to that article was one stating that income flows into India are really helping the rupee to higher ground VS the dollar…  And then another talked about the rally that I’ve been talking about in pound sterling…   In the U.K. apparently, they ARE buying the Kool-Aid and believe that their economy will come roaring back once the virus is contained….   As if!

Ok, there’s only so much good news I can give you each day! HA!  So, let’s go to the Data Cupboard and see what’s on the docket this week!

Well, it appears that we won’t spend a lot of time here, until later this week… Today’s Cupboard has the Leading Indicators for January, but it’s only economic data geeks like me that pay attention to this data set…  So, the currencies and metals are on their own today, if they want to follow up on Friday’s buying of these two asset classes.

To recap… The currencies and metals both rallied on Friday to end last week. In the overnight markets  there’s been more slippage in the Dollar Index, and Gold is up $13, and Silver is up 15-cents in the early trading, so it appears there will be follow up to Friday’s rally in both currencies and metals. Chuck is worried about the ill-effects of the polar vortex and how long they will last in Texas…  China is gaining a wider distribution of their renminbi, and investment flows into India are strong, thus supporting the rupee… And some economists are drinking the Kool-Aid in the U.K. and pushing pound sterling higher…

For What It’s Worth… So, how many of you have seen the movie “The Big Short”?  it was a movie that featured a trader by the name of Michael Burry, who shorted the housing markets back in 2007, and when everyone thought he had lost his mind, the housing market imploded, and he walked away with beau-coup bucks covering his shorts… Well, that “guy”, Michael Burry is back and he has some things to say about inflation… And that arricle can be found here: Michael Burry Warns Weimar Hyperinflation Is Coming – The Burning Platform

Or, here’s your snippet: “one day after the Weimar tweetstorm below, and shortly after our article came out, Burry tweeted the following:

People say I didn’t warn last time. I did, but no one listened. So I warn this time. And still, no one listens. But I will have proof I warned.

Indeed he will.

One week ago, Bank of America hinted at the unthinkable: the tsunami of monetary and fiscal stimulus, coupled with the upcoming surge in monetary velocity as the world’s economy emerges from lockdowns, would lead to unprecedented economic overheating… or rather precedented as BofA’s CIO Michael Hartnett reflected back on the post-WW1 Germany which he said was the “most epic, extreme analog of surging velocity and inflation following end of war psychology, pent-up savings, lost confidence in currency & authorities” and specifically the Reichsbank’s monetization of debt, and extrapolated that this is similar to what is going on now.

There is, of course, another name for that period: Weimar Germany, and because we all know what happened then, it is understandable why BofA does not want to mention that particular name.

Of course, others have been less shy – in 1974, Jens Parsson wrote a fascinating, in-depth historical analysis of the hyperinflationary collapse of Weimar Germany under the original money printer, Rudy von Havenstein, “Dying of Money: Lessons of the Great German and American Inflations” one which we periodically remind readers is absolutely critical reading in preparation for what comes next.

Then overnight none other than the Big Short, Michael Burry, who has been rather busy making waves within the financial community with his hot takes (most recently, his slam of Robinhood and his bullish view on Uranium), picked up on the theme of Weimar Germany and specifically its hyperinflation, as the blueprint for what comes next in a lengthy tweetstorm cribbing generously from Parsson’s seminal work. And while the details are familiar to most monetary historians, the fact is that now none other than the man who was made famous in the Big Short is calling for Weimar-style hyperinflation in the US. Below is an easily digestible repost of Burry’s lengthy Saturday tweetstorm, which shows just how similar our world is to that prevalent in the years just before Weimar Germany saw the most explosive hyperinflation in history.

The US government is inviting inflation with its MMT-tinged policies. Brisk Debt/GDP, M2 increases while retail sales, PMI stage V recovery. Trillions more stimulus & re-opening to boost demand as employee and supply chain costs skyrocket. #ParadigmShift”

Chuck Again…  You know… people didn’t listen to him in 2007… Will they listen to him now?  I doubt it, because people just don’t want to believe that the Gov’t would lead them down the road of runaway inflation…  But those of us that have hedged our investment portfolios with Gold & Silver, see and get what he’s saying… And speaking of inflation fears… don’t look now, but Copper is trading above $4.00 this morning…  hint, hint… 

Market Prices 2/22/21: American Style:  A$ .7885,  kiwi .7314,  C$ .7918, euro 1.2136, sterling 1.4018, Swiss $1.1137, European Style: rand 14.8392, krone 8.4912, SEK 8.2639,  forint 295.67,  zloty 3.7046,   koruna 21.3467, RUB 73.99, yen 105.58, sing 1.3228, HKD 7.7533, INR 72.42, China 6.4859, peso 20.66,  BRL 5.3806, Dollar Index 90.25,  Oil $59.69,   10-year 1.39%, Silver $27.52, Platinum $1,273.00, Palladium $2,414.00, Copper $4.01, and Gold… $1,798.40

That’s it for today…  Well today’s is Washington’s Birthday…  When I was in elementary school we celebrated Washington’s birthday, but years later they decided to bundle all presidents together, and call it president’s Day…  Well, the full team reports for Spring Training this week. When I first started coming to Spring Training down here in Jupiter, you could go around to the back and watch the team go through fielding and hitting drills… I could sit there on a bleachers bench, watching my beloved Cardinals practice on 3 different fields… But not this year! No one can watch practice… UGH!  Next Monday, I’ll have seen my first game of the spring… And this weekend we will be having guests… YAHOO! I told my friend, that it was good he was coming so that Kathy would stop yelling at me! HA! Our Blues split a pair of games with the Sharks this past weekend, and start a new pair of games tonight VS the Kings…  Let’s Go Blues!  And with that, one of my fave bands will take us to the finish line today, as Poco sings: Just For You And Me…  I hope you have a Marvelous Monday, and please… Be Good To Yourself!

Chuck Butler

 

 

PPI Surges Higher in January…

February 18, 2021

* Currencies & metals continued to get sold on Wed.

* Since the PPI print yesterday, the dollar is getting sold… 

Good day.. And a Tub Thumpin’ Thursday to you! With no games for me to want to watch last night, I began a hunt for something in my email archives…  Believe it don’t, but I’ve been asked by the folks at Asset Strategy International to be on a virtual panel that they host quarterly… And of course I said “yes, I would be honored to be on that panel”  When it gets close, I’ll be sure to give you all the link to watch it. I’ll be on with my publishers, and good friends, Mary Anne, and Pamela Aden.  Kind of reminds me of when I used to get requests to speak all the time…  Any way, they wanted a picture of me and a bio! Wait! What? I haven’t written a bio in 15 years!  Well, I did find what I was looking for after an extensive search, through my archives…  An old bio…  I updated it, made some changes, and doctored it up as best I could, and sent it off with a dated picture of me, but I don’t think that matters… The only difference in the picture and now is that now I’m completely bald, and wear different glasses…  The Guess Who greet me this morning with their song: Undone… “She climbed a mountain that was far too high, and when she found out she couldn’t fly, it was too late”…

I know that I’ve expressed my adoration for the singing voice of Burton Cummings the lead singer for the Guess Who, in the past, but in case you missed class that day, now you know!

Well, there was more selling of Gold yesterday, the markets were not kind to the shiny metal, but… There’s always a silver lining, right? And in Gold’s corner, there was a late day rally that brought the downward movement in Gold, which at one point in the day was negative $25, to a negative $17.60, to close at $1,776.90…  Silver which is enjoying this renewed interest in the metal, and causing major supply problems, gained on the day, -13 cents, to close at $27.45…

In yesterday’s Data Cupboard, there was the January PPI (wholesale index)  or Producers Price Index, which would indicate the early stages of inflation down the line as measure by CPI (consumer inflation)

Well… PPI has been benign for quite a few years now, as deflation as gripped the economy, and brought non-existent pricing pressures…  Well, yesterday, that all changed… And PPI posted a gain of 1.3% in January… This is the largest 1 month move in PPI since…. the government changed the way the inflation metric is calculated in December 2009!!! 

Now, remember me telling you that inflation fears at the consumer level, were rising, and helping to push the yields of Treasuries higher? Well, I did… Any way, this huge jump higher in PPI will eventually spill over the CPI, and when it does…  I wouldn’t want to be the guy that signs the stimulus bill!

I say that because…. Drum roll please….  Most economists that are smarter than the average bear, have said that the $1.9 Trillion Stimulus bill would cause inflation to rise…..  Well, it’s already rising and that’s before the Gov’t prints the $1.9 Trillion in new currency!

