It’s A FOMC Day!

September 22, 2021

* Currencies give back some gains on Tuesday…

* The House kicks the can down the road once again… 

Good Day… And a Wonder Dog Wednesday to you! Well my weather app was correct, the cold front did come through on Monday night, and I have to say that I’m just not ready for colder weather… I’m good with chilly weather, but not during the day light hours. I don’t like having to put on sweatshirts, or sweaters just to go outside in September! I dropped my iPad on the patio the other night, and cracked the screen… I thought at first I could figure out how to fix it, but then discretion became the better part of valor, and I took it to get fixed. I got it back last night, and it’s just like new! Want another sign that colder weather is coming? Our Blues are starting training camp! AYE, AYE, AYE… The late, great, Leon Russell greets me this morning with his song: Stranger In A Strange Land…  “How many days has it been since I was born, and how many days till I die?”  I’m a HUGE Leon Russell fan, folks, so forgive me for getting carried away this morning.

Well, The Drama Queen can go back to riding her broomstick, and sending the flying monkeys to get the good folks, the House voted last night to extend the Gov’t’s spending until Dec. 3, and suspended the debt ceiling through 2022…. The bill now goes to the Senate, where it will receive some resistance, but in the end, it will be passed, and we as a country, will once again, kick the can down the road…

The Spinners had a song: It’s A Shame…  I changed the words to: It’s a Shame, the way you mess around with our future, It’s a Shame the way you hurt us…  

OK, well I was wrong yesterday, and I admit it, so don’t go rubbing it in….  I said that the Bank stocks got rocked but the rest of the stocks gained on the day…  Apparently, a green number on MarketWatch doesn’t mean up on the day… I don’t really follow stocks, so it made sense to me that U.S, stock jockeys would see the Evergrande default as a non-event for us… But apparently they didn’t… So, I’ll be more careful in the future…

Speaking of being wrong… How about that trading platform for Bitcoin, that reported a 90% drop of the cryptocurrency to $5,000 and change?   Now, that type of reporting would cause some heart attacks for some, eh?

Ok, Ok, I’m getting to what the currencies did yesterday… They gave back some of their previous day and overnight trading gains yesterday… Traders are very fearful right now of what the Cartel is going to say after their FOMC meeting today…  I’ve gone out on a limb in saying that I doubt seriously that the Cartel can begin to taper… I don’t see the Cartel getting out of the bond market without causing  interest rates to move higher. And then there’s the  government debt payments which are HUGE folks, and rising interest rates on those bond payments would cause major problems with finances in the U.S.  

But why that fear would have any thing to do with their reason for buying dollars is beyond me, folks… For if interest rates rise, the house of cards which is the U.S. economy and finances, would come crashing down. Sure, interest rates would be higher, but how high? Higher than most countries around the world, except Russia… But that’s another story… But, in the end, the higher interest rates would not help, as all the King’s men and all the King’s horses couldn’t put the U.S. economy back together again… 

Gold and Silver had good days yesterday, which marks 3 days of gains for Gold, and one day for Silver… Gold gained $10.10 on the day to close at $1,774.10, and Silver gained 22-cents, to close at $22.57… Silver’s high for the day was much higher than the 22-cents it ended the day with… But the price manipulators couldn’t let that go…

In the overnight markets last night… There was little to no movement in the currencies, as traders there are in a wait-n-see frame of mind, with regards to the FOMC Meeting today.. .  I still find this whole mentality a bit strange, but then I’m not a trader any longer, and don’t talk to them any longer, which means I have no idea why they are being so bull-headed about this… 

Gold is starting the day down $1, no biggie, but in a reversal of fortunes, Silver is up this morning 24-cents, while Gold trades in yesterday’s clothes. 

Remember back after the dot.com collapse, all the financial scandals that kept coming to light? Well, I was reminded of them when I saw this article from World Bank’s ‘Doing Business’ scandal is bad for globalization — Quartz (qz.com)… Here’s the skinny: “Last week, investigators from an external law firm released a report showing World Bank officials pushed the team developing the influential Doing Business index to manipulate it in several cases. Under pressure from senior leaders including then-CEO Kristalina Georgieva, employees altered scores to boost China’s and Saudi Arabia’s rankings because it was deemed politically expedient to do so. They also were told to ignore developments in Azerbaijan that would have helped improve its score.

As a result of the findings, every piece of data produced by the World Bank will now be suspected of playing to one or more favored stakeholders. Here’s why that’s bad for globalization.”

Chuck again… Here we go!

In other news…  in yesterday’s 5 Minute Forecast, which is edited by Dave Gonigam, had this to say: ““Almost one-third of all working-age men in America aren’t doing diddly-squat,” says an article at Yahoo Finance, written by the outlet’s editor-in-chief Andy Serwer (who frankly sounds a bit judgy).

[Also, we’re pretty sure there’s a double negative embedded in that sentence: If you are not doing diddly-squat, doesn’t that mean you are doing something?]

Back to our topic today, The 5 has long noted the disparity between the official unemployment numbers and the labor force participation rate — the percentage of working-age adults who are either working or actively looking for jobs. According to the St. Louis Fed, that number clocked in at 61.7% in August.

Meaning nearly 40% of American workers officially between the ages of 15 and 64 are sitting on the labor sidelines (for whatever reason). And of that percentage, about 30 million are men.

“They don’t have a job, and they aren’t looking for one either,” Serwer clarifies.”

Chuck again… The 5 goes on to describe some reasons why these men aren’t filling some of those 10.9 Million job openings…  Cash jobs seems to be the key… Hmmm… out of the Governments’ taxing authorities hands, that’s sure!

The U.S. Data Cupboard yesterday, had the Current Account Deficit, which was greater in the 2nd QTR than the 1st QTR…  The numbers were nearly the same, as the 1st QTR’s Deficit was $189 Billion, and the 2nd QTR’s Deficit was $190 Billion…  Just more debts to throw on the pile that’s now $28.8 Trillion…

Today’s Data Cupboard has the aforementioned FOMC Meeting, and some existing home sales data… That’s it for today with regards to data, and that has, in recent times, been a boon for the dollar… The FOMC Meeting today is a BIG one folks… The markets believe the Cartel will announce some kind of tightening, which tapering is in a way, and Chuck continues to believe that the Cartel has its hands tied…  I guess we’ll see later today, eh? 

To recap… The House passed a bill to extend the Gov’t’s spending through Dec. 3, and suspended the debt ceiling until 2022… The bill now goes to the Senate, where it will meet some resistance  but expect a rubber stamp in the end… No one wants the country to default…  They might want to curb our deficit spending, but not default. Of course in my mind, there will be a time for discussion of defaulting… But that comes later… The currencies game back most of the previous day’s games yesterday, but Gold gained $10, and Silver gained 22-cents…  What’s up with men not working?

And the World Bank starts the meter for financial scandals…

For What It’s Worth…  Well, now the corporate leaders in the U.S. are shouting that inflation is not “transitory”, like the Cartel Heads keep telling us it is… And that’s the gist of this article that reports on the Corporate heads meeting that took place last week, and it can be found here; “Not Transitory” – US CEOs Warn Inflation Is “Unprecedented” And Becoming “Structural” | ZeroHedge

Or, here’s your snippet:” Some of the biggest names in business virtually attended the annual Morgan Stanley Laguna conference last week and warned about the complex nature of soaring inflation.

Much of the discussion was centered around the soaring cost of raw materials, labor, and logistical nightmares. Corporate leaders from 3M Company to Trane Technologies to General Electric Co., among others, all warned about increasing inflationary pressures, according to Bloomberg.

3M’s Chief CFO Monish Patolawala shocked attendees by calling inflation “unprecedented.” He said the impact of higher commodity prices and soaring freight prices would impact its 2021 earnings.

Trane Technologies Plc’s CFO Chris Kuehn told a very similar story: “Unprecedented is the word we’d use around the inflation side.”

At the virtual event, Morgan Stanley analyst Josh Pokrzywinski joked that everyone could check the word “unprecedented” on their 2021 bingo cards.

But what has become an increasing concern, pointed out by General Electric’s CEO Larry Culp, is that inflationary pressures are “increasingly getting structural in nature.”

David Petratis, CEO of lock maker Allegion Plc, said inflationary pressures might stick around two to three years. He said his company is preparing for more persistent inflation, adding “it’s not a transitory situation.”

Diversified power management company Eaton Corporation’s CEO Craig Arnold said supply-chain bottlenecks are fueling price increase this quarter. “Much to our surprise, and to the surprise, really I think of everybody in the industry, we’ve seen that things actually got materially worse,” he said. “I’m hopeful that by the time we get to the end of this year, things have settled a bit,” he added. “But I’ll acknowledge as well — we got it wrong. I think we all got it wrong,” he said. Eaton expects revenue guidance for the current quarter to miss because of part shortages.”

Chuck again… Well, after reading this, as if I were there and listening to the Corporate Heads, I would take away that inflation pressures are here to stay, and could even get worse, folks… At least that’s what I took from the article…

Market prices 9/21/2021: American Style: A$.7247,  kiwi .7021,  C$ .7825, euro 1.1730, sterling 1.3642, Swiss $1.0843, European Style: rand 14.7736, krone 8.6402,  SEK 8.6706,  forint 302.87,  zloty 3.9496,   koruna 21.6376, RUB 73.17, yen 109.52, sing 1.3518, HKD 7.7870, INR 73.86, China 6.4654, peso 20.07,  BRL 5.3057,  BBDXY 1,153.36, Dollar Index 93.21,  Oil $71.55, 10-year 1.33%, Silver $22.81, Platinum $973.00, Palladium $2,046.00, Copper $4.20, and Gold… $1,774.10

That’s it for today… And this week… Yesterday was another of those days where I think I could sleep all day… I had a difficult time getting going all day… I think that since it was a rainy day yesterday had something to do with my sleepiness… But this morning I feel great! I wish I was going to the hospital for tests today, instead of tomorrow! The land that the hospital and my oncologist’s office is on, used to be a 9-hole golf course, that I used to play all the time! I was thinking about that the last time I was there, that I’ve spent a lot of my adult life on that land! HA! My beloved Cardinals keep winning, marking a 10-game winning streak now, and Kathy’s lucky lamp is still on! Gotta keep winning…     And AC/DC takes us to the finish line today with their song: Hells Bells…   I had a Biology teacher in High School that used to say: “Hells Bells” all the time… I hope you have a Wonder Dog Wednesday today, and please Be Good To Yourself!

Chuck Butler

 

Janet Yellen Becomes A Drama Queen!

September 21, 2021

* Currencies & Gold rally on Monday… 

* The overnight markets see more dollar selling… 

Good Day… And a Tom Terrific Tuesday to you! Another beautiful day here on Monday, but from what the weather app tells me, a cold front is on the way, and on Wednesday the high will be 70 degrees… Well, did you get a glimpse of the Harvest Moon last night? I don’t know why I’ve become so interested in full moons, but I guess it had to do with when we bought our beach place, and watching the full moons, especially the super moons, rise out of the ocean is a real treat!  Mike Shannon is a true St. Louis celebrity… He was recruited to play QB at Mizzou, but the Cardinals offered him a bonus and he signed, then played for the Cardinals back in the 60’s. He’s been in the broadcast booth since, and while people like to make fun of him, I love hearing his voice on the radio, and after this season concludes, he will retire…  I’ll miss your voice Mike… Crosby, Stills and Nash (CSN) greet me this morning with their 70’s classic song about the shooting and killings at Kent State University: Ohio…

For all of you youngsters out there that have no idea of what I’m talking about… Four Kent State University students were killed and nine were injured on May 4, 1970, when members of the Ohio National Guard opened fire on a crowd gathered to protest the Vietnam War.

Ok, that’s it for the history lesson today…  Well, the currencies tried to start something yesterday, with their moves against the dollar… But, I doubt, given all the dollar buying lately, that it’s about to get turned around, for now… But for yesterday, it was the currencies turn to rally… The moves were across the board in all currencies, and they were small but at least they were positive, eh?  Gold also found a bid yesterday, while Silver couldn’t find one… The price of Oil rallied and gained almost a whole dollar on the day to $70.90, and Bonds didn’t move on the day…

For those of you keeping score at home: Gold gained $10.60 on the day to close at $1,765.00, and Silver lost 11-cents to close at $22.35…  I had quite a few emails in the Pfennig Replies Box, that centered around how the price manipulators were able to move the price of Gold & Silver by large margins…  I responded to each of them, and then thought, I should do a quick explanation here too…

So, here goes… The Bullion Banks get the memo from the U.S. Gov’t. to stop Gold’s rise… These same Bullion Banks then show up at the COMEX with arms full of short Gold paper trades…  It is my understanding that they use futures contracts on the near date, with no intention of making delivery of their sell contract, and buying it back at a profit before the expiration date. 

