Powell: Inflation Is Solidly Around 2%… Really?

September 1, 2021

* Currencies & Metals see little movement on Tuesday…

* ECB to meet tomorrow, with inflation rising… 

Good Day… And a Wonder Dog Wednesday to you! See that? I changed it up today, aren’t I the tricky one? HA!  Man that hurricane Ida sure has caused some damage after landfall, and moving N.E… That video of the highway in Mississippi collapsing was scary… I hope everyone in Ida’s path have taken precautions and will be safe… About 8 years ago, I wrote a Sunday Pfennig, (yes we did those back in the day) and in it I said that one way to reduce our debt was to end all wars… That not only meant the current war in Afghanistan, but also,  the war on drugs, the war on poverty, and we didn’t know about COVID back then but you could easily add in the war on COVID…  What a waste of money through the years we as a country have spent on these stupid things… As if, we could stop drugs… As if we could end poverty… And now as if we could control a virus…. I’m just saying…  Michael Stanley greets me this morning with his rock classic song: Let’s Get The Show On The Road…

I think I heard some of you saying the title of that song, as I went on about money spent on wars… You may recall that I also said that we, as a country, should close all bases around the world and bring the soldiers home to defend our borders… Remember that was 8 years ago, before our southern border became political…  OK, now onto the markets…

Well, the dollar selling that went on in the overnight markets of Monday into Tuesday, saw a stop put to it during the U.S. session yesterday, and the dollar rallied to recover some of its losses overnight. The BBDXY started the day at 1,144 and ended it at 1,146… So not a huge move, but a recovery for the dollar any-old-way you look at it… Gold found a way to add $3.90 to its value and close at $1,815.10. Silver however, never found a bid on Tuesday and lost 13-cents to close at $23.98…  I had a reader from Denmark send me a note yesterday, and asked me if I thought starting a class action suit against the price manipulators was a good idea…

I referred the question to Ed Steer, who happens to be a board member of GATA…  Ed responded quickly, and said, “There have been lots of suits tried, but all have either all petered out, or failed.

Most banks involved have already been charged and found guilty, but they continue doing it anyway, because neither CFTC nor SEC will purse it with the zeal it needs.”

Ed then went on to tell me the following: “And according to Ted Butler, JPMorgan got out of its short positions in everything precious metal related back in March and April of 2020.  That big price smash back then was them exiting stage left.”

I want to thank Ed Steer for that explanation… And thank him for his daily letter on Precious Metals… He’s an expert in the field of precious metals folks… and you can find him here: www.edsteergoldsilver.com

In the overnight markets last night… There’s been little to no movement in the currencies and metals in the overnight and early trading sessions to speak of.  The BBDXY is trading at 1,146.31 this morning after closing yesterday at 1,146.78… So, see?  And Gold starts the day down $1.40, while Silver is flat as a pancake (Head East)…  There’s some economic data for the markets to deal with today, so let’s see where that takes us… 

Ok, here’s a report on CNBC,com this morning that hits home… “The Social Security trust fund most Americans rely on for their retirement will run out of money in 12 years, one year sooner than expected, according to an annual government report.

The circumstances, which were exacerbated by the Covid pandemic, threaten to shrink retirement payments and increase health-care costs for Americans in old age sooner than expected.

The financial outlook for Social Security and Medicare, two of the nation’s preeminent safety net programs, has deteriorated over the past year.”

Chuck again… My dad used to tell me that I should never rely on Social Security for my retirement. He told me that he didn’t see how it would still be feasible to pay people their money back when so many baby boomers were retiring in the coming years…  That’s the thing that makes me so angry, folks… I’m only asking for my money back that I put into the system through payroll deductions that I made since I was 15 and working selling subscriptions to the Globe Democrat, door to door! 

The European Central Bank (ECB) will meet tomorrow and as I told you yesterday, inflation in the Eurozone is rising quickly… So what will the ECB do, ignore the rising inflation, like their brothers-in-arms at the Cartel? Or do they address it, and act like a real Central Bank that’s main mandate is to not allow inflation to rise? 

And don’t look now, but Japan is implementing another stimulus plan… That makes 100 of them so far… I’m exaggerating here, but you get the point, they keep making stimulus packages, and their economy is remains mired in a deep funk…  We’re turning Japanese, I really think so! 

