Short Sellers Achieve Their Goals!

January 14, 2021

* Gold & Silver get sold once again on Wednesday

* A Big day of economic data tomorrow, will the markets care?

Good Day… And a Tub Thumpin’ Thursday to you!  The sun did make a short time appearance yesterday, as clouds owned most of the skiy for most of the day. It’s important to the Florida Chamber of Commerce that the sun made an appearance (for about an hour). That way the Chamber gets to count it as a day with sunshine. They love to call out the number of days with sunshine that they have in a year…  I woke up this morning with a sore throat, and I don’t think it came about because I yelled at the walls yesterday! Earlier this week I woke up with an ear ache, but that lasted one day… I’m hoping this dryness in my throat also lasts just one day! When the nights here become warmer, I’ll head out to the deck, with my Bose Bluetooth speaker, and sing along with the music from my phone… So, I need a strong voice! HA!  Speaking of music from my phone, Modern English greets me this morning with their 80’s hit song: I Melt With You…

Yesterday brought about more selling in Gold… I think the price manipulators achieved their directive with their massive short Gold paper trades, that caused the price of Gold to fall more than $100 in the last week… Their directive? Well, first, the short sellers want to drive the price of Gold down so that they can close out their existing short trades at profits, and…. To scare short term buyers of Gold into selling their Gold…   Of course long term owners of Gold, that hold it as 1. A diversification, 2. Hedge against dollar weakness, 3. Store of wealth, and have no intention of selling… And if anything they would look to buy more at cheaper prices…

I had a couple of dear readers ask me to explain how the price manipulators get these engineered takedowns to work…  And I will… but not today… I really need to have time to decide how I’m going to say things so that everyone gets it…   So, maybe next week…

OK, the dollar bugs didn’t exactly rule the day yesterday, as most of the currencies traded in a very tight range…  The Dollar Index ended the day at 90.45, up from 90.27 so the dollar bugs did gain some ground on the day…    The stupid CPI (consumer inflation index) showed a .4% gain in December, but that still has annual inflation around 1.80%… And Core Inflation was only up .1%…  And that brings me to the discussion of how the Bond boys were seeing inflation rising, but it’s just not… The velocity of money is falling once again, and that news basically brought bond yields back a bit and brought their trend of rising every day to a halt.

John Williams over at Shadowstats.com did his usual recalculating of CPI the way it used to be calculated before Clinton and Greenspan saw to it that CPI would never be calculated the same again… And Mr. Williams shows that CPI is really running around 4.5%…  So, do you think that IF CPI actually showed 4.5% inflation, that the Fed would be pulling the dust covers off their rate hike machine?  Or would they let inflation run a little hotter?  Before you answer, let me remind you of what I told you the other day about how the Fed can’t hike rates…

I don’t know about you, but there are things that I buy that I see the price increases in, and then there are things like Big Screen Tv’s that prices on them keep going down. As with other technology do-dads…  But in the end it all comes back to the velocity of money…  And as long as the Velocity of Money is going down, we won’t see inflation run hotter, or even get off the ground to run…  I’m just saying…  

A lot of people are talking about “pent up demand” and how when released will cause a huge surge in economic activity here in the U.S.  Well, for a brief discussion of “pent up demand” here’s David Rosenberg on his Twitter handle: “I keep hearing about “pent-up demand.” But how does this apply to services? Are people who used to get haircuts monthly going to make up the spending loss by visiting the barber 2x monthly post-pandemic? Makes no sense but people just talk without understanding basic economics.” – David Rosenberg on Twitter…

In The overnight markets… there’s been some  drifting of the currencies and metals… Gold is down $1 and Silver is up 4-cents this morning, and the I just don’t think there’ll be any major movement today until we see the color of Joe Biden’s stimulus plan, which is on the docket to be shown to the world today.  I got a kick out of a headline story on Bloomberg that said, “It should be hard for Gold to do anything but appreciate” Well, whoever wrote that needs to step back and see what the price manipulators have done to Gold’s price in the last week!  

I received a phone call from good friend Dennis Miller yesterday, and he was chuckling out loud over something I wrote yesterday, regarding my discussion of former CFTC Chairman, Gary Gensler apparently getting the nod to lead the SEC..  I said that I was calling B.S. on his ability to be a hard nosed regulator…  In my opinion, he couldn’t see the trees in the forest if he stood right smack in front of the forest!  And I don’t mean to be mean to him, I’m just saying if he was the Commodities regulator, and never once found any indication of price manipulation, then he’s either blind or didn’t look… I’m just saying… 

The price of Oil backed off and slid downward in the past 24 hours, and trades this morning with a $52 handle…  I know that the Oil business in the U.S. has gone to hell in a handbasket, and that’s a real shame because we, as a country had become energy independent.  I would think that $50 price of Oil would be enough to bring some of the shale producers back, but not all of them… A couple of the big Oil companies filed for bankruptcy last summer… 

So… The U.S. Data Cupboard has the Weekly Initial Jobless Claims for last week, the first full week of Claims since the week before Christmas!  Tomorrow’s Data Cupboard will have December prints of Retail Sales, Industrial Production and Capacity Utilization, and Business Inventories… So, one of the more busy days for economic data  I’m really getting tired of reporting bad economic numbers and the markets just ignoring them… But that’s the opposites world we live in these days… As Jackson Browne sings… These Days I sit on cobblestones, and count the time in quarter tones to ten…  I think that’s what I’ll start doing on days when there’s economic data to report, as that should be much healthier for me! 

To recap…  The Gold sellers were back in force yesterday, causing a $10.60 loss in Gold on the day. Chuck thinks the price manipulators achieved their goals last week of scaring the short term buyers of Gold into selling… The dollar bugs won a little ground back from the currencies yesterday, and in the overnight markets… there’s just been some drifting of both the metals and currencies…  

For What It’s Worth…  Ok… Remember The Big Mac Index?  Times in the past were that currency traders waited anxiously to see what the Economist mag. Would say each year about their Big Mac Index, and what currencies were undervalued and which ones were overvalued…  Longtime reader Bob, sent me this link and I thought that it was FWIW worthy…  It’s about the Russian ruble, and the Big Mac Index, and it can be found here: Russian Ruble Is World’s Most Undervalued Currency on Big Mac Index – The Moscow Times

Or, here’s your snippet, for those of you feeling squeamish about reading a Russian newspaper article, here are just some bits: “The Russian ruble is the world’s most undervalued currency, according to the Big Mac Index, compiled by British newspaper The Economist.

Based on market exchange rates, the Russian currency should be worth three times more against the U.S. dollar — 24 rubles per $1, rather than the 73.8 the currency was trading at Wednesday.

The Big Mac Index compares the price of the famous McDonald’s burger across the world. After accounting for differences in living standards — measured by GDP per capita — the ruble comes out as the most undervalued of the 55 currencies tracked by The Economist.

“A Big Mac costs 68% less in Russia ($1.81) than in the United States ($5.66) at market exchange rates,” The Economist said in its latest update to the index, published Tuesday.

“Based on differences in GDP per person, a Big Mac should cost 39% less. This suggests the ruble is 47.3% undervalued.”

The ruble has come out as “undervalued” against the dollar on the Index for the last nine years. The currency slid another 20% in 2020 on a combination of the coronavirus pandemic, a slump in global oil prices, geopolitical risks related to the U.S. election and the fallout from the Novichok poisoning of leading Kremlin critic Alexei Navalny last August.”

Chuck again… Ok, in the “old days” of currency trading this would be HUGE news to traders, and they would be making trades to bring the ruble back in line, which would mean they would be buying rubles and driving the price higher…  Those were the days my friend, we thought they’d never end, we’d sing and dance forever and a day…

Market  Prices 1/14/21: American Style: A$  .7765,  kiwi .7206, C$ .7893, euro 1.2151, sterling 1.3656, Swiss $1.1242, European Style: rand 15.1270, krone 8.4796, SEK 8.3145,  forint 295.56,  zloty 3.7353,  koruna 21.5581, RUB 73.63, yen 104,00, sing 1.3256, HKD 7.7535, INR 73.06, China 6.4633, peso 19.78, BRL 5.3135,  Dollar Index 90.33,  Oil $52.76,  10-year 1.10%, Silver $25.32, Platinum $1,117.00, Palladium $2,422.00, Copper $3.63, and Gold… $1,844.00

That’s it for today, and until next Tuesday, as Monday is a holiday…  Our Blues started their new season last night in Colorado… The NHL did our Blues a real bummer in the league’s realignment… St. Louis was put in the western Division, away from their rivals, Chicago and Nashville. And most of their away games will come on so late that most St. Louis fans won’t be able to stay awake to watch them! UGH! I was able to stay awake for the 1st period and the Blues looked good… I woke up in the middle of the night, as usual, and checked the score on my phone, to see that the Blues had won the game 4-2. I’m really bummed out about this realignment for our Blues.. I hope management gave the league hell for doing this to the St. Louis fans… I told you earlier in the week that I was rereading the book 1984, and since I first read it in the early 70’s, I had forgotten most of it, so it’s like a new book to me!  Tell me if any of this seems familiar to you:  This is Big Brother’s slogan:

War Is Peace

Freedom is slavery

Ignorance if Strength…

Seems very familiar to me… Oh, and did you hear that Ron Paul had his Facebook account shut down? More censoring of free speech…    Hmmm…..  Ok, time to go… Oh, and look what’s playing that seem so apropos…  It’s R.E.M. taking us to the finish line today with their song: it’s The End of The World …. “it’s the end of the world, and I feel fine…”   I hope you have a Tub Thumpin’ Thursday, and a nice long holiday weekend, and please Be Good To Yourself!

Chuck Butler

How Many Dollars Will Be Printed For Stimulus?

January 13, 2021

* Gold, Silver & euros bounce back on Tuesday

* Pound sterling defies logic… but is the opposite the new norm?

Good Day… And a Wonderful Wednesday to you! I experienced my first day down here this winter without sunshine yesterday, as it was cloudy all day… Back home I hear it was a sunny, warmer than usual, day… So good for them! Yesterday, I didn’t spend enough time on Congratulating the University of Alabama and their college football Championship… What an offense they displayed every game all year long! Ohio St. didn’t have an answer for Denvonta Smith… The Heisman Trophy Winner, and rightfully so! And since Alabama is in the SEC, (like Missouri) I root for them when they aren’t playing Mizzou! The late great, Leon Russell greets me this morning with his song: This Masquerade…  We’re lost, in this masquerade… 

Like the Good Witch, Glenda, who waved her wand, and told the Munchkins that it was all right now, that they could come out,  Gold Traders waved their wands and told investors that the sellers were all gone now, and it was all right to get back in… Gold wasn’t able to hold all of its early $16 gain yesterday, but did manage to gain $11.60, to close at $1,856.00, and Silver added $ .70-cents to close at $25.67…  The euro also heard the all clear horn blaring and was able to add back 1 of the 2-cents it had lost Friday and Monday…   The intervention to buy dollars and sell euros, as I described yesterday had come to an end, for now, that is…  There’s no telling if Treasury Sec. Mnuchin will get around to spending all of his Slush Fund, or not, before he leaves office next week, and former Cartel, I mean Fed Chair, Janet Yellen takes over…

Speaking of Yellen… The Good folks at Wallstreetonparade.com , wrote last week about Yellen, so lets step back in time and see what they had to say about Ms. “there will not be another fiscal crisis”…. Here’s Pam & Russ Martens: “Yellen needs to immediately come clean with the American people as to just what happened in 2018 after she left the Fed. As Treasury Secretary, Yellen would not only have control over the slush fund called the Exchange Stabilization Fund, which the New York Fed can use to trade in gold, stocks and currencies, but Yellen will also Chair the Financial Stability Oversight Council (F-SOC), which makes decisions on threats posed to the U.S. financial system by those very same banks that have provided millions to enrich Yellen.”

