Traders Get The Memo That Inflation Is Soaring!

July 15, 2021

* Currencies & metals both rally on Wednesday… 

* Is the Empire of Debt ready to come crumbling down? 

Good Day… And a Tub Thumpin’ Thursday to you! What a day yesterday! The sun was out, the sky was blue, the temps were hot, and we had visitors! When Darling daughter, Dawn, was in college, she met a young lady from Chicago, named Kat… Dawn and Kat were inseparable for those years, and Kat became one of our family, staying with us very often, instead of going home to Chicago. Columbia is only two hours down the road.  Well, Kat is all grown up now, married and has two little boys, and they came to visit us! I loved seeing Kat again… And her boys? Well they left here tired and ready to sleep, we had worn them out, in the swimming pool!  Tom Petty and the Heartbreakers greet me this morning with my fave song by them: Last Dance With Mary Jane…

It was quite a day for the currencies and metals too on Wednesday…  The dollar got sold and the currencies rallied all day long, along with Gold & Silver, that for once in a Blue Moon didn’t see arms full of short paper trades show up at the COMEX…  The BBDXY which the previous day had closed at 1,147, ended Wednesday at 1,141.71…  So, up by a major amount on Tuesday and back down by a major amount on Wednesday…  Apparently currency traders don’t have a clue as to what to do these days…  The euro rose into the 18 handle and Kiwi kept the pedal to the metal after the Reserve Bank of New Zealand announced that they were ending their bond buying…

Talk about up one day and down the next… The price of Oil yesterday traded with a $75 handle, and this morning it’s dropped to $71! Come on Oil traders make up your minds!

And Gold…. Well it was up $20 on the day to close at $1,828.30, and Silver was up 27-cents to close at $26.33…  I guess investors got the memo that inflation is soaring, and there’s not a thing the Fed can do about it at this point…  So… the question is this… How much higher can inflation rise before the Fed does address it? 

Yesterday I said that the year on year increase in inflation was 5.4%… Bill Bonner added:” talking about the year-to-year rate. The actual increase from May to June was 0.9% – the biggest one-month increase in 13 years.

If that were to continue, it would put the inflation rate over 10% for the year.” – Bill Bonner in his Diary… 

Remember what I told you yesterday about the stupid CPI? And that if they are saying inflation is running at an annual rate of 5.4%, then the actual number is probably around 7.5%…   Well, even my estimation is going to be off!

There’s something happening here…. What it is ain’t exactly clear…  Well, the only reason it ain’t clear is that the Fed and Government keep telling us it doesn’t exist, and that it will go away… I’m talking about inflation here… It’s all around us, and yet, we keep hearing the authorities tell us not to worry, that it’s just phase…  You know, like I used to have to tell myself when one of my teenage kids decided to go a different route… “It’s just a phase”, and not to make a big deal out of it….  But this is different, in that it’s not going away, it’s not just a phase, and its eating away at your buying power, while the Fed fiddles away while Rome burns….  

In the overnight markets last night…. I tell you… This is driving me nuts, and I need a vacation! Last night the dollar recovered a bit , with the BBDXY rising to 1,143, from its close in the U.S. of 1,141… All of the currencies have slipped from their levels of yesterday, and once again this is a case of traders being dolts…  I’m just saying…   

Gold & Silver are basically flat, to down a bit in the early trading today. Silver is up 2-cents, and Gold is down $3… So, no real direction indicated in the early markets today… I guess the data might have something to do with the direction, but then you never really know what’s going to excite the traders… 

The end of the Empire is near folks… I’m not talking about the guy with the sandwich board walking around saying the “end is near”…   I’m talking about the U.S. being an Empire that is number 1 in the world…  And we only have ourselves to blame for this… I strongly suggest you read a book by Bill Bonner and Addison Wiggin, titled: Empire of Debt… The book is about 15 years old, but sill holds true today, with the only caveat that now, we’re even closer to the end of the Empire…   I say we’re to blame because we allowed our Congress to keep deficit spending when we all know that we knew in our heart of hearts that you can’t keep kicking the debt can down the road forever!  And while they were deficit spending, nothing was going wrong, and that gave everyone a false sense of security… But eventually the good times come to an end, and you have to pay the piper… 

We’re getting closer to the culmination of all that bad stuff I wrote about over a year ago… Defaults, digital dollars, and a different financial system…  So, I have one question to ask you? Got Gold?  Oh, and one more question… What have you done since that time that I warned everyone the direction we as a country were heading, to protect your wealth? 

Ok… So, I hear that the Gov’t is going to spend another $5 Trillion on infrastructure… Oh, I’m sure that there are plenty of bridges and roads that need repair, but isn’t that a local problem not a Government problem?  All I know is this… that of that $5 Trillion, none of it will come from tax receipts, because those have all been used up, and that I would be a shiny quarter that there will plenty of “pork” in this deficit spending debacle…  Someone is going to grease their pockets, big time, folks… and maybe even more than one someone…

And to repeat… that’s money that will have to printed…  So, $5 Trillion more dollars to help dilute the already Trillions of dollars out there, I don’t see how the dollar can hold onto its value with that kind of dilution, do you?  Oh, I know the PPT as the Exchange Stabilization Fund (ESF) that has a treasure chest of funding to support or prop up the dollar, but at some point it will become a loss leader to prop up the dollar and the support will go away… 

The U.S. Data Cupboard yesterday has the June PPI (wholesale inflation) and it was up much greater than expected at 1.0% for the month… Annualized that’s producer increases of over 10%…  And we’re just getting into these producer price problems folks… A dear reader sent me a letter from his steel provider, and in the letter the Steel Company told their clients that steel prices have jumped by 30%, and that their prices would increase by 20% starting 9/1/2021….  

See how that works… the producer sees price increases and they pass them onto the customers… So, expect higher inflation going forward, folks…

Today’s Cupboard finally has some real economic data in Industrial Production and Capacity Utilization for June… In addition we’ll also see the usual Thursday fare of Weekly Initial Jobless Claims…

You know I don’t see how the economy is going to get back to “normal” with all these businesses reporting that they can’t find enough labor to keep their businesses going… People just don’t want to work any longer… They’ve grown accustomed to the stimmy checks I guess… I told you that when the first of these stimmy checks went out that it was setting a bad precedence, and look what’s happened since… Another one, and another one, and pretty soon there will be calls for more… if you give a mouse a cookie…. 

To recap… The currencies & metals had good days yesterday, with no sign of price manipulation on the day! Chuck thinks that traders finally got the memo that inflation is soaring… In the overnight markets

 Chuck really gets into inflation today folks, so make sure you didn’t skim over it and go back and read it!  And then he goes on to explain how the Empire of Debt (the U.S.) is about to come to and end, not like the guy with a sandwich board that says the end is near, but an end of their deficit spending… And yesterday’s PPI print showed that wholesale inflation is soaring and that means that prices increases will be passed onto the consumer…

Yesterday, I talked about the PBS program Frontline, where the people responsible for the program, took aim at the Fed for their policies that have really only helped the rich…  Well, last night, good friend, Dennis Miller of www.milleronthemoney.com sent me a link to the program and so I am going to give that link to you dear reader, so you can watch in your spare time… The program is 53 minutes long, so make sure you allot enough time… it can be found here: The Power of the Fed (full documentary) | FRONTLINE – YouTube

For What It’s Worth…  Well, this may be a sign of the times, folks… This comes from my local paper, the St. Louis Post Dispatch, and it highlights the lack of workers in sanitation… So, why go through the effort of separating recycling and regular trash?  This article can be found here: Labor shortage slams St. Louis trash pickup and many other city departments | Politics | stltoday.com

Or, here’s your snippet:” ST. LOUIS — The city is throwing out recycling with the trash in an effort to catch up on routes, a sign of broader struggles from being short hundreds of civil service employees.

“Physically, my workforce had no more to give,” Refuse Commissioner Todd Waelterman said of the cutback. “That is why this week we are mixing these two together.”

The roll carts are being recycled as usual. He said it’s the alley dumpsters, which 80% of city residents use to recycle, that are being mixed. That saves a pickup route.

“That recycling is all fluffy and light unless you load it up with a lot of beer and wine bottles,” he said.

Like in many other cities, St. Louis employers need more workers. Local officials said summer vacations, holidays, competition and fallout from COVID-19 have contributed to the shortage.

Waelterman said the Refuse Division was short on people even before the pandemic. The division has 146 full-time positions allocated; 30 are vacant, and a dozen part-time positions are open. Most of the vacancies are heavy equipment operators who drive trucks that pick up garbage. Others do bulk pickup.

In 2018, trash problems stemmed from the city’s garbage trucks breaking down. The city has since bought or leased-to-own 40 trucks and has five more ordered. Now, the city is struggling to find people to drive and load them.  “

Chuck again… I’m glad to read that their worker shortage began before the pandemic… As I’ve said a few times previously, that the U.S. economy was going down the tubes before the pandemic hit, and then it got worse, but when people say we need to get back to where we were before the pandemic, they don’t know what they’re talking about, because we, as a country and its economy, were sucking wind then!

Market Prices 7/15/2021: American Style: A$ .7441,  kiwi .6995,  C$ .7975, euro 1.1809, sterling 1.3861, Swiss $1.0905, European style: rand 14.5593, krone 8.7911, SEK 8.6670,  forint 304.34,  zloty 3.8731,  koruna 21.6667, RUB 74.15, yen 110.00, sing 1.3543, HKD 7.7672, INR 74.48, China 6.4674, peso 19.94, BRL 5.1224, BBDXY 1,143.57, Dollar Index 92.54,  Oil $71.94, 10-year 1.33%, Silver $26.35, Platinum $1,140.00, Palladium $2,635.00, Copper $4.23, and Gold… $1,825.30

That’s it for today… And for tomorrow and for two weeks… The next time I’ll write to you will be Monday, August 9th…  How will you be able to get through the day for over two weeks without a Pfennig?  Well, I have a suggestion…  When you have Pfennig pangs, simply go to: www.dailypfennig.com and read an old article!  Hey! I had to do some real negotiating to get that URL to follow me to Aden Research, folks, so put it to use!  For those of you on Twitter, you can find me at ChuckOButlerjr or just put my name in the search and find me… like I said yesterday, I might Tweet something while I’m gone, if something happens that is crazy, and then I might not… You never know! I was thinking last night that, you know how the currencies & metals always gain while Chuck is away? Well, maybe yesterday’s price action is the markets getting ready for my absence?  HAHAHAHAHA! As IF!  Man it was great to see Kat yesterday… The last time I saw her, I had stayed at her house In Columbia, Mo after a football game in Sept 2014! YIKES! That’s too long!  Well… I have my favorite Neil Young song spooled up to play at the finish line today… Harvest Moon…  Neil Young has so many songs that I like, but this one always seems to get to me…  I hope you have a Tub Thumpin’ Thursday, and Fantastico Friday tomorrow, and for the next two weeks please promise me that you will Be Good To Yourself!

Chuck Butler

 

 

 

New Zealand To End Bond Buying Program!

July 14, 2021

* Currencies get sold on Tuesday

* Strong inflation puts the dollar on the run in the overnight markets! 

Good Day… And a Wonderful Wednesday to you! The MLB All-Star Game was last night, and being a National League guy, I was hoping the NL would be able to stop the AL… But that didn’t happen, as the AL took an early lead, added to it later, and won the game… again! When I was a younger man, the NL won every year it seemed… But no more…  No rain yesterday for us here in the middle of the country, and starting today, we should have some regular summer weather here without rain, that is until Friday… Which means I won’t be having a driveway happy hour on Friday, UGH!  I started having driveway happy hours over a year ago, where we could all sit in our lawn chairs with sufficient distancing and talk to each other face to face, which to me beat the heck out of those Zoom happy hours! But when there’s a threat of rain, well, no happy hour for me! Bill Withers greets me this morning with his song: Lovely Day…  “And then I look at you, and I the world’s all-right with me”…

Well… there was no fighting back by the currencies yesterday after getting sold the previous night, the selling continued, and everyone was pointing to the stupid CPI report, as the reason for the dollar strength…  Well, if that’s the reason, then traders and investors are being quite myopic…  They’re only looking to higher interest rates sooner than later, and not that inflation is roaring and doesn’t appear to be “transitory” at all, and a currency is NOT supposed to gain while inflation is roaring…  At least that’s how currencies in the past 50 years have reacted to inflation… 

The BBDXY saw a HUGE jump higher yesterday going from 1,142 in the morning to 1.147 at the end of the day… The euro fell below 1.18 once again, and Gold and Silver couldn’t get their respective legs under them all day…  It was the same-0, same-0 for the metals, folks… Lots of short paper trades arriving at the COMEX as the CPI was being printed, and showing that inflation is rising at the fastest rate of 5.4% yoy since 2008!   Now tell me face to face that the dollar should be bought in times like this….  Because if you do, I’ll laugh hysterically at you, until you begin to laugh too! 

For the record… Gold finished the day up a whopping 80-cents to close at $1,808.30, and Silver couldn’t get started on the day and  lost 24-cents to close at $26.06…  Same-o, same-o for the metals it just drives me nuts!