So, I believe that this surprise in PPI was the reason that Gold finally found a bid later yesterday, and is up in the early trading this morning…  Oh, and another surprise in yesterday’s Data Cupboard saw January Retail Sales soar 5.3%!!!!!  After 3 months of wallowing in the mud, this data set finally made a move higher, and taken with the increase of PPI, things are looking like CPI will be quite high when it prints next Tuesday 2/23…

Currency printing alone won’t move the inflation needle too much… But supply chain problems causing wholesale price increases that carry down to consumer price increases, will move the inflation needle…  About a week or so ago, I wrote about the two ways that inflation can arise…  I think it would behoove me to repeat that explanation, provided by Bill Bonner…

“Either the economy heats up (cyclical inflation)… and businesses need more labor and raw materials to keep up with the demand. Shortages then arise. Everyone tries to keep up with the whirlwind of getting and spending, leading to higher prices…

Or… the other possibility (systemic inflation) is that the economy cools down. Fake money, false price signals, regulation, bubbles, giveaways, and COVID-19 shutdowns could simply cause a cutback in buyable output… while the supply of available money continues to rise.”

Yes, the latter of the two ways is what we’re seeing these days… And that, my friends is the reason I think the recent bout of Gold selling has been about… These traders all know that when inflation does start to rise here in the U.S. that Gold will rise alongside it… Or at least historically it has done that, so they knocked the price of Gold down so that it starts its rise from a lower base….  I know, I know, you have to stick with me through the end of that discussion to get what I’m talking about, but you did it, and you get a Gold star for doing so! HA!

Oh, and a funny thing happened on the way to the Forum…  The Cartel’s Meeting Minutes from the last meeting were printed yesterday, and guess what the Cartel members had to say about inflation fears…. “they were not concerned about inflation, with “most” officials saying that inflation risks were weighted towards too low”  Hmmm… I wonder if anyone showed them the PPI print yesterday?  These guys and gals can’t find pin for a room full of bubbles, how would they know if they saw inflation rising? …   I’m just saying…

The Currencies yesterday, floundered about like a fish on the dock…But in the end, they gave back a bit more in value to the dollar bugs… The Dollar Index, which yesterday morning was 90.84, ended the day at 90.91… Obviously not as large an increase in the Dollar Index as the day before when it rose 84 bps…  But a day that the currencies aren’t proud of, for sure! 

In the overnight markets there’s been some dollar selling, as the currencies are a little higher VS the dollar this morning. Gold is up $3.70 in the early trading, while Silver is down -28 cents…  A reversal of the recent trend for these two metals. Pound sterling continues to rise, as does the price of Oil, which added another whole figure to its price in the past 24 hours, and now trades with a $61 handle… 

Yesterday, I made a BIG Deal out of the fact that China passed the U.S. as Europe’s top trading partner in 2020…  And that got me thinking about something that I had written a couple of years ago, when then President Trump announced the trade tariffs on China…  I said that no good would come of that, and asked him to reconsider the tariffs…  Remember? These tariffs were supposed to narrow the Trade Deficit that the U.S. had built over the years…   Well here are the facts on that… “The US last year posted its biggest annual trade deficit since 2008 as the global health crisis depressed export markets for American companies.

The gap in trade of goods and services widened to US$678.7 billion in 2020 from US$576.9 billion in 2019, according to Commerce Department data.”

Look who was right…. Neener, neener, neener!  The dollar was too strong for the past 6 years, and that has weighed heavily on our inability to make inroads in overseas exports… I read a report last year that made the hair on the back of my neck stand up…  (I really don’t have hair on the back of my neck, but if I did, it would have been standing up!)  The report was written by an economist who said that the Trade Deficit was not important… OK, smarty pants, what happens when you need to import a particular item from a country that you desperately need (like face masks), and through the years you have racked up a very sizeable trade deficit with this country… And the Country balks at giving you any more credit?  Well, in the old days, those would be fightin’ words… But in today’s world, everyone major country has the capability of wiping out the other countries, so it’s a Mexican Standoff, if you will when it comes to wars…

Then comes the scary part…  What happens IF the leader of the country in debt, decides that the only way out of this is by waging war?  Uh-Oh…

I rest my case…  And besides, what’s another $678 Billion in red ink?  It all comes from the Magic Money Tree, right?  I shake my head in disgust that these things are even thought of this way by some people….

The U.S. Data Cupboard yesterday had more than the data prints we’ve already talked about this morning… In addition, to retail sales, & PPI,  we also saw Jan. Industrial Production, which was positive .9%, but down from Dec’s 1.3% figure… And Capacity Utilization surprised with an upward move to 75.6 from 74.9…   That one is quite interesting, but one print doesn’t make a rally, for businesses, so we’ll circle back in March when February CAPU prints…

Today’s Data Cupboard has the Weekly Initial Jobless Claims,  and while we’re talking about inflation fears and trade problems, the Import Prices data will print today too…

To recap…  The currencies and metals got sold again on Wednesday, this time the selling wasn’t as harsh as Tuesday’s selling, but then it was still selling. Nonetheless….  In the overnight markets the dollar has gotten sold a little, so we’ll see if it carries over to today’s trading… Chuck talks at length about the rise in PPI, and points out the two ways inflation can rise. Chuck also spends some time talking about the U.S.’s trade problems… Chuck gloats about who was right about those tariffs!

For What It’s Worth… Ok, to end the week, I have a very long FWIW article for you today…  it’s title is in the link below…  this is a very important discussion folks, and that’s why I chose it for the FWIW article today, so grab a cup of coffee, and get comfortable…  And it can be found here: Who Bought the $4.5 Trillion Added in One Year to the Incredibly Spiking US National Debt, Now at $27.9 Trillion? | Wolf Street

Or, here’s your snippet: “Driven by stimulus and bailouts, and fired up by the tax cuts and by grease and pork, the Incredibly Spiking US National Debt has skyrocketed by $4.55 trillion in 12 months, to $27.86 trillion, after having already spiked by $1.4 trillion in the prior 12 months, which had been the Good Times. These trillions are all Treasury securities that form the US national debt, and someone had to buy every single one of these securities:     

Tuesday afternoon, the Treasury Department released the Treasury International Capital data through  December 31 which shows the foreign holders of the US debt. From the Fed’s balance sheet, we can see what the Fed bought. From the Federal Reserve Board of Governors bank balance-sheet data, we can see what the banks bought. And from the Treasury Department’s data on Treasury securities, we can see what US government entities bought.

Share of foreign holders falls to 25% for first time since 2007:

In the fourth quarter, foreign central banks, foreign government entities, and foreign private-sector entities such as companies, banks, bond funds, and individuals, reduced their holdings by $35 billion from the third quarter, to $7.04 trillion. This was still up from a year ago by $192 billion (blue line, right scale in the chart below). But their share of the Incredibly Spiking US National Debt fell to 25.4%, the lowest since 2007.

The Fed added $253 billion to its Treasury holdings in Q4, bringing the pile to $4.7 trillion by the end of December, a record share of 17.5% of the Incredibly Spiking US National Debt . Over the 12-month period, the Fed added $2.37 trillion in Treasuries to its holdings, more than doubling its pile:

Chuck Again…  I can’t get all of the article here so you’ll have to go to the link to read it all… It’s quite interesting seeing the distribution of Treasuries, and the increase that the Cartel, I mean the Fed, has taken on, which to me is nothing more than demonetizing the debt…  For which if the markets ever woke up and realized what the Fed was doing, would not be good for the dollar… 

Market Prices  2/18/21:  American Style:  A$ .7771,  kiwi .7206,  C$ .7880, euro 1.2064, sterling 1.3932, Swiss $1.1140, European Style: rand 14.5860, krone 8.4696, SEK 8.3170,  forint 297.25,   zloty 3.7202,   koruna 21.4186, RUB 73.77, yen 105.75, sing 1.3274, HKD 7.7425, INR 72.56, China 6.4561, peso 20.21,  BRL 5.3827,   Dollar Index 90.72,  Oil $61.38,  10-year 1.29%, Silver $27.16, Platinum $1,263.00, Palladium $2,400.00, Copper $3.88, and Gold… $1,780.60

That’s it for today… and of course this week…  Remember last winter, when I had to make 2 trips a week an hour north of where I stay, to the wound center in Port St. Lucie?  And this year, no such trips!  Tomorrow I’m going to be getting a visitor!  My good friend, Walt is coming to visit me. He says he needs a dose of Chuck’s thoughts… I said, “buy me lunch and I’ll talk all day!”   Tomorrow is also the day when I’ll be ordering my spring training baseball game tickets!  YAHOO… Pitchers and Catchers reported to Jupiter yesterday, so it’s all systems go, right now, subject to change at any time!  Feb. 28 is the first game for me… I’m already as excited about going to the stadium as a kid at Christmas! And with the Cardinal’s new 3rd Baseman, Nolan Arenado, the lineup will have a different look to it this year, which was badly needed for a bland offense last year… I don’t think I’ve missed any birthdays this week, so I’ll see what’s playing to take us to the finish line today… Ahh, it’s Brewer & Shipley with their rock classic song: One Toke Over The Line… Now there’s an oldie for you! And with that, I hope you have a Tub Thumpin’ Thursday, and will Be Good To Yourself!