But she won’t, because no one is going to make her do that… And isn’t that just shameful? Take in over $7 Million dollars in speaking fees to the casino banks that you’re now going to be the head person on the oversight group…   If I were still a young man with a wild temper, I would be cussing up a storm right now… But being more mature, in a way, I’m still going to go yell at the walls, once my wife wakes up!  See how understanding I am?  HA!

In the overnight markets, Gold has held steady, and is down just one Washington this morning, and Silver is down 25-cents, to start the day…  And Ed Steer tells us this morning that, “The U.S. Mint is Out of 2021 Gold Coins Already” The euro ran into some more selling in the overnight markets, as the Asian and European traders didn’t get the message that it was all clear now… HA!  

One currency that I haven’t talked about in a while is the pound sterling/ cable… Cable has really been on the rally tracks for a couple of weeks now. Each day when I list the currency prices, I say to myself, I need to mention this currency, and then forget to do that… But not today! I must have my thinking cap on!  Who would’ve thunk that? That Chuck would have his thinking cap on? Well… any way, the pound is proving that it doesn’t need a strong economy, and higher interest rates to rally… I find this to be very strange, in that the Bank of England (BOE) has their fingers on the negative rates trigger, and the markets don’t seem to care…  And can you blame them?  With more than $18 Trillion in negative yielding bonds in the market, and Central Banks at either zero or negative with their base rates, it has become the “norm”…  And that my friends, is a real shame… I’m just saying… 

OK.. Just one more day until we will see just how many Trillions Joe Biden is going to add to our debt levels, and how much currency is going to need to be printed, and how many more Treasuries will the Cartel, I mean the Fed have to buy?   Here’s the thing that scares the bejeebers out of me…  Once the size of the stimulus package is announced, one would think that Gold would take off to the moon…  And while it should do that, the price manipulators know that too, and will do everything in their power to keep that from happening…  And then the naysayers of Gold will say, “Look, the U.S. is turning on the printing presses and Gold can’t rally”….   Of course I hope I’m wrong on that, and the price manipulators stay away…

Speaking of price manipulators… OK, he’s not or was not a price manipulator, but he was an enabler, so he’s just as bad…  Who am I talking about?  Seems that the new president is going to name Gary Gensler as  chair of the U.S. Securities and Exchange Commission,,, Here’s what the GATA folks said about that, “Former CFTC exec who couldn’t spot gold and silver market rigging to head SEC,,”  I find this news preposterous! Totally preposterous! The Reuters article that GATA highlighted, said that Gensler was known as a hard nosed regulator that would stand up to the Big Banks…  Really? I mean Really?  All the years he was at the CFTC (the commodities regulator) and never found one thread of evidence that price manipulation was going on, is going to be the head of the SEC?   I’m getting some exercise this morning, as I shake my head in disbelief!

We’ve got Yellen overseeing the banks, and Gensler overseeing the brokerage houses…  Neither one of them could find their rear-ends with both hands!   I’m just saying…

The price of Oil keeps rising into new handles to trade in lately…  The price of Oil this morning is trading with a $53 handle…  For the first day in about 10, the yield on the 10-year Treasury didn’t rise yesterday, and instead lost a few BIPs… Maybe the bond boys had gone too far, too fast with their daily increases of yield…  Or, maybe they read the Pfennig, and saw where I said that Biden’s stimulus was going to add to Treasury Bonds that the cartel, I mean the Fed will need to buy, and they backed off for now… The 10-year’s yield is still negative when you take the current yield and subtract inflation.  And that’s something to think about…

Another thing to think about was an article I read yesterday that talked about how for the first ever, Russia owns more physical Gold than U.S. dollars…   And the scales are really tilting toward more gold ownership and less dollar holdings…   You may be thinking that this is just Russia, and they can’t move the markets… And you would be right… But… Russia could get China to go along with them, and India, and even Japan, in owning less dollars….  And that list of participants in the dollarization would begin to grow, and grow… 

The U.S. Data Cupboard finally has something for us today, after suffering through two days of little to no data, and Cartel, I mean Fed speakers by the boat load out speaking that included: Geroge, Mester, Brainard, Bostic, and Rosengren… All speaking on the economy, which they all think will rebound later this year…

I got a kick out of a comment by Cartel, I mean Fed Chairman, Powell, who said that “there was no economic impact from the Fed pumping Billions of dollars into Wall Street.”   He said that folks with a straight face, and no sign of giggling, or snickering…  but inside he must have been doing both! Jerome Powell is a smart man, and smart enough to know that you don’t pile Billions of dollars into Wall Street without causing impact!  He knows that! But he’s selling us a can of goods that’s expired… And not one Congressperson, or man on the street, will call him on that statement.  I call B.S.!   Just look at the stock market’s  buble…   And while we’re speaking of things the Cartel, I mean the Fed nad cuased… The housing Bubble goes along with the stock market bubble that’s been blown even larger by ZIRP, and currency printing…  Need I say more?

OK, back to the Data Cupboard! Today we’ll see the color of the December Core Inflation, and the stupid CPI…  (consumer inflation)  Both will likely show inflation falling in Devember… In addition to those two prints will be more Cartel speakers: Harker, Brainard, and Clarida will be out telling lies about the economy…

To recap… Come out, come out, it’s all clear now… Ding dong the witch is dead, the mean old witch the wicked witch. She’s gone where the goblins go , she’s gone, she’s gone, she’s gone…  That’s how Gold and the euro had to feel on Tuesday, and the intervention went away, and traders were able to mark up the two assets like they had been doing before the wicked witch (intervention & manipulation) appeared last Thursday…  Wall Street On Parade has a problem with Janet Yellen, and Chuck has a problem with Gary Gensler… And it’s all explained in the letter, above…

For What It’s Worth… OK, talk about losing your mind over something… This article talks about people that have forgotten their passwords, and are locked out of their Bitcoin accounts…  And it’s not just one or two that have done that! This article can be found here: Bitcoin owners without password watch as wallet worth rises – Business Insider 

Or, here’s your snippet: “People have lost roughly $140 billion in Bitcoin because they forgot their passwords or got locked out of accounts, and would-be millionaires are struggling to access their wallets.

People are watching Bitcoin prices rise as some struggle to recover millions of the cryptocurrency, according to The New York Times.
Those who lost access to their Bitcoin are given 10 guesses before the content of their digital wallet is seized up and encrypted for good.
Around 20% of the existing 18.5 million Bitcoin are in stranded wallets, worth roughly $140 billion.”

Chuck again… Now that’s a short snippet today! But it gets to the gist of the story, which is amazing to me that people wouldn’t have written down their passwords, and then put that away in a safe place. But given they’ve been given 10 chances to unlock their account, they probably wouldn’t remember where their safe place was…  I’m not making fun of these people, I’m just saying that they’re SOL on their Bitcoin…  

Market prices  1/13/21:  American Style: A$ .7738,  kiwi .7181, C$ .7854, euro 1.2164, sterling 1.3669, Swiss $ 1.1251, European Style: rand 15.2907, krone 8.4886, SEK 8.3274,  forint 296.11,  zloty 3.7218,   koruna 21.5095, RUB 74.05, yen 103.95, sing 1.3259, HKD 7.7538, INR 73.16, China 6.4646, peso 19.82,  BRL 5.4395,  Dollar Index 90.27,  Oil $53.43,  10-year 1.12%, Silver $25.52, Platinum $1,074.00, Palladium $2,473.00, Copper $3.63, and Gold… $1,855.00

That’s it for today… I was surprised the other day when I talked about Ohio St. that I didn’t get some responses telling me how great their team was. I guess I have no readers that are OSU fans…  (now I’ve goaded them into responding! HA!) 70,000 users of Twitter have had their accounts banned…  Parlar had its cloud management taken away… And free speech is getting a very bad rap… What’s going on in this country?  Did you know that Thomas Jefferson fought the sedition Act, saying that it took away a person’s free speech?  I knew that reading that book on Thomas Jefferson would help me with something one day!  When will they come for me?  I’m going to shut down my Twitter account because of these actions taken by Twittter…  Don’t worry The good folks at FXStreet will still post my Pfennig on Twitter…  But may be not after today, eh? The Doobie Brothers take us to the finish line today with their song from the Captain and Me Album: Dark Eyed Cajun’ Woman…  I hope you have a Wonderful Wednesday, and please Be Good To Yourself!

 

What’s Going On With Mnuchin’s Slush Fund?

January 12, 2020 

* Dollar/ euro gets most of the action on Monday

* When will traders wake up and smell the coffee? 

Good Day… And a Tom Terrific Tuesday to you! Last nigh, watching the College football championship game, I thought early on, that two BIG 12 teams were playing, as no defense was being played at first… But then the cream rose to the top…  It was late last night, the game seemed out of reach, and so I locked up and went to bed, not staying awake and feeling bad about it this morning! An executive decision, ha!  Today is the birthday of my oldest son, Andrew…  More on that in the closing today… The Beatles greet me this morning with their song: Norwegian Wood…  I once had a girl, or should I say she once had me…. 

Well, let’s see… All the of the world is stacked up against the dollar, and on Monday, the dollar bugs ruled the day… How was that achieved, with all that is up against the dollar these days?  Well, I would guess you would have to think that Treasury Sec. Mnuchin’s “slush fund” aka Exchange Stabilization Fund(ESF) that was first called a “slush fund” by the folks at Wall Street On Parade…., would have to be questioned about their whereabouts yesterday, when the crime was committed… 

The euro lost a full cent yesterday, and is now 2-cents below where it was trading last Thursday morning… So… my spider sense was really tingling yesterday, so if you want to hear why it was tingling, then stay right here… If you’re like my old marketing person that wanted no part of my conspiracy thoughts, skip ahead…

Ok, for those of you who want to know…  this is what was going through my mind yesterday… Remember how I told you weeks ago, that the leaders of the Eurozone, didn’t want the euro to get so strong, as their economy is in the dumps and the last thing they need is for a strong currency to squelch exports?  Well, you don’t suppose that European Central Bank (ECB) President LaGarde gave Mnuchin a ringy dingy last week do you? Well, I do… and I’m sure the conversation went something like this: LaGarde, hello, is this the Treasury Sec.?  And Mnuchin says, yes, how may I help you, Christine?  She says, I’m in a pickle here, Traders are selling dollars and buying euros, and these traders are not slowing up, can you help me?  And Mnuchin answers, Yes, maam, I certainly can… You see I have this slush fund for manipulating the markets, and there’s no reason to be using it all on stocks, and Gold…  LaGarde then says, OK, this conversation never happened, right? To which Mnuchin replies, what conversation?

Oh, and I relook at the currency screen, it’s all there for us to see… The euro was the only currency to lose a chunk of value yesterday… Normally, as the euro goes, so goes the rest of the currencies, but not yesterday, which tells me the trade was buy dollars/ sell euros… Right Mr. Mnuchin?

I welcome those that stuck with me through my conspiracy idea, and for those of you who skipped ahead, here we go…   OK… Gold, after fighting back to recover from a $20 overnight loss, to start the day pretty much flat, ended up losing $6.60 to close $1,844.40, and Silver lost $54-cents to close $24.97…  Not the Huge chunks of selling like in the previous 3 trading days, but still I’m thinking that investors aren’t selling Gold, it has to be paper short Gold trades…

When will the markets weigh in on Biden’s plans for stimulus?  You know, wake up and smell the coffee? Trillions more will be added to the National Debt, which right now closing in on $28 Trillion, and will be over $30 Trillion by the time all the chicks are hatched on the stimulus.?   So, when will the markets begin to punish the dollar again? When the actual stimulus is announced on Thursday this week?  I always was led to believe that the markets are always forward looking…  Well, they certainly aren’t looking forward on this, now are they?