You know what? I think my vacation is coming at the right time, because I was just about to go nuts on the U.S. Gov’t for manipulating the dollar and metals! But I’ve calmed a bit now… But it still irks me to no end that it’s just little old me out here screaming at the walls about manipulation of the dollar and metals… Spending your tax dollars to boot, to defend the dollar…  When you see those taxes taken out of your paycheck, do you even think about where or what they are going to?  The reason for taxes has been lost in the shuffle folks, and nowadays tax receipts are easy pickins’ for the folks at the Treasury, and Fed, and Congress…. We are in bad need of a leader folks, someone who can lead us out of this mess that we’ve gotten into…  I’m just saying…

In the overnight markets last night….  Well we had a reversal of patterns it seems last night… The overnight markets have seen dollar selling, and the currencies are rallying… So, maybe the Europeans and Asians looked at the inflation number and decided that enough dollar buying was enough… Maybe…  Gold and Silver are on the rally tracks in the early trading today, and it’s a sight for a sore eye! Gold is up $21.40 this morning, and Silver has added 41-cents to its price…  The BBDXY, which closed yesterday at 1,147, has slipped to 1,143 this morning…  So… Maybe… 

The price of Oil is rising once again, and this morning it trades with a $75 handle…  So, with the currencies on the rise, Gold & Silver on the rise, the price of Oil on the rise, I guess Bill Withers was right this morning when he sang It’s Going to be a Lovely Day! 

There was a great development overnight, that has the New Zealand dollar/ kiwi on the rally tracks this morning… The Reserve Bank of New Zealand (RBNZ) announced that they would bring their bond buying to an end…  WOW!  What’s this? The RBNZ attempting to bring back their glorious past, when Don Brash was Gov?  Well whatever their motives are, this IS the right thing to do, and traders have taken notice with a strong move higher for kiwi! 

Ok… how about some more  good news? Good Friend Dennis Miller sent me this last night… “Social Security recipients may get biggest cost-of-living bump in almost 40 years”  No wonder the Fed Heads keep saying that inflation is “Transitory”… otherwise if no one sees inflation, there can’t be inflation, right? And no inflation means no cost of living adjustment (COLA) for Social Security people, like me! But now the cat’s out of the bag regarding inflation, and now the U.S. Government is going to be backed into a corner, and have to raise Social Security payments… The article from NewBreak says: “The 69 million Americans who collect Social Security are on track to get the biggest cost-of-living hike since 1983, with one advocacy group for senior citizens projecting a 6.1% increase to benefits due to surging inflation.”

Well, just to throw some cold water on this news…. I’ll believe the increase, whatever it is, when I see it next year… I don’t trust the Gov’t. to make the COLA on time, or correctly… And what’s anyone going to do about it if it doesn’t seem correct?  Remember the media is in the Gov’t’s. back pocket so you’re not going to be able to shame or guilt the Gov’t in the newspaper!

UGH… You try to be upbeat on something, and it turns out to be negative after all! 

Well, this is quite the story, so let’s get into this… Yesterday, I received an note from one of my fave people in the world, the former Gov. of S. Carolina, and former ambassador to the U.N.  Nicki Haley… When she talks I listen folks… and you should too!  Ms. Haley had this to say, “Cuban citizens have gone to protesting Communism.” And the White House tried to spin this as “Cuban protesters yelling “freedom!” during anti-communist protests, where protesting rising COVID-19 cases” Wait, What? 

My favorite cartoonist, Ben Garrison, had this to say, “On Sunday Cuba experienced the largest protests against the brutal communism they are forced to live under in recent memory. If they were protesting against “rising COVID cases” why were they not wearing masks and shouting “Death to COVID.”

How many times have we heard those on the left make excuses for oppressive communist and socialist regimes, saying communism works, they just didn’t “do it right.”

Chuck again… What a bunch of bunk from the U.S. Gov’t… of course they’ll have a difficult time getting their socialism policies through the system if Cuba is revolting from socialism… So, just like inflation, the Gov’t tells us lies, and hopes that we don’t see what’s going on, for if don’t see it, it doesn’t exist, right?

And then there was this… PBS program Frontline had a very interesting program last night it focused on  how the Federal Reserve Bank has changed from a Central Bank to a Bail Out Kingpin…  Here’s a short snippet of what they talked about, which to me was the very first time a media member took on the Fed…  

The Fed’s radical makeover of itself began in December of 2007 when the Fed decided, on its own, that it had the authority to secretly pump out trillions of dollars in cumulative loans to prop up the mega banks on Wall Street, as well as to the foreign banks that were on the other side of Wall Street’s hundreds of trillions of dollars in derivative trades. The Fed secretly ran that program through at least July of 2010 according to the eventual audit that was conducted by the Government Accountability Office. (That audit only came about because Senator Bernie Sanders attached an amendment to the Dodd-Frank financial reform legislation of 2010.)

The Fed’s latest massive bailout operation began on September 17, 2019, months before there was a case of COVID-19 anywhere in the world. The full scope of this operation and other bailout programs remain a dark secret at the Fed, casting a pall over investors’ confidence in the transparency and stability of the U.S. financial system.

Frontline writers and producers James Jacoby and Anya Bourg, who are the force behind last night’s  Frontline documentary, The Power of the Fed, will now become part of a rarefied group of individuals who have mustered the determination to cut through the Fed’s insidiously cultivated armor of Fed-speak and its preposterous structure that allows it to create trillions of dollars of money electronically out of thin air for bailouts, with only feigned oversight by Congress.”

Chuck again… WOW! Well, it’s about time that someone or some people took on the Fed, and exposed what they are doing to the public!  I try to do that, but I only have so many readers, and PBS isn’t exactly NBC, but it is a member of the mass media, and I’m sure millions more people are aware of what the Fed is doing today, than were aware of their shenanigans yesterday! 

The U.S. Data Cupboard today has Producer Prices (PPI) which is wholesale inflation, that gets here first before being passed onto the consumer…  Yesterday, I told you that the Federal Budget was supposed to print, but if the numbers hadn’t been massaged, and cooked enough that it wouldn’t print until ready… Guess what didn’t print yesterday? 

The Fed’s Beige book will also print today, old news, of course, but it will be interesting to see what regions are reporting inflation increases…

To recap… The currencies and metals never did find their legs yesterday, and so the selling which began in the overnight markets, carried over to the U.S. session yesterday… The only asset that saw a gain yesterday was the price of Oil… Bonds got sold, currencies got sold, metals got sold, shoot Rudy, even stocks saw some selling..  Inflation was reported to have risen faster in the previous month at 5.4% than it has since 1983… But don’t worry, it’s only transitory…  Chuck talks about inflation again, and about what’s going on in Cuba…

Before we head to the Big Finish today I have an error to correct from yesterday… Ok… yesterday I made a writing faux pas… I was talking about how high interest rates haven’t always hurt Gold, but I said, “and while I will give them that higher interest rates are usually good for Gold”… When I obviously wanted to add a “not” in there… And say that higher interest rates are not usually good for Gold…  I could blame it on the rain… Or my fat fingers… or the sun got in my eyes… but I guess I’ll have to take the blame for this one… I guess my fat fingers just got ahead of themselves… Yeah, that’s it! That’s the ticket! And my first wife was a young Elizabeth Taylor!

For What It’s Worth… I’m going to pass on a FWIW article today, as I’ve had two articles I’ve highlighted above today, that could very well have been FWIW articles…  I do want to circle back on the PBS show last night, and give kudos to the people responsible for the program… We need more people to have the intestinal fortitude to show the public what the Fed is up to…  I’m just saying… 

Market Prices 7/14/2021: American Style: A$ .7473,  kiwi .7031, C$ .8024, euro 1.1824, sterling 1.3877, Swiss $1.09, European Style: rand 14.6077, krone 8.7245, SEK 8.6290,  forint 302.62,  zloty 3.8655,   koruna 21.6757, RUB 74.21, yen 110.33, sing 1.3527, HKD 7.7664, INR 74.41, China 6.4669, peso 19.93, BRL 5.17.10, BBDXY 1,143.20, Dollar Index 92.52,  Oil $75.02, 10-year 1.37%, Silver $26.47, Platinum $1,141.00, Palladium $2,919.00, Copper $4.21, and Gold… $1,829.70

That’s it for today… Well, I whined and complained enough that my oncologist found an appointment for me before I leave for vacation… I did ask nicely, and as charmingly as I can be… But when re-reading the note, it did sound whiny!  I just want to talk to a doctor about this sinus thing they found, that’s all…. So, it’s Thursday, but at noon, so I’ll still be able to write on my last day before my two-week annual summer vacation! I sat outside watching the All-Star Game last night, all by myself… no worries, I’m used to that, and I’m not going into the song by Eric Carmen again! I finally came inside about the 5th inning, because I was getting tired… Whenever I read a book, I get about 3 or 4 chapters into it, and my eyes begin to droop, and well, then I know it’s nap time! But I didn’t get any reading in yesterday until last night… I know that I’ll be  very happy to be away from these manipulated markets for two weeks… I might Tweet something while I’m gone, but probably not…  Alrighty then… here’s a real treat… Dion and The Belmonts take us to the finish line today with their song: The Wanderer… “Well, I’m the type of guy that never settles down…” I hope you have a Wonderful Wednesday and will please Be Good To Yourself!

Chuck Butler

 

Irish Branded Gold Bars To Be Sold For The First Time!

July 13, 2021

* currencies and metals fight back on Monday… 

* But the overnight markets beat them down again… 

Good Day… And a Tom Terrific Tuesday to you! What a show last night! The All-Star Game Home Run Derby, was quite the spectacle for my eye, don’t know about your eyes, but for my one lone eye it was quite the feast for a baseball lover like me! I should have known when I filled out my HR Derby Bracket, that the favorite, would not win… Congrats to The Mets’ Pete Alonso, for his repeat HR Derby Championship.  I’ve watched the HR Derby every years since it began and this year’s Derby was the best, with the only challenge coming from the year Mark McGwire was hitting balls out on the streets of Boston! I think I’m over my virus that was shared with me by little Evie, as I ate some cheese & crackers last night with no problems… So, now I can get back to wondering what the hells is “ Advanced sphenoethmoid sinusitis, how I got it, and how not to get it again!’ The Box Tops greet me this morning with their song: The Letter…  A classic 60’s song!

Well it took most of the day on Monday to reverse what the overnight markets had done to the currencies and metals, but in the end the dollar was getting sold, Silver was in the green, and Gold was only down $1.40 on the day, after being down as much as $10 in the early trading…  The euro recovered, the A$ recovered, the franc recovered, and so did the loonie, which had fallen below 80-cents for the first time in a month of Sundays, last week, but has since recovered back above 80-cents… And since I mentioned the franc, I have to admit that while the euro & sterling go through gyrations nearly every day, the old Swiss Franc seems to be oblivious to these gyrations…

So… as I just said above, Gold fought and fought to get to positive territory yesterday, only to come up a $1.40 short on the day… That put Gold’s closing at $1,807.50… But Silver did reverse the tables on the price manipulators, and ended the day up 13-cents, to close the day at $26.31… I searched and searched yesterday for something that would tell me why Gold was getting sold in the early markets, but since I didn’t find anything, I can put that down to the price manipulators taking back the gains that Gold booked late last week…  Have I told you lately just how much I thoroughly dislike these price manipulators? There is a Silver lining here though, and that is they do keep Gold’s price from getting out of hand for investors…  But when investors don’t take advantage of these buying opportunities, I don’t feel sorry for them, if at some later time they decide they need to buy Gold and it’s $2,000…

In the overnight markets last night… What the heck is going on in the Asian and European markets? Again last night, the dollar was bought, and pushed back the gains the currencies made during the U.S. session yesterday. It just doesn’t make sense to me… these are the countries that have Central Banks backing up their trucks to load up on physical Gold because they see what’s going on in the U.S., but then they turn around and buy dollars?  Makes no sense to me, folks, and I’ve been around currencies since 1991…  

Ok, on the inflation front… Yesterday the NFIB Small Business Index printed, but that wasn’t the BIG news… In the reports from the Small Business we got a clear picture of  the cost and supply pressures that are affecting small businesses.

Per the latest NFIB Small Business Optimism Survey, 47% of respondents are currently planning to raise prices. That’s the highest such number since 1981. And quite frankly, I’m surprised it’s only 47%… I would think the number should be around 95%, for cost and supply pressures are really rising, folks… And they won’t be turned around quickly in anyone’s imagination, even Paul Krugman’s! 

So, have you heard the news of what’s going on in Minnesota or Minnesnowta (what my former boss called it) ? Well, you knw that there’s been talk of Universal Basic Income (UBI) here in the U.S. and I’ve gone crazy against that idea, right? Well in the state of Minnesota they are doing a trial run of UBI… And no I’m not kidding…  Apparently, about 200 families will get as much as $500 a month for two years in the latest city program to test unrestricted cash payments. And the money comes from the Federal Gov’t… Which means… tax payer money, because the Federal Gov’t doesn’t have money to send to the state for this ridiculous boondoggle… The Federal Gov’t could print it… But I don’t see that as what’s happening here… They’re using tax payer funds to pay people for their votes… That’s how I see it.. 

Ok, onto uplifting…  I pulled this from Bloomberg.com this morning, as I thought it was funny…  probably not funny for those in this situation, but funny to me because this is what happens when you lay on the couch, in the A/C eating chocolate bon bons, watching NetFlix…   Here’s the snippet: “Americans who soothed themselves with calorie-laden comfort foods are frantically trying to slim down for the perfect office bod. Gym memberships are up, personal trainers are booked and digital subscriptions to WW, the company formerly known as Weight Watchers, were 16% higher at the end of the first quarter from a year earlier.”