I had a longtime reader send me note yesterday, asking where the recap had been? I was like, Holy Cow, I knew each day I was forgetting something, but couldn’t put my finger on it, but that was it… The RECAP! What dolt I had been forgetting to add that each day…

Well, the Data yesterday here in the U.S. wasn’t good, and makes you wonder why on earth did the dollar rally? Everything from Consumer Confidence to Pending Home Sales saw HUGE drops from the previous month… The only piece of data that was positive was the Case/Shiller Home Price Index, which went from +16.8% in May to 18.6% in June… That’s the fastest pace of House Price appreciation on the books, in history, folks… And there’s no Housing bubble?  And that positive data print is actually a negative data print if you are someone looking to buy a house right now…

The stupid Consumer Confidence saw a HUGE index number drop from 125.1 in July to 113.8 in August…  I’ve always said that this data print was nothing more than a pulse of the stock market… Well, the stock market hasn’t exactly been on fire lately, but it hasn’t exactly lost a lot of ground either, and so that makes me wonder what’s on the minds of these Consumers right now… I would think the Delta variant of the COVID Virus is the monster under the bed right now… 

If I were to be asked this by an interviewer, I would say that it’s the same thing I’ve been saying for months now, and that is, that we all know in our heart of hearts that there’s something wrong here in the U.S. and while we can’t put our finger on exactly the one thing that’s wrong, we all know that somewhere along the line there’s going to be debt reckoning…  Good Friend, Dennis Miller, sent me a picture yesterday of a gas station bill board, that said, “Has anyone tried turning off the U.S. and turning it back on?”….

OK… onto other things… I received a note from the great Mogambo Guru on Saturday, welcoming me back writing the Pfennig… See? The Mogambo sounds harsh at times in his notes, but he’s got a big heart!  I wish I had thought of him when I was thinking of who could write something for me when I returned… Of course I was completely satisfied with the stuff Frank Trotter wrote for me…  (Thank you Frank! ) But bringing the great Mogambo Guru out of retirement would be a hoot! 

Last Friday, Cartel Chairman Jerome Powell, was talking with reporters after he signaled that the Cartel’s monthly bond purchases would begin to be tapered by year end, and said, “while inflation is solidly around the Fed’s 2% target rate, “we have much ground to cover to reach maximum employment,” which is the second prong of the central bank’s dual mandate and necessary before rate hikes happen.”

Now, I’m going to take this apart because he has thrown me a softball without any arch to hit…  First of all how on earth does he believe that inflation is “solidly around 2%”?  The Fed’s key inflation gauge just showed a 3.6% increase in August the largest since 1991… So tell me, how does his math work out that 3.5% is solidly around 2%… Oh, wait! I see what went wrong here, he meant to say that inflation was solidly higher than the 2% target….  Not that I want to put words in his mouth… Or, better yet, maybe I should be his writer! 

And notice that he said that the Cartel’s dual mandate is inflation and employment? When is he going to stop being worried about the stock market? Well, at least we all know that he knows what the Fed’s responsibilities are, now we have to wonder why inflation isn’t getting attention…

Today’s Data Cupboard has the ADP Employment Report for August, and the so-called experts believe it will show that 600,000 people found jobs in August… I know one thing, that if that’s true, then there’s 600,000 more jobs that need to filled before the economy can grow… Now, whether or not they get filled is another story… There are hoards of people willing to get back to work, and then there’s hoards of people that just don’t want to go back to work… And for that not wanting to work we can give the credit to our illustrious leaders (NOT!) and the Cartel for keeping rates ultra low…

To recap… The dollar was bought on Tuesday during the U.S. session, although the buying didn’t recover the loss the dollar took overnight.  The U.S. Data was awful yesterday, except for the Home Price Index, which we all knew would be strong again… So, there was no reason for the dollar to rally, but it did… Chuck asks Ed Steer about suits being filed against the price manipulators, and Chuck realizes that he’s forgotten the recap for over a week! ‘’

For What It’s Worth…  Ok, this is an article that some will like and some will not, but it’s investor John Paulsen talking about Gold and other things like Bitcoin, and it can be found here: Is Bitcoin a Good Investment? Billionaire Paulson Says Crypto ‘Worthless’ Bubble – Bloomberg

Or, here’s your snippet: “Now though, more than 14 years after CDOs and credit-default swaps dominated everyone’s attention, Paulson is again seeing signs of excessive speculation.

Paulson, 65, is increasingly concerned about rising prices, he said in an episode of “Bloomberg Wealth with David Rubenstein.” The rapidly expanding money supply could push inflation rates well above current expectations, he said, and gold, which he’s backed for years, is primed for its moment.

His harshest words are for the hottest investments of this era. SPACs, on average, will be a losing proposition, while cryptocurrencies are a bubble that will “eventually prove to be worthless.”