I said out loud on Friday, when looking at my screen, that Gold has lost $55 today…  And my wife replied, even though I didn’t think she was listening, and said that “our gold isn’t going to be worth what we paid for it soon”…  And I said, “are you kidding me? Do you not know at what price we own our Gold? So, we had a long discussion and now she knows… 

In the overnight markets… There’s been little movement in the currencies, the Dollar Index is 90.42, a far cry from the depths it traded to last week. Gold is up $16 in the early trading today, which looks good to me, as the daily attacks on Gold were beginning to give me a rash! Silver is also up this morning, 56-cents, so these two are back to climbing the stairs… 

IF my spider sense is correct, and we did see some currency intervention with the dollar and euro, it won’t take long for traders to figure it out and begin to either fight back and prove once again that the markets have deeper pockets than those that might fight them, or… traders will cower to the intervention and back off their selling… 

If I were a betting man… I would put a few bucks down on what’s behind door number 1 above… For that would be the normal response by traders, but… in this time of opposites, you never know what will happen…  So, make a call for yourself, and see what happens… 

Have you been watching the rise in yield on the 10-year Treasury?  Every day it seems it adds another 5 Bips… This morning the bond has a yield of 1.15%, which is a far cry from the depths it traded to a couple of weeks ago…  So, the question is… Has the low in the Bond’s yield been set and will it now begin to correct higher?  Before you answer that, you need to remember that the U.S. is about to go all out on deficit spending, and thus will need to finance those deficits with MORE Treasuries, which are seeing less interest in them from the likes of China, Japan and Russia, which also means the cartel, I mean the Fed will have to buy them, and that will drive the yield downward… by how much?  We’ll have to see the extent of the Cartel’s, I mean the Fed’s buying… 

But the rise in the yield is the bond boys telling us something folks…  I’m just saying… 

I’m re-reading the book 1984… For if I recall, it really explains what’s going on in this country these days… All the banishing, and removing of people and their free speech, is just one example… I first read the book back in the 70’s and thought at that time, we are so free… This will never happen here…  I’ll betcha a dollar to a Krispy Kreme that they don’t have kids in High School read this book any longer…  I’m just saying…

The U.S. Data Cupboard is really “lacking” this week, for real economic data… We’ll have to wait until Thursday to see something worth talking about, and on that same day is when Biden is scheduled to announce his stimulus package…   We will see Core Inflation tomorrow… but that’s nearly a 2nd Tier report, as far as I’m concerned…

To Recap the selling of Gold went another day on Monday, but wasn’t as harsh as the previous 3 days… And Gold is up $16 in the earl trading this morning, so maybe the low has been established…  The euro lost about one cent in yesterday’s trading, and has lost over 2-cents since last Thursday morning… Chuck thinks that it’s a case of Mnuchin’s slush fund getting some action, as he thinks the ECB called him for help last week, and the dollar was bought, and euros sold… The proof is in the pudding, as most of the currencies didn’t react negatively to the euro getting sold, which told Chuck that it was just a dollar/ euro intervention… 

For What It’s Worth… The good folks at GATA sent me the link for this article about how it’s not the time now to give up on Gold, and it can be found here: This Is No Time to Give Up on Gold – Ricks Picks (rickackerman.com)

Or, here’s your snippet: “

With gold’s gratuitous, 4% plunge on Friday, bullion has once again affirmed its reputation as one of the nastiest, most frustrating assets an investor can own. Its chief enemy is a global network of shamans, thimble-riggers and feather merchants who make their living borrowing bullion from the central banks for practically nothing, then lending it to everyone else for slightly more. They are always looking for excuses to pound quotes so that they can replace what they’ve borrowed at a lower price. Helpful to this goal is a story that, however ridiculous, spooks gold bugs into dumping their holdings. The current story is that the Democrats will somehow be bad for bullion, although no one can say exactly why. To believe such claptrap is to implicitly believe that when Kamala Harris takes over for the mentally failing Biden, she will impose rigorous constraints on spending that will strengthen the dollar. Yeah, sure. But that’s not the point. The balance of power is about to change so radically in Washington that no one really knows what will happen next. For all we know, the Republic might not survive until mid-term elections in 2022. If such a grave crisis is in fact bearish for gold and silver, then Harris, Schumer and Pelosi are bullish for America and the dollar; Greenspan, Bernanke and Powell were skinflints; John Wayne was a homo, and beer causes cancer.

The bottom line is that we should tune out bullion’s rigged swoons until the crooks and shysters are ready to let it run. Sometimes it takes courage and conviction to stay the course, and this is one of those times.

Gold’s correction since August has been moderate and that when it ends, there is potential for further appreciation to at least $2290/oz. That’s a 25% gain from current levels — sufficient to outperform the broad stock averages just as bullion has reliably been doing for years.”

Chuck again…  Well, that was good in that it put to bed the crazy thought that the new administration will be bad for Gold… I thank the good folks at GATA for sharing that with me…  Did you know that the folks at GATA have been exposing the Gold price manipulation longer than I have?  Well, now you do! 

Market  prices 1/12/21: American Style: A$ .7724,  kiwi .7180,  C$ .7838, euro 1.2156, sterling 1.3493, Swiss $1.1242, European Style: rand 15.4090, krone 8.5344, SEK 8.2578,  forint 295.53,  zloty 3.7721,  koruna 21.5440, RUB 74.54, yen 104.20, sing 1.3283, HKD 7.7548, INR 73.25, China 6.4792, peso 19.97,  BRL 5.4543,  Dollar Index 90.42,  Oil $52.99,  10-year 1.15%, Silver $25.53, Platinum $1,071.00, Palladium $2,420.00, Copper $3.63, and Gold… $1,860.50

That’s it for today…  Happy Birthday, Andrew!  On this day 39 years ago, your mom and I went to the hospital. You see you were two weeks late, and so the doc decided that they would induce your mom… Now this was 39 years ago, and back then normal people didn’t have doplars to tell them the sex of the baby… They went by the speed of the heart beat, which in your case indicated that you would be a girl… We had a girl’s name picked out. Laura, was to be her name. And what a surprise for me when you came out, and you were a boy!  When we took you home, you older sister, Dawn, was happy with you, but she wanted to know where Baby Laura was?  Oh, and it snowed 9 inches on the day you were born…  You played a lot of different sports as a young man, and I always told you that when you stopped playing to “give back to the game you love”, and you have done just that!  Happy Birthday Bud….   And with that it’s time to go…  Mr. Excitement, Jackie Wilson takes us to the finish line today with his song: Your Love Keeps Lifting Me Higher….  Ok, I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

 

Gold Cries Uncle!

January 11, 2021

* Currencies get sold on Friday… 

* U.S. Data last week was ugly… 

Good Day… And a Marvelous Monday to you….  Well, are you suffering from Football playoff games withdrawal this morning? 6 playoff games this past weekend… Crazy… And the College National Championship Game tonight! I have just a passing interest in the NFL, and on Saturday, I had forgotten about the games being played until it was 8 o’clock at night! The NFL players turned me off to watching them a couple of years ago, and my interest in the games has never really come back. I’m rooting for Alabama in tonight’s game VS Ohio St. I for one, didn’t think that OSU should be included in the final 4, since at that point they had only played 6 games… Not their fault, but still… Try and navigate a full Conference schedule of 10 games, there’s bound to be a bad game there most years… I’m just saying…  OK… Head East greets me this morning with their song: Never Been Any Reason…

On a side bar here… The Band, Head East’s first album had a picture of them eating at counter at a restaurant that my good friend Duane and I used to frequent for breakfasts… The Olivette Diner…

OK… I give… I give, I’m calling uncle, stop twisting my arm! Can you hear Gold crying out in pain? Three straight days of engineered takedowns last week, and in the overnight markets more selling….  On Friday, Gold lost $63.80 to close at $1,851.00 and Silver lost $1.71 to close at $25.50…  It’s been downright ugly this past week for Gold & Silver, with Gold taking the brunt of the selling…  Why? I have no idea why anyone in this day of constant currency printing, zero interest rates, negative yielding bonds, and half the country’s economy shutdown, would anyone that has their head screwed on straight would be selling their Gold…  And I say this to all of the Gold sellers… You’ll be sorry…

I really don’t get it… Biden “has said he plans to push out at least two more comprehensive stimulus packages that could add trillions to the U.S. federal debt,, and mean the printing presses for currency debasement will be running overtime…  If this pullback in Gold’s price doesn’t scream “buy me” then I don’t know what will…  I’m just glad I don’t get the itch to sell my Gold Holdings when it seems that the price manipulators have pushed gold into the elevator going down…  If I were still working, I would be looking to add to my Gold holdings, not sell them…

So, it wasn’t just the metals that got sold late last week, the euro, which had touched 1.23 a couple of times and even traded over it last Thursday morning, found the footing very slippery and hasn’t been able to find terra firma since…  So, suddenly traders had second thoughts about selling dollars? Did they have a coming to Jesus meeting with the Powers that Be about selling dollars?  Because that’s what it sure looks like to me…  Traders arrived at their desks on Friday morning, to a memo from the bosses, that said, “Quit selling dollars, now”!  And don’t think that this scenario is ridiculous, or unfathomable, because that’s how trading desks work…

I found this little snippet on the forexlive.com site, listen in here: “The dollar will go wherever the Fed does, and the Fed will follow inflation. Already the talk from the central bank is changing. Less than a month ago they were contemplating more QE or lengthening the average maturity of purchases. This week, Clarida and Evans were talking about timelines for tapering bond purchases.

They’ve been strident in forecasting no rate rate hikes into 2024 but that always comes with a caveat about inflation.”

Chuck again…  they were trying to explain why they think the dollar is due for a rally…  And they think the Fed will hike rates when inflation starts to run higher…  Have they not been paying attention in class when I’ve explained how with so much debt the U.S. cannot afford to have higher interest rates, period!   It is important to point out though, that in a trend, asset movement is not a ONE-WAY Street, there’s always a chance of volatility, and to me that’s what late last week was… A tempest in a Teacup is more like what’s happening… I do believe… Of course I could be wrong… But I do believe this dollar strength won’t last long… 

So, let’s go through the U.S. Data Cupboard prints from late last week… First we had the Weekly Initial Jobless Claims, which were 787,000 for the previous week… That’s not good considering that the week was shortened by the holiday… Then we had the Nov. Trade Deficit which was $68.1 Billion up from the previous month’s number of $63.1 Billion… And we had Clarida and Evans, two Fed Heads, speaking and they both mentioned tapering bond purchases… Hmmmm…  On Friday, we saw the BLS version of Jobs for December and they actually showed 140,000 jobs lost in the month, which was pretty darn close to the ADP number of 123,000 jobs lost…    The problem with this number is that in reality it was far worse than 140,000 jobs lost… The BLS added 157,000 jobs to the surveys, which means that the surveys showed 197,000 jobs lost in December…

And what’s this I see, is this a disturbance in the force? Avg. Hourly Earnings rose from .3% in Nov. to .8% in December…  A .5% gain in wages… This will lead to inflation rising folks… Wage inflation is what the Fed has been waiting for…

We were supposed to see the color of the latest Consumer Credit, (read debt) but it failed to launch on Friday… And that gets my conspiracy controlled mind working overtime, folks…

So, as you can see… The economic data wasn’t good late last week, and so we know that it wasn’t the data that got everyone all lathered up to sell Gold & currencies…  Now, does my explanation of what happened make more sense?  I thought it would…

In the overnight markets… Before I went to bed last night, I checked the markets as they had opened in Asia, and Gold was down already , $20… I went to bed thinking that this morning I would see Gold down another $50… But to my surprise, the $20 loss has been wiped out, and Gold is down just 50-cents this morning…  There had to be a ton of bargain buyers in the overnight markets, to bring Gold back to near even today…  And Gold is taking the stairs up after their trip downward in the elevator! 