I’ve been watching the Canadian dollar / loonie, lose ground lately, and I’ve been surprised by that downward move, as commodity prices are on the rise again, especially the price of Oil, but that hasn’t helped the loonie move higher or at least hold its ground.  The loonie had outperformed the other currencies for the first six months of 2021,  but now it’s fallen 3.2% since June 30. With the Canadian election now put to bed, maybe the loonie can get back on the rally tracks… 

In the overnight markets last night…. There’s been a little more slippage in the dollar as the currencies added to their gains yesterday. Gold is up $3.90 in the early trading, and Silver, yes, Silver is up this morning 31-cents…  Ed Steer reported this morning that 2.6 Million Troy Ounces of Silver have been Added to SLV… Which tells me that the individual investors are buying Silver’s ETF, and if it weren’t for all the price manipulation lately, that Silver would be rising and probably be close to $27, $28 in price…  

Well, the sock market collapse that was called for to happen yesterday, didn’t occur, and instead stocks rallied on Monday… I have no idea why these people keep making a BIG Deal out of their forecast for a stock market collapse on “X” date…  But not to worry, I’ll keep posting their calls as they make them, just so we can keep count of them!  I have an article from Hugo Salinas Price for the FWIW section today, you’ll not want to miss it, as it will discuss the best way to buy Gold…  (spoiler alert, it’s the same thing I’ve told you for years now!)

While the talk of stocks is still fresh… Recall I wrote about China’s Evergrande and the implications of the fallout of an imminent default of Evergrande’s $315b unserviceable debt pile… There have been plenty of articles calling Evergrande, China’s Lehman Bros…( Bank stocks didn’t fare well yesterday, but overall stocks rallied… ) Apparently they don’t know how China works… I believe the fallout from this default will be contained by the Chinese Gov’t to China, and not be the global problem the Chicken Littles were calling for…  So, yesterday’s rally in stocks here in the U.S. was telling…

OK… a week or so ago, I wrote about how U.S. Treasury Sec. Janet Yellen, was warning about the pending Debt Ceiling talks…  Well, she doubled down on her previous comments last weekend with an op ed in the Wall Street Journal. Before now, I didn’t know that Yellen was a Drama Queen…  Yellen said that “the crisis triggered by a default would compound the damage from the continuing coronavirus pandemic, roiling markets and plunging the U.S. economy back into recession at the cost of millions of jobs and a lasting hike in interest rates.”

You, me and the guy down the street, knows that the Debt Ceiling has been raised so many times in the past that it’s raising has become a rubber stamp of approval by Congress…  So, why is Yellen doing her best Gloom and Doom over this issue?  Scare tactics folks, the Gov’t has to keep rolling out the scare tactics to keep control over us…  I’m just saying…

OK… Yesterday, I talked about the lack of free speech in the U.S. these days… And that got me thinking about how I’m so lucky to have publishers like Mary Anne and Pamela Aden, who are located in Costa Rica… The cancel crowd can’t reach them there, and therefore I still get to express my free speech platform…  Did I ever tell you that I used to be called: Mr. Lucky?  Clutch was another name I was given during my youth,  But we have to keep the pressure on the state reps and senators  to not allow censorship…   just because the submission doesn’t follow their “woke” cancel culture…

I spend a lot of time watching Prager U. videos, folks… I even ordered one of their Children’s books for when Evie gets a little older and I can read to her about the formation of the U.S.  back when it was all good, and could be good again, if only… 

There’s not a lot for us to see in the U.S. Data Cupboard today folks… The Current Account Deficit is about the only real piece of data today. Tomorrow, is the FOMC Meeting… A lot is expected of the Cartel heads at this meeting, I’m afraid they are going to disappoint us, as usual…

To recap… The currencies and Gold rallied on Monday, while Silver didn’t find a bid all day, and lost 11-cents… Gold gained $10.60 on the day, and the price of Oil rebounded almost a whole dollar in value yesterday.  Chuck calls out the stock market collapse guys, and also renames the Treasury Sec. to Ms. Drama Queen… And Chuck asks you to call your state rep or Sen. And tell them that censorship is bad… The overnight markets have seen a little more dollar selling and even Silver is up this morning! 

For What It’s Worth…  Ok, I teased you a bit earlier and told you that Hugo Salinas Price was the guest in the FWIW section today… I really liked this article because it says what I’ve been saying for years now regarding buying Gold… And it can be found here: www.plata.com.mx/enUS/More/422?idioma=2

Or, here’s your snippet: “The bad news is: there are no real prices of gold and silver available in the World today.

It is useless to follow the investment recommendations put forward, all in good faith, by individuals such as Peter Schiff.

The prices presented by the Media in our world are determined by a small group of individuals in London and New York; this group decides each and every working-day, what the prices of gold and silver are to be that day.

That daily decision has nothing to do with a “Market” for these metals.

The section of Kitco.com devoted to comments regarding the markets for the precious metals is perhaps entertaining, but otherwise worthless.

Some days, the prices of these metals are allowed to rise, and the hearts of gold and silver investors go “pitty-pat”. But following that rise, comes a collapse – investors who purchased metals earlier in the day, are now losers.

Then, other days, the prices of the precious metals are falling and investors rush to sell their stock of metals, to avoid further loss; the suddenly, the price turns around and goes up a bit. But the investors have now liquidated all or part of their stock, and cannot benefit from the rise.

The real purpose of the precious metals markets of today is TO CONFUSE THE PUBLIC.

This “Confusion as a Goal” of broadcasting fictitious prices of the precious metals has allowed the Dollar to survive as long as it has, as the World’s No. 1 currency.

There is one way – and ONLY ONE WAY – to profit in the precious metals markets: you buy, at whatever the price is, when you wish to buy, and take possession of the metals you have purchased.

You put your purchase away, shut up about it, and WAIT. You MAY die before the price of the metal you bought, goes up and stays up. On the other hand, if you are still breathing, and the Dollar has died and gone to Hell, what you will be able to purchase for one ounce of gold will prove to be the very great surprise of a patient life.”

Chuck again… Remember this folks… if you take possession of your physical Gold (or Silver) don’t tell people about it… Words can fall into the hands of the wrong people… And believe me there are plenty of wrong people out there these days!

Market Prices 9/21/2021: American Style: A$ .7265,  kiwi .7038, C$ .7849, euro 1.1745, sterling 1.3682, Swiss $1.0823, European Style: rand 14.8079, krone 8.6587, SEK 8.6578,  forint 300.48,  zloty 3.9379,  koruna 21.6219, RUB 73.28, yen 109.41, sing 1.3506, HKD 7.7855, INR 73.59, China 6.4657, peso 20.07, BRL 5.3105, BBDXY 1,152.12,  Dollar Index 93.07,  Oil $71.15, 10-year 1.32%, Silver $22.66, Platinum $933.00, Palladium $2,008.00, Copper $4.16, and Gold… $1,768.90

That’s it for today…  Well, my beloved Cardinals made it 9 wins in a row last night… A tight game that went to the Cardinals… I have a Cardinals neon light in my basement that my wife calls the “lucky light”… you can surely guess that it has been illuminated for the last 9 games! She wasn’t home last night but sent me a text to make sure I turned on the “lucky light”, and I did just as I was told! HA! My beloved Missouri Tigers (Mizzou) travel to Boston College this Saturday. BC is unbeaten and will be a tough row to hoe for my Tigers… I have a new item on my back bar here… My friend, and former colleague, the metals guru, Tim Smith, brought me a Ted Simmons bobblehead!   Ted is my all-time fave Cardinal… He began his career at catcher for the Cardinals at age 19!  I was still trying to figure out my life when I was 19! Hey 19… We can’t dance together, we can’t talk at all… (Steely Dan)…  Well, Jr. Walker and the All-Stars take us to the finish line today with their song: What Does It Take…. (love this song!) I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

 

Chuck Butler

What Did You Spend That $600 On?

September 20, 2021

* Currencies & metals get sold down the river last week

* What are the Cartel Heads doing with stocks? 

Good day… And a Marvelous Monday to you! My beloved Cardinals are on a roll to say the least! They have won 8 games in a row, and are looking like a completely different team than the one they made us all suffer through for 140 games… They travel now to Milwaukee, where the Brewers have already qualified for the playoffs… Cardinals gotta keep on winning! Well, it was a real Chamber of Commerce weekend, weather wise that we just went through here in the Midwest… If the weather stayed like that too long, it would cost us a fortune to live here! The Beatles greet me this morning with their song: The Long And Winding Road… 

That’s what I feel like we, as a country, are on these day… The Long and Winding Road to financial ruins… But then that’s just me, and a handful of other guys that write and keep pointing out the direction that we’re taking… Sure things “seem” to be going along smoothly, but they also say that when they’re in the eye of a hurricane… And the dollar bulls? They are taking the bait, hook, line and sinker these days, buying dollars by the bushelful…  What was their excuse for buying dollars last Friday? Oh, that’s right, August Retail Sales “surprised” with a positive print of .7%, when Retail Sales were expected to be negative -.7%…  Oh, so they were surprised by the back to school bump that Retail Sales gets every year at the end of summer?

So… on Thursday & Friday, the currencies got sold down the river, and the metals went along for the ride… A joy ride it wasn’t, as the current was very swift, and rocky… The BBDXY rose from Thursday morning’s 1,146.09, to close on Friday at 1,152.47… That’s a HUGE jump in the dollar index folks, and shows what I’m talking about when I said the currencies got sold down the river… The euro got pushed down to 1.1725, and the rest of the currencies followed the Big Dog down the river…

On Thursday last week, it was yet another engineered takedown of Gold by the price manipulators… There really was nothing, absolutely nothing, say it again, that would have garnered a selloff like we saw on Thursday… The price manipulators were so brazen with their selling, and it just gets my goat! Gold was sold down by $40.40 to close on Thursday at $1,753.70, and then on Friday, Gold was only allowed to rally by one thin dime! That put the close on Friday at 1,753.80. Silver got sold both days, with Thursday’s selling by 95-cents! And then on Friday it was sold down again by 51-cents, to close the week at $22.36…

Taper, Schmaper… There is not going to be any tapering by year end folks… And as soon as traders get it in their thick skulls that it’s not going to happen in the time frame that the Cartel has drawn out, they will stop with this pestering dollar buying!  I’m reminded of what my former colleague and good friend Ty Keough used to tell clients when the dollar was rallying… He would say, “Well, when the dollar is down, is when you should be buying more currency”…  Cheaper levels of currencies and metals are the call there, and here today…

The last two trading days of last week were very ugly folks.. .stocks got sold for the 3rd week! Bonds got sold, as yields on the 10-year rose to 1.36%, Oil lost nearly $2 of its price, and the currencies and metals were down in the dumps… So, where was money going if all these things were getting sold? Shoot Rudy, even Bitcoin got sold late last week! These funds from all this selling had to be going somewhere, right?  Just to cash? Not when you only earn about.1% on cash… But maybe, just until the smoke clears and the all clear horn has been sounded…

That doesn’t appear to be today, as the calls for a major stock sell off are being sounded once again by the same folks that have cried wolf 3 previous times… As I said before if they keep saying it, eventually it will come true, and then they’ll be on record as saying that they called the stock selloff… Because, I know that eventually it will come true, as stocks have been in an overbought position for longer than you think… But I’m no stock jockey, and I didn’t stay at a Holiday Inn Express last night, nor do I play one on TV… I’m just pointing out facts…

In the overnight markets last night… There was more dollar buying but not to the tune of late last week’s barrage… The BBDXY is 1,153.63 this morning, so up from Friday’s close of 1,152.47… Gold and Silver are flat this morning, with Gold up $2.80 and Silver down 1-cent…  Hold on to your hats folks, this week will be a doozy!

The price of Oil has fallen out of bed, and trades with a $70 handle this morning, having been as high as $73 early last week!  Bonds are getting bought this morning, and Bloomberg forecasts that the 10-year’s Treasury yield will be 1.69% by year end…  Hmmm…. Interesting, very interesting… 

Well, well, well, what have we here? Could this be the final straw of Fed Credibility? I’m talking about the news articles this past weekend regarding the Fed Heads buying stocks ahead of monitary policy decisions were made public… This is HUGE folks, because it’s not only a few Fed Heads, but it includes the Fed Chairman, Jerome Powell, and Robert Kaplan Dallas Fed President, who sits on the Federal Open Market Committee…  A few years ago, Martha Steward when to jail for “insider trading” But I doubt seriously that these guys will ever see the inside of a cell, because…. The Elite, take care of the Elite… They don’t throw people under busses… And they don’t go to jail… 

But this makes me sick to my stomach folks… And if everyone knew what these guys were doing they would be calling for their heads… But this will get swept under a rug, and if you asked a random person on the street what they thought about this, they wouldn’t have the faintest idea…  And that’s a sad state of affairs, folks… I’m just saying…

Just in case you think I’m spreading non factual news here… You can find the info here: Fed Chief Powell owned same type of assets bank bought during Covid (cnbc.com)

And here’s another: Dallas Fed President Traded S&P 500 Futures. Dallas Fed Will Not Say If He Shorted the Market During Pandemic Crisis in 2020. (wallstreetonparade.com)

OK… what else is on my mind this morning?  Free speech… That’s what! Or the lack of free speech would be a better lead in to what I’m going to say here…  If you don’t like the sound of this next diatribe then skip ahead, you won’t hurt my feelings…

But I’ve remained pretty quiet about all this cancelling of people’s free speech by the Social Media Platforms, and YouTube, etc.  If whatever the person has to say that doesn’t jibe with the new “woke” mentality of the platform, they cancel the submission, and in some cases close the account of the person… Shoot Rudy, they cancelled the account of the President of the United States!  All, I’m saying here is that this is not the free country that I grew up in… I knew in my heart of hearts that all that PC Policing that was being done a few years ago, was going to lead to this…  The pendulum has swung folks, and it has swung too far to the other side, could we please just come back to the middle?