Chuck Butler

 

 

China Passes The U.S. As Europe’s Top Trading Partner…

February 17, 2021

* A U-Turn in the Currencies & metals on Tuesday

* Chuck has a great 4-minute video for you to watch today… 

Good day… And a Wonderful Wednesday to you!… What has happened to my beloved Missouri Tigers Basketball team?… 10 days ago, they had moved up in the national standings to #10… And since that time they have lost three straight games, including their loss last night to Georgia… A team that they had beaten pretty handily earlier this season… My St. Louis U. Billikens played last night too, and they had little difficulty winning VS LaSalle.. We had a nice dinner last night with friends here, as two of them are headed back home today…  Why? Why would anyone go back to those cold, frigid, frozen tundras, covered with snow?  Me? I would rather build sandcastles on the beach, than snowmen in my front yard… I’m just saying…  Earth, Wind & Fire greets me this morning with their song: After The Love Is Gone…  “Oh, after the love has gone. What used to be right is wrong, Can love that’s lost be found?”

What used to be right is wrong…  Man, could those lyrics be any more truer today?  Oh well, I don’t want to start the day ticking everyone off with my thoughts on that, so I’ll stick to what I know best…

Baseball…  HA!  Just kidding I wouldn’t do that to you, right out of the starter’s blocks this morning! So, let’s turn to the currencies, which yesterday morning, were pushing the dollar down, but that didn’t last long in the U.S. trading hours, and soon the euro was trading below the 1.21 handle, after climbing to 1.2166 in the overnight markets Sunday night… What caused this major U-Turn?  Well, it wasn’t data that caused it, and it wasn’t any Cartel heads speaking that caused it…  So before we come to the conclusion as to what caused this dollar buying, let’s look at what Gold & Silver did yesterday…

Gold lost $24.90, on the day and closed below $1,800 at $1,794.50… Silver lost 34-cents to close at $27.32…  And don’t think for one minute that the rise in Treasury yields has caused this sell off of Gold & Silver… Because, as we have seen , with the recent increases in Treasury Yields, that they can be short lived…  All it takes is some Cartel buying to drive up the price and reduce the yield…  I haven’t looked at Ed Steer’s letter yet this morning, but I will go out on a limb and say that I think this attack on Gold & Silver, carried over to an attack on the currencies, and all of it benefitted the dollar. … So, adding 1+1 you get 2 (I don’t care what math teachers say about that these days!)  And the 2 here would indicate to me that it is represented by the price manipulators, and the PPT…  A deadly duo for non dollar assets…

The good folks at GATA sent me a quote from Craig Hemke of Sprott Metals, and he had this to say: “The fight against the criminal forces that control the precious metal pricing scheme continues, and it is still far from over. However, if we can continue to apply pressure to the banks through physical metal acquisition, a forced deleverage is coming. When that finally happens, you can be certain that the price discovered through a system that is more based in physical reality will not be $27 per ounce.”

Sounds a lot like me through the years, doesn’t it? I’ve always contended that to break the short sellers is to have loads and loads of physical metals bought and stood for delivery…  And that’s why I continue to harp on anyone that reads this letter that they need to buy physical metals…

And just to finish this off.. I have, for you, a link to a 4 minute video that the Reddit folks put together that’s a play on the movie: Downfall…  that the folks at GATA sent me…  And it’s titled: The Downfall of the Silver Cabal…  so check this out, it would be funny if….  Well, here’s the link: Downfall of the silver cabal : Wallstreetsilver (reddit.com)

Oh, and one more thing on Silver before we move along…  Dave Kranzler, of Investment Research Dynamics, and a constant contributor to the GATA folks, had this to say yesterday, “The iShares silver ‘trust’ SLV is likely a fraud.” 

In The over night markets… There was more dollar buying throughout the night, and this morning the Dollar Index is trading at 90.84, which is 70 points higher than yesterday morning’s 90.14… Gold & Silver didn’t fare any better than the currencies, and Chuck believes that the metals manipulators and the PPT combined forces to bring the non-dollar Assets down…  Chuck also includes a good link to a 4 minute video that you should watch for the fun of it… 

There’s a report out in the Eurozone that says that China has passed the U.S. as Europe’s main trading partner… Wait! What?  Yes, here’s a sample of the report… “Recent data from the European Union’s statistics office, Eurostat (pdf), show that China dethroned the US as Europe’s top trade partner in 2020. EU exports to China grew by 2.2% to €202.5 billion ($245 billion) and imports from China increased 5.6% to €383.5 billion in 2020, while EU exports to the US fell by 8.2% and EU imports from the US dropped 13.2%.” 

Yes, that makes sense given that China’s economy grew last year, while the other major trading countries saw their economies contract.  But when I read the article, I kept saying to myself: Say it Ain’t So Joe! 

The price of Oil has climbed to a $60 handle in the past 24 hours..  Seems the frigid temps have shut down refineries in Texas, as the cold front has dipped into the southern part of the U.S.  So is this a lasting rally in Oil, or is it a short timer?  I just think that it’s pretty interesting to see Oil trading with a $60 handle, for what’s it been  2 years since we last saw this? 

As I mentioned above, Treasury yields continue to climb higher, and the 10-year Treasury’s yield is at 1.29% this morning…  This rise has been quick and to the point which has me worried…  but like I said above, all it would take is for a boat load of buying from the Cartel to bring yields back down, but after they have risen so much, how much could they really be brought down? I guess we’ll have to wait-n-see, eh? 

Ok, here’s something that I want to get off my chest…  it risks being political in a sense, but that’s not my goal here… My goal is to point out that food supplies are dwindling, and that will cause huge spikes in the price of food…  You, me, and the guy down the street that washes his car with his shirt off, will all feel the pain of higher food prices… Didn’t I tell you last week that my wife has already reported to me that groceries are much more expensive these days? 

What’ causing these dwindling food supplies?  Well, the burningplatform.com had an article this past weekend that I’m going to give you three paragraphs from… Ready?  Yes, I’m ready…

“One of those presidential actions envisions the conservation of 30 percent of the nation’s lands and waters over the next decade. Where will all of that protected land come from? Perhaps from Bill Gates, who now owns the deed to most of the farmland in the nation? Doubtful.

The answer is from small, independent farmers, whose agricultural activities, the Democrats say, are responsible for 10 percent of the manmade greenhouse emissions purportedly frying up the planet.

Indeed, what seems to be happening in the United States is that the local farmers are being squeezed out of business, or paid not to grow food, while Big Agriculture is more concerned with exporting its supplies than keeping domestic food stocks safe and affordable. That seems to be a reckless policy at the best of times; at the peak of a pandemic, however, it is simply a recipe for disaster.”

OMG! What are we doing? Well… I guess the answer is in the desire of the Gov’t, and their Cartel, and Treasury that we as a country generate inflation…    All I’m going to say here is that we, as a country, need to be careful what we wish for… Because, you see, I don’t see a gentle rise in inflation… I see it getting away from us so fast that it would make your head spin…  And then the only way to get it under control is to raise rates.. And with all the debt that we have to service, higher rates is NOT advised…  Candidate Trump back in 2015, said that if Interest rates got to 5% “We were screwed”… Sorry about the language, just wanted to make the quote correct…

Ok, well the U.S. Data Cupboard today finally gets off its rear end and off the couch, where it was relaxing and eating chocolate bon-bons last week, and will give us some real economic prints today… First on the docket is Jan. Retail Sales… Refresher.. Retail Sales in December were negative -0.7%… I don’t believe the BHI (Butler Household Index) indicated that Retail Sales will be strong in January… They may not be negative, but they won’t be strong…

In addition, we’ll also see Industrial Production and Capacity Utilization for January…  Don’t look for any miracles here folks… The rot on the economy’s vine is being exposed daily…  The economic prints should be like the Paul Simon song: Oh, Cecelia you’re shaking my confidence daily…

To recap…  It was an ugly day yesterday, after seeing things change in the overnight markets, the price manipulators and the PPT went to work to support the dollar… Gold lost $24, and the euro lost about 1-cent on the day… Ugly, ugly, ugly… That’s for sure… Chuck talks about inflation again, and also talks about food shortages causing rising prices… The games people play now.. every night and every day now, never saying what they mean, now, never meaning what they say… (Joe South)  And to that, Chuck talks about Silver a lot today…

For What It’s Worth… Ok, well, since I talked a bit above about the rise in the Treasury yields, I thought it would best to follow it up with an article about it in the FWIW section today… And so… That’s what we have. A zerohedge.com article about the rise in Treasury yields, and it can be found here: 1.25% 10Y Yields: Now What? | ZeroHedge

Or, here’s your snippet: “10-year yields broke through 1.25% during the overnight session on what can best be described as pressing a crowded trade. We’re certainly onboard with a challenge of 1.25% and 1.273% (March 19th peak) beyond there, if for no other reason than late-Friday’s selloff has created more questions than answers – suggesting the underlying momentum evident during the overnight session must run its course before any retracement is in the offing.   