Chuck again…  I remember that when the shut down began a writer said that Americans will either become alcoholics or great chefs… he needed to add one… overweight lazybones…  

The GATA folks sent me a note yesterday that caught my eye immediately… the note was title: Irish branded Gold bars to go on sale for the first time….     Now if you have an ounce of Irish in your blood, you are probably like me and very interested in this story!  So, that story will be in the FWIW section today, don’t miss it!

So, yesterday I was just doing some research and came across an article on FX Daily.com that talked about how they worried that a spike in inflation that would show up in the stupid CPI print this morning, could cause a rush to Bonds, and fears of higher interest rates, which wouldn’t be good for Gold…  I got to thinking about that… and while I will give them that higher interest rates are usually good for Gold, you have to go back to the 70’s to see it differently…  Oh, those 70’s again, right? Yes… Look I was a both a teenager and adult in the 70’s so I recall what went on then more than I do 20 years ago! I was in a trivia contest and one of the categories was “the 90’s”… I knew nothing!  I can tell you that NAFTA came on in the 90’s, and that Alex was born in the 90’s, and beyond that… nothing! Oh, I started the Pfennig in 1992! But I doubt that’s on any trivia roster of questions! 

Ok, getting back to my thought on higher interest rates and Gold, back in the 70’s… Gold experienced one of its glory decades going from $41 in 1970, to $850 in 1980…  But in reality, individuals weren’t allowed to buy Gold until Jan 1, 1975… But the point I’m trying to make here is that Gold rallied even in the face of 18% interest rates in the U.S.  The runaway inflation carried a bigger stick than interest rates in determining the price of Gold!

Man I sure went the long way to get to the point there didn’t I?  Oh well… as I’ve told you before, once these fat fingers get flying, watch out!

On a sidebar… I was very upset to hear that a 3rd shot may be needed to combat the new variant of COVID 19… I’m hoping that doesn’t come to newsstand near me…  I’m just saying

The U.S. Data Cupboard today has the aforementioned stupid CPI (consumer price index) which in June had risen to .7% a huge jump from May’s number… So, it’ll be interesting to see what the folks at the BLS say about CPI this month… Not that whatever they do conjure up it won’t be anywhere near what you and I are experiencing in inflation… That’s a given!  The Federal Budget is supposed to print today also, but… like past times, if the numbers haven’t been massaged and cooked enough, they’ll not print until ready…

To recap… The currencies and metals fought all day to recover what was lost in the overnight trading the night before… But for the most part they did, with only Gold not able to get back to flat and lost $1.40 on the day… No biggie… Silver was able to get back above water on the day, along with the euro, A$, franc, etc.   Chuck does a long dissertation on why higher interest rates doesn’t always mean that they are bad for Gold…   And Ireland is going to sell for the first time, Irish branded gold bars!  How about that!

For What It’s Worth….   Well, I teased you above about the Irish branded Gold Bars, and now I have to produce the story!  No worries, I’ve got it right here in my back pocket!  When I saw this article I sent the link to Ed Steer, and then remembered that he was a board member of GATA, and that he had probably had already seen it, and he responded that he had, and that he had it queued up  for his letter Tuesday…  So, the article can be found here: Irish-branded gold bars to go on sale for the first time – BelfastTelegraph.co.uk

Or, here’s your snippet: “People will be able to give the gift of the gold as Irish-branded gold bars go on general sale for the first time following an agreement between one of the country’s oldest institutions and a bullion dealership in the capital.

The Dublin Assay Office – overseen by The Company of Goldsmiths of Dublin – was established 384 years ago and assays and hallmarks articles of precious metals sold in Ireland.

The Dublin Assay Office Gold Bullion Bars being made available are 999.9 parts per thousand fine gold and are the only Irish-branded gold bars available on the market.

They can be purchased through Dublin-based Core Bullion Traders in 10g, 1oz, 50g and 100g investment-grade bullion bars.

Based on the current market price of gold, a 1oz Dublin Assay Office branded gold bullion bar would cost in the region of 1,590 euro.

Core Bullion Traders’ Head of Trading believes that they will be a big attraction among the Irish abroad, who want a connection to their native land.”

Chuck again… My Irish eye is smiling… Hello, Tim Smith? Hey Tim can you get me some of these Irish branded Gold Bars?  (for those of you new to class Tim Smith is my metals guru, and he can be reached at 1-800-926-4922)

Market prices 7/13/2021: American Style: A$ .7475,  kiwi .6974,  C$ .8008, euro 1.1836, sterling 1.3845, Swiss $1.0905, European style: rand 14.5389, krone 8.7027, SEK 8.6058,  forint 301.23,  zloty 3.8093,  koruna 21.6603, RUB 74.44, yen 110.26, sing 1.3522, HKD 7.7649, INR 74.44, China 6.4739, peso 19.90, BRL 5.2079, BBDXY 1,142.51, Dollar Index 92.39,  Oil $74.32, 10-year 1.35%, Silver $26.18, Platinum $1,121.00, Palladium $2,943.00, Copper $4.18, and Gold… $1,809.80

That’s it for today… I was busy yesterday, getting stuff taken care of before I leave for vacation next week… And every time I thought I had taken care of every thing, my wife reminded me of something else that needed to be taken care of… I hadn’t taken my meds for two days, because I knew my stomach would not deal with them, and so I got back on the meds wagon last night… I don’t think two days without was harmful to me… All but Alex will be with us this vacation… So, it’s not going to be a cheap vacation! HA!  I didn’t get a nap yesterday, so I was more than ready for sleep last night after the HR Derby! I was very disappointed this morning when I stepped on the scale, I hadn’t really eaten anything for two days, and I hadn’t lost a pound! UGH! I basically shut down for two days, so that’s probably the reason I didn’t lose any pounds… UGH!  Three Dog Night takes us to the finish line today with their song: Mama Told Me Not To Come…  Now there’s one you probably haven’t heard in a while! I hope you have a Tom Terrific Tuesday, and will Please Be Good To Yourself!

Chuck Butler

 

The IMF, BIS & World Bank Give The Thumbs Up For Digital Currencies…

July 12, 2021

* Currencies and metals rally late last week

* But gave back those gains in the overnight trading… 

Good Day… And a Marvelous Monday to you! A rainy weekend for us here in the Mid west… And the last game before the All-Star Break between the Cardinals & Cubs was rained out…  It was a quiet weekend, for yours truly, as I must have gotten a taste of Little Evie’s GI virus, on Friday night… All I’ve had to eat since has been saltines, and lots of Gatorade Zeroes… Well, I guess I owe you an explanation of what my MRI said…  Well, the good news is that there was no sign of Cancer, or bleeding, but what they did find was this: Advanced sphenoethmoid sinusitis…  I had to Google it to find out what it was, but apparently it was the cause of the excruciating headaches… That have since subsided… I’ll have to end up going to the ENT Doc to find out more…  But no cancer was the most important thing I read in the report for sure! So… now that we’ve put that to bed… The Moody Blues greet me this morning with their song: I Know You’re Out There Somewhere…

The currencies had a good trading day on Friday of last week, after spending the week, up to Friday, drifting and weakening… When I left you on Thursday last week the BBDXY was 1,144.91, and the index ended Friday at 1,139.57… The Dollar Index also showed some weakness, at it fell from 92.52 to 92.13 to end the week…  The euro was the main beneficiary of the dollar weakness, as it ended the week pushing toward 1.19 again…  The price of Oil had a rollercoaster week, starting out the week with a $76 handle, then watching it drop to a $71 handle by mid week, only to end the week with a $74 handle… So, none of this helped the Petrol Currencies, because there was no definitive direction of the price of Oil…

After seeing the yield on the 10-year Treasury fall to 1.26% last week, calmer heads have prevailed and the yield rose back to 1.36% by week’s end… I read this weekend that a nutcase from CNBC pointed to the yield on the 10-year and said, “The bond guys are saying that the Fed is correct, that inflation is only temporary”… 

I about fell out of my chair! What a dolt! Does he not know that the Fed is doing most of the buying of Treasuries these days, so what does a lower yield on the 10-year Treasury prove? That the Fed’s buying has pushed down the yields… That’s all there is to that!  And if the Fed is still trying to push the “Transitory or Temporary” inflation lie, then this is their way to build a case for that lie…  I’m just saying… 

Gold & Silver both found ways to gain VS the dollar as the week came to and end, although it was not easy peasy… Both metals saw lots of short paper trades in their respective honor, show up at the COMEX both Thursday and Friday, but, they both prevailed at the end of the week, with Gold gaining $4.80 on Friday to close the week at $1,808.90, and Silver gained 20-cents to end the week at $26.18… I read this weekend that one year ago, Gold was trading near where it is today… Now we all know that last summer Gold found its way to over $2,000 in August… I sure would like to see that happen again, as the shiny metal has been pushed down so many times by the price manipulators that it deserves to beat them…

In the overnight markets, last night… it was as if Thursday and Friday’s action in currencies and metals didn’t happen, and the dollar buying was prevalent once again… The BBDXY has risen to 1,142.75 from the 1,139.57 it closed on Friday… The euro has given back about 1/3rd cent, and Gold has given back all its gains from Thursday and Friday in the early trading, and Silver has followed suit…  There’s nothing going on to bring about this change of direction, folks…  And the price of Oil has slipped lower again… up down, up down, the rollercoaster ride in the price of Oil continues… 

Ok, over a year ago, I wrote to you, dear reader, and told you my vision for the future of the U.S. and the dollar, etc. One point I made then, I have  continued to follow up on, is the implementation of a digital currency here in the U.S. that will replace the dollar, or folding cash if you will…  At the most recent G20 meeting digital currencies were discussed, and while the major media didn’t find the need to report on it, I found this little snippet on Yahoo Finance, “The IMF, the World Bank, and the Bank for International Settlements are advocating for the cross-border benefits of central bank-issued digital currencies, suggesting that projects like a digital dollar in the U.S. would support global development.”

Chuck again…  Yeah, the IMF, BIS and World Bank just thought that they would throw that out there and see if it sticks to the wall… Apparently, no one questioned them on this, and so , now they’ll take the next step…  And if anyone throws up a line of questioning going forward, they’ll be taken back to the G20 meeting, and they’ll say, “We discussed it then and no one had a problem with it”…

OK, onto more uplifting things…  Last Thursday I wrote about the U.S. Mint and them complaining that they didn’t have the Silver slugs to mint into coins, and that’s why they hadn’t minted any for the last two months… And then after hitting send, I sat down to read Ed Steer’s letter (www.edsteergoldsilver.com), and much to my chagrin I found that what I wrote was wrong… Then Ed sent me a note and said I needed to read his letter…  In it he said, “The U.S. Mint had a monster surprise waiting for me when I logged onto their website yesterday afternoon. They had completely revised and updated June bullion coin sales — and there were some eye-popping numbers.

For the month of June, the mint reported selling 182,000 troy ounces of gold eagles — and 2,800,000 silver eagles. Their gold buffalo sales for June remained unchanged at 27,500.

The other thing that didn’t change was silver eagles sales in May, as they still show zero.”

Chuck again… So, maybe I should hold up the Pfennig each day before I read Ed’s letter!

And regarding the Consumer Credit (read debt) report last week… I saw that consumers are using their credit cards again… There was a HUGE jump in credit card balances last month, along with personal loans and student loans…  This is good new for the economy, but bad news for the debt picture in this country… No government stimmy checks? Hey! We’ve still got our credit cards!

The U.S. Data Cupboard didn’t really have much for us last week, and this week it won’t have very much for us until Thursday, with Thursday and Friday, having a plethora of real data, it should bring a fun end of the week for the markets…

We will see the stupid CPI (consumer inflation) report for June tomorrow… This report doesn’t come anywhere close to what real inflation is, and I’ve explained the reason why so many times through the years, if I had a dollar every time I mentioned it, I could buy me cup of coffee now…  HA!  Geez, talk about inflation… I remember when I could get a cup of coffee for a shiny quarter! And now it will cost you a George Washington at Micky D’s!  

To recap… The currencies and metals ended last week on a strong note, and pushed the dollar down once again…  Consumer Credit (read debt) is moving higher each month again… I don’t see this as something that’s not going to bring about tears…  The Big 3 in terms of International Banks, the IMF, BIS and World Bank issued a statement at the G20 that most media missed… They talked about how they are behind Gov’t’s using digital currencies, and even signaled out the digital dollar… The Data cupboard won’t have much for us this week until we get to Thursday & Friday…  So… we could see the currencies go back to drifting until later in the week…

There will be a boat load of Fed Heads out speaking this week… Telling lies, and spreading untruths….

For What It’s Worth…  This article showed up in my email box from our local paper, the St. Louis Post Dispatch, which I’m certain they pulled from someone else’s newspaper, for they don’t write their own stories any longer, except in sports… But this is about Wells Fargo Bank, who have decided to shut down personal lines of credit…  Wait, What? Yes, the bank will no longer offer lines of credit to bank customers.. This article can be found here: Wells Fargo ends personal lines of credit: What it means for consumers | Personal Finance | stltoday.com

Or, here’s your snippet: “Wells Fargo customers have begun receiving notification that their personal line of credit accounts will close, and the company confirmed Thursday that it will no longer offer the product. Once the accounts are closed, customers will no longer be able to draw from them.

The company announced that it would discontinue the product last year, said Wells Fargo spokesperson Manuel Venegas in an emailed statement. But if the looming closure of your account is news to you, it may be an unwelcome surprise.

Not only will the accounts close, but Wells Fargo also indicated consumers’ credit scores may take a hit as a result.