The currencies seem to have plugged the hole in the dam..  And they are sitting at the same levels they closed on Friday.  This week, we’ll see what becomes of Biden’s stimulus plans, and how much currency printing will be required… It’s just a darn shame folks, that we, as a country, keep going to the well, of deficit spending… One of these days, we’re going to find that the well had gone dry, we’ll pull up the bucket and there will be no water (currency) and then what will we, as a country do?  Can you say default? I knew you could… 

I had a dear reader send me a note that someone had written that was titled 545 VS 300,000,000,000 People…  (that’s 300 Million!) he’s talking about us! Well, here are a couple of snippets from this excellent piece written by a man named Charlie Reese…

“One hundred senators, 435 congressmen, one President, and nine Supreme Court justices equates to 545 human beings out of the 300 million who are directly, legally, morally, and individually responsible for the domestic problems that plague this country.

I excluded the members of the Federal Reserve Board because that problem
was created by the Congress. In 1913, Congress delegated its Constitutional
duty to provide a sound currency to a federally chartered, but private,
central bank.

It seems inconceivable to me that a nation of 300 million cannot replace
545 people who stand convicted — by present facts — of incompetence and irresponsibility. I can’t think of a single domestic problem that is not
traceable directly to those 545 people. When you fully grasp the plain
truth that 545 people exercise the power of the federal government, then it
must follow that what exists is what they want to exist.”

Chuck again..  This is a very good synopsis of what exists in this country, and that if the people of this country would just wake up and realize that all our problems are direct result of what these 545 people do… Maybe we could vote them out, and start all over again… Maybe…

There’s no data scheduled to print today… So maybe they’ll try to sneak the Consumer Credit data under the radar today…   Only the shadow knows if they will or won’t…

To recap… it’s been downright ugly and in the whole forest, for Gold & Silver from Wednesday on… And Chuck gives a few reasons why that shouldn’t be happening, but it is, so use it as a buying opportunity… Currency traders must have gotten a memo to stop selling dollars, which they did on Friday… Gold appears to have taken the elevator down, and will now have to take the stairs back up, but it will… in Chuck’s opinion that is…  The economic data was ugly last week too… But who uses fundamentals like economic data any longer? 

For What It’s Worth… Once again I’ve come to a place where I wish all this information and proof was around 10 years ago, when I said Gold was being manipulated downward, and was told by the power that be that I couldn’t talk about it any longer, because it was simply conspiracy… Well, now it’s conspiracy fact!  This article talks about how Deutsche Bank just had to pay a HUGE fine for manipulating currencies and metals, and it can be found here: Deutsche Bank to pay nearly $125 million to resolve U.S. bribery, metals charges | Reuters

Or, here’s your snippet: “Deutsche Bank AG will pay nearly $125 million to avoid U.S. prosecution on charges it engaged in foreign bribery schemes and manipulated precious metals markets, the latest blow for the bank as it tries to rebound from a series of scandals.

Germany’s largest lender agreed to the payout as it entered a three-year deferred prosecution agreement with the U.S. Department of Justice, and a related civil settlement with the U.S. Securities and Exchange Commission.

Almost all of the payout relates to charges Deutsche Bank violated the federal Foreign Corrupt Practices Act (FCPA) over its dealings in Saudi Arabia, Abu Dhabi, China and Italy, court papers show. Nearly two-thirds of the payout is a criminal fine.

The settlements were made public on Friday at a hearing in the federal court in Brooklyn, New York.

“Deutsche Bank engaged in a criminal scheme to conceal payments to so-called consultants worldwide who served as conduits for bribes to foreign officials and others,” in order to win and retain “lucrative business projects,” Acting U.S. Attorney Seth DuCharme in Brooklyn said in a statement.

In the metals case, prosecutors accused Deutsche Bank traders of placing fraudulent trades, known as spoofing, to induce other traders to buy and sell futures contracts at prices they otherwise would not have.”

Chuck again…  I’ll say what I always say when another bank gets taken to the woodshed for manipulating the markets…  And no one goes to Jail…. 

Market price 1/11/21:  American Style:  A$ .7710,   kiwi .7190,  C$ .7829, euro 1.2267, sterling 1.3487, Swiss $1.1235, European Style: rand 15.4414, krone 8.5109, SEK 8.2731,  forint 296.22,  zloty 3.7187,   koruna 31.5513, RUB 74.05, yen 104.18, sing 1.3286, HKD 7.7551, INR 73.43, China 6.4744, peso 20.18,  BRL 5.4143,  Dollar Index 90.44,  Oil $51.86,  10-year 1.10%, Silver $25.04, Platinum $1,041.00, Palladium $2,409.00, Copper $3.63, and Gold… $1,850.50

That’s it for today… I hope your team won this past weekend… I no longer have a home team to root for, and by default I get the K.C. Chiefs… They are A Missouri Team!  The cold front I talked about coming my way this past weekend, did make it here, but I was still able to sit out by the ocean and read in comfort… In other words, it didn’t actually get cold! Maybe for lifelong Floridians it was cold, but not for me! I received new noise cancelling AirPods for Christmas and I’ve been putting them to work each day! I love they way, when I have to take one out of my ear to hear what someone is saying to me, the music pauses, until I put it back in my ear! I don’t have too much else to say this morning, so I’ll end it.. The Guess Who take us to the finish line today with their song: No Sugar Tonight…  I’m sure I’ve talked about how I like the Guess Who’s singer, Burton Cummings… Ok, I hope you have a Marvelous Monday, and please Be Good To Yourself!

Chuck Butler

The Dollar Bugs Fight Back!

January 7, 2021

* Gold sees another engineered takedown

* Currencies lose ground to the dollar on Wednesday… 

Good day… And a Tub Thumpin’ Thursday to you! What a scene yesterday from the Capitol… I’m not going to say any more about that because I don’t want to be accused of talking politics… Of course I don’t really know what is construed as politics any longer, since last week all I said was, that McConnell had nixed the $2,000 checks… And I got told to shut the *&^( up about politics!  OK… Have you ever gotten to the point where you know you’re right but everyone keeps telling you you’re wrong, and you get so frustrated that you want to lash out?  I’m just wondering if that’s ever happened to you?  It happens to me all the time, and in my younger days, when I had a very bad temper, I would lash out, and then feel bad for doing so…  Doctors and nurses can’t believe that I ever had a bad temper, they always tells me how easy I am and how I just go with the program… I tell them, “that’s because you have the needles!” HAHAHAHA!  Elton John greets me this morning with his song: Mona Lisas and Mad Hatters… One of my fave Elton John songs…  that one and Honky Cat…

Well, I guess the price manipulators didn’t like that I said that 2021 would be a “golden year”, and that all the currency printing was going to be beneficial to Gold… Yesterday early morning, Gold was down a few bucks, not big deal… And then the boys in the band showed up at the COMEX with their arms full of short Gold paper trades, and the engineered takedown was on…

Gold, yesterday lost $32 on the day…  Now tell me how this sounds…  We start they year with a $44 gain, followed by an $8 gain, and then all the reasons Gold was being bought the previous two days went to hell in a hand basket? And people sold?  See howd illogical that sounds?  The only people that were selling actual positions didn’t cause a $32 slide! The Price Manipulators, led by JPMorgan saw to it that before everyone thought that Gold was going to be a one-way shot higher, that they had different plans…  Here I go getting my exercise again… Shaking my head in disbelief…

OK… The currencies gave back a bit of ground on the day too, but nothing like the hit that Gold took… The euro was able to remain above 1.23, which had been a line of resistance… And the Aussie dollar (A$) did slip below 78-cents but barely… So… it was Moving Day on Tuesday, and Move back in day on Wednesday!  There was nothing, absolutely nothing, say it again, that would have caused this backing off of selling the dollar… If anything, you would think that the goings on in D.C. would have caused some additional dollar selling, but not yesterday…  Makes you think that the PPT was buying dollars once again…

In the overnight markets, the dollar bugs won the battle… not the war, but the battle, and pushed the euro back below 1.23, and the Aussie dollar further down the 77 handle… It appears that it was a bunker down and hide behind dollars night… I don’t know what the overnight markets were fearing, but it sure looks like they feared something… The Big Bad Boogie Man? Or The Big Bad Plunge Protection Team?  Most like it was the latter of those two… I’m just saying… 

So, we start our Tub Thumpin’ Thursday with the dollar pushing back, and Gold down $4, and Silver down 19-cents. The price of Oil remains above the $50 handle, and the 10-year Treasury’s yield climbed higher in the past 24 hours and is trading this morning at 1.05%!  

Have I ever told you about a presentation I did in Orlando  in 2003? Well, if I have I’m going to tell it again, because this is what happens when the dollar in entrenched in a weak trend like it was in 2003…..  I was scheduled to speak in a room that held about 200 people…  Before I took to the stage, I noticed the room filling up quickly, and soon all the seats were taken, and people began to camp out sitting the floor… Then the standing room only crowd filled in against the walls of the room, and then a Hotel person came in and told me that they would not allow any more people in the room.  So, Chris Gaffney went to the back of the room, and held the door ajar, and would tell the people waiting out in the hallway, what I was saying… The amount of people wanting to get in to hear what I had to say probably totaled 350… Not the largest crowd I ever spoke to, but… the first time I had to have someone relaying my message to the folks outside the room…  After that year, the conference people began putting me in larger rooms…

But that’s what the frenzy to get out of dollar is like when the dollar is entrenched in a weak trend, as it is beginning to be now… I guess they don’t hold “in person” conferences any longer, and everything is virtual… So, it will be difficult to gauge when the frenzy to sell dollars come to be… But I do feel it will come, and I’m sure if it does come it will be this year!

And this morning, Ed Steer (www.edsteergoldsilver.com) had an interview with Doug Casey, and I’m going to borrow a small piece of that interview because it plays well with what I’m talking about here…  So, take it away Doug… .”First of all, we have to define what Mises meant by a “crack-up boom.” It can occur when the public realizes that money is being printed at a great rate, and it’s likely to continue being printed at a great rate. The public then starts moving out of money to buy anything of real value. All that money is passed around faster and faster, like an old maid card, causing a “crack-up boom.” It’s not a real boom. It’s caused by fear, not prosperity. The desperation of trying to get into real goods and get out of the U.S. dollar creates what you might call uneconomic economic activity.”-Doug Casey

The U.S. Data Cupboard had the ADP Employment Report for December yesterday, and the report showed that the economy lost 123,000 jobs during the month…  YIKES…  Of course the BLS Jobs Jamboree on Friday won’t come near that number… I’m just saying…   December Factory Orders also printed and showed a 1.0% gain, VS 1.3% in Nov.   So, Riddle me this Batman… How can Factory Orders show a drop in Dec from Nov. but the manufacturing index (ISM) showed a big gain?   Hmmm.

This morning’s Data Cupboard has the Weekly Initial Jobless Claims, which will be skewered once again because of the holiday last week…  It won’t be until next week that we see a full week of claims being filed… And we have 3 Fed Heads on the speaking circuit today… Bullard, Evans and Day…  I wonder what lies they’ll be telling us this time?  As Pink Floyd sang: Haven’t you heard, it’s a battle words, and most of them are lies….

To recap… it was another engineered takedown in Gold yesterday by the boys in the band, who showed up at the COMEX with their collective arms full of short Gold paper trades… And Gold lost $32 on the day… The currencies saw some dollar buying that didn’t amount to too much, but still knocked the currencies off their lofty levels on the day. And Chuck gives us a glimpse of what the frenzy to sell dollars is like when the dollar is well entrenched in a weak trend…

For What It’s Worth…  You know I first met Jim Rogers years ago, when he came to our office at EverBank World Markets and had lunch with us at our desks, and we talked about markets etc. And ever since that day, I’ve bought and read all his books, and sit up and take notice any time he’s on TV or in print…  And so it was with this article that quotes Jim Rogers thoughts on Silver, and it can be found here: Jim Rogers recommends investment in silver | The Korea News Plus (newsarticleinsiders.com)

Or, here’s your snippet: “Famed investor Jim Rogers, the founder of the Quantum Fund, recommended investment in silver in the New Year as its price is substantially lower than historic high.