Moreover, the lack of an immediate bearish trigger also implies the recent bout of weakness has taken on a different character than had the march toward higher yields been accompanied by a fundamental data event or an influx of Treasury supply. In fact, the relatively smooth takedown of the February refunding left investors with the impression the supply concession in place prior to the auctions themselves would be sufficient. It’s the reemergence of the bearish trend in the absence of an identifiable catalyst that makes the selloff particularly notable.

Given the fact rates are edging higher on a combination of bearish underpinnings as opposed to a distinct driver, the technical landscape is useful in gauging the extent to which any repricing may extend. Beyond 1.273%, there is little support for 10s until an opening gap from 1.431%-1.471% that was established in late-February. 1.50% also holds obvious significance, however a 25 bp selloff driven by a series of already known bearish factors is difficult to envision, leaving us to anticipate dip-buying will emerge long before the overhead opening gap with an eye on anything >1.30% as sufficient incentive for any demand not sated by last week’s auction of $41 bn 10s at 1.155%.

To be fair, there are plenty of factors supporting a durable repricing toward higher Treasury yields;

  1. inflation expectations as evidenced by 10-year breakevens at 224 bp overnight,
  2. elevated energy prices as the front-month WTI nears $61/barrel,
  3. progress toward Biden’s stimulus deal expected by month’s end now that the impeachment trial has been concluded,
  4. massive Treasury issuance needs and, of course,
  5. record high equity prices yet again.

We’d be remiss to argue against the intrinsic bearishness of these factors, rather the challenge is gauging the extent to which any repricing can sustainably press before running up against the bullish concerns.

Chief among the influences expected to keep yields from returning to an environment in which 2-handle 10s are back on the table is the overhang of slack in the labor-market resulting from the initial hit to the front-line service sector. 

Chuck Again… See what I mean? There are arguments on both sides of the table regarding whether these higher yields can be added to or subtracted from… 

Market Prices  2/17/21… American Style:  A$ .7738,  kiwi .7181,  C$ .7870, euro 1.2060, sterling 1.3858, Swiss $1.1164, European Style: rand 14.7652, krone 8.4782, SEK 8.3318,  forint 297.68,  zloty 3.7334,   koruna 21.4340, RUB 73.46, yen 106.04, sing 1.3293, HKD 7.7523, INR 72.82, China 6.4560, peso 20.31, BRL 5.3686,  Dollar Index 90.84,  Oil $60.74,  10-year 1.29%, Silver $27.22, Platinum $1,239.00, Palladium $2,400.00, Copper $3.82, and Gold $1,791.80

That’s it for today… Well, yesterday was Fat Tuesday, although, there were no Mardi Gras celebrations on the streets in New Orleans, or St. Louis… It would have been too cold in St. Louis, but the pandemic put the kyboshes on that! My Billikens have won 4 games in a row, and are looking like they did before they had the Covid breakout on the team and had to shut down for three weeks, and miss 10 games! Yesterday was a day of rain here… With all the sun you’ve got to have a little rain sometime… right? It was still warmer than 48 other states!   I hit the wall yesterday, and without any sun to sit out in, I began reading my new book, and fell asleep in my recliner… Waking up in time to go to dinner! The sun has returned this morning, so hopefully I can stay awake to enjoy it! HA!  Heartsfield takes us to the finish line today with their rock classic song: Shine On…  I sure hope you have a Wonderful Wednesday, and continue to Be Good To Yourself!

Chuck Butler

Bond Yields Are Rising… A Sign Of Caution?

February 16, 2021

* Currencies & metals have a rough end of the week… 

* But the overnight markets, last night, bring about dollar selling! 

Good Day… And a Tom Terrific Tuesday to you!  Well, I sure hope you had a nice weekend… I’ve heard from folks back in the MidWest, and they didn’t have a nice weekend, as frigid cold temps and multiple inches of snow put the kyboshes on most Valentine’s Day celebrations…  My darling daughter Rachel was kidding when she asked me yesterday if I missed the weather there, and I replied, “yeah, I miss it like the plague”!    It was sunny, a little breezy, and 80+ here yesterday… Now that, I can truly appreciate! I finished reading a book that I thoroughly enjoyed..  the book’s title is: The Spy and the Traitor, by Ben Macintyre… It’s nonfiction, but it kept me on the edge of my seat… One of my fave people in the world, Allison Baur, was given the name Allison Road, by me,  when she was a young girl… And her smiling face always lights up a room… And The Gin Blossoms greets me this morning with their song: Allison Road…  In honor of my favorite Allison!

Well, well, well, what do we have here? To start our day today, I have an interesting thought for you to consider… Do you recall the feel the day… the music died?  That song is on my mind this morning, as I relate it to the news over the weekend from the good folks at GATA… So, here we go… remember when I told you that I had doubts about whether or not the Trust company that stores the physical Silver for the Silver ETF, actually had the physical Silver to back up the total ounces represented by the ETF’s?  Ok, in case you forgot, there’s your reminder…  Now keep that in mind as I tell you about how  The silver exchange-traded fund SLV appears to have just amended its prospectus to acknowledge difficulty in sourcing metal for the fund.

The amendment warns that the fund now may be vulnerable to a “dramatic” short squeeze — like the recent short squeeze in GameStop shares that caused a worldwide sensation.  – UH-oh…

So, bye, bye Miss American Pie…  ETF holders of SLV now have to worry about whether or not the Trust Company has the physical Silver or not….    Questions 67 & 68!

Ok, now that’s a way to start a letter with a HUGE insinuation right from the get go! HA!  

The currencies & metals didn’t have good days on Thursday and most of Friday…  And the Dollar Index which on Thursday morning was 90.39, and on Friday at the close, the Index was 90.48…  The euro held in there for the most part, and began to come back on Friday late in the trading day.   Gold & Silver didn’t fare well either day… Gold lost $19 on Thursday, and 40-cents on Friday… Silver did better, but still lost on Thursday 5-cents, and on Friday Silver gained 20-cents…  Gold Closed on Friday at $1,824, and Silver closed at $27.46

Friday’s price action in Gold was something to behold… At one point in the day it was down to $1,810, down $14, but then it came roaring back to close at $1,824, down just 40-cents on the day…  One would have thought that this comeback in Gold would have carried over to Monday’s trading, but with the U.S. markets closed for the President’s Day / Mattress Sale Holiday, Gold lost $5.90 to close yesterday at $1,819.40 and Silver closed at $27.66

In the overnight markets, the dollar is back on the chopping block, with the Dollar Index falling to 90.14, the euro climbing, and dragging the other currencies along. Gold is down 80-cents in the early trading and Silver is up 6-cents… So, no real movements here with the Gold & Silver… Copper on the other hand is up to $3.81 this morning.. Another strong move higher for the base metal.. 

Ok, enough of that… I was sitting around the pool yesterday with some friends from our building, when of the ladies said, “Chuck can tell us about this”… She continued, “I read where China is attempting to take over the reserve status of the dollar”… I said, well, this all began in 2009, when China began signing currency swap agreements with its trading partners, removing the dollar from the middle of the terms of trade…  I then explained that China works on 100 -year plans, so this is not something that’s going to happen overnight, but it is something that China has been working on .I then explained that China needed deeper currency markets for the renminbi, and larger more open bond markets, and once they have established those two things, they can work on easing investor’s minds that the currency is from a Communist nation…

Another currency that investors just can’t get warmed up to, is the Russian ruble… Russia gets blamed for everything, but… What they don’t get blamed for is the expertly way they’ve been able to grow their economy while the U.S. and Eurozone economic sanctions remain in place. But… if you can get past the fact that its Russia’s currency, then you would find one of the very few currencies that still pay interest on deposits… And you would also find a currency that’s so tightly tied to the price of Oil…  As the countries of the world begin to spool up their respective economies, the price of Oil will, in my opinion, rise again, and that bodes well for the ruble..