“We realize change can be inconvenient, especially when customer credit may be impacted,” Venegas said.

Here’s what you need to know if your account will be closed, how your credit may be affected and other borrowing options to consider.

Customers will receive 60 days’ notice ahead of their account closure, Venegas said in the statement, along with reminders leading up to it. This could be a signal that it’s time to stop making withdrawals and turn your attention to repayment.

Once the account is closed and you can no longer draw from it, your annual percentage rate will be frozen and that’s the rate you’ll pay on the remaining balance, Venegas confirmed.”

Chuck again… Well, I’ll tell you my take on this…  this is just the tip of the iceberg, folks… Other banks will end up following, and if they don’t, they’ll institute high banking fees to continue the programs… The Banksters really do believe they run the world, folks…

Market prices 7/12/2021: American Style: A$ .745,  kiwi .6960,  C$ .7998, euro 1.1848, sterling 1.3854, Swiss $1.0915, European Style: rand 14.4775, krone 8.7193, SEK 8.6083,  forint 299.95,  zloty 3.8436,   koruna 21.7041, RUB 74.36, yen 110.23, sing 1.3524, HKD 7.7667, INR 74.56, China 6.4477, peso 19.96, BRL 5.2582, BBDXY 1,142.75, Dollar Index 92.35,  Oil $73.54, 10-year 1.34%, Silver $25.96, Platinum $1,096.00, Palladium $2,886.00, Copper 4.23, and Gold… $1,800.10

That’s it for today… Well, my 2 week annual summer vacation is growing nearer… This will be the last week of Pfennigs for two weeks…  You know when I had a team of folks back in the day at the old EverBank, they would fill in for me… But now it’s just little old me….  All by myself, don’t want to be all by myself, anymore…  (Eric Carmen)  I’ve tried my best to get someone to be a regular contributor to this letter, but he’s enjoying his retirement too much!  Rain, rain go away… I don’t think the rain will be gone until Wednesday this week… UGH!  I guess I’ll try to eat something this morning, as all I’ve had since Friday is saltines… But I haven’t felt hungry, not after all the gyrations my stomach went through on Friday night… UGH!  So, that was great news on the MRI results, eh?  Now I just have to learn how the finding  caused the pain, and how to keep it from coming back! The late great Leon Russell takes us to the finish line today with his song: Back To The Island…  I hope you have a marvelous Monday, and please Be Good To Yourself!

Chuck Butler

Who’s Buying Dollars?

July 8, 2021

* Currencies get sold on Wednesday… 

* Gold inches higher this week in daily trading… 

Good Day… And a Tub Thumpin’ Thursday to you! Before I get started on today, let me tell you that I’ve not heard from the doctor yet about what they found causing my head to ache like of sonofagun! I’m sure the radiologist didn’t get finished with  their reading until late… So, today is the day… I’ve not taken anything for pain since Sunday morning, and either I’ve grown accustomed to the pain, or it has subsided by a lot… And that’s a good thing! Little Evie was here again yesterday, as she has a GI virus, and can’t go to Day Care… Yesterday, I didn’t get to spend much time with her, as I was preparing for my MRI… You know… showering, shaving, putting on regular clothes, acting like I was going out on the town! But she’ll be back this morning, so it will be play on Garth, play on Wayne, with little Evie! Elton John greets me this morning with his song, and one of my fave song of his: Mona Lisas And Mad Hatters…  They don’t write songs like that any longer, folks…

 

So, who on God’s green earth is buying dollars? Central Banks around the world know what the scorecard says, and that is that the U.S. knows that they need to inflate their way toward some semblance of deficit spending control, and these same Central Banks around the world are backing up the trucks and buying Gold, not dollars… And I’d like to think that my former brothers in the currency trading business are not falling for that, “Well the Fed is going to hike rates in 2 years, so we may as well bulk up on dollars now, line” Because if they are, they are NOT the traders I thought them to be!

So, with all that said, yesterday, the dollar once again booked gains VS the currencies… The BBDXY started the day at 1,143.35, and ended it at 1,145.51… The euro fell back below the 1.18 figure, and the Aussie dollar (A$) fell back below 75-cents… The Petrol Currencies saw most of their gains booked last week during the uptick in the price of Oil, all fade away in the last two days of trading… This is not how I had thought, a couple of weeks ago,  the currencies would be in two weeks… If we turn back the time, and go back two weeks, we would find the BBDXY trading around 1,124… and all the currencies looking like they were ready to go on a long trending run higher… But that was before the Plunge Protection Team (PPT) stepped in and all the currency euphoria was over…

So, what’ the PPT got to be thinking here? They buy dollars and think what? That this is a good investment? Come on, give me a break here! That can’t possibly be the reason you’re buying dollars, for we all know that whether the inflation hits hard this year, or next year, that it’s coming, and that will reduce consumers buying power, and the economy will come to a standstill, and then dollar holders will all be rushing toward the exit door at the same time…  You’ve got to be kidding yourself if you think for one minute that we as investors that read this newsletter, don’t know what’s going on, and I take a great offense at that thought, that we’re all a bunch of bumbling idiots!

I told you on Tuesday morning that this could happen with the markets going haywire over the Fed’s FOMC Meeting Minutes, of which the Fed heads did dive into the topic of tapering, but came away from the meeting with the idea that nothing was imminent…  But the markets didn’t hear that last part, they only heard about how the Fed Heads dived into the Tapering discussion… Lame Brained idiots, is what I think of anyone that’s swayed by these Minutes…

So… Gold yesterday did the same thing it did the day before, it traded up in the early morning, by double digits, and by noon it was fighting to keep any of those gains… Gold started out yesterday up $10 and ended the day up only $6.90… Silver once again lost all its early morning gains, and ended up with a 24-cent loss on the day to close at $26.20, and Gold closed at $1,804.90…

In the overnight markets last night… The Dollar Index has slipped back to a 1,144 figure, and the euro has climbed back over 1.18. But that’s it as far as currency highlights…  This is all going to end up in tears for dollar holders, I’m telling you now, so you’ll listen to me later…  Gold has gained nearly $8 in the early trading this morning and Silver is down 2-cents as we start the day…  

And have you been tracking the yield on the 10-year Treasury? It has really dropped in recent days… Just two weeks ago the yield on the 10-year Treasury was 1.50%, and today it’s just 1.26%…  is this yield curve control? Well, we’ll never be told that, but it sure quacks like duck to me… 

And talk about dropping like a rock… The price of Oil began the week at $76, and this morning its trading with a $71 handle…  I guess it just shows to go ya, that a lack of announcement on Oil production from our friends, (NOT!) at OPEC, doesn’t go as far as it used to!  I have to say that I’m really surprised by this drop in the price of Oil… I really thought it was going to test the $80 handle in the coming weeks… It may still, but chances are ’cause I wear a silly grin, every time you’re near, no… wait! Chances are that it won’t test the $80 handle any time soon now… 

Before I go on… Do you believe the U.S. Mint’s statement that they halted the sale of Silver coins because they’re experiencing a shortage of raw Silver from their sources?  I don’t believe it, you see… The U.S. Mint has sources for their Silver that goes back 100 years, and these sources are to feed the U.S. Mint Silver before any other Mint…  So, what’s behind their coming out with these lies?  Is the U.S. Mint’s workers being like other people in the country that don’t want to work any longer? That’s the only thing I can think of because I’m not buying what the Mint is selling… 

While we’re on the subject of Gold… here’s some news that should be sending Gold over the moon in price… I took this from Dave Gonigam’s 5 Minute Forecast yesterday…   So, here’s Dave:

“On July 1, Ohio became the 41st state to end sales tax on precious metals — gold, silver, platinum and palladium — bullion and coins. And the moratorium on Ohio’s precious metals sales tax goes into effect on Oct. 1, 2021.

“These efforts are common sense,” says state Rep. Kris Jordan (R). “We should not be taxing money” (emphasis ours).

“This form of double taxation discourages Ohioans from buying precious metals in the state and drives their business elsewhere,” he says. “Ohio precious metal dealers [can now] better compete with our neighboring states as well as on the online marketplace.”

Alongside the Buckeye State, 40 U.S. states now exempt precious metals — fully or partially — from state sales taxes.

Leaving nine states – including Vermont, New Jersey, Maine, Tennessee, Kentucky, Wisconsin, New Mexico, Mississippi, Hawaii and the District of Columbia — that still penalize residents who buy historic safe-haven assets.

“Of those remaining nine states,” Money Metals says, “Hawaii, Maine, Mississippi, New Jersey, Tennessee and Wisconsin have recently considered measures to remove the sales tax in their states.”

We see you, Vermont, Kentucky, New Mexico and D.C.…” – Dave Gonigam, The 5 Minute Forecast

Chuck again… if more people in this country knew that the inflation we’re seeing, while some of it is distribution chain supply problems caused by the pandemic, but most of it is being brought on you by your Government, then seeing that Gold is no longer being taxed in 41 states, I would think that Gold would be taking off to the moon… But you’ll never hear about this stuff on the nightly news, or cable news, folks… to that would mean your news outlet would be banned! So, feel free to share the Pfennig with however many people you care to share it with… That brother-in-law that always brags about his McMansion and boat, you might want to leave him off your list!

The U.S. Data Cupboard today has the usual fare of Weekly Initial Jobless Claims for last week… And Consumer Credit (read debt) … I would think that with the stimmy checks in our rear view mirror now, that Consumers are racking up the debt again… But I guess we’ll have to wait-n-see…

Here’s a snippet of the FOMC Meeting Minutes yesterday… The Fed members saw a less clear signal from incoming data and cautioned that reopening the economy after a pandemic left an unusual level of uncertainty which required a “patient” approach to any policy change, stated the minutes, which were released on Wednesday.

Still, “a substantial majority” of the officials saw inflation risks “tilted to the upside,” and the Fed as a whole felt it needed to be prepared to act if those risks materialized.”

Ok… who didn’t see the word Transitory used to describe our current inflation, as in previous meeting minutes? I wonder where the word went? Now, you’re not going to hear the Fed Heads say, “we were wrong, about the inflation being transitory”… But just leaving the word out of their meeting minutes is akin to saying just that! 

To recap… Another day of dollar strength, and Chuck wants to know who’s buying dollars in the face of Government generated inflation?  Gold couldn’t hold its early morning gains once again, and ended the day up only $6.90, which Silver lost 2-cents on the day… Chuck points out that 41 states are now eliminating sales tax from Gold Sales… Chuck believes that if all Americans knew that the Government is sponsoring the inflation they’re seeing, and that in 41 states there’s no longer sales tax on Gold, then Gold would be trading over the moon right now…

For What It’s Worth….  Today’s FWIW is a quick and dirty article that appeared on the Financial Times, which requires you to have a subscription to read it… So, I’ll give you the link, but you’ll have to decide if it’s worth your while to subscribe just for this article that do have the gist of it in the snippet today… This is an article about how Europe is following China in choking off the use of cryptos in their payment system, and you can find it here: https://www.ft.com/content/bf99e9e3-d104-4a92-81a1-8bd70b884b3f

Or, here’s you snippet: “In an email to users today, the exchange said that from 8 a.m. universal coordinated time Wednesday, customers would no longer be able to deposit crypto funds through the Single Euro Payments Area, or SEPA, schemes. Its move was due to “events beyond our control,” the exchange said.

The network, a European Union project that aims to harmonize euro payments across the region, allows consumers to send euros across three dozen countries.

Binance, which typically accesses SEPA through payment intermediaries, described the move as “temporary.” But the restriction marks the latest prohibition on customers moving funds on to the exchange from conventional banks and other types of financial accounts.

Deposits through the UK’s Faster Payments network have also been disabled over the past week. Barclays, one of the region’s biggest lenders, said Monday that it is barring UK clients from buying cryptocurrencies on the exchange using bank cards. …”

Chuck again… I had a reader send me a note that last time I wrote something about the cryptocurrencies and said that I only wrote about them when things were going bad for the… Well, he won’t be disappointed today, because that’s what this article was all about! 

Oh, and here we have another Gov’t agency using the term “temporary”… Yeah, like the removal of Gold backing the dollar was only “temporary”, along with taxes, and many other things Governments have used the word “temporary” to lesson the blow of the announcement… I’m just saying… 

Market Prices 7/8/2021: American Style: A$ .7445,  kiwi .6975,  C$ .7966, euro 1.1832, sterling 1.3793, Swiss $1.0901, European Style: rand 14.3385, krone 8.7562, SEK 8.6032,  forint 302.34,  zloty 3.8342,   koruna 21.8026, RUB 74.44, yen 109.98, sing 1.3512, HKD 7.7695, INR 74.64, China 6.4677, peso 20.07, BRL 5.2141, BBDXY 1,144.91, Dollar Index 92.52,  Oil $71.55, 10-year 1.26%, Silver $26.18, Platinum $1.081.00, Palladium $2,926.00, Copper $4.26, and Gold… $1,812.30

That’s it for today… I apologize for not being able to tell you what’s up with my brain… But I’m at the mercy of the messengers here! So, I guess you’ll know next Tuesday… My Beloved Cardinals  couldn’t complete a sweep of the Giants, as they lost the last game of the series with the best team in the NL…  They now make that 3.5 hour flight from San Fran to Chicago to play the Cubs this weekend before the All Star Game break… The Cardinals only had two All-Starts named to the team… UGH! But I guess when you have a team batting average of like .250 there aren’t any outliers there!  The Cardinals are usually a strong second half team, so hopefully that will hold true again this year!  I’m going to leave you this week with a funny, to lift your spirits… Good friend Dennis Miller sent this to me and now I’m sharing it with you: here goes:           Cross a four leaf clover with poison ivy and you get a rash of good luck. HA!   Carlos Santana and his band take us to the finish line today with their upbeat song: Everybody’s Everything… That song got little Evie bouncing this morning! I hope you have a Tub Thumpin’ Thursday, and a Fantastico Friday tomorrow, and please Be Good To Yourself!