The financial commentator made the advice in a recent interview with E-Trend, a YouTube channel focusing on economic and stock market news.

“Silver is down 50 percent from its all-time high. Gold is down 10 percent from its all-time high, less than 10 percent. I will buy both, but I will buy more silver than gold,” he said.

The gold price has moved below $1,900 per ounce over the past month compared to its historic high of $2,069.4 this August.

That of silver approached $50 an ounce in the late 1970’s to fluctuate below the historic high after that. Silver struggled over the past decade but turned around after the virus outbreak to trade at around $25 last month.”

When asked about the stock market… “I am not very good at market timing, but I would imagine the bubble will pop later in 2021 because bubbles don’t go on forever, and bubbles are already developing in Korea, Japan, America, and some places,” he said.”

Chuck again… You always and I mean always know where you stand and what’s on his mind, when Jim Rogers talks… And like the old EF Hutton commercial… When Jim Rogers talks, I listen….

Market Prices  1/7/ 2021: American Style: A$ .7745,  kiwi .7251, C$ .7858, euro 1.2267, sterling 1.3489, Swiss $1.1322, European Style: rand 15.2294, krone 8.4379, SEK 8.2015,  forint 292.16,  zloty 3.6775,   koruna 21.3388, RUB 73.87, yen 103.66. sing 1.3242, HKD 7.7529, INR 73.30, China 6.4571, peso 19.75, BRL 5.2933,  Dollar Index 89.85,  Oil $50.79,  10-year 1.05%, Silver $27.16, Platinum $1,098.00, Palladium $2,459.00, Copper $3.65, and Gold… $1,915.20

That’s it for today… I hope things calm down in D.C. I see it being repeated around the country… I sure hope I’m wrong there… Now on to nice things…  I sat out on the deck that overlooks the ocean yesterday, reading my book and usually I only stay out there for an hour or two, but I was so entrenched in this book, that I spent too long and my bald head got pink… It didn’t hurt, like sunburn, it just had a pink head! This morning the pink is all gone…  I love the winter sun down here, if had sat outside in the sun in the summer time here, I would have 3rd degree burns on my bald head!  But not now… the sun is warm  and comfortable, to sit in and soak up Vitamin D…. That “cold front” I talked about yesterday is taking its time getting here, so for another day it’ll be nice and warm!  The Counting Crows takes us to the finish line today with their 90’s song: Mr. Jones…   At the time of that CD’s release, you would have thought The Counting Crows would be a band that lasted a long time with multiple CD’s…   Oh well… I hope you have a Tub Thumpin’ Thursday, and a Fantastico Friday tomorrow, and will remember to Be Good To Yourself!

Chuck Butler

 

Tuesday Was “Moving Day”….

January 6, 2021

* The euro finally breaches 1.23!

* Oil price trades above $50…. 

Good Day, and a Wonderful Wednesday to you!  Thanks to all who sent along a note yesterday, confirming something that I already knew… That you dear Pfennig readers, are the best! OK, tried to stay awake for the Missouri Tigers basketball game VS Miss. St. last night, but one thing you learn when you come from west of the East Coast… The time difference doesn’t seem like much, but a game that starts at 8 back home, comes on at 9 here, which means it doesn’t end until 11…. UGH!  I read this morning that  they blew their halftime lead, and lost the game… UGH!  What a beautiful day here yesterday! I do believe a “cold front” will be coming through this weekend, and the highs will only be in the mid 60’s… That’ll be our winter… HA! I had a dear reader send me a note telling me I needed to stop talking about how nice it is in Florida this time of year, or else, everyone will want to move here! HA!  Smokey Robinson and the Miracles greet me this morning with their song: I Second That Emotion…  So, if you feel like giving me a lifetime of devotion… I second that emotion…  Smokey Robinson had the smoothest, coolest, voice!

OK… I’m kind of in La la land after listening Smokey Bill Robinson! OK… got to get it in gear!  Well, as I left you yesterday morning, the dollar was back on the chopping block, and that’s where it stayed throughout the day Tuesday. Gold had an early $7 gain yesterday, and finished the day up $8.30, and closed at 1,951.50, and Silver gained 31-cents, to close at $27.61… The euro pushed with strength against the dollar, and closed the day at 1.2298…  And the Aussie dollar (A$) really added some ground between its current value .7755, and 77-cents…  

Let’s get back to the euro for a minute… The single unit has really rallied in recent months, and has finally breached the 1.23 level, which appeared to be a line of resistance for the euro, as it had breached the 1.23 level a couple of times in recent days, but had failed to hold the level or add to it.  But in my humble opinion, this is something you see when an asset gets close to a line of resistance, it will test the line a few times before finally moving past it… And in the overnight markets the euro has pushed past 1.23, and has added to its value even more, trading right now at 1.2344…  

Remember when I told you that in a weak dollar trend, the offset currency to the dollar is the euro, and the euro would rally, even with the Eurozone in an economic mess? Well, we are certainly seeing that these days, eh? 

Speaking of the overnight markets, they have once again taken the conn on selling the dollar…  As I just told you the euro is rallying, the Aussie dollar (A$) has really soared to above 78-cents…  And recall yesterday, I told you about how the euro was rallying with their bad fundamentals? Well, I could have substituted the Japanese yen for the euro, for the yen too is on the rally tracks, and Japan is a mess!  I recall years ago telling my colleague, Chris Gaffney, that it sure would be nice if the countries that had rallying currencies in the weak dollar trend, had good fundamentals to talk about…  Sure looks like the same thing is happening again… 

Well, the price of Oil rose to $50 yesterday… That was a nice jump in the price which on Monday was trading with a $47 handle for a while…  I guess Oil traders and investors bought the Government line about ramping up the distribution of the virus vaccine, hook, line and sinker…  I would have thought that they would wait and see if what the Gov’t said really came to fruition…  But NOOOOOOO! The dollar is falling, daily, it seems, and Oil is a anti-dollar investment, which is strange given that most Oil trades in dollars…  So, why not take a flyer on ramped up distribution of the vaccine?

With the price of Oil rising, the Petrol Currencies like: the Norwegian krone, Canadian dollar, Brazilian real, and Russian ruble have noticed, and traders are marking those currencies higher…  You know, I’ve explained this before, but what the heck, I’m going to do it again!  The Norwegian krone gets a double helping of attention in times like this, because, even though the krone isn’t tied to the euro, it follows the euro up and down, and when the euro is moving up, and Oil is moving up, the krone gets a double shot of love!   The song from the Peter Pan movie of years ago, keeps popping into my head…  We’re following the leader, the leader, the leader, wherever he may go! 

Ok, I got my walking orders from a couple of dear readers yesterday… (I kid) They directed me to the real price of Copper… And where to find it, and that the prices I had listed were scrap Copper prices… So, all good from now on…  

Well, have you ever thought in your wildest dreams that the U.S. would be compared to a Banana Republic?  During the last weak dollar trend 2002-2011, my good friend, and former Big Boss, Frank Trotter and I would give presentations together… I would talk about the currencies and metals, and he would talk about the bank… There were a few times during that time period, when Frank would refer to the U.S. as a Banana Republic… He was the first to say that… 

And now Michael Snyder, of whom I’ve used in the FWIW segment in the past, is now saying that the U.S. has become a Banana Republic….  Here’s a quote from him: “I know that sounds absolutely crazy, but it is true.  Once the COVID pandemic hit the United States, those that control the levers of power in this country decided to go “full Weimar” and they never looked back.  As a result, the size of our money supply is rising at a rate that would have been unimaginable just a few short years ago. M1 was up by more than 50 percent in 2020.”

I found that article here: Snyder: The United States Has Become A Banana Republic (blacklistednews.com)

I said yesterday that currency printing was going to help the price of Gold to rise in 2021, And I can’t emphasize that thought enough…  The U.S. has put their currency printing on steroids… Apparently they really do want to see inflation rise…  But, until the velocity of money begins to rise, inflation will be held to some select commodities, and agriculture…  And mark my words now, so you can listen to them later…  Once inflation begins to rise, the Fed will NOT be able to stem its rise… 

And I ask one question:   Got Gold?

And talk about timing! yesterday I said that thought that the 10-year Treasury would finally see its yield rise about 1.00% this year, and in the next 24 hours that’s exactly what it’s done!  I did a double take on the figure when I looked it up this morning, for it’s been a month of Sundays since the 10-year’s yield was above 1.00%…. 

Man, I’ve got to say that this cutting out carbs (not full Keto) is boring!  I can’t have pretzels with my low carb beer… I can’t have a late night snack of cookies and milk…  I had tuna salad the other night wrapped in a lettuce leaf!  And now I’m at a road block to losing more weight, and lowering my blood sugar number… I can’t get either one to go lower! UGH!…  the good news is that I’m not ready to give up… But could I please have some variety here? 

The U.S. Data Cupboard will have Dec. Factory Orders for us today, and the ADP Employment Report for December.  Yesterday, the ISM for Dec. rose from 57 to 60!  ARE YOU KIDDING ME?  There is no way in hell that the manufacturing in this country is hitting on all eight!   The markets ignored the print, and continued to sell dollars… So… I think that they saw the ridiculousness of that print!

To recap… The currencies and metals, and Oil all had good days yesterday… Nothing like Monday’s $44 gain for Gold, but a good day nonetheless…  Oil is back to $50, a big step for Texas tea….  Let’s see if it can add to that figure, or slump again, as has been the case for the last year…  Chuck talks about currency printing, and brings in Michael Snyder to give his thoughts on what’s going on there…  And the euro finally breaches its  line of resistance at 1.23…

Before we head to the big finish today, longtime reader, Bob, sent me an article that was titled: Madness, Mayhem, Manipulation and More Tyranny By John W. Whitehead…  I loved that title… for 2021, Madness, Mayhem, Manipulation and More!  I think that just about nails what I see for this year! 

For What It’s Worth…. well… I have used articles by Egon Von Greyerz before, and will again this morning… In this article Egon talks about some numbers that have gotten completely out of control, like Money Supply, that we discussed earlier… And the article can be found here: THE FACTS & NUMBERS OF 2020, THE GOLDEN FUTURE OF 2021 (goldswitzerland.com)

Or, here’s your snippet: “As we say goodbye to 2020 and look toward 2021, the key numbers on my screen and mind have nothing to do with dates yet everything to do with this: 14.

14 is the number of trillions by which the aggregate money supply increased in the U.S., EU, Japan and eight other developed economies in a single year, 2020.

Wow.

Of course, other numbers matter in ways which can’t be fully fathomed, such as the 1.7 million deaths attributed to a global pandemic of the same year which has sent the global economy into a crisis not seen since the Great Depression.

And speaking of depressions, in terms of inflation-adjusted GDP growth rates per capita, the classic measure of a depression, we are clearly experiencing one now, and have been since before COVID. 

As to other memorable 2020 numbers, and despite open evidence of an economic depression, the DOW shot past 30,000 as global GDP tanked, economies plunged and death counts mounted, proving yet again that there’s very little a money printer at a central bank near you can’t do to support a Frankenstein securities bubble.

In short, as viral risk locked us all indoors, every risk asset, from credits, equities to crypto’s saw a risk-on high (including a 66% surge in the MSCI All-Country stock index) that would make any market bull blush, then sneeze.