“I wouldn’t recommend anyone invest in cryptocurrencies,” Paulson told Rubenstein, co-founder of Carlyle Group, on Bloomberg TV.

Paulson’s dismissal is sure to attract critics after digital assets vastly outperformed gold in recent years. His record since the “greatest trade” has also been mixed. He turned his hedge fund firm into a family office last year after assets dropped to about $9 billion in 2019 from a peak of $38 billion in 2011 and he found himself managing mostly his own money.”

Chuck Again…  it’s nice when I read about a famous investor that has the same thoughts as I do…

Market Price 9/1/2021: American Style: A$ .7340,  kiwi .7050,  C$ .7937, euro 1.1820, sterling 1.3755, Swiss $1,0905, European Style: rand 14.4366, krone 8.6957, SEK 8.6306,  forint 294.29,  zloty 3.8167,  koruna 21. 5179, RUB 73.29, yen 110.33, sing 1.3465, HKD 7.7770, INR 73.01, China 6.4608, peso 20.03,  BRL 5.1685, BBDXY 1,146.31, Dollar Index 92.63,  Oil $68.60, 10-year 1.32%, Silver $23.98, Platinum $1,014.00, Palladium $2,570.00, Copper $4.22, and Gold… $1,813.70

That’s it for today…  Cardinals & Reds play two today, as IDA rained out last night’s game…  And we’re supposed to see not as hot weather, so that means I’ll be outside watching the first game at least… I sat outside reading for about an hour yesterday, and then had to go inside, it was getting too hot! I love warm weather… not excessively hot weather, of which we haven’t had a ton of this summer here in the Middle of the country. Well, I haven’t fallen lately and that’s a good thing, and the brain fog seems to have lifted. I still get worn out too easily… My platelets were low last week, and so I have to go back to the lab next week for another blood draw to see if they’ve improved… I would imagine they will have improved, as it was too soon after getting out of the hospital to take a reading of them… I’ve been able to keep my blood sugars in check, and that’s a good thing! The Chicago Transit Authority, aka Chicago, takes us to the finish line today with their song, and one my faves: Beginnings… I hope you have a Wonder Dog Wednesday, and please Be Good To Yourself…

Chuck Butler

 

Eurozone Inflation Hits A Multi Year High!

August 31, 2021

* Currencies & metals give back some of their Friday gains on Monday

* The overnight markets see more dollar selling… 

Good Day… And a Tom Terrific Tuesday to you! What a great weekend I just had with good friends on a lake in SW Missouri. The weather was beautiful, the meals were outstanding, and the company was fabulous! A GREAT BIG TANKS to hosts: Kevin and Lisa… I’m still working on trying to regain my strength, and I still feel like my balance is off, but those are signs that I had Covid… I wanted to point out that good friend, Dennis Miller, interviewed me regarding the Fed, for his weekly letter, that posted to his website: www.milleronthemoney.com . So, if you want to see what I had to say, check it out, and while you’re there, subscribe to his newsletter! Carlos Santana greets me this morning with his classic rock song: Evil Ways… 

Well, our 20 year war is over… The last of the American forces left on Saturday… I sure hope no one was left behind in that God forsaken land… My God Bless all the soldiers, alive or otherwise, while we tried to change the Middle East… We, as a country, spent more than $5.4 Trillion and lost more than 4,800 U.S. soldiers, and thousands of maimed soldiers returned home.. For what? Those people have been fighting each other for centuries, even our soldiers had to wonder at times what the hell they were doing there…  Even though the evacuation was a chaos… I’m glad we as a country are out of there!

Ok, sorry about that rant… you came here for markets and news on dolts… And I begin with in op-ed… sorry….  Well, the BIG NEWS last week was that I was wrong about Cartel Chairman Jerome Powell’s speech to the virtual attendees of the Jackson Hole Boondoggle. Recall I said that I didn’t think Powell would announce the framework for Tapering at this virtual conference. But, he proved me wrong, and did announce the framework for Tapering… I got to thinking about this last night, and to me Tapering is like a rate hike, even though Powell made certain that the markets didn’t take the Tapering talk as a rate hike… So, just like the inflation we’re experiencing, The Cartel says it doesn’t exist… And as far as Tapering equaling a rate hike, The Cartel says no it isn’t…  What a bunch of crock!