Moving on to other thing… My good friend Rick S. sent me this and I thought it did a great job of bringing the debt in this country to the forefront and allowing people to think about it differently and not allow all the zeroes to boggle the mind…  here we go!

Lesson # 1:

* U.S. Tax revenue: $2,170,000,000,000

* Fed budget: $3,820,000,000,000

* New debt: $ 1,650,000,000,000

* National debt: $19,271,000,000,000

* Recent budget cuts: $ 38,500,000,000

Let’s now remove 8 zeros and pretend it’s a household budget:

* Annual family income: $21,700

* Money the family spent: $38,200

* New debt on credit cards: $16,500

* Outstanding balance on credit cards: $192,710

* Total budget cuts so far: $385

Chuck again… See what I mean?  What would happen if you or me tried to get along with $192,710 in credit card debt? Someone with an ounce of brains would finally decide that we had been given too much credit, and would begin to call the debt payments to be made…

The U.S. Data Cupboard last week had the aforementioned Retail Sales… But another data print that we saw on Thursday was the Weekly Initial Jobless Claims, and unlike previous weeks, the number of ,Claims didn’t go down, they went up! And I’m going out on a limb here to say that I think given the COVID virus variants that are present today, that we could very well see these Claims continue to go upward each week. Certainly not like in the spring in 2020, but move higher each week and take the euphoria out of the folks that continue to say the economy has recovered…  Well, that’s not true and we know it’s not true, otherwise we wouldn’t have 10.9 Million job openings and 8.4 Million people unemployed…

This week’s Data Cupboard has a FOMC Meeting on Wednesday… Some pundits think that this will be the meeting that the Cartel heads begin to pull back the reins on stimulus…  I don’t think that to be the case, but then I could be wrong… But it just seems to me that the Cartel knows the real facts about the economy and unemployment, and while they may want to begin to remove stimulus, their collective hands are tied… 

To recap… it was a very ugly end of the week last week, as Thursday and Friday brought about major dollar buying and currencies and metals getting sold down the river. Chuck is besides himself this morning at the brazen way the price manipulators implemented yet another engineered takedown of Gold & Silver… What are the Fed Heads up to these days? Chuck talks about their stock trading ahead of monetary policy decisions… He also touches on the lack of Free Speech, and… gives us a breakdown of expenses that take out all the zeroes so that it’s more easicly understoon…

For What It’s Worth…  Well, folks, this is something that screams FWIW if anything does! This is an article about a new proposal that the President proposed that would require banks to report any transactions of $600 or more… Wait! What? And it can be found here: Biden proposal mandates banks to track and report all transactions over $600    :   Opinion: – (informationclearinghouse.info)

Or, here’s your snippet: “ Opposition is mounting to a Biden administration plan to require financial institutions to report customers’ account flow data to the Internal Revenue Service, with banks, credit unions and some consumer advocates warning it would be a massive invasion of consumer privacy.

The Treasury Department outlined a proposal in its recent budget request for a regime requiring banks and other financial institutions to report inflows and outflows in consumer accounts with more than $600. The goal is to crack down on tax evasion by high earners and narrow the so-called tax gap between what Americans pay and what they owe.

Financial institutions sounded the alarm over the new plan — meant to help the administration pay for the American Rescue Plan and infrastructure overhaul — before it was formally unveiled on May 20, noting the potential regulatory burden. But criticism has intensified from a broader array of stakeholders over concerns that consumers’ private information could be compromised.

“It’s not a targeted program,” said Ed Mierzwinski, senior director of the federal consumer program at the U.S. Public Interest Research Group, who warned lower-income Americans could be targeted by the reporting regime. “They are collecting information about everybody and I don’t know why it is necessary to collect information about everybody.”

The top 1% of taxpayers fail to report as much as 20% of their income, and the projected tax gap could reach roughly $7.5 trillion, according to estimates. The IRS cannot always identify more obscure income sources in parnerships, LLCs and S-corporations. The administration has also called for more resources at the IRS to conduct tax audits, which plummeted between 2010 and 2018.

The proposed financial reporting regime is seen as helping the government gain insight on wealthy earners. But financial trade associations and others warn that will be a costly undertaking for the industry to implement it, and it could expose private account data. Many say that would be a significant expansion of what banks report to the government about their customers, on top of the suspicious activity reports they submit to the Financial Crimes Enforcement Network.”

Chuck again… This is just the beginning folks…  IF they get this passed, then the next thing will be to have banks report on your spending in any amount. Of course in my mind that will mean when we are on a digital currency basis…  I shake my head at the direction this country is going folks… I feel so badly for my kids and grandkids…

Market Prices 9/20/2021: American Style: A$ .7234,  kiwi .7020, C$ .7788, euro 1.1707, sterling 1.3684, Swiss $1.0742 ,Eu0ropean Style: rand 14.7775, krone 8.7484, SEK 8.7279,  forint 301.89,  zloty 3.9283,  koruna 21.7006, RUB 72.84, yen 109.54, sing 1.3522, HKD 7.7864, INR 73.58, China 6.4652, peso 20.13,  BRL 5.2872,  BBDXY 1,153.63, Dollar Index 93.36,  Oil $70.55, 10-year 1.33%, Silver $22.45, Platinum $926.00, Palladium $2,046.00, Copper $4.20, and Gold… $1,757.60

That’s it for today… Back to normal today..  But on Thursday this week, I’ll not be writing as I’ll need to report to the hospital bright and early Thursday morning…  Just normal stuff folks, no need to be concerned, as my breathing is much, much better, my strength is almost all back, and I’ve put the double dose of Covid and pneumonia behind me… I know, some of you are saying, well, it’s about time! Well, give me a break here, I’m 66 years old, have had cancer for 14 years, along with taking daily chemo for many of those 14 years, and I’m over weight…  I tend to think that I’ve done quite well in my recovery! Grandkids, Braden and Evie came to stay with us Saturday night… Braden is 10 now, and pretty much does his thing, but Evie has to be entertained all the time, and she wears me out! But she’s so darn cute, that I don’t care! I got her to sit still for about 10 minutes and watch the baseball game with me on Saturday night. That was quite the accomplishment on my part I thought!  The Ides of March take us to the finish line today with their great 70’s song: Vehicle…  I hope you have a Marvelous Monday, and please Be Good To Yourself!

Chuck Butler

 

 

Currencies & Metals Get Ambushed Again…

September 16, 2021

* yesterday’s moves were small in the currencies

* But the overnight markets have taken down the currencies & metals

Good Day… And a Tub Thumpin’ Thursday to one and all! Well, my beloved Cardinals took my suggestion that they continue to win into last night’s game VS the Mets, and scored 5 runs in the first inning to cruise to a victory, and sweep of the Mets…. They come home now to play a weekend series against a team that’s chasing them, The Padres… Gotta keep winning…  Well, yesterday was one of those days for me, when I can’t seem to wake up, and didn’t do so until 11:30 am. Sat outside to watch the game last night, with neighbor Paul.. It got a little chilly by game’s end, but that’s what it’s supposed to do in the fall! Early last week I was convinced the Cardinals were not going to make the playoffs, and now they’ve got a punchers chance! The great Al Stewart greets me this morning with this song: On The Border…

Well, yesterday was a slow day for the currencies, and they didn’t really gain or lose much throughout the trading day…  The euro was 1.1829 yesterday morning and at the close yesterday it was 1.1820, so as you can see, not much movement at all…  The Bloomberg Dollar Index (BBDXY)  lost a little ground to show what I’m talking about… the BBDXY yesterday morning was 1,144.04, and ended the day at 1,143.78. Gold on the other hand saw selling throughout the day, and ended up down $10.50 to close at $1,795.10… Gold was up $11 on Tuesday, and down $10 on Wednesday… Strange goings on here folks… I’m just saying…  Silver lost a whopping 2-cents on the day and closed at $23.93…

In the overnight markets last night… It’s been another ambush of the currencies and metals overnight folks…  They took the euro back below 1.18, and Gold is down $20 in the early trading today… What gives?  What on earth are the overnight markets thinking? Well, this is quite the takedown, folks… The BBDXY this morning is 1,146.09, so up over 2 whole figures.  Silver is down 46-cents.

The Petrol Currencies are the only ones with a fighting chance this morning, as they hold their recent upward moves VS the dollar, and add some as the price of Oil is trading with a $72 handle this morning, and doesn’t seem to be pausing for the cause…  The Russian ruble leads the Petrol Currencies… 

So to be clear, John Williams showed that consumer inflation did slip lower in August from July, but his slippage had inflation slipping to 13.2%…  And to me this is more representative of what I’ve been experiencing, and I’m sure you will agree… When I chastised the BLS yesterday I was chastising them for saying inflation was only 5.3%…  That’s a far cry from 13.2%… And you would think the BLS would be embarrassed to print such a low number… But NOOOOOOOOO! They don’t have a conscience folks, other wise they wouldn’t throw out such stupid numbers that everyone knows are wrong…  Reminder here that the BLS is also responsible for the jobs data each month…  And the Good Lord knows all too well that I do not believe the BLS’s jobs data…

OK… Well, Global Debt has reached $300 Trillion…  The U.S.’s portion of that is $28.7 Trillion or 135% of GDP… China, Japan, the U.K. along with the U.S. are the major contributors, and one country that’s a super power that has not run up large debts, is Russia… And on a lessor scale, Singapore…  And still investors are worried and scared stiff to invest in Russian rubles… And with the price of Oil now trading with a $71 handle, the smart money is looking to the ruble… And the ruble is still one of the few currencies that pays interest… 

How will these countries ever pay off their debts? Well, they either need to inflation or die, or begin to cut their deficit spending and try to get to Budget surpluses to pay down some debt…  So, like I said they need to inflate or die… So, take the U.S. because that’s where most of live (I do have readers all over the world!) The Gov’t can’t allow the inflation reports to show real inflation numbers or else the people would revolt, but the Gov’t needs for inflation to run hot for an extended period of time just to get their heads above water…

Circling back to Gold… Did you hear this news, that someone bought 40,000 contracts of Gold? Here’s the skinny: Whales moving the markets are more common in crypto, but since 10 August, a new major player has appeared on the long side of the gold futures contracts market. Raw data shows a large non-commercial trader has amassed as many as 40,000 COMEX gold contracts, the equivalent of 4 million ounces of gold – a cool $AU9.85bn.  WOW! That’s a HUGE position especially for a non-commercial trader… 

So, now the question is: Will this “whale” take delivery of this Gold at the end of his contract? I sure hope they would because it would break the COMEX…  Oh, and if you check the prices of Gold around August 10, you’ll see that this investor bought at cheap levels…

It was a very slow news and markets day yesterday… I searched and searched for something to talk about, but my search ended up much like, oh never mind, no need to bring that up here…   But I did find something later in the day, in Dave Gonigam’s 5 Minute Forecast… So, take it away Dave!

“California’s $470 billion CalPERS — for the benefit of the state’s government employees — has been without a CIO for more than a year now after former CIO Ben Meng’s investment acumen missed the mark. Namely, under Meng’s management, CalPERS’ investments earned just 4.7%, well shy of its 7% target.

[Apropos of nothing, we found this nugget on Mr. Meng’s CV: He was a risk manager. At Lehman Bros. Oy.]

If the absence of a competent CIO isn’t alarming enough, according to CalPERS 2020 annual report, the fund invested $3 billion in Chinese companies — including businesses heavily involved in China’s neo-Silk Road venture.”,

Chuck again… Thanks to Dave Gonigam and his 5 Minute Forecast…   Now, think about that how the world’s largest pension fund, in the world’s 5th largest economy, is investing in China… I don’t see how that will be a problem do you?  I kid here… I do believe these investments will prove to be very risky, and cause tears…  Just my 2-cents…

And then I came across this on Bloomberg.com this morning: “In order to retire and enjoy decades of financial security, two in five American investors figure that it will take:

a) $300,000  
b) $750,000 
c) $1.7 million
d) a miracle

The answer, according to the 2021 Natixis Global Retirement Index released Tuesday, is choice d — a miracle. That’s what 46% of Millennials, 45% of Gen X and 30% of Baby Boomers said in the annual survey.

The firm surveyed people with at least $100,000 in investable assets. Half of respondents with a net worth of $1 million or more said they were resigned to the fact of having to work longer than they’d anticipated. In the U.S., the 750 survey respondents had a median net worth of $450,000 and had saved on average more than 16% of their salary.”