Chuck Butler                 

The Markets Hold Their Breath Waiting For The FOMC Minutes…

July 7, 2021

* The Dollar Index surges on Tuesday… 

* The ISM Services Index falls out of bed in June! 

Good day… And a Wonderful Wednesday to you! Today is finally the day that I’ll find out what’s causing the excruciating pain, at times, in my head, as I report to the hospital at noon for an MRI of my brain. As I said, kiddingly last week, spoiler alert: They won’t find one! HA! The reason for this pain has been on my mind for 2 weeks now… Do you know all the horrible outcomes you can conger up in two weeks?  Well, I’m here to say that I doubt seriously that it’s cancer related, for I’ve been on daily chemo for  the majority of 14 years… And the short periods of time that I wasn’t on chemo, is when I had tumors in my left eye, and right mandible (jaw)… And I didn’t bump my head on anything, recently, although, when I was a youngster, I was knocked out a few times on the football field…  Ok, enough of that! My second fave Doobie Brothers song greets me this morning: Another Park, Another Sunday…  “ City streets and lonely highways I travel down. My car is empty and the radio just seems to bring me down I’m just tryin’ to find me A pretty smile that I can get into….It’s true, I’m lost without you”

Another day of stuck in the mud for the currencies… The euro say a tiny bit of slippage during the day, and the Aussie dollar (A$) lost ¾’s of a cent on the day. The BBDXY started the day at 1,140.37 and ended it at 1,144.42… A strong move in the index, but across the board the currencies all looked at or near their trading figures of yesterday… The price of Oil saw a huge slippage in price yesterday, falling from $76 on Monday to $73 and change on Tuesday… Here’s something for you to think about… All the gas stations raised their prices for gas on Monday… How long do you think it will take them to lower them again? Yeah… they’ll drag their feed… and get every red cent they can get from you and me who need gas to motor our vehicles…

Gold started the day yesterday up $18 but couldn’t hold or add to that early morning gain, and ended the day only up $4.30… Silver couldn’t hold its 18-cent gain and ended the day losing 35-cents, but remaining above $26…  The only inflation news I saw yesterday was the price of propane has doubled since early in the year, and is now $1.00 I have a big honking gas grill that I never use any longer… Only opting for charcoal either with my Big Green Egg, or Weber grill…  That big honking gas grill used to go through a tank of propane in a month, and I would have to take it out, go to the hardware store and get it filled… I can’t imagine what that would cost per month today!  Well, I guess I can if I really put my mind to it, but that hurts my head, so I won’t…

In the overnight markets last night…. The markets were surprised by the huge jump in the Dollar Index yesterday, and I’m scratching my bald head trying to figure that one out too… The Currencies, overnight stayed in their recent ranges, and Gold & Silver are back on the rally tracks this morning, with Gold up $9.50, and Silver up 25-cents… 

The only piece of data yesterday shouldn’t have helped the dollar, as the Services Index (ISM) fell out of bed, falling from 64 in May, to 6o in June… it was pointed out that this is a sign of stagflation… prices go up but production goes down… Well, what ever it is, it shouldn’t have led to a rally in the dollar index!  

Leads me to believe that the folks that administer the Exchange Stabilization Fund (ESF) were bored and had to spend some of the ESF’s funds… The dollar index rallies, and Gold & Silver can’t hold their early gains… while the Services Index falls out of bed…  Something smells fishy here and it isn’t yesterday’s catch! 

So, have you been reading about the Reverse Repos at the Fed?  Yeah, it’s gotten crazy again, with banks just laying off all their low yielding stuff to the Fed….   The banks then just leave the cash that Fed pays them at the Fed… I’ve got a story for you in the FWIW section today that talks about this and what it’s doing in the markets, so stay tuned, don’t change that dial!

Well, the U.S. Data Cupboard today has the Fed’s FOMC Meeting Minutes, that I talked about yesterday… The markets will be holding their collective breaths until these minutes are printed this afternoon..  I say.. what’s the big deal? Since the meeting Fed Chairman Jerome Powell has talked a couple of times and explained that interest rates aren’t going to be raised until 2023… End of discussion… But the markets being markets will make a big deal out of these minutes… So hang onto your hats today, the wind will be gusting at times from the FOMC Meeting Minutes. 

To recap… There was a HUGE rally in the Dollar Index yesterday, but most of the currencies remained in their recent ranges, with only the A$ getting whacked, but it’s not part of the dollar index, so what ever is going on there is above my pay grade… Gold couldn’t hold its huge early morning gain of $18 yesterday, and only gained $4.30 on the day, and Silver did the same, losing its early morning gain of 18-cents to end the day down 35-cents… Chuck believes the ESF was back at work buying dollars…  Chuck also points out the mess in the reverse repos market… 

For What It’s Worth… Well I set this article up earlier this morning, so you know what it’s about… Those darned reverse repos… And this article quotes a man who has pointed out that this was a mess before the pandemic and now it’s even messier, and the article can be found here: Zoltan Sees Reverse Repo Hitting $2 Trillion In Weeks: What Happens Then | ZeroHedge

Or, here’s your snippet: “Two weeks ago, in the aftermath of the Fed’s surprise hawkish FOMC announcement which also hiked the administered rates on the Fed’s overnight repo and IOER facilities by 5bps to 0.05% and 0.15% respectively, we quoted Credit Suisse repo guru Zoltan Pozsar who explained it best in his post-mortem, writing that “the re-priced RRP facility will become a problem for the banking system fast: the banking system is going from being asset constrained (deposits flooding in, but nowhere to lend them but to the Fed), to being liability constrained (deposits slipping away and nowhere to replace them but in the money market).”

What he means by that is that whereas previously the RRP rate of 0.00% did not reward allocation of inert, excess reserves but merely provided a place to park them, now that the Fed is providing a generous yield pick up compared to rates offered by trillions in Bills, we are about to see a sea-change in the overnight, money-market, as trillions in capital reallocate away from traditional investments and into the the Fed’s RRP.

In other words, as Pozsar puts it, “the RRP facility started to sterilize reserves… with more to come.” And just as Deutsche Bank explained why the Fed’s signaling was an r* policy error, to Pozsar, the Fed also made a policy error – only this time with its technical rates – by sterilizing reserves because “it’s one thing to raise the rate on the RRP facility when an increase was not strictly speaking necessary, and it’s another to raise it “unduly” high – as one money fund manager put it, “yesterday we could not even get a basis points a year; to get endless paper at five basis points from the most trusted counterparty is a dream come true.”

5bps is too generous, according to Pozsar who warns that the new reverse repo rate will upset the state of “singularity” and “like heat-seeking missiles, money market investors move hundreds of billions, making sharp, 90º turns hunting for even a basis point of yield at the zero bound – at 5 bps, money funds have an incentive to trade out of all their Treasury bills and park cash at the RRP facility.”

Indeed, as shown below, bills yield less than 5 bps out to 6 months, and money funds have over $2 trillion of bills. They got an the incentive to sell, while others have the incentive to buy: institutions whose deposits have been “tolerated” by banks until now earning zero interest have an incentive to harvest the 0-5 bps range the bill curve has to offer. Putting your cash at a basis point in bills is better than deposits at zero. So the sterilization of reserves begins, and so the o/n RRP facility turns from a largely passive tool that provided an interest rate floor to the deposits that large banks have been pushing away, into an active tool that “sucks” the deposits away that banks decided to retain.”

Chuck again… Ok folks this is a part of the markets that you don’t deal in, and so you are wondering why I chose to print this today… Well, it’s all about banking and what the banks are doing, and you have cash in the bank, do you not? It’s a vision of what’s to come… mark my words on that! And that’s not a good thing, as I don’t see all this working out smoothly, and no one going home with tears in their eyes…  I’m just saying… 

Before I head to the Big Finish today, I wanted share with you this quote, that good friend Dennis Miller sent me yesterday… Don’t just read it once… Read it again, and again, until you completely understand what he’s telling you: “”What are the differences between Mark Zuckerberg and me? I give private information on corporations to you for free, and I’m a villain. Zuckerberg gives your private information to corporations for money and he’s Man of the Year.”

Julian Assange

Market prices 7/7/2021: American Style: A$ .7516,  kiwi .7048, C$ .8040, euro 1.1822, sterling 1.3835, Swiss $1.0829, European Style: rand 14.3084, krone 8.6718, SEK 8.6164,  forint 300.82,   zloty 3.8205,  koruna 21.7084, RUB 73.77, yen 110.71, sing 1.3465, HKD 7.7673, INR 74.60, China 6.4674, peso 19.95, BRL 5.1333, BBDXY 1,143.53, Dollar Index 92.54,  Oil $74.65, 10-year 1.35%, Silver $26.47, Platinum $1,104.00, Palladium $2,934.00, Copper $4.33, and Gold… $1,807.50

That’s it for today… Another Chamber of Commerce day here in my summer home…  I read yesterday that there was a map printed of the hot spots around the world… I sure hope they didn’t mistake the Midwest for a hot spot! Because we aren’t! You know, in the 60’s, I recall two weeks in the summer one year, where the daily temperature was above 100… No one was screaming about hot spots then, it was summer! And while I’m on that subject, have you ever noticed the nightly weather reports where they show the record high dates? They’re always from the early 1900’s! Well, not always, but most of the time… And those folks didn’t have air conditioning! Tough Old birds, for sure! My beloved Cardinals  won again in San Fran last night… Of course I couldn’t stay up to watch the game, as it was played in San Francisco and started about the time I’m about to call it day… Same thing tonight, and then I do believe the Cardinals are finished playing on the West Coast for this year… YAHOO! The Rolling Stones take us to the finish line today with their song: Dead Flowers…  (I love this song!) It’s from the Sticky Fingers album, of which is the only Stones album I own… I hope you have a Wonderful Wednesday, and please Be Good To Yourself!

Chuck Butler

 

 

The Housing Bubble Comes To The Midwest…

July 6, 2021 

* currencies have been stuck in the mud… 

* Oil price spikes higher… 

Good day… And a Tom Terrific Tuesday to you!  Since this is the first Pfennig of July, Pfennig tradition calls for: There I was on a July morning, looking for love, with the strength of a new day dawning, And the beautiful sun….(Uriah Heep) What a marvelous weekend, weather wise, and good company, friends, family, and lots of sunshine… Normally this time of year, it’s so darn sweltering hot, steamy, humid, and unbearable outside, but not this year! Temps were warm, but not hot and a good time was had by all… the pain I’ve been dealing with in my head, is better… I had some bad days since we last talked, but I got through them, just like I’ve done with  all the other health obstacles that have been put down in front of me through the years!  I’m not bragging, I’ve been very lucky, and full of God’s grace…  My beloved Cardinals can’t hit their way out of a wet paper sack… Watching their futile attempts to hit have become very frustrating to me…  Oh well, there’s next year!  HA! I listened to Sirius XM’s top 400 Classic Rock songs this past weekend. I was surprised by the # 1 song… And that’s the song that greets me this morning, The Eagles, and their mega hit: Hotel California…

Well, it’s been a few days since I last talked to you… Not much has gone on in that time as most senior traders were heading to the Hamptons on Thursday to extend the holiday weekend.  One thing that did happen or didn’t happen is our friends (NOT!) at OPEC failed to announce production increases, and that caused a spike upward in the price of Oil… So more inflation coming our way in the form of higher gas prices…  And silly me, I was thinking a couple of months ago that with gas prices so low, I could get another gas guzzler! So glad I didn’t go with that idea!

Gold has stopped the bleeding, and has gotten back to moving upward, although it was still below $1,800, until the overnight trading last night…  Silver had a monster day on Friday, closing up 40-cents, but at one time on Friday it was up 61-cents… So, the paper traders are still hanging around, darned them! I had picked out a different word to use but decided to use darned…  Yesterday, while the charcoal was burning all over every neighborhood, and fireworks filled the night time sky, the rest of the world traded, and although the volume was very light, Gold closed up $ 4.30   to end the day at $1,792.60

Going through Twitter yesterday, I came across this tweet from Fred Hickey, who is an analyst… “Physical gold demand in China & now India (accounting for over half of physical purchases) have increased, swinging gold prices from discounts to the global gold price to premiums. Appears gold’s seasonal strong period has begun!”

I sure hope he’s right!  You know that the spot price of Gold isn’t anywhere near where a coil dealer would charge you for a Gold Coin….  The physical demand for Gold has been so strong, and that allows minters to charge an arm and leg for minting coins, and those prices are passed down the the consumer/ buyer…   There are no more discounts, folks… If you’ve procrastinated on buying Gold, then you’re out of luck… I’m just saying…  There’s Gold to be bought, but at some hefty prices…

The Currencies have been stuck in the mud since we last talked… For instance, on Wednesday last week the BBDXY (dollar index) was 1,140.75 during the day, and this morning the index is $1,140.37…   There’s just been no real data to trade from and by the time there was some (The jobs Jamboree), most senior traders were gone, leaving instructions to the junior trader to not take any long positions in his absence…  So, this week we should be getting back to normal volume and so on, with the currencies… the dollar had no right to be trading as high as it is… But it is… And makes me think that all currency traders have lost their collective minds…

In the overnight markets last night… There was still no movement in the currencies, but… Gold is rallying up $18.30 this morning, to bring the shiny metal back above $1,800…  And Silver is up 18-cents this morning, and Silver has put that line in the sand drawn at $26 in its rear view mirror…  The price of Oil slipped back below $76 this morning, after rising to $76 and change after the announcement or non announcement I talked about earlier. 