Already the ruble has in the past 10 days rallied alongside the rise in the price of Oil… And speaking of the price of Oil, it has risen to trade with a $59 handle this morning…  Talk about looking forward when trading… 

Ok, remember me saying that I wasn’t jumping on the pound sterling bandwagon?  For those of you who aren’t following me here…  A couple of weeks ago, I talked about how the pound sterling was rallying, and really outperforming most other currencies, and I questioned the reason for the rally, saying to be careful out there….    And then over the weekend this blurb showed up in my email box…

“The U.K. economy contracted by 9.9 percent in 2020, initial estimates from the Office for National Statistics showed on February 12, 2021. A study of historical data by the Bank of England shows that recession to be the worst since 1709, the year known as the Great Frost, an extraordinarily cold winter in Europe, what was then a largely agricultural economy”  

Ok, so markets look forward, and not backwards, so they don’t care about the economy contracting 9.9% last year… But when you come from that low of a figure for economic growth, and the reasons for the contraction are two-fold, with 1. Being the pandemic, and 2. Being the U.K.’s debt levels, and neither of those two have gone away… One has to wonder what the markets are looking at in the future to warrant this rally in sterling…  I’m just saying…

Inflation fears are rising folks…  I talked a lot about inflation and the fears of inflation last Thursday, so if you missed that discussion, simply go to www.dailypfennig.com and read it there…  One of the key indicators that inflation fears are rising is the performance of the base metal, Copper…  And Copper, of which I’ve only very recently been reporting the price each day, has gone from 3.62, to 3.81  in price in the past few weeks…  Now, you might think that this move higher for Copper isn’t much compared to Bitcoin’s latest move, you would be right, unless of course you remembered, with my help of course, that copper is bought in HUGE quantities… So, to buy a Ton of Copper for wiring etc. this move in price would be very damaging to your bottom line…

And to add further on these inflation fears… The yield on the 10-year Treasury is on the move to higher ground, and this morning it trades with a 1.26% yield..  That’s nearly double the yield it traded at a few months ago…  The Bond Boys are telling us something, and I think it’s all about inflation… 

Did you hear the news late last week that the U.S. is moving along with their own version of a digital currency?  Just remember when one day you wake up to find that your dollars in the bank are now digits, that I warned you in the summer of 2020…  

And speaking of digital currencies, China has moved along with the implementation of their own digital currency, testing it in a few cities in the mainland…  So, far, so good, but then you wouldn’t expect to hear anything other than things were fine, from the Chinese, right? 

The U.S. Data Cupboard was guilty of non-performance last week, but it will redeem itself with this week’s fare of economic reports, and it all gets started tomorrow, with January reports of Retail Sales, Industrial Production and Capacity Utilization… So, the dollar gets to trade without burden of weak data another day today…

To Recap…  The currencies & metals ended last week on a down note, but in the overnight markets the dollar is back on the chopping block and all the anti dollar asset classes are on the rally tracks…  The U.K. just printed its worst economic performance since the “cold winter” and still pound sterling rallies…  And Chuck points out that the bond boys are telling us that inflation is rising with the rise of bond yields… 

For What It’s Worth…  I have to say that, while I’ve heard this speech before, it really lit the lightbulb over my head to bright! This is James Rickards, talking about a method used by FDR back in the 30’s to spur inflation, and how it should be used today… And it can be found here: The Only Way Out of the Death Trap – The Daily Reckoning

Or, here’s your snippet: “I’ve said the U.S. is caught in a debt death trap. Monetary policy won’t get us out because the velocity of money, the rate at which money changes hands, is dropping.

Printing more money alone will not change that.

Fiscal policy won’t work either because of high debt ratios. At current debt-to-GDP ratios, each additional dollar spent yields less than a dollar of growth. But because it must be borrowed, it does add a dollar to the debt. Debt becomes an actual drag on growth.

The ratio gets higher, and the situation grows more desperate. The economy barely grows at all while the debt mounts. You basically become Japan.

I’ve written about it before, but it bears revisiting, especially since there are newer readers who may be unfamiliar with it. Here’s how they can do it:

The Fed can call a board meeting, vote on a new policy, walk outside and announce to the world that effective immediately, the price of gold is $5,000 per ounce. They could make that new price stick by using the Treasury’s gold in Fort Knox and the major U.S. bank gold dealers to conduct “open market operations” in gold.

The Fed will be a buyer if the price hits $4,950 per ounce or less and a seller if the price hits $5,050 per ounce or higher. They will print money when they buy and reduce the money supply when they sell via the banks.

The Fed would target the gold price rather than interest rates.

The point is to cause a generalized increase in the price level. A rise in the price of gold from $1,900 per ounce to $5,000 per ounce is a massive devaluation of the dollar when measured in the quantity of gold that one dollar can buy.

There it is — massive inflation in 15 minutes: the time it takes to vote on the new policy.”

Chuck Again…  Yes, it would create inflation and yes it would help with the debt levels, but… it would massively reduce the buying power of your dollars… So… it would behoove you to have at least a 20% allocation of physical Gold in your investment portfolio…  So, when your dollars get whacked, your Gold will be there to offset the losses in the dollar…  I’m just saying…

Market Price 2/16/21: American Style:  A$ .7796,  kiwi .7260,  C$ .7918, euro 1.2166, sterling 1.3928, Swiss $1.1265, European Style: rand 14.4520, krone 8.3661, SEK 8.2594,  forint 293.87,  zloty 3.6907,  koruna 21. 1378, RUB 73.36, yen 105.37, sing 1.3229, HKD 7.7523, INR 72.71, China 6.4568, peso 19.99, BRL 5.3684,  Dollar Index 90.14,  Oil $59.80,  10-year 1.26%, Silver $27.72, Platinum $1,299.00, Palladium $2,460, Copper $3.81, and Gold… $1,818.60

That’s it for today…   man am I ever getting bad at remembering birthdays!  I need to implement a calendar and record them and have them pop up each day to remind me to mention them! Last week, for instance, I forgot to mention the birthday of one of my fave people, Lisa Yanker… I sure hope her day was grand!  My computer still thinks I’m in St. Louis, and it gives me the weather each day when I turn it on… And this morning it said the temp was 0….  YIKES! Winters like I remember them being, Cold, and full of snow! Hmmm…  You don’t think that, no, it couldn’t be a return to the weather cycle of nasty winters…  Something to think about!   The great guitar player, Elvin Bishop takes us to the finish line today with his song: Traveling Shoes…    I hope you have a Tom Terrific Tuesday, and Please Be Good To Yourself!

Chuck Butler

Inflation Fears Are Growing…

February 11, 2021

* Currencies & metals rally for a 4th consecutive day!

* What’s the deal with the Gov’t’s version of Consumer Inflation? 

Good Day… And a Tub Thumpin’ Thursday to you!  Well, both my fave college basketball teams were playing last night at the same time, which had me going back and forth to watch both the Mizzou, and St. Louis U games… I couldn’t stay awake for either one, and so when I woke up in the middle of the night, which is what I do almost every night, I checked my phone to see who won the games…   Mizzou got pummeled and SLU won… It was another beautiful day here, warm, with full sun, and umbrella blue skies…  The daily highs in temps here for the next 6 days will be about the same, before we see the highs dip into the 70’s again… I absolutely love this weather!  An old friend who used to come to Spring Training with us, before bowing out, Big Jay, used to say, “the weather is the same every day, sunny and 80”… And if he were going to be here this week, that would have held true for him! Gerry Rafferty, greets me this morning with his song: Get It Right Next Time…  Gerry Rafferty also sang for Steeler’s Wheel, back in the day… And we lost him way too early… 

Well, the Dollar Index lost more ground yesterday, but not a huge chunk of ground, but lost ground nonetheless. In the FWIW section today, I will have an article on the Dollar Index, so make sure you don’t change channels! So… it was the 4th consecutive day of dollar weakness, and I’m of the opinion that this is exactly what the Cartel heads want to see… A slow grind down for the dollar, so that people don’t try to hit the exit door at the same time… Sort of like the old story about how if you put a frog in boiling water, it’ll jump out immediately. But if you put him in warm water, and slowly turn the heat up, the frog will never notice it, until it’s too late!

And one way to keep the dollar from falling off a cliff, is to keep a lid on what people think is the real Consumer Price Index (CPI)… Yesterday, the stupid CPI showed a .3% gain, which was widely expected to happen, but Core Inflation was flat, no growth…  Really?  So food and energy, by way of deduction here was up .3%… Since the total number was .3%, but when taking out food and energy, it was flat, then Food and Energy was .3% higher…

You know, when my wife tells me that the prices at the grocery story are higher every time she goes back, then you know that food prices are rising, and that’s a form of inflation…  And the game keeps getting played by the Gov’t… Telling people lies about what the real inflation rate is… John Williams over at shadowstats.com, who calculates how CPI was computed before Clinton and Greenspan worked their magic with hedonic adjustments, says that real CPI is north of 5%… Now what do you think investors would be thinking if the Gov’t printed a 5% CPI? Well, I can tell you that they would be thinking of dumping dollars quicker than NY Minute!

And like I told you yesterday, the Chapwood Index shows inflation is around 10%…   Longtime friend, Bill Bonner explains the two kinds ways inflation is derived… So, here’s Bill from his letter yesterday, that can be found here: Bill Bonner’s Diary – Daily Newsletter | Rogue Economics

Either the economy heats up (cyclical inflation)… and businesses need more labor and raw materials to keep up with the demand. Shortages then arise. Everyone tries to keep up with the whirlwind of getting and spending, leading to higher prices…

Or… the other possibility (systemic inflation) is that the economy cools down. Fake money, false price signals, regulation, bubbles, giveaways, and COVID-19 shutdowns could simply cause a cutback in buyable output… while the supply of available money continues to rise.”