Chuck again…  I found that very interesting that so many investors think it will take a miracle for them to retire…  The  masses are beginning to see what I’m seeing, and that is with so much debt, there’s no way the country will be able to keep all their promises…  That’s a sticky wicket folks… 

The U.S. Data Cupboard yesterday, had the August Industrial Production, and much like many of the data prints in recent times, it failed to meet expectations, only gaining .4%, VS .5% expected, and the .8% gain in July…  Capacity Utilization remained unchanged in August from July, so nothing to look at here, move along…  

Today’s Data Cupboard has the usual Thursday fare of Weekly Initial Jobless Claims, and then a real piece of economic data: Retail Sales for August. You may recall that July’s Retail Sales were negative -1.1%, and I don’t expect August, even though there was still some back to school buying, to come out of negative territory…   How can Retail Sales be strong, when all the money is gone?  No new stimmy checks in the mail, all the credit cards are maxed, and now… The rent is due… Uh-Oh…

To recap… The currencies didn’t move much yesterday… But Gold got sold by $10.50, to offset its $11 gain on Tuesday…  Industrial Production failed to meet expectations, falling in line with most data prints in recent times. And Chuck points out that the Global debt has reached $300 Trillion… Now go try on that hat for size!  But in the overnight markets there was another ambush and takedown of the currencies and metals… It’s an ugly day to start today… 

For What It’s Worth…  A few weeks ago I highlighted an article that quoted Jeffrey Gundlach, and how he thought the Fed’s policies were not in keeping with a reserve currency… Well, he’s doubled down now and today’s FWIW is another rant by Mr. Gundlach, and it can be found here: Jeff Gundlach Warns “History Books Won’t Say Inflation Was Transitory”, Remains Long-Term Dollar Bear | ZeroHedge

Or, here’s your snippet: “Building on his thoughts from earlier in the year that the dollar “is doomed,” DoubleLine Founder Jeffrey Gundlach reiterated in tonight’s webcast that any “economic growth we’re seeing isn’t really economic growth,” it’s just spending funded by “massive amounts of tools and devices The Fed has used.”

As he noted previously, consumption is not really the economy. The economy is about production. And when you buy goods produced in Asia with stimulus money, it shows up as GDP, but it’s really Asian GDP. It’s consumption in the United States. “So the economy isn’t really that strong with five million fewer jobs.”

“The Fed decided to go big early,” Gundlach said and warns that policy makers going big with stimulus will be a “recurring theme” going forward, building on his previous thoughts that: “We’re running our economy in a way that is almost like we’re not interested in maintaining global reserve currency status.”

CPI would be at 12% year-over-year if inflation statistics used actual home prices rather than owners’ equivalent rent, Gundlach says.

The copper-gold ratio is saying that the yield on the 10-year Treasury “makes no sense,” Gundlach says. The ratio shows it should be at 3%. The copper-gold ratio is telling the message of Fed and Treasury manipulation, Gundlach says.

Chuck again… Here’s a guy who thinks like I do, folks, and he runs a HUGE Bond Fund!

Market Prices 9/16/2021: American Style: A$ .7320,  kiwi .7112,  C$ .7915, euro 1.1772, sterling 1.3824, Swiss $1.0939, European Style: rand 14.4550, krone 8.5934, SEK 8.6166,  forint 296.83,  zloty 3.8857,  koruna 21.4676, RUB 72.60, yen 109.39, sing .13429, HKD 7.7843, INR 73.39, China 6.4343, peso 19.86, BRL 5.2405,  BBDXY 1,146.09, Dollar Index 92.73,  Oil $72.53, 10-year 1.30%, Silver $23.40, Platinum $945.00, Palladium $2,166.00, Copper $4.25, and Gold… $1,772.20

That’s it for today… Well, we’re putting the finishing touches on the 2nd week of September, I really can’t tell you where the year has gone!  It seems to me that just a couple of weeks ago I was sitting in Roger Dean Stadium watching day baseball, spring training games… My beloved Missouri Tigers try to forget about their game last week at Kentucky, on Saturday… Go Tigers!  It’s been a great week weather-wise, and it appears to be continuing right through the weekend. YAHOO!  I’m not as tired this morning, so maybe I caught up on my needed sleep yesterday…  Edwin Starr takes us to the finish line today with his song: War…  I’ve used his words more times than you can shake a stick at through the years… War, what’s it good for, Absolutely nothing, Say it again! I hope you have a Tub Thumpin’ Thursday, and please Be Good To Yourself!

 

Chuck Butler

 

11 Months In, Federal Budget Is $2.7 Trillion Deficit!

September 15, 2021

* Currencies & metals inch higher VS the dollar

* Spin Doctors attempt to tell us inflation is going away… 

Good day… And Wonderful Wednesday to you! I almost didn’t answer the bell this morning…  Man, am I draggin’ the line this morning! Crazy game last night, for my beloved Cardinals, who won and that’s all that matters at this time of year! When there are games like last night, I can’t turn it off and go to bed… So, I was up late last night, so forgive me if misstate something this morning, I have an excuse!  The sun was in my eye, I tripped on a rock, the other guy called for it first… you know that kind of excuse that a young ball player gives for not catching the ball…  Steely Dan greets me this morning with their song: Aja…  Aja, when all my dime dancing is through, I run to you….

Ok… what a crock! The headlines yesterday were all about how inflation had “slowed” in August from July…  So, my initial reaction to those headlines was, “What a Crock!”  The bean counters that deal with all the hedonic adjustments of the Consumer Price Index (CPI) said that inflation had dropped from 5.4% in July to 5.3% in August… They are so wrong, they’re almost right…  But they are wrong, and they know it, but they can’t say it, because they work for the Gov’t.  And the Gov’t doesn’t want you to know what the real inflation rate is, for if you knew, you would rush out and start buying things before their prices got out of hand, and that would beget more inflation, and before we knew it, well… it would be ugly…

But… if we did know what the real inflation rate was, and we do know from John Williams’ Shadow Stats website, the markets would know and would be hammering on the Cartel to hike rates to slow the inflation… Now, wouldn’t you rather have a Central Bank that fought inflation than one that ignores it?  I’m just saying…

The currencies didn’t rally yesterday as the spin doctors did a great job of selling the population snake oil… I’m talking about the media response to the fake inflation number…  Oh, I can hear all those that said that it wasn’t inflation we were seeing, and if it was it wouldn’t last, crowing to the full moon… But, as I always say, one report doesn’t make a trend… And just because the BLS comes up with an inflation report that’s hedonically adjusted, and it’s lower than the previous month, doesn’t mean it’s all clear on the inflation front.

But… the currencies didn’t exactly get sold by the bushelful like they were in the overnight markets of Sunday to Monday.  The BBDXY started yesterday at 1,145.84, and ended the day at 1,146.29… That’s some small change folks…  Gold however did rally on the day, gaining $11.10, to close the day at $!,805.60, and Silver gained 13-cents to close at $23.94…  

In the overnight Markets last night… there has been a little dollar selling, with the currencies inching higher VS the dollar, and the metals are basically flat in the early trading today, with Gold adding just $1.60, and Silver flat as a pancake (Head East)…  The BBDXY which closed yesterday at 1,146.20, is trading this morning at 1,144.04, So the general feeling this morning is sell dollars… We’ll see how long that lasts… 

So… what’s on the agenda today?  The U.S. Federal Budget was printed on Monday, and it showed that with just one more month in the fiscal year, that the Budget deficit is $2.7 Trillion dollars…  Last year at this same time with a month to go, the Budget Deficit was $3 Trillion…  So, while better than last year, it’s really a mess folks… $2.7 Trillion to be added to the current debt…   Extending this to the start of the covid pandemic in March 2020, the U.S. government deficit for the past 17 months is a stunning $5.1 trillion!!!   There’s no two ways about it folks… We as a country are turning into a Banana Republic…  Oh, I know that’s pretty harsh, but I recall my days doing presentations with my former Boss and long time friend, Frank Trotter, who would describe the U.S. finances a those of a Banana Republic… I wonder what he would think of them now?

The headline story on the Federal Budget print on MarketWatch was touting the prospects of lower Budget Deficits with the implementation of higher Corporate taxes….  I laughed out loud when I rea that… What on earth on these people thinking?  For either the Corporations will find loopholes and ways to not pay more taxes, or… Congress will see new tax receipts and think that they need to be spent…  You can mark my words on that one folks…

And then seeing that they didn’t get the bang for their buck, they’ll go back to the drawing board, and you know who will be next in line to make up their tax receipts don’t you?  You and me… It’s coming folks, if not already upon us, hidden in the new tax plan the House came up with…

The U.S. Data Cupboard today will have a couple of real economic data prints for us… Industrial Production and Capacity Utilization both for August… These two aren’t normally market movers but… They are important to keep track of… Capacity Utilization is one of the few data prints that is forward looking…  And I’ve explained this before, but will again just for good measure…  Capital expenditures are key to a strong economy, without them, the economy just muddles along, which is what we saw going on for the last decade… 

To recap…  The stupid CPI dominated the media and markets yesterday, and the media couldn’t help from celebrating big time because the annualized inflation rate fell to 5.3% from 5.4%…  You would have thought that the drop was 5 full percentage points or something the way they carried on… As Chuck always says one report doesn’t make a trend…  All I know is that everything is more expensive these days…   The currencies didn’t move much yesterday, but Gold rallied, and in the overnight markets

For What It’s Worth…  I read a long article yesterday that I’ll give you the link for, and it’s very well written, with great thoughts, and viewpoints. The article is written by Matthew , of Matterhorn Investments, a Swiss firm, that is headed by Egon Von Greyerz, of whom I’ve featured in the FWIW section before… This article talks about how investing and the economy and Fed Policy is not real…  So, if you don’t have the time to read it all save the link and go back to it when you do have time… The article can be found here: Nothing is Real: A Visual Journey Through Market Absurdity – Matterhorn – GoldSwitzerland

Or, here’s your snippet: “From where I sit in terms of both history and economics (at least until these subjects are equally “canceled” from the modern curriculum), falling GDP as indicated above effects all our lives far more than falling statues or controversial children’s books.

 

But as we’ve written so many times, the powers-that-be are clever little foxes, and even crashing GDP and skyrocketing debt, which are objectively time-proven cancers for society, can be a boon for their false narrative of governmental or central bank “guidance,” which is nothing more than increasing social control hiding behind a Covid mask.

Debt to GDP: The New Distortion

After all, one way to address the appalling 135% debt to GDP ratio in the U.S.  is to simply reduce the productivity component rather than debt component of the ratio, akin to telling a man with only one arm that his shirts will fit better if we remove the remaining arm.

A “bad” debt to GDP figure is just veiled anchoring for more QE “stimulus” and more ludicrous fiscal spending of money which governments don’t in fact have but which a mouse-click at the Eccles Building can produce in seconds.

 

In simple speak, this latest GDP “bad news” looks like an open as well as carefully planned piece of “good news” for a QE-addicted, fully Fed-supported and ultimately rigged to fail stock bubble.

The Pointless Taper Debate

As for Fed tapering, even the hawks at that same Atlanta Fed can’t keep their message or ethics straight for more than a week.

Nothing at all shocking or new there…

Another Fed Two-Step

Back in August (8/27), for example, Atlanta Fed President, Raphael Bostic, bravely declared: “Let’s start the taper and let’s do it quickly.”

But fast forward just a few days to September 2, and that same Fed President, like so many other fork-tongued masters of doublespeak within the FOMC, back peddled with fabulous elan, declaring instead that “we’re going to let the economy continue to run until we see signs of inflation.”

The amount of “duplicitous dumb” within this single sentence defies both belief and this report’s word count, but for simplicity’s sake, and despite “signs of inflation” literally everywhere, Bostic’s latest semantic two-step translates to this: Don’t expect a “taper” of the free money spigot anytime soon.

Besides, and as we wrote last week, even if a “taper” in Fed QE were to occur, such hawkish optics won’t stop the Fed from dumping ever-more dovish liquidity into the system via clever little tricks up the sleeves of its Reverse Repo Program.

In short, the Standing Repo Facility (or SRF) is just QE by another clever acronym, so please: Don’t let the headlines or double-speak from above fool you.

Taper or no taper, the dollar in your wallet is about to drown under even more currency-killing liquidity from on high.

In short, nothing is real.”

Chuck again… nothing else to add here, just make sure you get the time to read the article in its entirety…

Market Prices 9/15/2021: American Style: A$ .7323,  kiwi .7094,  C$ .7879, euro 1.1829, sterling 1.3824, Swiss $1.0907, European Style: rand 14.3080, krone 8.5791, SEK 8.5720,  forint 294.79,  zloty 3.8440,  koruna 21.3980, RUB 72.78, yen 110.13, sing 1.3431, HKD 7.7823, INR 73.36, China 6.4423, peso 19.87, BRL 5.2240, BBDXY 1,144.04,  Dollar Index 92.44,  Oil $71.48, 10-year 1.26%, Silver $23.94, Platinum $945.00, Palladium $2,096.00, Copper $4.32, and Gold… $1.807.20

That’s it for today… What a game last night in NY…. My beloved Cardinals had to come from behind, then took the lead, only to give it up, and go extra innings where they finally broke through and won the game, and now are all alone in the second wild card position for the playoffs this morning… Got to keep winning….  I had a run in with a squirrel late last week, that I’m still hobbling around in pain from… To make a long story short: I tried to get a squirrel out of my gas grill only to find it had nested there and had two baby squirrels… When I opened the lid, the squirrel jumped out at me, I backed up and tripped and fell… Thankfully the squirrel ran away leaving the babies, but I fell on my right side, and the patio is quite hard! OUGH!  The mom squirrel eventually came back and got her babies out of the grill…  Now I have to watch the grill for any signs of nesting coming back… UGH!  Ok… I was up late last night with the game, and so I’m tired, so let’s get this out the door! The Byrds takes us to the finish line today with their song: Eight Miles High…  3 of the original members of the Byrds went on to become rock legends… David Crosby, Chris Hillman, Jim McGuinn… I hope you have a Wonderful Wednesday and please Be Good To Yourself!