So, what did the currencies and metals do with this info? They rallied! Gold was up $24 on Friday, while Silver added 43-cents. The euro traded above 1.18 once again, and most of the currencies followed the Big Dog, euro, as it left the porch and chased the dollar down the street… But that was Friday… And with the long weekend to think about what the Cartel had said, the currencies and metals gave back some of their Friday gains on Monday… Gold lost $6.60 to close on Monday at $1,811.20, and Silver gained 2-cents to close at $24.1l… The euro lost a little ground, yesterday, but remained about 1.18..

In the overnight markets… Traders were back to selling dollars, as witnessed by the BBDXY, which closed yesterday at 1,147.54, and is trading at 1,144.67 this morning… The Eurozone received some news this morning that should make for an interesting European Central Bank (ECB) meeting on Thursday… Eurozone inflation hit a multi year high in July, and I don’t think I need to remind you that Germany, the largest member of the Eurozone, has a BIG allergy to inflation, as there are still people in Germany that remember the hyper-inflation era that roared its ugly roar during the Nazi era… And Germany is NOT going to sit by idly and wait for inflation to rise, like our Central Bank… 

Gold is working on gaining back its loss yesterday, in the early trading the shiny metal is up $3.60,  and Silver is up 6-cents…  I want to point out something that happened yesterday…  Silver ended the day 2-cents but that was more than 28-cents lower than its intra-day high… And Gold was down $6.60, but was up during the day… Clear example of price manipulation… But it is what it is… We take the good with the bad, and roll with the punches, us “Gold people”… 

Last week, St. Louis Cartel President, James Bullard, was on TV spouting off that the economy is very strong on something like that.. So I went to Twitter to see what David Rosenberg had to say about that, and here’s his Twitter post: “Jim Bull(ard) just said on CNBC that we have a “booming economy” on our hands. And here we are, set for a fourth straight month of negative real retail sales figures. In the past, such a losing streak only occurred in recessions.

I can always depend on David Rosenberg to set the record straight! Thank you Mr. Econoguy! OK… I had a dear longtime reader send me a note on Friday, asking me to address his list of questions  that included: Gold vs. Silver? Proportions?

Actual metal vs. paper ETFs/ “MarketSafe Bullion CDs/etc. Proportions, too?

Liquidity…both selling/buying?

Allocated vs. unallocated vs. at home in the safe?

Storage location…within the US or somewhere outside and untouchable?

The safest, most reliable, and easiest folks to deal with?

OK…  Gold Vs Silver?  I really own more Silver than Gold… But I don’t have a preference if it came down to I could only own 1…   Proportions?   I’ve long said, even when I was at EverBank, and I used to give presentations all over North & Central America, was that an investor should own 10-15% in metals, and when metals are rallying move the allocation up to 20%…

Actual metal VS paper ETF’s… Again I’ve always contended that I prefer to own physical metals, and not ETF’s… The main reason is simply that when push comes to shove, try getting your Gold or Silver out of an ETF…

Liquidity… both selling and Buying…  I’m thinking that when push comes to shove that you’ll have to either pay through the nose for Gold or Silver, or do without… Selling is different, and here I believe that there will always be a buyer…

Allocated VS Unallocated VS at home in the safe? ….  I’ve used the unallocated or pooled method of buying Gold & Silver through the years, it’s safe, and it’s cheaper than buying the allocated metals… Eventually though I had my pooled accounts converted to Allocated, paid the minting charge, and delivery charge, and had the metals sent somewhere for safekeeping.  If you own metals and you hold them in a safe in your home, please DO NOT TELL ANYONE that you have them in your house… Other than that, it’s fine to hold your metals in safe in your home… And you’ll find that when push comes to shove you won’t be able to get to the bank’s safe deposit box to retrieve your metals..

The Safest, most reliable, and easiest folks to deal with…  This one’s easy… Call my metals guru, Tim Smith at 1-800-926-4922… That’s the number for TIAA World Markets… And tell Tim I sent you there… I don’t receive a wooden nickel for sending you there, I just like it when we’re together and he says, “I had 10 more people say that you sent them”…

And since we’re on the subject of Gold, I came across this on Bloomberg.com… “Veteran investor Mark Mobius said investors should have 10% of a portfolio in gold as currencies will be devalued following the unprecedented stimulus rolled out to fight the coronavirus pandemic.

At this stage, “10% should be put into physical gold,” said Mobius, who set up Mobius Capital Partners after more than three decades at Franklin Templeton Investments. “Currency devaluation globally is going to be quite significant next year given the incredible amount of money supply that has been printed.”