Chuck again… And the latter of those two are what we are looking at now folks…  Sure I’ve told you before that the velocity of money was the key to rising inflation, but this systemic inflation is real… and scary… 

Ok, so the currencies gained small amounts yesterday, nothing to write home about, but the Dollar Index which yesterday morning was 90.47, ended the day at 90.43, after hitting a low of 90.37. So, from this index you can see just how small the moves in the currencies were… But as I described yesterday, still making progress, which is important… 

Gold gained $4.60 yesterday, to close at $1,843.40, and Silver lost 20-cents on the day to close at $27.12…   But Gold was higher during the day by $12 more, which the price manipulators couldn’t leave alone… This current rally in Gold, from reaching a low last Thursday morning, has gotten its legs under the shiny metal’s price, and that’s a good thing… it doesn’t mean that the Gold rally is a One-Way Street upward, it’s just a good thing to follow… For if you haven’t bought your Gold by now, after all my hinting and pointing you in that direction to do so, then you’ll need to wait for the next dip lower in the price, and buy on the weakness…  Buy the weakness, sell the strength… One of the first things I learned when I began in the financial industry in 1973…

You see, I had missed the starting semester of College in September 1973, because I was still traveling around the country in our VW microbus, playing my guitar and thinking that all I needed was a break, before becoming a Rock Star…. So, in Rocktober of 1973, I began at Stifel Nicolaus and it was just supposed to be a temp job until the next semester began…  I loved learning about markets, and how they worked and traded, etc. and I never went off to college… Instead, I opted for night classes, of which two of my classes were on economics… I would bet a dollar to a Krispy Kreme, what I learned back in the day, VS what they teach in econ classes now, would not be the same…  But I digress…

In the overnight markets, The Dollar Index has fallen further, so if things continue this way today, it will mark the 5th consecutive day of dollar weakness… Gold is down a buck in the early trading, and Silver is up a nickel! So, no real movements here so far today…  The CPI data yesterday stirred the blood hot in Gold traders and it began to move higher, but was cut off at the pass, and only allowed to gain $5…  The euro is moving higher in the 1.21 handle, and the Petrol Currencies are back on the rally tracks, with the price of Oil staying above $58… 

The price of Copper has really moved higher in the last week… When I first began to report Copper’s price it seemed that it remained at 3.62, every day…  But then last week it began to move higher, and today Copper is trading at $3.76…  A friend of mine that has to buy copper for wiring, asked me what was going on with the price of Copper, and I told him that it was inflation fears…His customers were not happy with that for sure, but it is what it is… 

The U.S. Data Cupboard, only has the Weekly Initial Jobless Claims suite of data prints today… Remember what I told you last week that you shouldn’t pay attention to the continuing claims behind the curtain, for once the continuing claims run out, the person is no longer counted at unemployed… And they certainly are no longer receiving their continuing claims, so they get dropped!  Like I described yesterday, makes about as much sense as a tanning booth at a nudist colony! 

And we’ll end the week, tomorrow, with the Data Cupboard still lacking at best, to produce a print of real economic data…  And next week will start off slow, staring with nothing on the Monday President’s day Holiday, and won’t get around to printing anything worth looking at until Wednesday, when Retail Sales and Industrial Production and Capacity Utilization will print… That seems to me to be a long time from now, especially with the Monday holiday in the middle…

The reason this is something to talk about, the lack of data, is that the last real piece of economic data was last Friday’s Jobs Jamboree, which was downright awful/ weak. So the bad taste of that report is still in the mouths of currency traders…  But it’s wearing out, and they need something else to reinforce their belief of the need to sell dollars…

To recap…  it was indeed the 4th consecutive day of dollar weakness yesterday… Gold gained, but Silver lost, and the Dollar Index keeps going down, to the ground, to the earth… And pretty soon, it could reach lows it hadn’t seen in several years! Chuck stays strictly to the markets that he covers today, without any straying into fields that get him in hot water with some readers, so that should make everyone happy!

For What It’s Worth…  Well, for some time now, the good folks at FXStreet.com have posted my Pfennigs on their site, and then posted them on Twitter, so when I saw this report from them on the Dollar Index, I though that I should return the favor! So that’s the FWIW article today, from the FXStreet.com and it can be found here: US Dollar Index Price Analysis: DXY drops further below key support to refresh monthly low (fxstreet.com)          

Or, here’s your snippet: “DXY bears attack late January lows during the four-day declines.

  • MACD flirts with bears, sustained trading below key SMAs nd trend line suggest further weakness.
  • Confluence of 100-day SMA, 50% Fibonacci retracement adds to the upside filter beyond the monthly top.

US dollar index (DXY) remains depressed around 90.40, intraday low of 90.37, ahead of Wednesday’s European session. In doing so, the greenback gauge stretches Friday’s U-turn from a two-month top towards attacking the lowest since January 29.

Also portraying the bearish momentum could be the gauges downside break of a short-term support line, stretched from January 06, marked the previous day, as well as receding strength of the bullish MACD.

Even so, 50-day SMA near 90.40 restricts the dollar moves while joining hands with 23.6% Fibonacci retracement of November-January downside.

Overall, the bears have an upper hand over the USD bulls but are waiting for the fresh impulse to attack the 90.00 threshold, needless to mention about the yearly bottom surrounding 89.20.

Meanwhile, the corrective pullback may attack the previous support line, at 90.76, but further recoveries will have to refresh the multi-day top beyond 91.58 to attack the key hurdle around 91.75, including 50% Fibonacci retracement and 100-day SMA.”

Chuck again… Technicals are something that I’ve never really depended on, as they normally tell you why something happened after it happened, but once in a while you get something that looks forward, and this is what they are doing here…

Market  Prices 2/11/21: American Style: A$ .7750,  kiwi .7230,  C$ .7890, euro 1.2130, sterling 1.3827, Swiss $1.1236, European Style: rand 14.6404, krone 8.4566, SEK 8.3118,  forint 294.34,  zloty 3.7094,  koruna 21.2483, RUB 73.82, yen 104.70, sing 1.3242, HKD 7.7526, INR 72.79, China 6.4442, peso 19.94,  BRL 5.3799,  Dollar Index 90.39,  Oil $58.29,  10-year 1.14%, Silver $27.16, Platinum $1,256.00, Palladium $2,440.00, Copper $3.76, and Gold… $1,843.50

That’s if for today… And tomorrow, and Monday as well..  Well, you still have a couple of days to secure a Valentine’s Day President for your sweetheart…  On Saturday this week it’ll be my very good friend’s birthday.. .So Happy Birthday Duane! It would also have been my oldest sister’s birthday… We lost Brenda to cancer a very long time ago now, but as I did the night before when I heard the song: Tell It Like It Is, by Arron Neville, I’m reminded of how she taught me to slow dance to that song… I’ve lost both my older sisters, and at times like this I find that I miss them terribly! The Turtles takes us to the finish line today with their song: Happy Together…  “no matter how they toss the dice, it had to be, the only one for me is you, and you for me, so happy together!  I hope you have a Tub Thumpin’ Thursday and a Fantastico Friday tomorrow, and Please Be Good To Yourself!

Chuck Butler

 

 

Another Day Of Dollar Weaknes

February 10, 2021

* currencies & metals gain a 3rd consecutive day… 

* Gold & Silver keep pushing higher… 

Good Day… And a Wonderful Wednesday to you…  No local St. Louis, or Missouri teams were playing last night, so Kathy and Chuck went to dinner with friends, Pete and Karen… A good time was had by all, and Chuck had some of the best tasting pastrami ever! I realized yesterday that I had been very bad about remembering birthdays… But to my defense they did happen while I was very sick for a few days… So, Happy Belated Birthday wishes to: Chris Gaffney and Christine Peplow, two of my former colleagues on the World Trading Desk…  My bad, My bad on that one.. But they shouldn’t feel too badly, because I also missed my youngest brother’s birthday… I’m very sorry about that Michael!  I guess that when you get to my age, that remembering birthdays is like remembering the Gettysburg Address! Four score and seven years ago, Our fathers brought forth on this continent, a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal. We are now engaged in a great Civil War.. And from there, I would have to go to Google to get the rest, But in my elementary years, we had to recite this address in front of the class, and I aced it!  At least that’s how I remember that going! HA! The Walker Brothers greet me this morning with their song: The Sun Ain’t Gonna Shine Anymore… “the moon ain’t gonna rise in the sky… The tears are always clouding your eyes, when you’re without love”…

Well, that was a long intro this morning… And I’m not beating around the bush here this morning either… It was another good day for the currencies, led by the Big Dog, euro, and while Gold & Silver were not able to hold onto their early trading gains, Gold did find a way to gain $7.40 while Silver ended up the day down 1-cent…  So, in my books that’s a 3 consecutive days of rallies for the currencies and metals…

The euro added to its gains above 1.21 on the day, to end the day at 1.2130… And like I said yesterday, the trader sentiment toward owning dollars right now has certainly changed… At first, on Monday morning, I only saw the weak Jobs numbers as the reason for the change in trader sentiment, but, as the time grew on, I realized that it probably had a lot to do with the fact that the $1.9 Trillion Stimulus is on the fast track of approval… And if there’s anything that gets traders upset about owning dollars is the ideal of more debasement of dollars!  And of course that’s exactly what we would have when the Gov’t beings passing out the stimmy checks!