Chuck Butler

Oil Price Nears $71…

September 14, 2021

* Currencies gain back their Sunday night losses

* Petrol currencies moving higher with the price of Oil… 

Good day… And a Tom Terrific Tuesday to you! Well, after that “draggin’ The line” feeling I had yesterday morning, I spent the rest of the morning wanting to go back to sleep… I finally succumbed to Mr. Sandman, in the afternoon, and when I awoke, I felt so much better! When I was a young man, I would scoff at anyone that needed an afternoon nap… We all probably did that… But, I figure now, that with all the stuff I’ve been through, I deserve a nap when I feel the need! HA! Basically, your body tells you when you need to sleep, and I’ve become so good at listening to what my body is telling me… Eddie Money greets me this morning with his song: Take Me Home Tonight…

Well, all the dollar buying that went on Sunday night into Monday morning, was brought to a stop in the U.S. session yesterday…. Go figure…  The BBDXY, dropped from 1,147.93 in the morning to 1,145.53 at the close… The euro rose back above the 1.18 handle, and Gold found a way to gain $6.70, while Silver only gained 3-cents on the day…  I said yesterday that I would attempt to find out why the overnight markets were so bullish on the dollar, but… there really was nothing to speak of, out there that explained this scenario…  So, the foreign markets bought dollars, and the U.S. market sold dollars, isn’t life strange? A turn of the page, can read like before, can we ask for more? (Moody Blues)

In the overnight markets last night… The traders overseas thought, why buy dollars again when their brothers-in-arms just reversed everything they had done the night before… So, as far as the currencies were concerned there was little to no movement overnight. The BBDXY is trading in the same clothes as it wore yesterday at the close, 1,145.84, and the Dollar Index is 92.62… 

Gold, on the other hand, is not faring as well as the currencies, and is seeing selling this morning to the tune of $7.50… Gold closed yesterday at $1,794.50, so, with the selling this morning Gold is trading at $1,787.00, a relatively cheap level folks… And Silver is not faring any better, having closed yesterday at $23.81, it has given back 18-cents in the early trading to trade at $23.63…  

With the price of Oil now nearing $71 the Petrol Currencies have finally taken the flyer and begun to rally along with Oil… The Russian ruble leads the Petrol Currencies higher, and joining in is the Canadian loonie, the Norwegian krone, Mexican peso,  and pound sterling, with the Brazilian real not being allowed to participate, just yet… 

The Commodities are moving higher in price again folks… The inflation indicator, Copper, is pushing the price envelope and trades this morning at $4.30… But that’s not the only commodity that’s indicating inflation is rising, and Bloomberg’s Commodity Index shows a 25% YTD return… But I’m more interested in the recent run higher in commodities… And you should be too… 

So, today is the day that we see what the cooks and massagers think is the right amount of consumer inflation to report…  I always call the consumer inflation report the “stupid CPI” because it’s stupid… It’s cooked, it’s massaged, it’s manipulated, and it’s worthless to you and me… No wait! It’s not worthless, but pretty darn close to being worthless…  The thing it does do for people that know the history of the CPI, is it’s a indicator of two things… 1. How much inflation the gov’t wants to show us exists, and 2. Just how much the number is manipulated…

These days all markets are manipulated, and we’re getting to the point that a lot of data is manipulated too… When John Williams at www.shadowstats.com says inflation is really around 14%, but the Gov’t tells us it’s only 4%, you’ve got a very good idea how much the inflation data is manipulated…

What would it hurt to show people what the real inflation number is without having to subscribe to Shadowstats.com to know? Well, basically, inflation fears, begets higher inflation… if Joe six-pack sees hears that inflation is rising, he will jump at the opportunity to go out and buy that new refrigerator before its price rises… And that causes additional price rises, and pretty soon, you’ve got runaway inflation… That is unless you have a prudent Central Bank that has its hands on the interest rate lever, And we all know that we don’t have a prudent Central Bank…

Oh, and speaking of our Central Bank, or Cartel, as I prefer to call them… We sure haven’t heard much follow up talk regarding Tapering since Cartel Chairman Powell, first spoke the “T” word at the last meeting, now have we? I think that as the coming weeks go by, we’ll be hearing less and less about the need to Taper from the Cartel… They will be “Tapering” the “taper” talk!

It all depends on what the Elite wants the Cartel to do… The Cartel gets their marching orders from the Elite, and it all depends on what they want to see going on in the economy, folks…

Circling back to Gold getting sold this morning… I look at this and think that the price manipulators are at work here, to take a little off the top, because they know, or strongly believe that the Consumer Inflation Index (CPI) is going to show how strong inflation is (according to the bean counters and all their hedonic adjustments) , and they think that this will push Gold’s price higher… Therefore, take it down now, and when it rallies later, the net move will be flat…  That’s how I see it playing out this morning… 

So, the House has released the details of their tax plan… Tax and spend, has been the mantra of the Democrats for a long time, and they didn’t want to mess with that mantra..  I have something for you in the FWIW section today that goes with this discussion here, that you won’t want to miss! One of the items in the tax plan, that will be used to pay for the $3.5 Trillion deficit spending plan, is a change in the taxing of the cryptocurrencies, putting them in the same category as other investments…  

The U.S. Data Cupboard today, has the aforementioned stupid CPI, and Core Inflation for August… We’ll also see the color of the Small Business Index, which I would think would be weaker in August…  No matter what the CPI shows us today, the real inflation number will be much higher folks… And as long as the folks that put together the CPI keep showing it lagging, the Cartel can point to it and say that inflation is not a problem… And we, you and me, and the guy down the street that mows his lawn with his shirt wrapped around his head, get to pay for the Cartel’s ignorance to this problem…  I’m just saying… 

To recap… The selling in the overnight markets Sunday to Monday, was reversed by the U.S. traders yesterday, as the currencies recovered their lost ground, and Gold gained $6.70…  In the overnight markets last night, the traders thought why did we buy dollars only to have them sold? So, the currencies were flat overnight last night, but Gold is getting sold ahead of the CPI print this morning, and Chuck has his thoughts on that! 

For What It’s Worth…  Well, good friend, Dennis Miller and Chuck did an article together about a month ago, where we looked ahead 5 years and described what I saw for the country… In this article I talked about the U.S. Gov’t ending their programs like Social Security, and Medicare or at least making them unattainable, because they didn’t have the money to pay for them… Well, it’s starting folks…. the changes to how you and me make money and retire…  That’s what this article is about, and it can be found here: House Democrats propose new retirement plan rules for the wealthy (cnbc.com)

Or, here’s your snippet: “House Democrats proposed a slew of changes to retirement accounts for the rich on Monday, part of a restructuring of the tax code tied to a $3.5 trillion budget plan.

Taken together, Democrats’ reforms aim to erode the use of retirement accounts as a perceived tax shelter for the wealthy and instead promote them as a way for low- and middle-income Americans to build a nest egg.

 Most of the changes would start in 2022.

Wealthy individuals with retirement accounts exceeding $10 million would be prohibited from contributing extra savings and would have a new required minimum distribution each year, according to an outline of tax legislation unveiled Monday by the House Ways and Means Committee.

The bill would also repeal so-called Roth conversions in individual retirement accounts and 401(k)-type plans for those making more than $400,000 a year. It would also prevent savers from using the “mega-backdoor Roth” strategy, regardless of income level.

Further, the legislation would prohibit individual retirement accounts from holding investments that require buyers to be accredited investors, a status generally reserved for wealthy investors.

The proposals are part of a broader theme of raising taxes on those who earn more than $400,000 a year to help pay for education, climate, paid-leave, child-care and other measures while also making the tax code more equitable.”

Chuck again… This is just the start folks… Things will be quite different for investors and retirees in 5 years… Got Gold?

Market price 9/14/2021: American Style: A$ .7335,  kiwi .7113,  C$ .7908, euro 1.1808, sterling 1.3869, Swiss $1.0845, European Style: rand 14.2170, krone 8.6024, SEK 8.5874,  forint 296.36,  zloty 3.8549,  koruna 21.4817, RUB 72.88, yen 110.10, sing 1.3431, HKD 7.7786, INR 73.62, China 6.4514, peso 19.89, BRL 5.2323, BBDXY 1,145.84, Dollar Index 92.62,  Oil $70.97, 10-year 1.33%, Silver $23.63, Platinum $954.00, Palladium $2,127.00, Copper 4.30, and Gold… $1,787.00

That’s it for today… Another shorter version of the letter today… I find myself thinking I’m starting to sound like a broken record some times, and I certainly don’t want to do that!  Well, looky here… What a week ago I thought to be the end of my beloved Cardinals chances to make the playoffs, has them only 1/2 game out this morning after their win last night VS the Mets… Now their chances have become real… I don’t believe it myself, but the other teams in the race have folded like a cheap lawn chair, giving the Cardinals an outside chance, that they’ve taken advantage of… They’ve got to keep winning…  The early fall weather here has been fantastic, and I’m loving it!  Bill Withers takes us to the finish line today with his song: Lovely Day…   what an appropriate song for today!  I hope you have a Tom Terrific Tuesday, and please Be Good To Yourself!

Chuck Butler

 

 

Wholesale Inflation Soars, Gold Gets Sold?

September 13, 2021

* PPI soars, indicating that inflation continues… 

* The dollar gets bought in the overnight markets… 

Good Day… And a Marvelous Monday to you… Did you have a nice weekend? Mine was great! It started with a driveway happy hour on Friday, where I got to catch up with neighbors and former colleagues at EverBank. From there, the rest of the weekend was filled with absolutely fabulous weather, and two Cardinals victories, and being outside with my good friend Duane. The only bummer of the weekend was the loss by my beloved Missouri Tigers… UGH! I’m greeted this morning with a song by a 70’s band that didn’t last too long… Lobo greets me this morning with their song: I’d Love You To Love Me

Well, did you get a chance to check out that Producer Price Index (PPI) that printed on Friday last week? The producer price index increased 0.7% in August from a month ago, above the 0.6% Dow Jones estimate.  Prices rose 8.3% from a year ago, the biggest increase on record going back to 2010. That’s right… wholesale inflation or PPI, is up 8.3% from a year ago, which means that the pipeline to consumer inflation is chock-full-o-inflation, and it’s coming to a product that you want to buy, near you! 

So.. I have to wonder what the Cartel heads are thinking these days, for they have stood steady Eddie with their thoughts that the current inflation would wane by year end… But this PPI print says that a waning is not going to happen…  The Cartel has been so wrong on this inflation that they can’t change horses in the middle of the stream now… But, it would be far better for the economy and you and me, if the Cartel just began to fight inflation, and didn’t mention their previous error in forecasting… 

So, with all this inflation pressure in the docket just waiting to explode on the consumer inflation scene, one would think that the dollar would be be sold… But that wasn’t the case on Friday… The dollar wasn’t sold or bought on Friday, and that had me scratching my bald head… The BBDXY ended the week at 1,145.53, up just a tiny bit from Thursday’s 1,145.49… 

And Gold? The all-time leader in inflation hedges, couldn’t find a bid all day, and ended the day on Friday down $7.40 to close at $1,787.80, and Silver lost 32-cents on the day and ended the week at $23.78… What on earth is going on here? Is the opposites trading that we’ve seen in the past few years, spilling over to Gold?  Now that would be the icing on the cake for opposites, now wouldn’t it?

In the overnight markets last night, the Asian and European Traders have bought dollars by the bushel full… The BBDXY has risen from 1,145.53 to 1.147.93, and the euro has been pushed below the 1.18 handle..  I’m not seeing what caused this dollar buying in the overnight markets, but I’m sure it doesn’t make much sense any-old-way!  

As I look at the currency landscape this morning, the only currency that has held its ground VS the dollar, and found a way to move higher, is the pound sterling…  I’ve been watching the pound the last couple of weeks, as it bounced around 1.3775 and held its ground, but now it’s moved higher into the 1.38 handle… I’ve never been swayed by these moves higher by the pound, so be careful here, don’t get swayed by the strong move higher… 

Well, the Cartel made a Big Deal out of talking about Tapering in their last meeting, and they said they wanted to Taper by year-end… I just don’t see that happening, do you?  Let’s see now… The Reserve Bank of New Zealand (RBNZ) began tapering their bond purchases back in May, The Bank of Japan (BOJ) began tapering, the European Central Bank (ECB) announced at last week’s meeting that they too would begin to taper their bond purchases, and other European Central Banks will most likely follow the ECB…  

I find this to be something that’s very interesting… These Central Banks around the world have seen the writing on the wall with regards to rising inflation and see tapering as a means to tightening rates, without having to actually hike rates…  Makes you wonder, doesn’t it, what the Cartel is going to do? 

Adding to inflation fears… The price of Oil is trading with a $70 handle this morning… I guess the fears of a slower economy because of the variants of the virus, aren’t scaring Oil traders… 

I’m going to repeat something I was talking about last week, because this topic came up a couple of times this past weekend… And that is that there are 10.9 Million job openings in the U.D. and 8.4 Million unemployed folks… And restaurants can’t stay open because they can’t find help, department stores have to shorten hours because they can’t find help, and so on… This is a real dilemma  here in the U.S., and there’s no real way to fix it other than to get people out there to go find a job… 

But the pandemic shutdown has brought on a new thought process when it comes to thinking about a job for Americans… Right or wrong, it has changed how people look at jobs, and they have decided that they aren’t going back to their old jobs…  So 10.9 Million job openings will remain a problem, and 8.4 Unemployed will also remain a problem, and apparently the two shall never meet!