And if that wasn’t enough to make one question the death of capitalism and rational price discovery, the fact that 2020 also saw record low yields for junk bonds and a 5X increase in the price of Bitcoin ought to be evidence enough that investors are enjoying a collective madness led by an equally mad cadre of blind central bankers.”

Chuck again…  a very good article in its entirety, so if you have a couple of minutes today, click on the link and read what Egon has to say…. 

Market Prices  1/6/21: American Style: A$ .7810,  kiwi .7304,  C$ .7894, euro 1.2344, sterling 1.3645, Swiss $1.1415, European Style: rand 14.9836, krone 8.4010, SEK 8.1517,  forint 289.90,  zloty 3.6535,   koruna 21.1682, RUB 74.33, yen 102.78, sing 1.3158, HKD 7.7529, INR 73.05, China 6.4566, peso 19.71,  BRL 5.2949,  Dollar Index 89.28,  Oil $50.07,  10-year 1.01%, Silver $27.55, Platinum $1,102.00, Palladium $2,502.00, Copper $3.63, and Gold… $1,946.10

That’s it for today…   Man that was a real doozy of a day yesterday in the markets wasn’t it?  It was “Moving Day”… as bond yields, currencies, metals, and Oil all made moves upward against the dollar!  Well, I’m all set for another beautiful day here, before the “cold front” comes in…  I laugh at the people on TV that tell their audiences to “bundle up the kids, with scarfs, hats and gloves, as they wait for the school bus”… It’s 51 degrees! Back home, if it was 51 degrees, people would think spring came early! It’s all funny to me…  Another beautiful sunrise this morning, has me geared up for today, so you better not run into me on the deck today! HA!  Ok… Jefferson Starship takes us to the finish line today with their song: Miracles…  I hope you have a Wonderful Wednesday, and I hope you will Be Good To Yourself!

Chuck Butler

Gold & Silver Continue Their March To Higher Ground!

January 5, 2021

* Currencies see some profit taking on Monday… 

* Gold & Silver kick the dollar’s tail and take names later… 

Good day… and A Tom Terrific Tuesday to you! Another day here in S. Florida, where it was sunny and warm, albeit not as warm as the previous days, but still short-sleeve shirt weather! And if I haven’t told you before… I simply love it! OK, I know I’ve told you before, I was just having some fun… Which I didn’t have going through the Pfennig Replies box yesterday… I’m afraid that my humble little letter has entered into the Twilight Zone… Imagine if you will, a newsletter writer, who is forced to read nasty replies from people that want him to stop writing!   I told them… I won’t stop, but I can make certain you don’t have to read the letter any longer! I refuse to allow people who shout loudest to dictate what I talk about! That’s the way it’s done these days, if you don’t go along with the crowd, you’re immediately called a racist, a homophobe, an idiot, etc.  And I’m not going to allow that to happen to me!  Ok…  One of my all-time fave bands: Poco greets me this morning with their song: Bad Weather….

So, now that I’ve gone through all that…  The currencies saw some profit taking yesterday, as the day went along… The euro had traded past 1.23, but ended the day at 1.2257…  Gold on the other hand was kicking tail and taking names later, and ended the day up $44 to close at $1,943, and Silver ended the day up 84-cents to close at $27.31….  And as usual on a percentage basis, Silver outperformed Gold… the percentage gains were Gold 2.33%, and Silver 3.19%…   Doesn’t that just beat all the drums? I mean $44 is much greater than 84-cents…  but it is what it is…

So, what got into the price of the metals yesterday?  Well, you see we ended the year with the best performance years in a decade, and that was just a precursor to what’s going to be a “golden year”, in my opinion… Currency printing, zero interest rates, and debt that is becoming a major problem, will all contribute to the “golden year”…  And yesterday’s price action was just giving notice of what kind of year this is going to be for Gold (& Silver)

In the early trading today Gold is up another $7 and Silver is up 22-cents, so the push higher for metals continues… 

I did receive lots of Happy New Year emails, so thank you… And one of them asked me to add the price of Copper to the Market prices roundup…  But there are 4 prices for Copper… and they are:

Bare Bright Wire (stripped/shiny) $2.85
#1 Tubing (clean tube/ clean fine wire) $2.75
#2 Tubing (paint/solder/burnt wire) $2.60
Tin Plated (wire/bus) $2.60

So… which one should I use?

OK… back to the markets…  The stock market bubble keeps getting more air blown into it…  How on earth does one make a call on this asset class? Trading here is beyond reason, and the P/E ratios continue to grow wider and wider… You know how to stop all this?  Talk me into investing all my sidelines cash into stocks…  That would be the kiss of death for the market… I know, because it happened in 1999…  Oh, you forgot about the dotcom crash?  I just came to realize that a lot of stock market participants weren’t old enough to be in the market for the dotcom crash of 2000…. They only know a rallying market…. Yes, we had a short-lived hiccup last March, but the Fed saw to it that the hiccup was drowned with cash, and voila! Hiccup was over!

Enough on that! I’m not a stock jockey, and have never been one either!  Although I did spend my first 6 years in the financial markets in brokerage houses…  And then I did start a brokerage in my basement… I held a brokerage and two principle licenses during my time in the business…

Let’s see… I’ve talked about the metals, and stocks, and currencies, what’s left to talk about? Oh! Bonds!  Well, I think this could be the year that the 10-year finally yields 1.00% once again… Inflation is stirring folks… and the bond boys will be the first to say it really does exist, and they will move the yields higher… The only fly in that ointment is just how many bonds the Fed will he buying in 2021… That figure could very well tip the scales toward continued yields that on a real yield basis (including inflation) are negative… 

I believe that the threat of bond buying by the Fed is what has kept the bond boys from moving yields higher to date…. The Fed increased their Treasury buying by 79% last year…  And previously I reported that the Fed now owned more Treasuries than the public…

The price of Oil slipped by about a buck yesterday…  I think when Oil traders heard the news that I heard that only 4 Million Americans have been vaccinated so far, that their dreams of renewed demand got squashed!  But… In the overnight markets the price of Oil has risen above $48 once again… 

Now, I do believe that I’ve touched on everything in markets!  And it’s time for…. Chuck’s view on what’s could happen in 2021….  Are you ready?

I’m just kidding, because if I gave you my thoughts on what could possibly occur in 2021, you wouldn’t need to come back and read the letter any longer! 

The Dollar Index is trading this morning at 89.63, just a couple of blips above where it was yesterday morning…  In the overnight markets the selling of the dollar continues…  You see… in the Asian and European markets, traders there can sell dollars without fearing retaliation by the Fed, or the Plunge Protection Team (PPT)…  I’m just saying…

Remember when I told you how the Chinese were boycotting the steel imports from Australia, because they got their feelings hurt by something that Australia said?  Well, a month later, the Chinese realized that they had cut their nose off in spite of their face, and that they needed the steel imports, and so very quietly, they began to accept the imports again… The Aussies never budged from their position, and you’ve got to give them kudos for that!  So, all in all we’re just moving along as before here… No saber rattling, or name calling needed… 

The U.S. Data Cupboard gets back online today with a real economic data print, the Dec. ISM (manufacturing index)…   Yesterday we saw the color of a 2nd tier print, Construction Spending, which as expected fell in December… I read something yesterday, that Construction workers segment is being hit very hard by the virus…  And that’s definitely coming into play here with this data… 

To recap… The currencies saw some profit taking yesterday but have rebounded in the overnight markets, as the dollar is back on the chopping block. Gold gained $44 yesterday! Chuck gives his reasons that he believes this is going to be a “golden year”…   Chuck throws his hands in the air, and discusses stocks… Bonds, and Oil…  The economic data for December will begin to stream in starting today…  

For What It’s Worth….  Since I spent a good part of the letter today talking about the stock market, I found this article to be a sister article to that discussion, and it can be found here: “Look Out Below”: Carl Icahn Issues Major Warning On Markets, Warns Rally Will End In “Painful Correction” | ZeroHedge

Or, here’s your snippet: “It has been a difficult year – and decade – for billionaire investor Carl Icahn, who despite making $1.3 billion by shorting malls via CMBX 6, a trade we first pitched as far back as 2017 as the Big Short 2.0, failed to make waves with any other prominent investments and in fact has been anecdotally net short during the market’s historic surge in the past two years.

Yet despite a spotty recent investing track record, the 84-year-old legendary corporate raider remains bearish on the fence about the market’s ludicrous ascent, as he made clear in an interview with CNBC’s Scott Wapner in which Icahn warned of the possibility of a significant decline for stocks, and predicted that “wild rallies” in the market always meet a dramatic end.

In my day I’ve seen a lot of wild rallies with a lot of mispriced stocks, but there is one thing they all have in common. Eventually they hit a wall and go into a major painful correction. Nobody can predict when it will happen, but when that does happen, look out below,” Icahn warned ominously adding that “another thing they have in common is it’s always said, it’s different this time. But it never turns out to be the truth.”

The relentless gains prompted some less bullish Wall Street strategists to warn of imminent turbulence: as we reported earlier, Morgan Stanley chief equity strategist Mike Wilson repeated his earnings from late last year, and said in his first note of the year on Monday that the market was “ripe for a drawdown” as the “risk/reward has deteriorated materially.”

Chuck again…  I loved that he flatly stated that “nobody can predict when it will happen… ”   And anyone that says they can… Well, you need to walk away ….  slowly so they don’t notice you walking away… HA! 

Market Prices  1/5/21: American Style: A$ .7707,  kiwi .7202,  C$ .7848, euro 1.2280, sterling 1.3583, Swiss $1.1367, European Style: rand 14.9202, krone 8.5310, SEK 8.2009,  forint 293.03, zloty 3.6999,   koruna 21.3496, RUB 73.91, yen 102.86, sing 1.3187, HKD 7.7525, INR 73.19, China 6.4692, peso 19.93,  BRL 5.2106,  Dollar Index 89.63,  Oil $48.50,  10-year .93%, Silver $27.53, Platinum $1,089.00, Palladium $2,478.00, and Gold… $1,950.20

That’s it for today…  I watched the sun rise out of the ocean this morning while I was writing…  Very beautiful, indeed!  The wind has died down the last two days, so sitting outside and reading is a little easier, without having to hold down the pages!  Remember last year at this time, I had to drive an hour north to Port St. Lucie to a wound center two times a week? Well, I don’t have that pain in the rear trip to do this year!  I still have two spots on one leg that need dressing, but nothing like last year! Thank goodness!  Long ago in a bank that no longer exists, I brought in a computer system to deal with our bond business, and I met a young programmer that was super! We’ve stayed in contact, somewhat through the years, and yesterday was her birthday! So… Happy Birthday, D.W.! Ok, the letter is shorter today, hopefully that’s the trend going forward! I Crosby, Stills & Nash (CSN) take us to the finish line today with their song: Ohio…   What if you knew her, and found her dead on the ground? Classic 70’s song!  I hope you have a Tom Terrific Tuesday today, and will Be Good To Yourself!

Chuck Butler

Back To The Chopping Block For The Dollar…

January 4, 2021

*Book squaring on 12/31 stopped the dollar selling… 

* But that only lasted one day… Gold is up $35 this morning! 