The good folks at GATA sent me this yesterday, that they pulled from Reuters: “Russia’s finance ministry said today it would buy 13.5 billion rubles ($184.25 million) worth of foreign currency a day between July 7 and Aug. 5, an increase in the amount of daily operations from the previous month.

The finance ministry said its regular foreign exchange and gold purchases on the market will total 296 billion rubles ($4.04 billion) over the next month.”

Chuck again… Hopefully that buying will keep Gold well bid, and the dollar down, as I’ve chronicled here previously, the Russians are anti dollar… so they won’t be buying dollars! Most likely euros and renminbi, but at this point we don’t really know.

Ok… more signs that a housing bubble is blowing in the wind, the St. Louis Post Dispatch reported that The average sales price of a single-family home in St. Louis and St. Louis County spiked to $324,061 in May, up 20% from that time last year. This is the Midwest folks… even in the the last housing bubble, housing didn’t get as out of touch with reality as the rest of the country did… So, this is HUGE news… When the housing bubble visits St. Louis, then we’ve got a full blown housing bubble…  I’m just saying… 

Well what have we here?  Seems that Venezuela is preparing to once again lop off zeroes from the national currency in an attempt to simplify daily transactions which sometimes barely fit on a calculator or require swiping cards multiple times to complete a purchase. 6 zeroes…. That’s what they are going to lop off their currency’s price!   Good friend Dennis Miller mentioned this the other day, and I said that it reminded me of Mexico in the 90’s when they moved their decimal point to beef up their currency…  Crazy 3rd world countries, that’s all I have to say about that!

Well, even though we’re back to working this week as a country, the data stream is still dry, with the FOMC Meeting Minutes the prize piece of data this week… UGH!   The markets will react ignorantly toward the minutes, as I’m sure they will contain some conversations about tapering and rate hikes, of which the markets will go crazy over…  I’m just telling you this now, so that when the dollar is being bought hand over fist on Wednesday afternoon, that you’ll know why… 

And then in about a week to ten days, all that euphoria will fade away, and the markets will be back to realizing that while there may be discussions about tapering and rate hikes, there is no proof that these will happen in the next year, and it’s then and only then that we get back to normal trading… 

To recap… the currencies have been stuck in the mud for over a week now, as most senior traders were off to the Hamptons for an extended holiday weekend. Gold & Silver are back on the rally tracks with small gains last week each day, and then a larger move in the overnight markets last night…  Fred Hickey tells us that physical Gold demand is strong, and the discounts are gone, and the GATA folks tell us that Russia is getting ready to back up the truck for Gold and currencies, which Chuck points out will not include dollars!

For What It’s Worth…  Ok, this is going to be a long one folks, because I truly believe that Dave Gonigam of the 5 Minute Forecast, put together  strong piece here that talks about Julian Assange, and with that I’ll just let Dave take it from here… 

This weekend, as we Americans celebrate whatever’s left of our freedom… an Australian man will spend his 50th birthday in a British lockup as an American political prisoner.

“In a divided Washington, few causes have as much bipartisan support as prosecuting WikiLeaks founder Julian Assange,” reported The Associated Press in late 2018.

That was when Assange was still holed up inside Ecuador’s embassy in London. Word had just emerged that the feds were prepared to bring charges against him under the Espionage Act of 1917. We rose to his defense in our virtual pages… and we recapitulate our case today.

Assange now rots in London’s high-security Belmarsh prison. Six months ago, a British judge rejected a U.S. request for extradition… but she denied Assange bail while the Justice Department appeals her ruling.

Meanwhile, you didn’t hear about it from any mainstream source… but only days ago, most of the government’s case against Assange fell to pieces. More about that later…

For now, we still need to set context… and so we return to that 2018 AP article, and the bipartisan bile: “Many Democrats seethed when the radical transparency activist humiliated Hillary Clinton by publishing the content of her campaign chairman’s inbox. Most Republicans haven’t forgiven Assange for his publication of U.S. military and intelligence secrets. Much of the American media establishment holds him in contempt as well.”

The American media establishment better watch its back: It risks taking itself down along with Assange. And that’s no cause for celebration, even if you hold the American media establishment in the contempt it frequently deserves.

For your editor, this is personal.

I’ve spent literally every working day of my adult life exercising the right to freedom of the press — a right bestowed by the Creator and secured by the First Amendment. That’s 20 years in broadcast news, 14 years and counting in financial publishing.

And yes, the activities we conduct in our trade are protected by the First Amendment — as you’ll soon see.

Our point today is that WikiLeaks too exercises the right to freedom of the press.

It was for this reason the Obama Justice Department opted not to pursue a case against Assange — much as it surely wanted to.

As The Washington Post reported in 2013, “If the Justice Department indicted Assange, it would also have to prosecute The New York Times and other news organizations and writers who published classified material, including The Washington Post and Britain’s Guardian newspaper.”

The Trump administration dispensed with those concerns. When he was CIA chief, Mike Pompeo declared, “We have to recognize that we can no longer allow Assange and his colleagues the latitude to use free speech values against us.”

To be clear, by “us” Pompeo meant the government. It’s the government against the people — and Assange has been on the side of the people, no matter which party occupies the White House or Congress.  

Little wonder Team Biden continues to pursue the case Team Trump began. For many Democrats, it’s pure revenge — as Glenn Greenwald wrote in 2018.

“Their emotional, personal contempt for Assange — due to their belief that he helped defeat Hillary Clinton: the gravest crime — easily outweighs any concerns about the threats posed to press freedoms by the Trump administration’s attempts to criminalize the publication of documents.”

People forget, but WikiLeaks has served as an essential source of information about how the economy and the markets really work — information that would have never come to light otherwise.”

Chuck Again…  Dave’s article goes longer, and you’ll have to visit the Agora website to read it all…. Yes, I realize that I’m just a small pimple on the rear end of the U.S .Government, but I do think that one day, should I still be telling the truth about what’s going on that some men in dark suits will show up at my door and take my laptop away…  That’s the world that I do believe we are heading to folks… Are you ready? 

Market Prices  7/6/2021: American Style: A$ .7569,  kiwi .7086,  C$ .8085, euro 1.1840, sterling 1.3857, Swiss $1.0831, European Style: rand 14.2263, krone 8.6257, SEK 8.5694, forint 298.24,  zloty 3.7946,   koruna 21.6264, RUB 73.35, yen 110.71, sing 1.3448, HKD 7.7664, INR 74.45, China 6.4621, peso 19.83, BRL 5.0683,  BBDXY 1,140.37, Dollar Index 92.36,  Oil $75.83, 10-year 1.42%, Silver $26.42, Platinum $1,112.00, Palladium $2,954.00, Copper $4.31, and Gold… $1,811.78

That’s it for today… I’m excited this morning, because little Evie is coming here for the day. Apparently she was sick yesterday and her parents can’t take her to day-care sick, so she comes here! I get to play with Evie today! YAHOO!  Talk about playing to the level of your competition… My Cardinals couldn’t beat the Pirates, the worst team in the division, but beat the Giants the best team in the NL!  Crazy baseball! The Olympics begin in a couple of weeks… And that brings me to a public service announcement… Chuck will begin his two week annual summer vacation on July 20th… There will be no Pfennig during those days, as I don’t even take my laptop with me! R.E.M. takes us to the finish line today with their song: The One I Love…  I hope you have a Tom Terrific Tuesday, and please… Be Good To Yourself!

Chuck Butler

 

 

 

We’ve Heard These Claims From The Fed Before…

June 30, 2021

* currencies drift on Tuesday… 

* Gold & Silver see the price manipulation again… 

Good Day… And a Wonderful Wednesday to you…  I had an awful day yesterday with the pain in my head… I’m not one to subject myself to pain medication, but… There comes a point, where there’s no other choice, and that’s where I was yesterday afternoon…  This morning is touch and go so far, so this may or may not be of regular length today… And quote frankly, I don’t think there’ll be a letter tomorrow, as I’m just not up to doing it, with all this pain in my head. That will send us into the 4th of July holiday weekend, with Sunday being the actual holiday, and Monday being the work week holiday… I have to wait until next Wednesday for my brain MRI… stupid people… And that’s all I have to say about that! REO Speedwagon greets me this morning with their top 70’s hit: Ridin’ The Storm Out… Which is what I fell like I’m doing…

So, I told you yesterday that I didn’t see the currencies doing much this week, and that they would probably result in nothing but drifting this week… And that’s exactly what we had yesterday! Get this… The BBDXY was 1,138.79, yesterday morning, and 1,138.75 at the day’s end… The Dollar Index also showed drifting as it opened yesterday morning at 92.04, and ended the day at 92.02…  So, nothing to see here, move along…

Gold & Silver however, didn’t see any drifting, and took shots to the mid-section yesterday. Gold lost $17.30 to close at $1,762.10, a multi-month low… And Silver lost 35-cents to close below $26, at $25.84…  James Rickards is back to calling a huge gain in Gold… I found this in Dave Gonigam’s 5 Minute Forecast yesterday…  And here’s what Rickards sees…

“Gold’s third bull market began on Dec. 16, 2015, with gold hitting a bottom of $1,050 per ounce at the end of the prior bear market. Since then, gold has rallied to about $1,800 per ounce as of this writing, almost an 80% gain.

“If we take a simple average of the price gains and durations of the two prior gold bull markets, we arrive at a 1,435% gain over a period of 10.7 years,” Jim says. “Applying that gain and duration to a baseline of $1,050 per ounce beginning in December 2015 leads to a projection for this bull market of $15,070 per ounce by August 2026.” – James Rickards in the 5- Minute Forecast…

Well, I sure hope I’m still around in 2026 to see that!  But, to me that’s quite a forecast… And I just can’t get my arms around $15,000 Gold… But IF it does get there, my kids and grandkids will be celebrating, I’m sure!

In the overnight markets last night… saw some dollar buying, not much but the BBDXY rose to 1,139, and the euro dropped below 1.19… Gold & Silver start the day on positive notes, with Gold up 50-cents and Silver up 13-cents to draw close to $26 once again. I really don’t see the ADP Employment report that’s due to print this morning holding a grasp over the markets, but then maybe traders are desperate for something to trade off of that it will be, today… But like I said I doubt it… 

So another day of kicking ’round the cobblestones, look at the fun in feeling groovy! 

OK… time for some silliness… Ok, I had to laugh out loud when I read this tweet by Sven Henrich, of whom I’m quoted off of Twitter before… This time he had this line that really hits home: “When will the Fed get slapped with an anti-trust suit for monopolizing the entire financial market?”   LOL!

Too bad it’s true about the Fed, and not about them being slapped with an anti-trust suit!

And back to our regular programming… And in other news… I read yesterday that some grocery stores are going to start charging 10-cents a bag for non-reusable shopping bags…  Oh, it’s starting here folks… right where it’ll be added to your grocery bill, probably without you knowing it… Until… you do!   And I know you can’t wait for digital dollars to appear, and your bank begins to charge you for who knows what, in fees… It’s all starting right here, right now with grocery stores…  a fee for this, a fee for that, and if you don’t like it, a fee for whining!

Ok.. I got to thinking the other day, in between periods, when my brain hurt so much I couldn’t think, that I’ve heard this song before… What song am I talking about? The song the Fed heads are singing about inflation, but only the words have changed…  Remember when then Fed Chairman Alan Greenspan said that there was no housing bubble?  And that real estate always went up?  And then no one except me, held his feet to the fire when the housing bubble burst and almost caused a collapse of our financial system!  Well, recently current Fed Chairman Powell, was singing from the same song sheet as Greenspan, but only this time he’s saying there’s no inflation to speak of, that’s it not real, and will be gone soon…   I’m going out on a limb here and say that he will put the Fed’s batting avg. at .000 of being correct…

A day without some talk about inflation is like a day without pain… no wait that’s just me, for everyone else it’s like a day without sunshine…  So, who else to set things straight but the best selling author, and publishing guru, Bill Bonner…   I’ll start with how Bill was showing how Paul Krugman is wrong most of the time, and let him take it from there, this is from Bill Bonner’s Diary:

“But what do we learn from Krugman?

He tells us not to worry about inflation – so, it is inflation we should be worried about.

He tells us central bankers will “step on the brakes” when inflation begins to go over the “speed limit.” Ergo, central bankers will not put on the brakes at all; they will push down on the accelerator.

He tells us not to worry about a replay of the 1970s. But wait…

In the 1970s, U.S. national debt stayed under $1 trillion. Now, it is over $28 trillion.

Total U.S. debt – households, businesses, and the government – was still under $2 trillion in 1971. Now, it’s over $85 trillion.

And in the 1970s, central bankers – as well as leading economists – still feared inflation and believed they had a duty to keep it under control. Now, they are under Krugman’s spell.

Inflation is no problem, they believe. And more government spending is the cure for every problem – from global warming to inequality.” – Bill Bonner’s Diary

In case you didn’t notice, I’m using a lot of quotes from other people today, as I really don’t have much else to add to the market movements… The currencies are drifting with no economic data, and Gold & Silver got manipulated downward once again yesterday.