Well, the old Debt Ceiling is coming upon us once again… Treasury Secretary Janet Yellen warned last week,  that if Congress doesn’t act, it will be The End of The World As We Have Known It. She must have been listening to R.E.M.’s greatest hits, because that’s all drama that’s not needed!  The Debt Ceiling is just a number that has been breached so many times in the past, that it’s become a non-factor… The Democrats blame the Republicans, and the Republicans blame the Democrats…  It’s a new version of “Who Did It”?    They both did! 

So why get all Chicken Little on us about this Debt Ceiling, Janet? 

After last week’s Data Cupboard that has very little in the way of data prints for us, this week’s offerings will be plentiful… Data prints like the stupid CPI tomorrow, and Industrial Production and Capacity Utilization, along with Retail Sales, and other prints will come our way this week… 

Just one more thing to say about the rising inflation and the dollar rallying… What on earth are traders thinking? That the Cartel is going to have to raise rates? Well, in my book, that’ll be the day, when you say goodbye, no wait! That’ll be the day that changes the world as we know it, because of the debt that the U.S. has amassed that has to financed… think about that for a minute, and then tell me that the Cartel will hike rates… 

To recap… The PPI on Friday soared to a record high, with an 8.3% increase from last year, for wholesale inflation, that will filter through to consumer inflation, and with consumer inflation on the docket to move higher, Gold was sold on Friday… Wait, what? Yes, Gold lost $7.40 on Friday in the face to rising inflation… Opposites trading? And Janet Yellen goes all drama queen on us with regards to the debt ceiling… 

For What It’s Worth… A few years ago, in a Sunday Pfennig, I went into a deep discussion about Deutsche Bank, and how I thought they were on the edge of a cliff… but they survived, and now they are issuing warnings about the economies of the world… This is an interesting article, and it can be found here: Why One Bank Is Warning Its Clients Of An Imminent “Hard Correction” | ZeroHedge

Or, here’s your snippet: “Earlier this week, when recapping the latest bearish outlooks from most large Wall Street banks, we touched on Deutsche Bank’s latest House View take in which the bank – along with most of its peers – said that its strategists expects an “imminent correction” without giving much context for the bank’s gloomy take.

So fast forwarding to today, the bank’s chief equity strategist Binky Chadha expounded on this bearish take, and in a note pointing out that “equity valuations are extremely rich”, he first explains “what’s keeping equity valuations high”, and then goes on to warn that “the risk the correction is hard is growing” adding that “there has been a clear negative relationship between initial valuations and subsequent forward returns, with the relationship strengthening as the return horizon is increased from 1 to 3 to 5 years out. For the highest decile of initial valuations, which is where we currently are, 5-year forward returns have on average been slightly negative.”

Starting at the top, Chadha lays out what everyone – even the NY Fed president – is aware of, namely that equity market valuations are “historically extreme” on almost any metric: “trailing and forward price to earnings (P/E), enterprise value to EBIT, EBITDA  or operating cash flow are all well into the 90s in percentile terms. High valuations are broad based across sectors and median company valuations are high.”

Furthermore, he notes that “equities are very expensive (36%) relative to the drivers of valuation which have explained the bulk (70%) of historical variation in them.” As a result, the cyclically adjusted P/E at 26.2x is well outside its historical 10-20x range “and easily the highest outside of the Tech bubble.”

Chuck again…  Well, this is nothing new regarding warning clients about the stock bubble… But the Cartel just keeps blowing air into the bubble, folks… It’s been very amazing to me just how stretched the bubble can get, but it does… 

Market prices 9/13/2021: American Style: A$ .7351,  kiwi .7106,  C$ .7886, euro 1.1775, sterling 1.3820, Swiss $1.0825, European Style: rand 14.2070, krone 8.6517, SEK 8.6462, forint 296.48,  zloty 3.8576,  koruna 21.5103, RUB 73.14, yen 110.12, sing 1.3434, HKD 7.7791, INR 73.66, China 6.4433, peso 19.90, BRL 5.2448,  BBDXY 1,147.93, Dollar Index 92.84,  Oil $70.54, 10-year 1.32%, Silver $23.68, Platinum $956.00, Palladium $2,228.00, Copper $4.30, and Gold… $1,789.20

That’s it for today… not was wordy today… I’m really draggin’ the line this morning, and I need something to get me revved up! HA! Saturday was the 20th remembrance of our 2nd day of infamy… It’s good that we have big productions of remembering this day so that people never forget how we were attacked… I used to have a small 9-inch tv behind my desk at EverBank and on that day the whole office staff were crowded around that tv watching the events. I’ll always remember that… So, my beloved Missouri Tigers hired an NFL defensive coordinator, to fix the defense… Well either he’s not the answer or the players are lacking…  Because the Tigers’ defense is really bad… The NFL’s season got going yesterday. I don’t watch much NFL any longer, and I dropped out of the fantasy football league I participated in for years…  David Bowe takes us to the finish line today with his song: Waiting For The Man…  I hope you have a Marvelous Monday and please Be Good To Yourself!

Chuck Butler

The Gov’t Gets Ready To Release The Kraken Of Deficit Spending…

September 9, 2021

* Currencies & metals continue to get sold on Wed

* But in the overnight markets the currencies & metals rally!

Good Day… And a Tub Thumpin’ Thursday to you!  I sure hope it’s a Tub Thumpin’ Thursday today because there’s a day game at Busch Stadium, the weather is absolutely Chamber of Commerce days, and well those two things combined should clear the way for a Tub Thumpin’ Thursday! I’m hosting a driveway happy hour tomorrow afternoon… Should be a good one… Everyone brings their own lawn chair, and cooler of their favorite beverages, and we socially distance the lawn chairs and then get to getting caught up with folks we haven’t seen in a while… I have to say, it’s tons better than a Zoom Happy Hour! And having told you that, I’m reminded that I need to tell my wife that we’ll have 20 people in the driveway tomorrow afternoon! The band, Lighthouse greets me this morning with their classic rock song: One Fine Morning… 

Well, I didn’t get any takers on my challenge for someone to prove me wrong yesterday, so that must mean you all agree with me regarding the price manipulation scheme…  I did get a dear reader chastise me for talking about the ACLU and Civil Liberties… Oh well… the one thing that dear readers must remember, is this: This is my letter, and I can choose to talk about anything I want to…

OK… well, all the selling of the currencies and metals that went on Tuesday, was watered down a bit yesterday… The BBDXY rose from 1,145.45 to 1.146.57, and Gold lost another $5.50… As far as the Gov’t is concerned, the price manipulators did what they were supposed to do, and that is: Scare Gold holders into selling their positions… That way, they, the Gov’t, doesn’t have to worry about them going forward…  So, the dollar was still being bought, for whatever reason there may be, it’s got to be trumped up anyway, because with the amount of dollars that are being printed these days, there’s only one thing that could happen to the dollar and that is for it to go down…

Of course that’s where the PPT (plunge protection team) steps in and buys dollars to protect it from a big fall… But if you’ve noticed whenever the dollar gets propped up by the PPT, and the currencies lose value, it only takes them a relatively short period of time to return to the levels they traded at before the propping up began…  And that tells me this:  The propping up of the dollar is meant to start a trend for people to buy dollars, but since no trend is evident, then…. The overall trade for the dollar is to be sold…

So… Gold lost $5.50 yesterday to close at $1,789.60, and Silver barely hung on to the $24 handle, after losing 39-cents on the day to close at $24.01…  So, I would have to say that the price manipulators did achieve the Gov’t’s goal of scaring Gold investors into selling their positions… But not me! And probably not you… For we know that no matter what the price manipulators do, we’re not selling, period!

In the overnight markets last night… there’s been some recovery in the currencies and metals… The BBDXY, which closed yesterday at 1,146.87 is down this morning at 1,145.49. So, not a HUGE move, but a downward move nonetheless, which is something we hadn’t see this week so far. In the early morning trading in the metals, Gold is up $8.80 and Silver is up 27-cents. Of course yesterday morning these two metals were up in the early trading, but that didn’t stop the price manipulators and as I said above Gold lost $5.50 on the day… So, maybe, just maybe, cause you never know, Gold will be able to add to its early morning gains today! 

So, let’s go back in time… dodododododododo…  Before the Pandemic or BP… And I was telling you things like a large percentage of Americans didn’t have enough in savings to pay a $500 bill… Well, now skip ahead to today, and we have, probably, most of those same Americans having been out of a job for some time, and now are faced with eviction from landlords that are strapped for money too… Thee was a question that was asked about this, and the person wanted to know what the folks that had been receiving sums of money from the gov’t for being unemployed, but didn’t have to pay rent or mortgage payments, did with their money?  Well, I’m sure they would tell you that they still had to pay for groceries, medical bills, and what have you… But it’s still a good question to ask…

When you take out Gov’t spending from the GDP calculation, you don’t have much to speak of there… And most likely we would be at the same GDP rate that we had averaged for the last decade, which was 2.1%…  The Gov’t is getting ready to release the Kraken of deficit spending on us folks, and that’s going to keep GDP looking stronger, but we all know that it isn’t really…  Dave Gonigam had a great term for the upcoming deficit spending yesterday in his 5 Minute Forecast, when called it the “Spendapalooza”…   in my best Gomer Pyle voice, I’ll tell you what I think of this upcoming deficit spending… Shame, Shame, Shame…

And here’s where I’m going to let longtime friend, and publishing guru, and best selling author, take over with his thoughts on Freedom… Take it away Bill Bonner!

“Free people don’t “invest” their own, real money in unwinnable wars and jackass projects. They don’t bail out Wall Street. They don’t shut down a whole economy to fight a disease that poses a threat to relatively few. They don’t lend money to those who can’t afford to pay it back.

In theory, the freer the economy, the richer the people in it. They devote their entire energies to doing what they want… rather than to doing what others want them to do.

After all, that is what freedom is all about. Choices always need to be made. The question is: Who makes them?

In a free economy, people make the choices for themselves. They eschew the bad bakeries and go to the good ones. They drop losing investments, and put their savings into ones that pay a real return.”

Chuck again… yes, Bill always has a way to to explain things that everyone can understand… I took that from his Daily Diary that can be found at www.rogueeconomics.com  

You may recall me saying that about 8 years ago I wrote a Sunday Pfennig that was titled: Chuck’s Debt Solutions… And in my list of things that we as a country could do to stop the bleeding in deficit spending and get back to a balanced budge, I said that we should end all wars… the War in Afghanistan, the war on drugs, the war on poverty, and so on… So, once again Chuck and Bill are on the same page here… 

The U.S. Data Cupboard yesterday had the Job Openings, and they grew to 10.9 Million from 10.1 Million in June… So, like I said yesterday, there’s 10.9 Million job openings in the U.S. and 8.4 Million people unemployed… But apparently, a lot of potential workers that have been off of the job for sometime now, aren’t going to go back to the job they left… And apparently, a lot of potential workers have decided that they can live with one income in the house… And apparently a lot of potential workers have decided to open their own business…  And there’s more reasons why these two numbers aren’t meshing…

Consumer Credit (read debt) declined in July from June… June’s debt figure for consumers was $38 Billion, and July’s figure was just $17 Billion…  But that doesn’t make a dent in the overall indebtedness of the U.S., which is now at $86 Trillion, counting Gov’t, Corp, and personal debts… and that doesn’t take into consideration the Unfunded Liabilities that according to the Debt Clock are $156.3 Trillion… And that’s before the Spendapalooza gets its feet wet…

I recall one of the last times I was in Vancouver to speak it was about 5 years ago… I was sitting in the lounge area and talking to Jeff Clark and telling him that the total indebtedness of the U.S. had just reached  $50 Trillion!   So, in 5 years, we’ve added $36 Trillion… Who’s going to pay for that?

Today’s Data Cupboard has the usual fare on Thursday, which is the Weekly Initial Jobless Claims, which have been dwindling every so slowly, but I would think that they probably have hit a bottom because the Variants of the virus are really starting to slow things down again…

To Recap… The dollar buying continued on Wednesday, but in a watered down version of what went on Tuesday… The euro lost more ground, as did Bonds, and the metals… Gold lost $5.50 on the day, and Silver lost 39-cents to barely remain above the $24 handle…  Again today there’s not much in the way of data that could stop the dollar buying, so keep those hatches battened down! But in the overnight markets there has been some recovery in the currencies & metals, now let’s see if they continue to move higher VS the dollar today. 

For What It’s Worth…  Since I was talking about GDP above this morning, I saw this article and thought, why not? As it plays well with the thought of GDP falling…  Lola, or Goldman Sachs has reduced their forecast for 3rd QTR GDP a 3rd time! And that article can be found here: Goldman Cuts Its US GDP Forecast For The Third Time In The Past Month | ZeroHedge

Or, here’s your snippet: “It’s official: while Q2 was the best quarter for the economy in decades, in Q3 it is now widely accepted that as we wrote a month ago, the wheels came off as a result of a “sudden negative change.”

One doesn’t have to look too hard to find out why: between Friday’s catastrophic jobs report, the near record plunge in consumer confidence, the sharp contraction in retail sales where reports have missed expectations for 3 months in a row, whether it is due to the end of stimmies or the recent restrictions from the Delta variant, one bank after another took a machete, or in the case of Morgan Stanley, a nuke to their GDP Q3 forecast, with he bank on Thursday cutting its Q3 GDP to just 2.9% from 6.5% previously.