Good day… And a Marvelous Monday to you! The first Monday of 2021…  Today, would have been my Dad’s birthday, so I’m thinking of you today, Dad…  Well, did you have a fun and safe celebration for New Year’s Eve?  I didn’t think I would make it to midnight, but I did, receiving my second wind around 10:30pm… We were entertained by a fellow condo owner, who played guitar and sang to us all night. And not once was I tempted to ask him if I could “sit in”…  Well, the two College football teams that will play in the National Championship Game next week, are Alabama and Ohio St. And the NFL playoffs are set… We’ll all have football overload next weekend! America starts us off in the new year with their song: Lonely People…  

Ok, so I said what I said last Thursday morning, because that’s how it looked at that time… I’m talking about my bold claim that the dollar was ending the year on a sour note…   turned out to be in error… Now, while it was not a good year for the dollar, on Thursday, the selling of the dollar came to stop and just like that! The dollar bugs were dancing in the streets once again…  But I have to tell you that I don’t think that this is any reversal of trader sentiment that has come over the markets of selling dollars… It had to book squaring, like I talked about on Thursday… And today, we’ll see just how that will play out… My thought, as I look at what the overnight markets did, is that it’s back to selling dollars once again today…

Gold did gain $3.70 on Thursday, and Silver lost 29-cents. Gold closed 2020 with one of its best years in a decade… And was just below$1,900 at $1,898, to close the year.   This is a BIG week for Americans, as the Senate will vote on accepting the electoral college’s finding. There’s also a HUGE protest / demonstration being planned in D.C. on Wednesday, to protest the election results… I’ve never seen this all play out before, so I’ll be interested in seeing what happens…  But that won’t have too much to do with what the dollar does this week. Or, could it? Only the Shadow Knows….

So… As we start 2021, it’ll be interesting to see if the same old economists dust off their suits, and come out to tell us that it will be a good year for the dollar?  Or, will they come to their collective senses and say otherwise?  I saw an article yesterday where the author tried like heck to get his readers to believe that he believed the dollar would rebound VS the euro, as the two Central Banks in play (The Fed and ECB) see their policies diverge…    You know, this gets me because, I’m sure his editor told him to come up with a story about how the dollar will rebound…   Good Try… But it’s not going to work… Because the “players” that make that determination, the traders, hedge funds, Pensions, Corporations, etc. I would bet a dollar to a Krispy Kreme that they didn’t read your article… And besides, a trend is a trend…  And if you’re a non-dollar investor, then the trend is your friend, as long as it’s the end of the strong dollar trend!

You know, I’m not trying to be biased here… I present the facts and then comment on them…  For the last 9 years, I’ve talked more about debt accumulation, ZIRP, QE, and stimulus packages, that should have damaged the dollar’s value, but didn’t… Because… The dollar was in a strong trend, and when that happens, as we saw the last 9 years,  it would take more than those things to damage the dollar…

And then about one-half the way through the strong dollar trend, I came to realize that we ere never going to return to fundamentals again… Well, maybe “never” is too strong of a word, but it sure does feel like it will be “never”…  Instead, it’s all about trader sentiment… I’ve talked about this trader sentiment since that time…  I mean look at what’s going on these days… We have the euro on a multi-month rally that has brought the single unit from 1.08 in May 2020, to 1.22 (1.23 before the book squaring last Thursday) , and the Eurozone fundamentals are bad, very bad…. And traders don’t care, they’ve made a commitment to selling dollars, and that’s what they have on their collective minds!

In the overnight markets last night the dollar has gotten placed back on the chopping block… Gold is up more than $35 this morning, and the euro has just about recovered all the ground it lost last Thursday, with the single unit kicking at the door of 1.23…  This price action in the dollar proves to me, I don’t know about you, but to me, it tells me that I was right about the book squaring, as we return to dollar selling on the first day of 2021… 

We’ll get to the currency roundup or Market Prices segment soon enough this morning, but when you get there you’ll notice that everything looks quite different these days… Shoot Rudy, even the Mexican peso is on the rally tracks!  

The Dollar Index has fallen to 89.53 this morning…  It’s long been said by people who watch the Dollar Index like a hawk, that should the Index fall below 88, then the dollar won’t recover for a very long time…   Well, it certainly looks as though that’s where the dollar is headed so strap yourself in, keep arms and legs inside the vehicle at all times, and hold on, because we’re going on a ride! 

The price of Oil is pushing higher once again, and this morning it trades with a $48 handle…  Everyone is getting the feeling that “soon” we will get back to operating an economy that isn’t attempting to walk with crutches…  I’m not so sure that’s going to happen so quickly, or efficiently, so we’ll have to wait-n-see…  But this renewed hope is what’s fueling the rise in the price of Oil… Oil traders are thinking that a return of demand is in the cards..  I guess we’ll see, eh?

The U.S. Data Cupboard gets back online this week starting tomorrow with the Dec ISM (manufacturing index), and will culminate with the Jobs Jamboree on Friday this week.  I’m sure as we go along this month with the December data prints, that they will build on the negativity of the November prints, and we will see the negative affects of shutdowns, and say at home orders in some states…  I got a kick out a Tweet I saw this past weekend, from the Gov. of S. Dakota… 

OK, so S. Dakota never shutdown their economy, they didn’t make people stay at home, and their economy remained open…  Kudos to Kristi Noem Gov. of S. Dakota, for expressing her views that right now, with the mess of economies in California, New York, etc. that her state is probably the owner of the strongest economy in the Union…  

There are some other data prints this week that are worthy of looking to… All of them are December prints, and they include: Construction Spending, Auto sales, Factory Orders, and the ADP Employment report, along with the usual fare of Weekly Initial Jobless Claims…  

And to repeat, I don’t think that any of these December prints are going to be strong in any way… They’ll all show the effects of economic shutdowns, and stay-at-home orders…  And IF once of these December prints do show strength, you’ll know that it was massaged, manipulated, and cooked by the number crunchers… 

To recap…. Chuck spoke too soon last Thursday, and book squaring probably was the culprit behind the 180 degree turnaround in the dollar on the last day of the year. It would have taken a month of book squaring to allow the dollar to have a good year, but since that didn’t happen, the dollar ended the year with its worst performance in quite a few years… Chuck goes through some of his thoughts as to what he believes is going to happen to the dollar going forward… And the dollar is right back on the chopping block this morning, as the overnight markets have gone right back to selling dollars… Gold is up $35 in the early trading today! 

For What It’s Worth….  I was going through Bloomberg on Sunday, and then Ed Steer’s letter came through, and he highlighted an article I has just read on Bloomberg! It’s about how Gold just put in a very good year’s performance in 2020, and it can be found here: https://www.bloomberg.com/news/articles/2020-12-31/gold-heads-for-best-year-in-a-decade-with-dollar-on-the-ropes

Or, here’s your snippet: “Gold posted the biggest annual advance in a decade after a tumultuous year, with gains this month aided by the dollar’s decline to the lowest since April 2018.

Bullion hit a record in August as investors feared an unprecedented wave of stimulus by central banks and governments would lead to currency debasement and inflation. Holdings in bullion-backed exchange-traded funds set an all-time high in October.

While prices ebbed as the roll-out of vaccines injected optimism into financial markets, the dollar’s continued weakness has helped support gold into the year-end.

Looking ahead, there’s little consensus from Wall Street’s biggest names on bullion’s direction. Morgan Stanley sees gold and other precious metals coming under pressure as financial markets normalize and longer maturity bond yields rise. Meanwhile, HSBC Holdings Plc sees gold climbing higher on continued uncertainty.

Much of gold’s performance next year will depend on whether the eventual return to normality is outweighed by ongoing stimulative policies. Led by Chair Jerome Powell, the U.S. Federal Reserve has signaled that its ultra-easy monetary conditions will last throughout 2021. Efforts to pass further fiscal stimulus through the Senate have hit another roadblock.

“Gold’s main drivers — weaker U.S. dollar and low real interest rates — are likely to provide support” even as vaccines are distributed around the world, said Vasu Menon, executive director, investment strategy, at Singapore-based Oversea-Chinese Banking Corp. With the lower-for-longer Fed, “it is too early to throw in the towel on gold,” he said in an e-mail.”

Chuck again…. And let us not forget to mention that what ever the price manipulators decide to show us what’s up their sleeve… will directly affect the price of Gold, short term…  or in spurts, as we’ve seen in the past!  

Market Prices 1/4/21: American Style: A$ .7776,  kiwi  .7207, C$ .7878, euro  1.2294, sterling 1.3658, Swiss $1.1370, European Style: rand 14.5820, krone 8.5080, SEK 8.1875, forint 293.69,   zloty 3.5972,   koruna 21.2576, RUB 73.92, yen 102.91, sing 1.3173, HKD 7.7523, INR 72.98, China 6.5295, peso 19.77,  BRL 5.1924,  Dollar Index 89.53,  Oil $48.53,   10-year .92%, Silver $27.33, Platinum $1,102.00, Palladium $2,498.00, and Gold $1,934.20

That’s if for today…  Well, my beloved Mizzou Tigers Basketball team suffered their first loss last week, but then came back strong on the road to defeat Arkansas…  Let’s hope they bottle what they put together that last game for the rest of the season… Well, I’m here in my winter home, where it has been sunny and warm, since we arrived last Wednesday….  I love it!  I sit outside by the ovean, in the sun soaking up Vitamin D, reading a book, with my ear buds in listening to music… It doesn’t get much better than that folks!  Well, I had a setback with my blood sugar count. I didn’t succumb to the temptations of all the sugary sweets at Christmas, but I did intake a few more carbs than usual, so it’s back to a strict diet now… UGH!  We watched a nearly full moon rise out of the ocean a couple of nights in a row. The orange orb, that then lights up the sky…  The Rev. Al Green takes us to the finish line today with his song: Love and Happiness….   I love the intro of that song!  I hope you have a Marvelous Monday, and Please Be Good To Yourself!

Chuck Butler

The Dollar Ends The Year On A Sour Note…

December 31, 2020 

* Currencies & metals have a good week 

* McConnell plays the part of the soup Nazi… 

Good Day… And a Tub Thumpin’ Thursday to you! It’s New Year’s Eve! Well, I’m here in my winter home once again… I left rainy, chilly St. Louis yesterday morning, and arrived here a few hours later, and it was partly sunny and 80! My kind of weather! Well, President Trump’s $2,000 offer of checks to be sent to citizens, was shot down by the Senate… So… no $2,000 check for you! So, when did the Senate get a coming to Jesus nerve and turn down spending money we don’t have to spend?  Ok, did you have a Great Christmas? Mine was good… family gathered like we do every year…  And the little kids…  I simply loved watching them! Last Wednesday, the grandkids, sans little Evie, came over to the house to bake Christmas cookies with Mimi… (Kathy) I took some videos of the baking extravaganza and when I need a laugh, I’ll pull up those videos! 10cc greets me this morning with their song: Dreadlock Holiday…

While Chuck’s Away…. As they used to say on the currency desk… “The currencies rally!” So, as I’ve offered before, if you would like me to go on permanent vacation, just say the word…  I could be easily talked into taking one for the team here… You know… I’m really flying blind here this morning, as I usually send myself some notes when I’ve been away for a week, that remind me of things that went on that I need to talk about, but not this time…. I was too busy celebrating Christmas! And then the next day after Christmas was Kathy’s birthday…  So, let’s see what I can find to talk about here…

The dollar continued to get sold last week, holiday or not… Yesterday, with the news that while the stimulus checks weren’t $2,000, the outlook for the economy continues to weaken, and the outlook for a recovery from the virus doesn’t  look like it’s going to be coming to a Theater near you, any time soon, and mark my words here, the new administration will go back to the wishing well and ask for more money soon enough…  And therein lays the problem, as I told you back when he first checks went out, that it was setting a bad precedence, in that, once you give somebody something for nothing, they will expect more, and more, and more, etc.    And so we are in our second of those “mores”…

I keep thinking about McConnell playing the part of the Soup Nazi.. “No $2,000 check for you!”  On a sidebar, wasn’t the Seinfeld show one of the greatest ever? 