The U.S. Data Cupboard yesterday has the Case/Shiller Home Price Index, which showed an increase in home prices for April… Wait until next month’s report, that’ll really show an increase, in my humble opinion… But there’s not a new housing bubble forming, here… according to the Fed…   Of course as I told you earlier, they’ve sung from that song sheet before, and were so wrong, they were almost right…

Today’s Data Cupboard as the ADP Employment Report for June…  And Friday we’ll see the color of the BLS’s Jobs report at the Jobs Jamboree…  But as I’ve told you before, I don’t care what the BLS prints any longer, it’s all lies and doubletalk… UGH

To recap… The currencies drifted yesterday, and Gold & Silver got manipulated downward once again… Chuck gives us the thoughts of James Rickards and Bill Bonner today, now that’s a 1-2 punch that carries some umph!  And that’s that!

For What It’s Worth…  Long ago, I used to quote the guys at Bullion Star.com a lot… But then they kind of when separate ways, and I lost track of them. Then yesterday, I found this on Ed Steer’s letter, that highlighted a story on BullionStar.com, and I knew then I just had to use it, because, after reading it, I had already planned some snide remarks, not about the article. So that’s the FWIW article today, about Central Banks buying physical Gold, and it can be found here: Thai central bank leads pack, buying 90 tonnes of gold over April and May (bullionstar.com)

Or, here’s your snippet: “In early April this year, the Hungarian central bank stunned gold markets with the surprise that it had purchased a massive 63 tonnes of gold during March, and in doing so tripled its gold reserves from 31.5 tonnes to 94.5 tonnes.

At the time, this 63.5 tonnes purchase (the details of which we covered ) was the largest year-to-date gold purchase by a central bank during 2021.

Fast forward to June and that record has now been broken, as Thailand’s central bank has now made public that over the two months of April and May inclusive, it purchased a total of 90 tonnes of gold, thereby putting the Bank of Thailand in the pole position of the global central bank gold purchases during the first half of 2021.

In fact, with China and Russia now ‘officially’ out of the market for buying gold since 2019 and early 2020, respectively, this Bank of Thailand gold buying is the largest short-term gold accumulation operation by any central bank sovereign since the Polish central bank bought 100 tonnes of gold in London during the first half of 2019 and promptly to Warsaw.

Thailand’s 90 tonnes addition in its gold reserves over April and May comprised a 43.5 tonnes increase in during April, and another 46.5 tonnes increase during May, taking its total gold reserves from 154 tonnes to 244 tonnes, a 58.4% increase.”

Chuck again… Ok, we’ve got these Central Banks loading the boat with physical Gold that they have bought, and the price of Gold goes down?  Thanks a lot you dastardly price manipulators, for nothing, absolutely nothing, say it again!

Market Prices 6/30/2021: American Style: A$ .7506,  kiwi .6990, C$ .8075, euro 1.1888, sterling 1.3866, Swiss $1.0866, European Style: rand 14.2973, krone 8.5468, SEK 5.070,  forint 295.53,  zloty 3.7992,  koruna 21.4176, RUB 72.53, yen 110.53, sing 1.3440, HKD 7.7659, INR 74.24, China 6.4605, peso 19.82, BRL 4.9340, BBDXY 1,139.10, Dollar Index 92.10,  Oil $73.87, 10-year 1.45%, Silver $25.98, Platinum $1,064.00, Palladium $2,780.00, Copper $4.21, and Gold… $1,762.60

That’s it for today, this week and until next Tuesday… And by then hopefully I’ve weathered the storm and gotten some relief for the pain… I’m really surprised I made it this long this morning, as I was ready to throw in the towel at the onset this morning! But I soldiered through… There’s really nothing I can do to help this situation except take the pain medicine… Don’t worry, I hate taking it so much, I would never be tempted to get addicted to it… As I always tell the nurse after she goes over my medicines… “Better living through Chemistry”…   So, what will you do for the 4th of July 3-day Holiday Weekend?  I used to be a big fireworks guy… But not so much any more…  Instead, I’ll put some huge chunk of meat on the Big Green Egg, smoke it till the sun doesn’t shine, and have a great Bar-b-que, even if it is just me and Kathy!  You know what, after dealing with the hospital yesterday, I’m tired of dealing with stupid people! People that take no pride in their work, people that don’t care that the customer is who they need to take care of!  And not the other way around! I’m tired of it… And from now on I’m going to be a real pain in the rear to people who treat me like that… So watch out America! Grand Funk Railroad takes us to the finish line today with a very apropos song: We’re An American Band…  “We’re coming to your town, we’ll help you party it down, we’re an American Band” I hope you have a Wonderful Wednesday, and big 4th of July holiday, and please remember to Be Good To Yourself!

Chuck Butler

Yellen Talks About The Threat Of A Default…

June 29, 2021

* Currencies drift on Monday… 

* Choppy trading in metals continues… 

Good Day… And a Tom Terrific Tuesday to you! Rain, rain please go away, Chuck wants to go outside and play! We’re stuck in a weather pattern that keeps these Thunderstorms popping up at any time, and brother have they brought the rain! And according to my trusty weather app, we’ve got 3 more days of this weather pattern. Well, my trip to the oncologist yielded the news that I’ve lost another 9 lbs in the last month since last seeing her… I told her, “I was wondering why my pants keep falling down!” I’m waiting for the scheduling dept. to call me to give me the appt. to have an MRI of my brain… (spoiler alert: they won’t find one! HA!) No seriously, I’ve been experiencing really bad head aches for a week now, so the MRI will tell us why…  I won’t beat around the bush here, with my history of cancer popping up like those Thunderstorms, anywhere and any place, I’m concerned about what the MRI will find… Most likely I’ve pinched a nerve in my neck that’s causing the head aches… Recall, I told you I had done something to the trap muscle in my neck about 10 days ago? One of my fave guitarists, Alvin Lee, and his band Ten Years After greet me this morning with their song: I’d Love To Change The World….

Well, we ended last week with the currencies moving higher VS the dollar, and Gold rising $7 on Friday, with Silver adding 18-cents to its value to end the week. The Data on Friday was interesting, as Personal Income in May was down -2.0%, and Personal Spending was flat…  Which told me that the stimmy checks have all been spent, and now there’s no more dinero to spend…

Yesterday we saw the currencies drift on the day, the BBDXY which when I last wrote to you last Thursday, was 1,137, and yesterday at the close it was 1,137… So no movements to speak of… And Gold lost $3.10 yesterday while Silver lost 2-cents!  Gold closed yesterday at $1,779.40, and Silver at $26.19…  There’s really no impetus for Traders to sell or buy dollars at the start of this week, as there’s really no economic data to speak of until we get to Friday, when we get the June Jobs Jamboree… Tomorrow will bring us the ADP Employment Report, but considering the large gaps between the ADP jobs report that the BLS jobs report, I’m beginning to get the feeling that the markets are no longer thinking that the ADP is the precursor of the BLS report…  Shoot Rudy, I could have told them they had no relationship a long time ago, if you’d only had asked me!  There’s no telling what the BLS will pull out of their magic hat when it comes to the jobs report each month…

In the overnight markets… mainly the European session, we’ve seen some dollar buying, not much, but some, as the BBDXY has risen to 1,138.79 and Gold is down $9.90 in the early trading, with Silver following suit and losing 19-cents…  I really didn’t expect to see Gold  & Silver losing ground this morning when I turned on my laptop…  I’ll have to do some searching later to find out what caused that selling… No time right now to do so, and besides, that kind of news doesn’t break as the asset is trading… No time left for me, no time… (Guess Who) 

The Petrol Currencies remain well bid, and we have a new front runner of the Petrol Currencies, and that is the Brazilian real… The real has really been on a run of late, and is trading below the 5 handle, which I don’t recall seeing for a few years now… About 10 years ago, when interest rates around the world were pretty much normal, the real put in the best year of performance of any currency… But that was then… No reason to believe that it could do that again, given today’s mess of interest rates, etc. But, for now, the real is for real…. HA!  

Well, last Thursday I gave you an dissertation on the U.S. Debt…  And then I came across this article on Reuters about how Janet Yellen is banging the drum for an increase to the debt limit, of which I didn’t think even existed any longer… It has all been a show to complain about the debt ceiling and how the Gov’t was going to shut down, etc, etc.,  and then it would get increased…  But everyone had gotten comfortably numb about the debt limit that I hadn’t seen nor heard of any talk of a debt ceiling for years! But apparently it’s still around, and Janet Yellen is fearful of it… let’s listen in…

“U.S. Treasury Secretary Janet Yellen on Wednesday warned Congress that the United States risks a debt default and a new financial crisis as soon as the August recess if lawmakers fail to act quickly to suspend or raise the federal borrowing limit.

Yellen said defaulting on U.S. debt obligations would be “unthinkable” and “would have absolutely catastrophic economic consequences.”

Yellen said that to avoid uncertainty for financial markets, Congress should pass new debt limit legislation – allowing the Treasury to continue borrowing – before the latest suspension expires on July 31.”

Chuck Again…  Joe Cocker did a song in the 70’s called Cry Me A River… That’s when he was doing his Mad dogs and Englishmen bit with the great Leon Russell…  But that’s what I’d tell Yellen, Cry Me a River, Janet….

“I was treated this past weekend to a link to a YOUTUBE video with the author of Rigged, Stuart Englert, who’s book came out in 2020… I recommended the book at that time, because it gave a very good layman’s explanation of how and why the Gold price is manipulated…  So, this video has the author explaining Basel 3, and what could come of it, IF it is adopted and adhered to by the Central Banks of the West… And I have that link for you today… It’s a 20 minute long video, so make sure you reserve enough time to hear what Mr. Englert has to say…  Stuart Englert: Basel III and Gold — What Does it Mean, Why Does it Matter? – YouTube

Spoiler alert: he’s like me in this understanding of what Basel 3 could be, it could be good for Gold, or it may mean nothing…

OK.. onto other things…  Talk that the Federal Reserve should develop a “digital dollar” is everywhere, but a top U.S. central banker today signaled he isn’t on board.

The Fed’s top overseer of the banking system — Fed Vice Chairman Randal Quarles — said he doesn’t see the benefits for a digital dollar and that the new product would “pose considerable risks” to the financial system.”

I got that info from the good Folks at GATA who took it from a story on MarketWatch.com

Before I go on… Let me say that I see what Quarles is doing here… He’s just putting up a smoke screen to be able to say when the whole financial system comes crashing down that he was against digital dollars… But this one person won’t put a stop to the charge to digital dollars, folks… It’s coming… are you ready? 

So… with little in the Data Cupboard this week until we get to Friday, I would think we’ll go through the week really drifting around with the currencies, and Gold & Silver being choppy at best… 

Oh, and there was one other piece of economic data last week that was interesting… The PCE (personal consumption expenditures) a key inflation indicator that the Federal Reserve uses to set policy rose 3.4% in May, the fastest increase since the early 1990s… Yes April 1992.. Where were you in April 1992?  That’s a long time ago in my book… But again, the Fed heads were quick to sweep the number under the rug, and say “move along, nothing to be seen here”…

To recap… The end of the week last week brought about some currency, and metals gains, nothing to write home about, but gains nonetheless. Yesterday, was a day of drifting for the currencies, and Chuck thinks that’s what we can expect the rest of this week as there is no real economic data to print this week until we get to Friday. Gold did lost a bit yesterday, and Silver was basically flat, down 2-cents on the day.

For What It’s Worth… I was reading Ed Steer’s Saturday letter on Saturday, and came across this article that he had highlighted in his letter that can be found here: www.edsteergoldandsilver.com  He pulled it from zerohedge.com, and that’s where you’ll find this article from Kyle Bass, about inflation, and that can be found here: Kyle Bass Slams Fed, Sees Inflation Everywhere He Looks | ZeroHedge

Or, here’s your snippet: “With U.S. stocks back at all-time highs as the market seemingly shrugged off the FOMC’s reaction to the latest inflation numbers, Hayman Capital’s Kyle Bass returned to CNBC for an interview with the “Closing Bell” crew on Thursday, where he offered a dramatically different vision of the present economic scenario vis-à-vis inflation.

In an interview where he expounded upon his claim that the U.S. is already grappling with real inflation rates above 10%, the billionaire investor proclaimed that “in every single aspect of life, I see inflation.”

Why? Because during the past year and a half, the Fed has introduced more broad money into the American economy in the shortest time than we have seen at any point in American history.

“I think look we’re going to see a short-term turn-down in inflation because the initial inflationary burst was enormous…this transitory comment may play out to be true for a short period of time but I think Sarah when you look at the the money supply the broad money in the US system from 1980 to 2010 it it vacillated between 50% and 60% of GDP and post the global financial crisis it moved up from roughly 60% to 68% 69% of GDP now that we’re approaching 90 so in the one year period one and a half year period since COVID started we have introduced 34% more broad money in our system in the shortest time period in the history United States so we’re going to see prices stay high and move higher over time if the fed continues to expand its balance sheet,” Bass said.

Even as the financial press prattles on about the significance of the Fed finally starting to consider tapering its asset purchases, Bass believes that the central bank won’t be able to shrink its balance sheet so easily.

“If you’re in the market place you want to own commodities if you’re in the real world you want to own productive real estate you even want to buy rural land in front of major demographic moves in the U.S…I’d rather own hard assets than equities today because I think we’re only seeing just the beginning of population moves in the U.S.”