It got so bad that the NY Fed on Friday unexpectedly announced that it was suspending its GDP Nowcast tracker, as the underlying numbers had gotten so bad volatile, the central bank’s economists were ashamed to use them for analysis as the product would have been ugly for the Biden admin:

“The uncertainty around the pandemic and the consequent volatility in the data have posed a number of challenges to the Nowcast model. Therefore, we have decided to suspend the publication of the Nowcast while we continue to work on methodological improvements to better address these challenges.”

But while the U.S. central bank can pretend away bad numbers as if they simply don’t exist – or are “too volatile” – especially if their discussion would impair the fake recovery narrative said central bank is busy constructing, investment banks don’t have that luxury, and late on Monday – with the U.S. on holiday – Goldman did precisely what we said it would do last week, and in a note titled “A Harder Path Ahead” published by its economics team, cut its Q3 GDP forecast for the third time in the past month. As a reminder, this is how Goldman reached the “startling” conclusion that the U.S. economy was headed for a brick wall, which we first revealed to our readers back on August 13 when we said that “A Sudden Negative Change In The Economy”, something the big banks would then proceed to realize in the coming days…”

Chuck Again… nothing more to add here, I just keep telling you that the data prints continue to disappoint and not meet expectations, and when it all adds up… you get a slower economy than the powers that be will allow you to think about…

Market Prices 9/9/2001: American Style: A$ .7370,  kiwi .7117, C$ .7881, euro 1.1830, sterling 1.3814, Swiss $1.0873, European Style: rand 14.1488, krone 8.6895, SEK 8.6100,  forint 296.35,  zloty 3.8312,  koruna 21.4716, RUB 73.28, yen 109.93, sing 1.3447, HKD 7.7773, INR 73.49, China 6.4606, peso 19.90,  BRL 5.2275, BBDXY 1,145.49, Dollar Index 92.55,  Oil $69.82, 10-year 1.33%, Silver $24.28, Platinum $986.00, Palladium $2,335.00, Copper $4.23, and Gold… $1,798.40

That’s it for today… And this week of course, no worries there won’t be any real economic data dur to print tomorrow… It has been a tough week for the currencies & metals…  Buying opportunities, remember buying opportunities… What would the Cardinals do, or where would they be in the standings this year without Adam Wainwright? Adam turned 40 last week, and he went out and pitched 8.1 Innings last night as the Cardinals stopped their losing streak at 4 games… And now Adam has announced that he’s going to comeback next year… He and his catcher Yadier Molina have started 301 games together… I doubt we’ll ever see that number reached by another duo ever!  I sat outside to watch the game with neighbor Paul last night, he brought me some homemade cookies that I informed him I couldn’t eat… And that I hadn’t had a cookie for almost a year now… OK.. Day game at Busch today, and you know me… I love day baseball games! After watching the Dodgers lineup for 3 games now, I can see why they are 36 games over .500!  They are relentless! Ok… The Doobie Brothers take us to the finish line today with one of my fave songs from thee: Another Park Another Sunday…  Don’t know that one? Go to YOUTUBE and put that title in, I’m sure it will become one of your faves too! And with that, I hope you have a Tub Thumpin’ Thursday today… And please…. Be Good To Yourself!

Chuck Butler

Have The World’s Investors Gone Stark Raving Mad?

September 8, 2021

* An ugly day on Tuesday, as the price manipulators were out… 

* 10.1 Million job openings, and 8.4 Million unemployed… where’s the problem? 

Good Day… And a Wonder Dog Wednesday to you! I don’t know where to begin to describe my hatred for price manipulators today… So, I’ll try to talk about something else for now… You know me, right? I truly believe in each person having the right to decide what goes in their bodies… Did you know that the ACLU (American Civil Liberties Union) the folks that fight for our civil liberties, have decided to stop fighting for our civil liberties, and fight for vaccine mandates? They, the ACLU doesn’t see any civil liberties problems with their stance on vaccines…  Now, that’s gotta make you wonder, what in tarnation is going on in this country? Foghat greets me this morning with their song: Fool For The City…

Well… sad to have to say this, but it was “one of those days” for the currencies and metals…  OK, I’m going to say something here that I have no proof of. I’ve just put two and two together, which in my book still equals 4, and the woke people can call me a white supremist because of that, I don’t care. It’s what I was taught… I’ve put together my thoughts on price manipulation through the years and used the WikiLeaks cables that go back to the 70’s regarding the U.S. Gov’t’s needing to diss Gold to protect the dollar.  I feel that the U.S. Gov’t basically is behind all price manipulation… They don’t do the dirty deed themselves, but they give the wink and nod to the Casino Banks to do the dirty work, and in return the Gov’t won’t prosecute them for price manipulation…

So prove me wrong on that scenario…

OK, so the dollar was bought by the bushel full yesterday… The BBDXY which began the day at 1,143.47, closed the day at 1,145.45…  The euro fell like a rock thrown from a cliff… And Gold? Well the price manipulators weren’t happy until they took nearly $29 from Gold’s price, and 39-cents from Silver’s price… It was a very ugly day for non-dollar investors… And then the ugly day turned even uglier when my beloved Cardinals lost again to the Dodgers… OK, back to the markets…

I have nothing more to add to what I’ve already said about price manipulation, which was so evident in yesterday’s trading that a blind man would be able to point it out… But… the silver lining here is that for investors wanting to buy Gold, they have an excellent buying opportunity after the price manipulators did their dirty deed yesterday… Dirty deeds, done dirt cheap! (AC/DC)

In the overnight markets last night… After all the dollar buying yesterday, the overnight markets, of which had started the dollar buying the night before, were plum tuckered out, but the dollar continued to move higher throughout the night. The BBDXY is 1,146 this morning, up from the close yesterday.  Believe or don’t, but Gold is up $5.60 and back to $1,800 in the early trading today, while Silver has gained 7-cents. Gold’s rise in the early trading has to be people taking advantage of the cheaper price, like I talked about above… 

All of the gains that the currencies put on their values last Friday have now been wiped out, with the only currencies holding to their gains being the Chinese renminbi and the Sing dollar… Of course I’ve explained the relationship of these two many times in the past so I won’t get into that again. Wait, What? You want me to explain it again? Really? Haven’t I bored you with that explanation many times before? OK, OK, here it is… 

The Sing dollar has had a history of staying in line with the Chinese renminbi, because they are in competition for exports, and Singapore can’t have the renminbi getting strong or weak without them following suit…  Now… aren’t you glad you pleaded with me to go here? 

OK… well I went out on a limb… I don’t have to find limbs that are so big any more… But I digress… I went out on a limb with a couple thoughts this morning…  Oh, believe me when I say that , I have more of these kinds of thoughts than you can shake a stick at… Most of them are reserved for the Butler Patio…

Speaking of the Butler Patio… we had it resurfaced this past spring, and it looks marvelous once again, so you can come barefoot or wear sandals, or flip flops, or sneakers, whatever footwear you choose, just make sure you bring a notepad, and a pen or pencil, because you’re not going to want to forget anything I talk about…

Silly stuff, I know, but you have to have some levity along with the serious stuff, or else I would be called the new “Dr. Gloom & Doom”…   

Well, I talked yesterday about the deficit spending programs that are on the docket waiting to be implemented… And I don’t think I explained what’s going to happen clear enough, so here’s my second try…  Congress is going to do everything under the sun and moon to get these deficit spending programs going by year end…  And, no wait, I’ve got to back up here…  The U.S. finances their deficit spending by selling Treasuries, and for months now, the Fed, I mean Cartel has been the major buyer of these Treasuries that have needed to be sold to finance all our deficit spending… And now, the Cartel tells us that they plan to Taper their Treasury purchases starting by year-end…

Now that’s two forces going against each other, which most times cause a HUGE EXPLOSION… And I don’t think this time will be different, that is, unless The Cartel decides to kick the Taper can down the road…  You see, where I’m going with this? The Cartel wants to taper, but Congress is going to make it so they can’t, and the Cartel’s Balance Sheet will continue to grow larger…  One day, the rest of the world is going to wake up and smell the coffee, folks… And when they do…  the dollar will be like Wiley Coyote, when he runs off a cliff…

So the Cartel will be just like Congress, who keeps kicking the debt can down the road… Credibility? The Cartel will have none left, but that won’t stop them from kicking the Taper can down the road, folks… 

And here’s something that I doubt you’ve heard about… European Junk bonds are now paying negative interest for the first time ever!  Here’s the good folks at GATA explaining what’s going on: “Investors in European junk bonds have begun accepting interest payments that are lower than eurozone inflation levels for the first time ever, in the latest sign that central banks’ crisis-era debt purchases have shifted the balance between risk and reward.

The yield on ICE BofA index of European high-yield bonds was pushed down to 2.34 percent this week, marking the first time buyers of so-called high-yield European currency bonds have accepted payments below consumer price inflation in the eurozone, which hit a decade high of 3 percent in August.”

Chuck again… Well, you what this tells me? That the world’s investors have gone stark raving mad! They call these bonds “Junk bonds” because their issuers aren’t exactly credit worthy, and their interest that they pay should reflect a “risk premium” to the buyers of the junk bonds… But that’s clearly not what we’re seeing here and it just proves to me that investors have gone crazy…

And then there’s this from the Data Cupboard today… 10.1 Million job openings in the U.S. and there are 8.4 Million people unemployed…  But yet only 240,000 jobs were filled last month… If you’ve got about 10 minutes to spare today, there was a good article on the Washington Post site that goes into detail what’s going on here…  you can find it here: Why America has 8.4 million unemployed when there are 10 million job openings – The Washington Post

The Data Cupboard today is basically empty of real economic data…  We will see the Cartel’s Beige Book, which rarely tells us anything… And Consumer Credit (read debt)… And that’s it!

To recap… The price manipulators had a field day yesterday takin down the currencies and metals. It was a very UGLY day for non-dollar investors… Chuck gives us his thoughts on how the price manipulation operates, and then gives us the silver lining for the day… Chuck is also a Big Fan of Civil Liberties… They’ve been taken from us ever since the cowardly attack on us 20 years ago this Saturday… Remember the Patriot Act? I digress here… There’s really no data to look at today, so there could be more dollar buying… Batten down those hatches!

For What It’s Worth….  Longtime readers know that I just don’t think that the Bitcoins of the world are going to be around forever like Gold has… China has already basically outlawed the digital currencies other than their own… Well, this came to me from the good folks at GATA and they took it from the NY Times, which you would have to have a subscription to read… But I have some of it here for you, and it can be found here: Crypto’s Rapid Move Into Banking Elicits Alarm in Washington – The New York Times (nytimes.com)

Or, here’s your snippet: “BlockFi, a fast-growing financial start-up whose headquarters in Jersey City are across the Hudson River from Wall Street, aspires to be the JPMorgan Chase of cryptocurrency.

It offers credit cards, loans, and interest-generating accounts. But rather than dealing primarily in dollars, BlockFi operates in the rapidly expanding world of digital currencies, one of a new generation of institutions effectively creating an alternative banking system on the frontiers of technology.

“We are just at the beginning of this story,” said Flori Marquez, 30, a founder of BlockFi, which was created in 2017 and claims to have more than $10 billion in assets, 850 employees, and more than 450,000 retail clients who can obtain loans in minutes without credit checks.

But to state and federal regulators and some members of Congress, the entry of crypto into banking is cause for alarm. The technology is disrupting the world of financial services so quickly and unpredictably that regulators are far behind, potentially leaving consumers and financial markets vulnerable.

In recent months, top officials from the Federal Reserve and other banking regulators have urgently begun what they are calling a “crypto sprint” to try to catch up with the rapid changes and figure out how to curb the potential dangers from an emerging industry whose short history has been marked as much by high-stakes speculation as by technological advances.”

Chuck again…  Ok, take what you saw happen to the Gold price yesterday, and then add in my explanation as to how that happens, and you’ll come to the same place I am with these digital currencies… The U.S. is going to issue their own digital currency, and I just can’t see them allowing other digital currencies to be in competition with their own digital currency… It just doesn’t make sense to me that the Gov’t would allow competition to their 1. Dollar, and 2. Own digital currency…

Market Prices 9/8/2021: American Style: A$ .7376,  kiwi .7105,  C$ .7896, euro 1.1822, sterling 1.3769, Swiss $1.0855, European Style: rand 14.2880, krone 8.6801, SEK 8.6047,  forint 296.02,  zloty 3.8189,  koruna 21. 4725, RUB 73.16, yen 110.29, sing 1.3450, HKD 7.7763, INR 73.48, China 6.4608, peso 19.91,  BRL 5.1690, BBDXY 1,146.08, Dollar Index 92.65,  Oil $69.32, 10-year 1.34%, Silver $24.47, Platinum $1,010.00, Palladium $2,454.00, Copper $4.19, and Gold… $1,800.80

That’s it for today… Another wordy letter for sure, but I seemed to have a lot to say today, so why save it for tomorrow… Today is all that’s promised to us… I actually got my iPad out last night, and tuned in to the Cubs game with Cincy, as my TV had the Cardinals on… The one time I was actually rooting for the Cubs to beat Cincy, they lost… I must have jinxed them! I sat outside for most of the game last night, and had to grab a hoodie as the temperature cooled to much for my liking… I keep my Cardinals hoodie close at hand because most of the time I need it as I get too cold in the house!  I basically live in the basement where my writing desk is, my large TV, my recliner, and bar are…  And it remains cool in the basement year round… Jack Johnson takes us to the finish line today with his song: Flake  I’m sure some of you are calling me that after my journey out on the limb today… But that’s OK, with me, just keep your opinions of me to yourself! HA!  I hope you have a Wonder Dog Wednesday, and please…. Be Good To Yourself

Chuck Butler

Traders Begin To Button Up Their Books Ahead of The Holiday Weekend

September 2, 2021

* currencies & metals turn their negative performance into a positive one on Wednesday!