And that my friends is what I’m going to talk about a lot this morning… Debasing the dollar… Every time the Fed & Treasury decide to print more currency, the current stock of dollars outstanding get debased even more…  This Thursday, good friend Dennis Miller is going to take on the, what I call, The Magic Money Tree… And if you don’t think that not having any spending restraints, which is what the Magic Money Tree (MMT) is all about, isn’t goin to debase the dollar by large amounts, then you’re drinking the gov’t’s Kool-Aid… Because it will, and a weaker dollar allows other countries’ inflation to be imported into the U.S. economy…  There’s no two-ways about this, either, so don’t go looking for one…

Many, many years ago, when I was writing for Mark Twain Bank, and Japan was going through their exercise of stimulus packages, and Quantitative Easing, and so on, I wrote about how if Japan really wanted to introduce inflation into their economy, they should allow the Japanese yen to weaken, which would bring inflation into the Japanese economy…  But did they listen? No… And even during the years when the dollar was getting stronger, the yen remained just as strong… And so here Japan is some 25 years later, and still no inflation…

Ok, back to the U.S. and their grand experiment to bring inflation into our economy that hasn’t been prevalent since Paul Volcker killed it in the 80’s…  Yes, the Chapwood Index, which I introduced to you, dear reader over a year ago, still has U.S. inflation around 10%, but that’s dealing with things the right way, and not the way the U.S. Gov’t chooses to do so… For if they did, citizens of the U.S. would be screaming bloody murder about how the Gov’t allowed inflation to get away from them!

So it was only a matter of time before the lightbulb over currency traders went on, and made them realize what the Cartel and Treasury were dong to the dollar, and allowing inflation to become a thing to have to deal with, all the while eating away at each citizen’s buying power, as the dollar goes on an extended ride down the slippery slope…  With that scenario, is it any wonder that currency traders’ collective sentiment would change about owning dollars?

So, be sure to check out www.milleronthemoney.com tomorrow if you don’t subscribe to his letter, and read about the Magic Money Tree, and while you’re there, sign up! Dennis and I share ideas all the time, so you might read something there that you didn’t read here, from me! 

In the overnight markets, there was some slippage in the currencies, but they are still stronger this morning than they were yesterday, for the most part, and Gold is up $2, and Silver is up 4-cents in the early trading today. The euro which reached 1.2130 yesterday, and slipped back to a 1.2116, level, but that’s small potatoes folks… So the slippage has be nascent at best… 

So, as we start our Wonderful Wednesday, this is the 4th consecutive day of dollar weakness… I fell that it’s important that Gold & Silver show progress every day, even if it’s a buck or two for Gold and a couple of cents for Silver. I liken this thought to the thought that I’ve always held about football games… The offense needs to gain 10 yards to get a new fresh set of plays. Each play it is important that they gain ground, no losses, no penalties, progress on each play, and that way it’s easier to gain the 10 yards… 

The U.S. Data Cupboard is still lacking any real economic data today. The stupid CPI (consumer inflation) will print for January along with the Core Inflation data… Where they take food and energy out of the inflation calculation, which makes about as much sense as owning the tanning salon at a nudist camp. It’s not like we the people don’t use eat every day, and use energy… Come on throw us a bone here and admit that we’re smarter than the average bear! 

The Federal Budget is due to print today, but sometimes the Gov’t accountants get behind and the data doesn’t print on time… When that happens you’ve got to use imagination as to why it didn’t print. I’ve always contended that it was ready to print but the number wasn’t what the Powers that be want it to be, so they have to go back and massage the numbers, cook the books, and see what comes out then…  That’s my story, and I’m sticking to it! And my first wife was a young Elizabeth Taylor!  (I love the humor of John Lovitz!) 

To recap… it’s the 4th consecutive day of dollar weakness today, as least so far this morning it is…  Trader sentiment has really done a 180 on owning dollars, and there’s two things that have caused this to occur… The weak jobs data last Friday, and the fast track that the Stimmy Checks, i.e. currency printing, thus debasing the dollar, is apparently on..  Chuck talks about this debasement of the dollar this morning, and how that’s going to effect your personal buying power…  And then he goes on about positive movements that are needed… 

For What It’s Worth…   You know I’ve had many questions through the years, asking me why invest in gold when the price is manipulated?  And recently I highlighted a note from the good folks at GATA regarding how investors are realizing that the Central Banks are rigging the price of Gold & Silver… And this is a note from GATA, (so no link, just whole article) of a response they received after printing the article just mentioned…   And so, here you go…  The response, and the answer from GATA Sec. Treasurer is below… .

 

Here’s your full article: “Our old friend C.W. took issue yesterday with the dispatch about the GATA-supporting analysis of Matterhorn Asset Managemenet’s Matthew Piepenburg, which was posted at King World News and which, your secretary/treasurer wrote, indicated that investors are starting to recognize that market rigging by central banks is especially directed against gold and silver:

http://gata.org/node/20887

C.W. wrote: “But isn’t that the whole point of the rigging? It’s so much more effective if investors recognize it is happening and who is doing it, which is why it is done on such a consistent and obvious basis.

“So I don’t think that the general recognition of the rigging means we are closer to its end. Rather, it means it will be more effective as investors realize they can’t win the battle with gold and silver and so invest elsewhere.”

Your secretary/treasurer had to agree with C.W. that central banks, having been forced into more blatant episodes of market rigging, may be glad if people realize, informally, that central banks will do whatever has to be done to defeat alternative currencies.

But, your secretary/treasurer added:

— The scheme of the central banks doesn’t work if people also start to realize that they can achieve and benefit from an alternative currency only if they avoid the futures markets, which central banks easily can control by virtue of their power to create infinite money and trade infinite amounts of things that don’t exist.

— Eventually, if the rigging gets too blatant, even mainstream financial news organizations might feel compelled to report about it and raise questions that central banks can’t answer without putting themselves in political jeopardy.

— Also eventually, if the rigging is generally understood around the world, nations that are not benefiting from it — like nations where gold is produced — may protest and even try to pull the plug on the rigging. Many smaller countries could pull the plug on it just by selling U.S. Treasuries and buying relatively small amounts of physical gold, since supply seems so tight.”

Chuck again… All excellent points Mr. Secretary/ Treasurer… And one’s that I’ve pointed out in previous answers to those questions I’ve received… 

Market  prices 2/10/21:  American Style: A$ .7728,  kiwi .7212, C$ .7875, euro 1.2116, sterling 1.3834, Swiss $1.1214, European Style: rand 14.7134, krone 8.4439, SEK 8.3183,  forint 295.25,  zloty 3.7000,  koruna 21.3779, RUB 74.04, yen 104.78, sing 1.3263, HKD 7.7522, INR 72.82, China 6.4393, peso 20.13, BRL 5.3784,  Dollar Index 90.47,  Oil $58.70,  10-year 1.17%, Silver $27.28, Platinum $1,222.00, Palladium $2,428.00, Copper 3.72, and Gold… $1,840.96

That’s it for today… Whew, I can tell you that Kathy wasn’t here, I would not be up writing at my usual time this morning. I would have slept for a few more hours!  It’s so quiet here when I’m alone… I’m just saying… But it was good for me to get up and get to writing!  Tonight, my beloved Missouri Tigers will travel to Ole Miss and the game comes on late down here, so I’ll be up late once again! UGH!  A full sun day here yesterday, and my weather app told me it felt like 89 degrees! The local leaders are doing some beach restoration here after the storms of last year, and the beach is looking great!  You know, there must not be many people traveling to Florida this year, for the roads aren’t that crowded, and beach doesn’t have many people on it, which is fine with me! The Allman Brothers take us to the finish line today with their instrumental song: In Memory of Elizabeth Reed… In one of the variations of bands I played in through my early years, one of them was a bluesy band, that played lots of Allman Brothers songs, like this one… And Grand Funk Railroad, which in the early days of the band their music was miles of difference from what they did later in their careers, when they became more pop.  For instance, Inside Looking Out, VS The Locomotion…  a song originally done by Little Eva… Ok, sorry for the long dissertation on Bluesy music… I hope you have a Wonderful Wednesday, and Please Be Good To Yourself!

Chuck Butler

Trader Sentiment Changes Again…

February 9, 2021

* Currencies & Metals rally a 2nd Consecutive day

* What are investors thinking buying negative yielding bonds? 