When I arrived at my winter home, I plugged in my laptop, connected to the wifi, and pulled up the currency prices to see the euro reach 1.23…  That was late yesterday afternoon… And this morning, the single unit is trading    a little weaker at 1.2280…     The Dollar index, which early last week , tried to rally, has fallen below the 90 figure….  And looks to be in some real trouble…  Traders are starting to see the future for the dollar, which is troubled to say the least. And don’t look now, but the news this past weekend was that China’s economy has passed the U.S.’s economy as far as size…  And make sure you make notes about all those economists that kept saying that the 4th QTR GDP would be strong… Because, they are going to be proven very wrong…  And with those wrong thoughts will be the ones from the other set of economists that said that a collapse of the U.S. dollar was not going to happen…

So, as we close out 2020 (thank goodness finally!), we have the dollar bugs on the run, we have the currencies led by the euro kicking tail and taking names later, and we have Gold back on the rally tracks…  A good sign for the currencies and Gold to start out the New Year,  which will not have to work very hard to beat 2020 in the race for what was a better year… 

There are three bubbles blowing bigger and bigger right now folks…  Home Prices…. Stocks…. And Bitcoin…  Will those bubbles bust in 2021?  Well, that remains to be seen, and I don’t have an answer for you, but I will say that I wouldn’t be surprised to see at least 1 of these 3 bubbles bust in 2021… I don’t have a crystal ball here, nor do I know something about these 3 that everyone else doesn’t know… I’m just making an educated guess about how long they’ve been blowing, and using my experience in watching these things come to an end…

Well, did you hear that Russia not only just reaped a record year in crop yields? And that they, in spite of the continuing economic sanctions Russia will post a positive 2.7% GDP for 2020… Hey! They’ve been hit by the Plandemic just like everyone else… So, posting a 2.7% GDP for 2020 is quite an achievement.  And the path of the Russian ruble shows that traders are sitting up and taking notice. At the beginning of this month the  ruble was trading with an 80 handle… and to end the month it’s trading with a 74 handle..

OK, before I get accused of being a Russia cheerleader…  I’ll move on to another currency that has really been the cat’s meow lately… And that is… drumroll please…  The Aussie dollar (A$) fell to a low of 57-cents back on March 20… ( I was at Roger Dean Stadium watching my beloved Cardinals and not paying attention to the currencies one iota) and last night, the currency traded above 77-cents… Oh, and remember that saber rattling exercise we went through a couple of months ago, when China announced that they were going to boycott imports of Aussie steel?  The Aussies have held their position and the Chinese are finding that they desperately need those shipments of steel… So, what could have become a major problem for both countries, turns out have been a tempest in a teacup… And the A$ moves on…

Of course maybe these two currencies I’ve just discussed aren’t your cup-o-tea… Well, when the dollar makes its final move into the new weak dollar trend, you’ll have your choice of currencies to own, and look to make a part of your diversified investment portfolio!

Gold had a good day yesterday… The shiny metal gained $15.90 to close at $1,895.30… And Silver put in another day of good moves gaining 46-cents to close at $26.76…  Silver has been the hot commodity lately, despite the fact that there are so many short contracts out there that it would take 190 days of production to equal the ounces sold short in those contracts. One of these days, someone with some gray matter will realize that this short selling more ounces than are above ground is wrong, immoral, unethical, and just plain stupid, and will stop this from going on… and when that does happen, or I guess IF that should happen, Silver will skyrocket to the moon… A real moon shot baby!  But until then, we have to settle for these, what I call, rally disruptions..

In the overnight markets last night, the euro slipped a little, probably profit taking once it hit 1.23, and Gold is down a buck, and Silver is down 22-cents… Year -end bookings will take place today, and already took place last night overseas… Square them up boys! I can hear the head accountant yelling out to the boys and girls on the trading desks in the big banks…  

The U.S. Data Cupboard has been lacking this past week, but with the Christmas holiday, and now the New Year’s holiday, I guess we shouldn’t expect much more than what we got, which was the year on year Case/Shiller Home Price Index… And circling back the 3 bubbles I called out above, Home Prices for Oct on a year on year basis increased 8.4%! 

So, riddle me this Batman… We’ve got over 20 Million people collecting unemployment, which means they don’t have a job… We’ve got millions more that have fallen off the unemployment books because their benefits ran out…  We’ve got the country running scared of a virus…. And through all that Home prices are soaring!   You know, I realized something the other day, and that I’m getting all of my daily exercise these days, by shaking my head in disbelief! HAHA!

To Recap…  It has been a good time for the currencies and metals while Chuck was on his winter vacation…  The President’s attempt to get $2,000 checks out to people in need, didn’t have a snowball’s chance in hell of getting through the Senate, who have become penny pinchers? Oh, one can only hope, but I doubt it seriously!  Chuck’s call that the dollar has begun a new weak dollar trade, continues to tread water, he’s just waiting for the damn to break on the dollar bugs…

Before we head to the Finish line today, I wanted to mention some of the people that we lost this past year that I followed….  Like Bob Gibson, Lou Brock, Dick Allen… Al Kaline, Whitey Ford, and just this week Phil Niekro…  We lost great musicians like Charlie Daniels, Leslie West, Chad Stuart, and more… Don’t know who Chad Stuart was?  Remember Chad & Jeremy?  Sean Connery aka James bond… And then Dawn Wells, and Melody Patterson, two of my faves!  Mary Ann, and Wrangler Jane!  I know I missed mentioning probably quite a few important names, but… These are the ones that when I heard they had passed I stopped what I was doing and thought about them…

For What It’s Worth…  You know, I worked in a few banks in my life… starting in 1979, with the old First National Bank of St. Louis…  Where I met my good friend, Ed Bonawitz…  What I’m getting at is I’m glad I don’t work for a bank now… Banks are sure getting black eyes from all the pounding they brought on themselves, and since the year 2000 Banks have been charged $195 Billion in fines…  For some that were dinged, they simply wrote it off as The Cost of doing Business…  But for some others they had to suck it up and take their blows…  Well, I have an article for you today that talks about these fines the banks have paid since 2000, and it can be found here: Cost Of Doing Business: Big Banks Have Paid $195 Billion In Fines Since 2000 | ZeroHedge

Or, here’s your last snippet of 2020: “Often times when the “too big to fail” banks are caught with their hands in the cookie jar (or placing the entire global economy on the precipice of collapse, as was the case in 2008), nobody goes to jail and the banks wind up paying a hefty fine and putting the “youthful indiscretions” behind them. This inevitably leads to jokes about how paying fines is part of the cost of doing business for big banks.

But it isn’t until you aggregate the sums paid over the last 2 decades, which FT did in a report published this weekend, that one can really see just how much these fines actually are becoming a cost of doing business for banks. Over the last 20 years, the six largest U.S. banks have paid out nearly $200 billion in fines and penalties.

Advocacy group Better Markets found that Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo have paid $195 billion, collectively, since 2000. The group claims the numbers show banks behavior deteriorating, as they have endured more fines since the global financial crisis than prior to it.

There were 85 major legal complaints against banks between 2000 and 2008. Between 2008 and 2012, that number was 110 cases, most of which were mortgage related. But since 2012, the group found that there has been another 204 legal actions.

Better Markets chief executive Dennis Kelleher said: “They’re all major legal actions . . . It’s not like it was a ‘broken windows’ theory post-crash where prosecutors are fining every little violation. If they were held to higher standards they all would have been put out of business because the recidivism is really quite shocking.”

He continued: “It’s absolutely shocking that JPMorgan has now pleaded guilty to three separate criminal charges for egregious years-long criminal conduct.”

Banks like JP Morgan are repeating past mistakes, too. In October, the bank paid $920 million for manipulation of the metals market – this comes after the bank admitted AML failings in 2014 and pleaded guilty in 2015 to manipulating FX markets.”

Chuck Again…  Again, I’m getting my exercise here, shaking my head in disbelief…

Market Prices 12/31/20: American Style: A$ .7737, kiwi .7239, C$ .7852, euro 1.2280, sterling 1.3658, Swiss $ 1.1355, European Style: rand 14.6789, krone 8.5144, SEK 8.1579,  forint 296.80,  zloty 3.7104,   koruna 21.3600, RUB 74.19, yen 103.05, sing 1.3213, HKD 7.7524, INR 72.97, China 6.5242, peso 19.89, BRL 5.1975,  Dollar Index 89.63,  Oil $47.96,  10–year .92%, Silver $26.54, Platinum $1,007.00, Palladium $2,416.00, and Gold… $1,894.10

That’s it for today… Well, I guess many people had to cancel plans for big New Year’s Eve parties… And we won’t be home to host an after dinner party like we’ve done the past few years…  So, how many of you will still be awake at midnight?  I doubt seriously I will be…  We’re going to celebrate with some condo friends around the pool, with social distancing of course!  I was very disappointed that my beloved Mizzou Tigers had to cancel their bowl game because of a virus outbreak… And then to top it off The Tigers basketball team got the snot kicked out of them by Tennessee last night… I know when I last talked to you I said that they had lost the game the night before, but they had actually won it… But no comeback was in the cards last night…  And it was on the Tigers’ home court! UGH! Well, hockey is slated to start in two weeks… That’s a good thing… I think our Blues will be better than the average Bear this year…   Hamilton, Joe, Frank and Reynolds takes us to the finish line today and this year, with their song: Fallin’ In Love….  Baby, Baby fallin’ in love, I’m Fallin’ in love again…  So… be careful out there tonight, this is what Kathy’s dad used to call “Amateur’s Night”…  I hope you have a Tub Thumpin’ Thursday And a very Happy New Year!  And Please Be Good To Yourself!

Chuck Butler

Chuck’s Christmas Pfennig…

December 24, 2020

Good day…  And a Merry Christmas Eve to you!  Just a quick note before he head to the Christmas letter…  I’m so distraught over the new so-called Covid Response Relief Package… All the pork that’s in it…  I know it’s Christmas Eve, but I’m going to fire off a note to my congresswoman, and let her know that this is NOT what  We The People are asking for, and expecting!  And with that, Have Yourself A Merry Little Christmas is playing, and that about sums it up for me… 

It’s Pfennig Tradition, that I put together a Christmas eve letter for all my dear readers, and so with no further ado…

 

T’was the night before Christmas

And all through the house

The occupants were congratulating each other

For their stimulus, but  not me

I’m such a grouch!

The debt level in this country

Has gotten out of control

But I’ve cried wolf for years

And still the spenders are on a roll.

It’s time to forget all that

And that’s a fact! 

The stockings were hung by the Chimney with care

In hopes that St. Nicholas would soon be there.

My grandkids I hope are all nestled in bed

With visions of playstations, and games

Dancing in their heads…

When on my laptop screen I saw such clatter

I had to click on to see what was the matter

$900 Billion more is being printed from thin air

And no one in Washington DC seems to care…

People that don’t make much will soon get a check

Let’s hope it keeps them from becoming a wreck!

I went to the window to yell at the walls

And outside were carolers singing Deck The Halls…

And then with a blink of an eye what did appear?

But a miniature sleigh and 8 flying reindeer!

This must be Santa, with gifts for all the girls and boys

I hope he has something for me

And I’m not talking about toys…

I’m hoping that he has cleared the air

Of this virus, and we can get back to life

Instead of going outside on a dare…

I’m hoping that 2021 is full of joy and happiness

So that we can forget 2020

But that won’t be so difficult, no less…

Now I’ve forgotten all about the markets

And the manipulations, and dolts and twits

It’s time for Christmas, and besides those

Things give me the fits!

My grandkids are ready to see what Santa brought them

And I whistled and shouted and called them by name

On Delaney, On Everett, On Braden, and little Evie

To the living room we go to open our gifts

But remember please that the greatest gift of all

Is what we call Christmas Day… When

The Good Lord was born… 

So, with all the calamity going on

I sneak out of site,

And say a prayer that this scene can go on forever…

And then I saw Santa and his reindeer, take off

And I heard him exclaim

Merry Christmas to all, and to all a Good Night!

Chuck Butler, Christmas 2020

PS… I always include a little message at this time, so here goes..

May the light & warmth of the season bring comfort & joy

To your family and friends this Christmas Season…