* Ohio enacts law to prevent taxing money! 

Good Day… And a Tub Thumpin’ Thursday to one and all! This will be a 4 day holiday weekend for yours truly, and many of the senior traders in NYC, as they head to the Hamptons for the last holiday weekend of the summer… I’m really bummed out that I will not be hosting our annual Labor Day BBQ Party this weekend… But like I said previously, I’m still going to make the Big Green Egg work overtime this weekend… My beloved Cardinals, after taking the first game of the doubleheader, laid a big fat egg in the second game and got smoked by the Reds… The Cardinals still won the series and picked up a game on the Reds for the 2nd Wild Card spot…  Kathy had something to say about the Cardinals’ chances to make the playoffs when she said, “They shouldn’t make the playoffs they aren’t good enough”… I was going to explain about getting in and getting hot, but decided to let that statement go, for she was correct!  Todd Rundgren greets me this morning with his song: I Saw The Light…

Well, didn’t I tell you yesterday that the folks calling the number of jobs created and reported by ADP were “so-called experts”? As you may recall I said that the so-called experts were calling for 600,000 jobs to be added in August… Well, like a ball that gets pitched and goes to the backstop… They were just a little outside with their call… The actual number of jobs added in August was 347,000, which at any other time would be hailed as great… Just not this time, because it missed the 600,000 number by a wide margin… Which is the point I was making the other day, when I said that most of the Data Prints in the U.S. have been disappointing and missing the expectations…

So, the rotten news on jobs added, carried over to the currencies and metals, with the dollar getting sold after starting the early trading getting bought… The move lower for the dollar was reined in at the close, but it still showed a loss on the day. The BBDXY which began the day at 1,146.31 ended the U.S. session/ day at 1,144.60…  For those of you keeping score at home with the old Dollar Index, you’ll want to show that the D.I. started the day at 92.63 and ended the day at 92.44…  The euro gained ground on the dollar on the day, and so did the Aussie dollar (A$)… And Gold & Silver turned around their negative numbers on the day, with Gold gaining 50-cents to close at $1,1815.60 and Silver gaining 24-cents to close at $24.22….

The euro traders were somewhat concerned about next week’s European Central Bank (ECB) meeting … So, the euro traders were not going to push the envelope too far and capped the euro’s gain at 1.1850… 

Speaking of the ECB… what on earth are they going to say and do when they meet next Thursday? Inflation, as reported earlier this week, is rising quickly, and they can’t allow inflation to grab hold of their economy… That is if they don’t want to face the crowds outside their building that came carrying pitchforks, and hoes…  Which I might say, if you don’t mind, the citizens of the U.S. should begin to think about doing at the Eccles Building, where the Cartel meets… I’m not inciting a riot… Just thinking that people of the U.S. should be asking the questions that cause the cheese to bind in the Cartel members…

Consumer prices in the Eurozone, increased by 3% this month from a year ago, if confirmed in a few weeks’ time, it would represent the highest inflation reading for 10 years.

This comes after Germany reported on Monday its highest consumer prices since 2008, with a headline inflation rate of 3.4% in August. France also reported its highest inflation rate in nearly three years on Tuesday.

So, it’s clear to me that the ECB needs to do something at this meeting otherwise…

If it weren’t for the Plunge Protection Team (PPT) keeping the dollar afloat, we would see the dollar getting sold like funnel cakes at a State Fair… Because… you don’t keep printing a currency and expect that debauching the current stock of currency won’t happen… It will happen eventually, when everyone and their brother realize that their currency is worthless…

In the overnight markets last night… there’s been little to no movement in the currencies & metals… I think traders are looking at the end of this week and cringing… On Friday the U.S. will have their Jobs Jamboree, and there won’t be a senior trader at their respective desk to trade off the data print… And then there will be 3 days to allow the data to digest, and there could be a lot of pent up frustration at the opening on Tuesday morning. 

Gold & Silver are flat this morning… The euro hasn’t budged off of 1.1850, and everything else is looking tired and wanting to go home…  Except that is the price of Oil… I don’t get what’s going on in Oil… Our friends (NOT!) at OPEC want to ramp up production, and the price of Oil rises?  The Delta variant of the COVID virus is spreading, giving off fear of new mandates, and the price of Oil rises?  Oh, well, any price increase in Oil helps the Petrol Currencies and so, other than paying outrageous prices for gas at the pump… The Oil price rising just shows inflation is strong… 

Ok, reading the 5 Minute Forecast like I do every day, I came across a story that Dave Gonigam put out that he called a “Lehman moment for the world’s second largest company”…  Here’s a snippet from the 5…

“So screams a headline at Zero Hedge about the impending default of China’s second-largest property developer Evergrande Group. Or as Ben Hunt of Epsilon Theory puts it: the “story no one is talking about.”

Chuck again… I guess we’ll see if the Chinese Gov’t will step in and bail out Evergrande Group… Or, will they allow them to fail and cause ripples to go through the Chinese markets, and hope that it doesn’t create a meltdown like the failure of Lehman Brothers did back in 2007…

You know me… I say if a corporation gets into deep and can’t get out that they should fail, and move on… There’s no need to have Zombie Corporations all over the place like we have here in the U.S.

I know that many of you Gold owners are growing tired of waiting for the big move upward in Gold’s price, and are thinking that you might take your profits and run…  Well… that would be the U.S. or Western way of dealing with Gold… In the East they view Gold as a store of wealth, and not a commodity that gets bought and sold on a whim…  I truly believe that when the U.S. and the rest of the West migrates to the Eastern way of dealing with Gold, that’s when we’ll see a true upward movement toward the bandied about prices of $4,000, and $5,000 and even $10,000…

Last May I wrote about how I viewed what was going to go down in the future for a lot of countries that had amassed great amounts of debt and had no idea how they would pay them down without defaulting on the debt… And that would cause a HUGE devaluation of their respective currencies, and that Gold would be the beneficiary of these defaults… I told you then that this was not something that I saw happening next week, or next month, or even next year, and that there would still be time for currencies to gain VS the every growing amount of dollars. But it was something that I had thought about a great deal, and would see it come to fruition eventually…

So, my thought last May was if in the end the beneficiary is going to be Gold, wouldn’t it be wise to buy Gold now before this all blows up on the markets and the currencies?  You know like the TV Commercial where they say, “Set it and forget it”… I say buy it and forget it…

You buy fire insurance in hopes that you never have to use it, right? You buy accident insurance for your car, in hopes that you never need to use it, right? You buy health insurance in hopes that you never need it, right?  Then I don’t understand why people don’t buy Gold as insurance VS a devalued dollar…

I’ve spent an inordinate amount of time talking about Gold this morning… Let’s move on to something else…

Yesterday, vehicle sales for August were supposed to print, but didn’t…  Have you driven by a Car Dealership recently? Did you see any cars in their lots for sale?  Car Dealers are moaning and groaning about the lack of new inventory and without inventory they have nothing to sell, and if they have nothing to sell, they can’t make the mortgage payments on the building and lot… Uh-Oh…  This lack of cars is troublesome to me folks…  As I watched the baseball games yesterday, I wondered out loud why Toyota was still running commercials saying they were having a sales event, when we all know they don’t have many cars to sell…  I guess the powers that be decided to not print the Vehicle Sales for August numbers, because they’re so awful they don’t want to scare investors into thinking that this isn’t good for the economy, which isn’t good for the stock market, which isn’t good for investors!

The backlog of cars is all being held hostage by the Chip makers…  The supply distribution chain is so screwed up right now that I read that a Taiwanese chip maker is going to open a factory here in the U.S. for Chips…. 

Or… I shudder to think of that this could happen, what if… China is holding back the chips for the cars to prove a point to the U.S.?  A real trade war could be the result, and since we don’t really manufacture stuff here in the U.S. any longer, I feel as though China would win that war, and then what’s next? Global rule? I shudder to think of things like…  Got Gold?

Today’s U.S. Data Cupboard has some interesting data prints for us to eye… First up is the usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims, and that will be followed up by 2nd QTR Productivity, and 2nd QTR Unit Labor Costs, and then we wrap this all up in a nice pretty bow with the July Factory Orders data… 

To recap…  The ADP Employment Report was disappointing as it didn’t come close to meeting expectations of 600,000 jobs added. Only 347,000 jobs added was the actual number, and that disappointment caused Gold & Silver to turnaround their negative performances so far on Wed, and bot ended the day up, albeit small amounts, but up not down. The currencies rallied VS the dollar on the disappointment, but the euro’s gains were capped by traders that fear what the ECB will do when they meet next week.  Chuck talks a lot this morning about Gold… So you won’t have wanted to miss that!  And the Vehicle Sales data for August was AWOL… or did the powers that be decide it was too risky to print? Only the Shadow Knows!

For What it’s Worth…  OK, since today is the start of a long holiday weekend for me, and probably a lot of you, I wanted a “feel good” story to end the week, and I think I found one… This is an article about how the Gov for the state of Ohio signed into law a bill that will exempt Gold & Silver from taxes… And then there’s the really good part that you’ll have to go to the article to read or get it below in the snippet. The article can be found here: Signed as Law: Ohio Takes Step Toward Treating Gold and Silver as Money – Activist Post

Or, here’s your snippet: “Ohio became the 41st state to eliminate sales tax on gold and silver bullion. Repealing sales taxes on precious metal bullion takes a step toward treating gold and silver as money instead of commodities. Taxes on precious metal bullion erect barriers to using gold and silver as money by raising transaction costs. As Sound Money Defense League policy director Jp Cortez testified during a committee hearing on a similar bill in Wyoming in 2018, charging taxes on money itself is beyond the pale.

“In effect, states that collect taxes on purchases of precious metals are inherently saying gold and silver are not money at all.”

Imagine if you asked a grocery clerk to break a $5 bill and he charged you a 35 cent tax. Silly, right? After all, you were only exchanging one form of money for another. But that’s essentially what Arkansas’ sales tax on gold and silver bullion does. By eliminating this tax on the exchange of gold and silver, Arkansas would treat specie as money instead of a commodity. This represents a small step toward reestablishing gold and silver as legal tender and breaking down the Fed’s monopoly on money.

“We ought not to tax money – and that’s a good idea. It makes no sense to tax money,” former U.S. Rep. Ron Paul said during testimony in support an Arizona bill that repealed capital gains taxes on gold and silver in that state. “Paper is not money, it’s fraud,” he continued.”

Chuck Again…  Ron Paul is correct… the paper currency in your wallet or pocket, is fake…  And I’m so glad that Ohio has taken these steps to bring back Gold & Silver as money… Now… what’s taking the rest of the states so long to follow?

Market price 9/2/2021: American Style: A$ .7385,  kiwi .7090,  C$ .7932, euro 1.1850, sterling 1.3790, Swiss $1.0916, European Style: rand 14.3460, krone 8.6840,  SEK 8.6036,  forint 293.49,  zloty 3.8034,  koruna 21.4296, RUB 73.08, yen 110.00, sing 1.3439, HKD 7.7725, INR 72.94, China 6.4610, peso 19.97, BRL 5.1595, BBDXY 1,143.83, Dollar Index 92.44,  Oil $68.97, 10-year 1.29%, Silver $24.23, Platinum $1,002.00, Palladium $2,536.00, Copper $4.21, and Gold… $1,815.90

That’s it for today, and for 4 days for me!  What a beautiful day yesterday turned out to be… A real Chamber of Commerce day here in St. Louis…  It was like August and heat is over, now we turn to Sept and get warm days, cool nights, and mornings… YAHOO!  I’ve always said that the fall weather is the best weather that we experience here in St. Louis… And it’s not even fall yet! By the time we talk again, dear reader, my beloved Cardinals will have kept in the Wild Card race or bowed out… I’ll be Ok with either outcome… As soon as their season ends, the folks at Roger Dean Stadium will be contacting me about my spring training season tickets… That always gets me revved up!  Sat outside watching the games yesterday with neighbor, Paul, of whom I hadn’t seen or talked to in over a month! The High School that my oldest son, Andrew, teaches at, (Lindbergh High) will have their first football game of the new season tomorrow night. Lindbergh is a public school that doesn’t recruit athletes, so they have to scramble to keep up with other schools, and they do a darn good job of it too!   And College Football begins this Saturday! My Missouri Tigers should be improved this year… Go Tigers! Ok… my favorite Earth Wind and Fire song takes us to the finish line today as they sing: September… Now if that song doesn’t get you dancing in your chair, nothing will! I hope you have a Tub Thumpin’ Thursday today,and please be careful this weekend…  and Please Be Good To Yourself!

Chuck Butler