Good Day.. And a Tom Terrific Tuesday to you! I was watching the news yesterday morning, with Robin Meade, when a story came across that talked about all the Super Bowl get togethers in Tampa had doctors fearing it could be a super spreader… And that got me thinking, didn’t they say the same thing about Christmas? I do believe that the numbers show that there was no such thing after Christmas… So, I thought to myself… Why do they keep wanting to keep us in fear?  Oh, well, I’m not a doctor, and I didn’t stay at a Holiday Inn Express last night, so I’ll duck out of this discussion while I’m still talking about what I know!  The Blues played their 4th consecutive game VS the Coyotes last night…   And the blew the game as the Coyotes scored a goal to tie the game with 0.5 seconds left in regulation! They they lost the stupid shoot out…    Let’s Go Blues!  Supertramp greets me this morning with their very appropriate song: Even In The Quietest Moments…

Monday was day two of the healing and rebound in the currencies and metals… Ever since the Jobs number came out last Friday, things have gone awry for the dollar bugs. And since there will be no real economic data this week, other than a couple more Cartel speakers, I doubt that this current two-day rally has much to stop it… That is as long as the PPT stays away…

The euro pushed higher in the 1.20 handle, and the Aussie dollar (A$) gained almost 2/3rds of a cent… While the dollar bugs were scrambling across the floor to get out of the spotlight, Gold added another $15 to their $21 gain on Friday… Gold closed at $1,831.40 and Silver which was up 49-cents, closed at $27.33… And don’t look now, but the price of Oil added more girth to its price and is trading with a $58 handle this morning. The Dollar Index traded yesterday morning at 91.16, and closed the day at 90.87, and is trading at   90.58   this morning. So, it’s in a free fall again… 

In the overnight markets, there was more dollar selling, and the euro has pushed through the 1.21 handle once again…  Gold is up $12, and Silver is up 35-cents in the early trading… So, as I said the sentiment toward the dollar has changed once again… The Safe Haven currencies of euros, yen and francs are all on the rally tracks, and Gold is moving higher, while Treasuries are getting bought, reducing the yield, and the only stickler this morning is the price of Oil, which lost the $58 handle it briefly held yesterday… 

So, recall last Monday, when it seemed Pandora’s box of short Silver secrets were about to be laid bare? The Wall Street Bets (WSB) folks, after causing 2 hedge funds to close that were short GameStop, had switched their attention to the Silver Shorts…  I had said that day that this will be a bigger nut to crack, and now the dirty deeds done dirt cheap are out of the bag…  Last week, the Big Bullion Banks added more new shorts in the reporting week ended Tuesday than in any other week (save one) in the last few years. The four big silver shorts added an astounding 6,672 new shorts (33.4 million ounces).  And needless to say, the attempt to cause a short squeeze had failed to get off the ground. But there’s still hope for them, and that is why supply of Silver coins is dwindling and what’s left has had a huge markup on placed on them over spot… So, demand is still strong, and that the WSB folks can be proud of…  Full disclosure here, I pulled some of the numbers above from an email that the GATA folks sent me yesterday…

So, the short squeeze enthusiasts were headed off at the pass, by the Bullion Banks… I don’t know… But maybe these folks attempted to put a short squeeze on Silver might not want to advertise what they are doing ahead of time, so that the Bullion Banks can’t head them off at the pass?

Alrighty then, let’s talk about something else… You know, I’m very amazed at how strong the British pound sterling is these days, and how just about every day, it moves higher VS the dollar. The reason I’m thinking that this rally is suspect, is that The Bank of England (BOE) has made no qualms about thinking that the U.K. economy needs negative rates… And while negative rates don’t necessissarily point to currency weakness, it certainly isn’t a reason to buy the currency!  The euro, yen, and francs have done OK, VS the dollar, with their negative rates. But they’re versions of negative rates have been in place for some time now, and the markets have gotten used to them… The BOE’s journey into negative rates I don’t think will be met with more sterling buying… So Be Careful out there!

Oh, and there’s something like $19 Trillion in Gov’t bonds with negative yields on the global markets… What a few Trillion more?  And if they counted “real yield”, where you subtract inflation from the yield, to get the real yield, then the U.S.’s stable full of Treasures would be added to the mix…  And people buy these negative yielding bonds?  Instead of getting paid for safety, you’re paying for it!  What on earth are these people thinking?

The U.S. Data Cupboard is still searching for something, anything in the form of a data report to print, and today it will find nothing! The only thing on the economic calendar is a scheduled speech by St. Louis Cartel President, James Bullard…  Who is a dove, but has really disappointed the doves in recent times. Bullard used to be known as someone who said what was on his mind, and not what was on the minds of the inner circle of Cartel heads… I’m just saying… 

What on earth is going on with this country’s leadership? I read a report yesterday, that Congress is thinking of proposing and playing the Universal Basic Income (UNI) card, very soon…  See? Didn’t I tell you that this was next on the agenda?  The country has gone to the stimmy checks three times now (the 3rd time is coming) and each time as soon as the checks were out the door, there was clamoring for more, just like I said would happen right after the 1st stimmy check was approved.  

I just don’t get it folks…  Back in the day when I ran The Everbank World Currency Desk, I used to have a saying to get people back on track, that would be: “doesn’t anyone want to work any longer?”  Which had the same effect on them as when I was a kid and my dad would just hang his belt on the door knob to let us know to settle down…  but that question takes on new meaning, with UBI for if you’re giving people money for nothing and the chicks are free (dire straits) what incentive do they have to work?   I’m just saying that someone with some gray matter should think of the collateral damage of UBI… 

To recap… Monday marked two consecutive days of rallies by the currencies and metals. Ever since the Jobs Numbers last week were woeful at best, trader sentiment has changed once again, and they are now thinking that owning dollars going forward are not a good idea… And in the overnight markets it appears that we’re headed for a 3rd consecutive day of dollar selling… Chuck points out that the Bullion Banks added millions of ounces of short Silver paper trades to head the short squeeze folks off at the pass… And Chuck points out that the pound sterling’s recent rally doesn’t really have two strong legs to stand on… And what on earth is Congress thinking of now? 

For What It’s Worth… Well when will this “tell on your neighbor” stop? Until neighbors are at each other’s throats?  This wasn’t a neighbor so to speak, but  we have this from blacklisted news that talks about the call for a boycott of Bank of America, and it can be found here; Calls for Bank of America boycott grow after data given to FBI (blacklistednews.com)

Or, here’s your snippet:” Customers are calling for a boycott of Bank of America, after a report that the bank handed over the account information of hundreds of innocent people in connection with the Jan. 6 deadly riots at the Capitol.

At the request of the FBI, the country’s second-largest bank allegedly snooped through information of anyone making certain purchases in and around Washington before and after the riots, and handed over the information of 211 people, according to Fox News’ Tucker Carlson.

Only one of those 211 people was brought in for questioning, and none of them were arrested, according to Fox’s report.

Federal investigators reportedly asked Bank of America for information on customers who made debit or credit card purchases in DC, reserved hotels and Airbnbs in and around the capital, patronized weapons store and made airline reservations within the timeframe surrounding the attacks.

Now, customers and non-customers alike are calling those reported actions an overreach, and taking to Twitter to announce they are canceling their accounts and calling on others to do the same.

“‘Bye bye, Bank of America’: Outraged customers boycott firm as it’s revealed the bank snooped through HUNDREDS of innocent people’s accounts looking for Capitol rioters – so who else is doing it?,” one user posted.

“Time to get out of Bank of America. Boycott them,” wrote another.

“The customer should SUE @BankofAmerica unless there was a subpoena involved!,” another user commented.

Bank of America released a statement Friday about the claims: “We don’t comment on our communications with law enforcement.  All banks have responsibilities under federal law to cooperate with law enforcement inquiries in full compliance with the law.”

Chuck Again… We The People will rise up and take back our civil rights and privacy! Well, at least we’ll try. I say that because BOA is a HUGE conglomerate of Banking…  But I will say good for those raising concerns with BOA…

Market Prices   2/9/2021: American Style: A$ .7715, kiwi .7225, C$ .7855, euro 1.2105, sterling 1.3772, Swiss $1.1189, European Style: rand 14.7859, krone 8.4719, SEK 8.3548,  forint 296.39,  zloty 3.6983,   koruna 21.2496, RUB 74.41, yen 104.68, sing 1.3277, HKD 7.7515, INR 72.91, China 6.4527, peso 20.05, BRL 5.3662,  Dollar Index 90.58,  Oil $57.92,  10-year 1.15%, Silver $27.68, Platinum $1,186.00, Palladium $2,396.00, Copper $3.65, and Gold… $1,843.60

That’s it for today… I stayed up to watch the hockey game last night, which is two late nights in a row for me, on school nights, no less!  I’ve got to say that the $40 I spent on a device that takes what is on my iPad and converts it to my TV, has been some of the best $40 dollars I’ve ever spent!  Hey! Great news for my beloved Cardinals, as they announced that catcher Yadi Molina is signed for another year, which would probably be his last year, that is unless father time decides to bless him with young legs! It’s been a good offseason, albeit later than usual, for the Cardinals, and now they are set to begin Spring Training! The sunrise over the ocean this morning was simply beautiful…  I like sunsets too… But since this is where I am, I get the sunrise, and truly enjoy it!  The Righteous Brothers take us to the finish line today with their love song: Unchained Melody…  “Woah, my love, my darling, I’ve hungered for your touch”  And with that, I hope you have a Tom Terrific Tuesday, and Please Be Good To Yourself! 

Chuck Butler