Chuck again… I agree with Kyle Bass here… we may well see a pullback of inflation this summer, but… and like Rickards and Rosenberg keep saying, inflation is a 2022 story…

Market Prices 6/29/2021: American Style: A$ .7530,  kiwi .7000, C$ .8085, euro 1.1907, sterling 1.3841, Swiss $1.0860, European Style: rand 14.3482, krone 8.5690, SEK 8.5223,  forint 295.04,  zloty 3.7965,  koruna 21.4072, RUB 71.17, yen 110.60, sing 1.3441, HKD 7.7635, INR 74.17, China 6.4559, peso 19.86, BRL 4.9342, BBDXY 1,138.79, Dollar Index 92.04,  Oil $72.51, 10-year 1.48%, Silver $26.00, Platinum $1,078.00, Palladium $2,758.00, Copper $4.20, and Gold… $1,769.50

That’s it for today… Well the month of June can’t get over fast enough for my beloved Cardinals who have only won 8 games during the month… The June Swoon… UGH! Daily readers will recall me saying back in March, during Spring Training that “This team can’t hit”… I thought we would win games with pitching and defense… But pitching has been bad, except for one pitcher… And well, we haven’t won many games!  Little Evie was here this past weekend on Sunday, and she and I have become good buddies… She gets away with some attitude with her Mimi, mom and dad, but not me… I forgot to mention last week when I was talking about Alex’s birthday on Monday, that it was also the wedding anniversary of Daughter Dawn and Jerry… I do believe it was their 18th…  I remember the crowd at the reception all singing happy birthday to 8 year old Alex… OK… Charlie Daniels takes us to the finish line today with his country rock song: Long Haired Country Boy…   Which I Identified with in my youth!  I hope you have a Tom Terrific Tuesday, and please Be Good To Yourself!

Chuck Butler

 

Petrol Currencies Get Moving Upward VS Dollar

June 24, 2021

* Currencies couldn’t hold their Tuesday gains on Wednesday

* Silver is kept from closing over $26 once again… 

Good Day… And a Tub Thumpin’ Thursday to one and all! Well, my beloved Cardinals come home from a 6 game road trip having only won 1 game… They have to be the worst Cardinals team in 30 years! But the season isn’t 1/2 over yet, so there’s still time to turn things around…  That’s me being the ever optimist here, in spite of what I see on the field each night…  Oh, poor me, right? For once Chuck has to suffer through a losing season… HA!  Another beautiful day here, warm, lots of sunshine, but that appears to be the last one for a few days that is… The weather app says rain the next 7 days.. UGH! I don’t believe it will be days full of rain, just thunder showers off an on, so there will be plenty of time to get outside, with or without sunshine! Red Rider greets me this morning with their song: Lunatic Fringe…  This is a song about the 70’s uprising against Jews…

Well, no beating around the bush today, I tell you straight up that I have a long explanation for you this morning about debt… I have a kind of long explanation of Basel 111, and some optimistic thoughts from me… So, with no more ado…

The currencies couldn’t hold their gains from Tuesday during Wednesday’s trading, and they slipped a little, with the euro coming back to 1.1925, from 1.1950 in the morning, and the BBDXY closing at 1,138.73, up from 1,138.40 in the morning.  The movement wasn’t big… but it was a move in the dollar’s favor on the day… Gold which traded most of the day up, and at one point was up to $1,796.00, before ending the day down 50-cents at $1,779.30… Silver traded much the same way moving higher at one point in the day to $26.39, before settling on a 10-cent gain to close at $25.96, and thus Ed Steer was correct again, when he said that the price manipulators wouldn’t allow Silver to close above $26.00….

In the overnight markets…. There was just a tad bit of dollar selling overnight, the BBDXY dropped to 1,137.05, from its close yesterday of 1,138.74… The euro is well into the 1.19 handle, and the Petrol Currencies are looking perky as I write, the price of Oil is near $73 at $72.97, which is helping the Petrol Currencies with their perkiness…  Gold is up $6 in the early trading, and Silver is up 19-cents, so it will interesting once again to see if these two metals can close above their recent lines drawn in the sand of $1,800 and $26… 

The U.S. Data Cupboard this morning finally has some market moving data, in the form of May Durable Goods and Capital Goods Orders… The usual fare of Weekly Initial Jobless Claims will also print this morning… This data surprised the markets last week with an uptick of Claims for the previous week… You may recall that the April prints of Durable & Capital Goods Orders were very disappointing, and negative… I would expect the boys & girls that do the reports have gotten the memo that says, these reports must be positive this month… And so they will be…

OK… I’ve got a long winded explanation of debt for you taken from my perusal of the Debt Clock…

Well… Long ago, and oh so far away… I fell in love with you, before the second show… No Wait! Come on Chuck, this is serious stuff you’re going to talk about!  OK… got your head on straight now? I guess so… I really don’t want to talk about this stuff, but I will…

I made a trip to the Debt Clock yesterday just for grins… 

The Debt Clock shows us that Total Tax Revenues taken in by the U.S. this fiscal year has been $3.5 Trillion  (rounded off)…  And that the Federal Spending this fiscal year has been $6.8 Trillion (rounded off)…  We are 3/4’s of the way through the fiscal year now… And so far we have amassed a deficit of $3.3 Trillion just this year!  When all the beans are counted our current deficit will be greater than $30 Trillion…

So, where does the U.S. obtain the difference of $3.3 Trillion?  Well, they sell U.S. Treasuries, which right now the 10-year Treasury has an interest rate of 1.45%…  So, that’s bond servicing costs, or interest cost, whichever you prefer to call it. 

Currently our debt is $28 Trillion… 

About $7 Trillion is what is called interagency debt that the U.S. owes to itself…

About $8 Trillion is owed to foreign governments…

The remainder is owned by investors around the world, including the U.S.

So doing the math… the U.S. currently pays interest on about $21 Trillion in issued U.S. Treasuries…($28 Trillion minus $7 Trillion)

(Now not all of the Treasuries are 10 year notes, some are longer dated bonds with higher interest rates, so for our calculations we’ll use 2% as the interest rate)

On $21 Trillion the interest costs per year are: $420 Billion …

So… while the markets got all giddy last week and bought dollars, because the Fed turned somewhat hawkish, let’s review what that means…  So, let’s say inflation begins to soar, and the Fed has no other choice but to raise rates, and let’s also say that interest rates return to normal at 5%… That would mean the interest cost on their debt servicing would be $1 Trillion per year…

Now, how in the world would that work?  Well, unless you as a Gov’t want to default on your debt, you have no choice but to pay the interest costs…  And if you pay the interest costs, you don’t have money for other boondoggles, like welfare, and the war on drugs, and the war on poverty, and oh, even social security might be in the path of the cuts… 

I’m sorry to have gone so long in this discussion, but it needed to be said, and every citizen in this country should understand these numbers, then maybe they wouldn’t be so demanding about receiving stimmy checks, and what have you…  So, I’m leaving it up to you dear reader to get this out to anyone you know…. Otherwise there will be 10’s of Millions of people that don’t understand what happened when the fit hits the shan…. I’m just saying…

OK, one down… now for the next explanation… Basel 3 is an interesting regulation for Banks and this will include the Bullion Banks who happen to also be the price manipulators.  These banks are going to have to reserve more money to hold unallocated Gold…  Here’s quick explanation from the folks at Basel 3…

“So, whilst Basel III does not materially change the treatment of allocated gold, it does increase the costs of holding unallocated gold. But does this mean the unallocated gold market will disappear? No it won’t, but the costs of holding unallocated gold will go up. Unallocated gold is an essential source of market liquidity. The clearing and settlement regime depends on it, and without an unallocated gold market it will be very difficult to finance (and facilitate) the upstream activities of gold producers and refiners, and the downstream users of gold such as jewellers and fabricators. The real economy demand for gold relies on the unallocated gold market. So whilst the funding cost of unallocated gold will increase, we are unlikely to see a major distortion in favour of allocated metal due to the imposition of the NSFR.”

Chuck again…  Gold is a safe harbor asset. Its lack of credit risk,  and its highly liquid nature means it can act as a financial system stabilizer. Anything that discourages banks from holding gold may increase the vulnerabilities of the financial system during liquidity crises.  There are some analysts that believe Basel 3 will be a non event for banks, and other analysts that believe it will be a God send for Gold…  I’m on the fence here, and not sure which mast I want to pin my colors to!

OK… I know that at times I sound doom and gloomy, and I’m really not that kind of person… I’m an optimistic kind of guy, always looking for good, but most of the time finding bad… And so when I was going through Twitter yesterday, I came across this tweet from Jon Gordon, and thought… This is more me… check it out:

“7 Ways to Make Today a Better Day:

  1. Look for the good.
  2. Appreciate the little things.
  3. Be a helper.
  4. Tell someone they matter.
  5. Give more than you take.
  6. Speak words of encouragement and hope (to yourself and others).
  7. Believe the best is yet to come.”

To recap… The currencies couldn’t hold their gains from Tuesday on Wednesday and begin today trying to regain their advantage over the dollar bulls… Gold traded down, then up, then back down on the day and closed 50-cents down. And Silver did the same closing up 10-cents but remaining below $26 once again… Chuck gives a long explanation about debt, he talks a bit about Basel 3, and tries to cover up all his gloom and doom talk with some things to make today better…

For What It’s Worth…  Ok… I’ve followed James Rickards for years, met him in Florida many years ago, and have read all his books. The guy knows what he’s talking about folks… He predictions and forecasts may not come to fruition, but the thought process behind it was good, and therefore warranted being aware… Well, Rickards has a new article about the Great Reset, and I think it behooves us to listen to what he has to say about it. The article can be found here: The “Great Reset” Is Here – The Daily Reckoning

Or, here’s your snippet: “or years, currency analysts (myself included) have looked for signs of an international monetary “reset” that would diminish the dollar’s role as the leading reserve currency and replace it with a substitute, which would be agreed upon at some Bretton Woods-style monetary conference.

Now, it looks like the move towards the long-expected Great Reset is accelerating.

At the recent G7 summit in the UK, G7 leaders gave their blessings to a $100 billion allocation of IMF special drawing rights (SDRs) to help lower-income countries address the COVID-19 crisis.

President Biden fully supports the idea. The White House issued the following statement:

The United States and our G7 partners are actively considering a global effort to multiply the impact of the proposed Special Drawing Rights (SDR) allocation to the countries most in need…

At potentially up to $100 billion in size, the proposed effort would further support health needs – including vaccinations…

A separate press release from the same day continued the same sentiment, stating, “We strongly support the effort to recycle SDRs to further support health needs.”

In another development, IMF Managing Director Kristalina Georgieva said last Wednesday that she expected the fund’s governors to approve a $650 billion allocation of SDRs in mid-August.

The basic idea behind the SDR is that the global monetary system centered around the dollar is inherently unstable and needs to be reformed.

Part of the problem is due to a process called Triffin’s Dilemma, named after economist Robert Triffin. Triffin said that the issuer of a dominant reserve currency had to run trade deficits so that the rest of the world could have enough of the currency to buy goods from the issuer and expand world trade.

But, if you run deficits long enough, you would eventually go broke. This was said about the dollar in the early 1960s. The SDR would solve Triffin’s Dilemma.”

Chuck again… Russia and China have already begun their dedollarization, and now the IMF is ready to replace dollars with SDR’s around the world?  Uh-0h speghetti-0’s…

Market prices 6/24/2021: American Style: A$ .7575,  kiwi .7057, C$ .8130, euro 1.1940, sterling 1.3910, Swiss $1.0888, European Style: rand 14.2140, krone 8.5135, SEK 8.4661,  forint 293.45,  zloty 3.7903,  koruna 21.2797, RUB 72.68, yen 110.82, sing 1.3435, HKD 7.7642, INR 74.05, China 6.4761, peso 20.11, BRL 4.9590, BBDXY 1,137.05, Dollar Index 91.78,  Oil $72.97, 10-year 1.49%, Silver $26.15, Platinum $1,091.00, Palladium $2,692.00, Copper $4.21, and Gold… $1,785.70

That’s it for today… Thanks for sticking with me today as I did some wordy explanations… On Monday next week, I won’t be writing as I will be at the hospital to visit my oncologist… I DO have the date right this time! And since I won’t be writing on Monday, I need to wish my youngest son, Alex , a Happy Birthday today for his birthday on Monday… Very Longtime readers will recall when Alex was 3 and would sit on my lap and help me write the Pfennig, with comments like: $#@*&T%$A HA!  Alex will be 26 on Monday… He a practicing Physical Therapist these days, owns a house, a car, a dog, and has grown up to be quite the responsible adult… I’m proud of him!  As a family, we will probably celebrate his birthday on Sunday, hopefully the weather will be nice, and I can cook some good stuff on the Big Green Egg! I know he loves the way I cook Turkey breasts, so I’m figuring that’s on the agenda for Sunday! I have a picture of Me, Andrew, and Alex at the All-Star Game here in 2009… one of my fave pictures… Oh, and last night Rachel was here and was walking to her car with little Evie, and I came to do the door and said, “hey Evie!”, she turned and ran to me across the front yard, and gave me a big hug… I was so excited that she did that! Made my day, week, year!  Ok, I hope you have a Tub Thumpin’ Thursday, and a Fantastico Friday tomorrow, and a we’ll talk again next Tuesday! The Beatles take us to the finish line today with their song: When I’m 64…  (will you still need me, will you still feed me, when I’m 64?) And Please Be Good To Yourself!

Chuck Butler