Chuck again… Ok, I’ve got to wonder if he was reading some old Pfennigs and came across the one I wrote last May, when I said that all the debt every country sans Russia and Singapore, were printing, that a default of one country would lead to another, and that would devastate their respective currencies… So, do great minds think alike? Or was he reading some old Pfennigs?

The U.S. Data Cupboard late last week, had Personal Income and Spending on Friday… And while the Income portion of the data was strong, thus leading to the Gold rally, the Spending portion of the data was very weak, and that’s not a good thing for the economy that according to James Bullard is Booming… Yeah, and my first wife was a young Elizabeth Taylor!

This week’s Data Cupboard will finish out the week with the Jobs Jamboree for August.. Did you know that the Labor Participation Rate here in the U.S. has been going downward for the last 20 years? Longtime friend Bill Bonner is always telling his readers that the Great U.S. Empire began its fall from grace at the turn of the century… And I agree with him 100%… Think about all the bad stuff that has happened since the year 2000…

Before we get to Friday though…  We’ll see the Case/ Shiller Home Price Index for July today… I don’t believe that price of homes had begun to show some wear and tear in July, so I would think that this data print will show the housing bubble is getting bigger…

For What It’s Worth…  Ok, Ed Steer of www.edsteergoldsilver.com highlighted this story in his Saturday letter, so it’s still fresh… But it does smell like yesterday’s fish! It’s about the Fed’s go to inflation gauge showing how inflation hasn’t been this high since the early 1990’s and it can be found here: Key inflation gauge rises 3.6% from a year ago to tie biggest jump since the early 1990s (cnbc.com)

Or, here’s your Snippet: “An inflation measure the Federal Reserve uses to set policy rose 3.6% in July from a year ago, meeting Wall Street expectations but also tying the highest level in about 30 years.

The core personal consumption expenditures price index, which the Fed sees as the broadest measure of inflation, was unchanged from June, which was revised up one-tenth of a percentage point, the Commerce Department reported Friday. That 3.6% reading equaled the Dow Jones estimate and appeared to be the highest level since May 1991.

Including volatile food and energy prices, the index rose 4.2% year over year, up from 4% in June and the highest reading since January 1991.

The Fed has viewed inflation pressures this year as largely the result of temporary pressures, though officials in recent days have conceded that the situation may last longer than originally thought.

Atlanta Fed President Raphael Bostic told CNBC on Friday that business contacts in his region have told him they see inflation persisting beyond the near-term time frame.”

Chuck again… No matter what the Cartel says about inflation whether it’s here to stay or transitory, they’ll be wrong… You can bet your bottom dollar on that one folks!  And even if inflation proves to be short term, (I don’t believe that) the price increases we’ve seen will remain in place…

Market prices 8/31/2021: American Style: A$ .7328,  kiwi .7063,  C$ .7947, euro 1.1840, sterling 1.3777, Swiss $1.0945, European Style: rand 14.5517, krone 8.6424, SEK 8.5863,  forint 294.85,  zloty 3.8346,  koruna 21.5719, RUB 73.48, yen 109.93, sing 1.3434, HKD 7.7812, INR 72.87, China 6.4650, peso 20.08, BRL 5.1962, BBDXY 1,144.67, Dollar Index 92.48,  Oil $68. 44, 10-year 1.28%, Silver $24.17, Platinum $1,011.00, Palladium $2,582.00, Copper $4.25, and Gold… $1,814.80

That’s it for today… A little market news, a little housekeeping, and  little pointing out of the dolts for you today… Well, this is the end of August… I’ll talk to you next in September! This coming weekend will be Labor Day Weekend… A 3-day holiday weekend… I don’t know if I’ve ever told you this or not, but here goes… I absolutely love fried Chicken… And Saturday night I had the best fried Chicken that I’ve had in a very long time! Who would have thunk that a side of the road diner would have great Fried Chicken?  Oh well, you learn something new every day! Before I went on my mini-vacation last week I stepped on the scale and saw that I had lost 92 lbs so far in 10 months… I was stuck on 75 lbs for the last two months, and then suddenly the lbs dropped off me… It’s certainly not because I’ve been exercising! Now if I could find a way to lose 70 more lbs… that would be awesome! Van Morrison takes us to the finish line today with his classic rock song: Moondance… Well, it’s a marvelous night for a moondance with the stars all up in your eyes… I hope you have a Tom Terrific Tuesday, and please Be Good To Yourself!

Chuck Butler

 

 

Bond Traders Get Prepare For Another Taper Tantrum…

August 26, 2021

* Currencies & Metals rally on Wednesday… 

* Today looks like “one of those days” for Gold & Silver… 

Good day… And a Tub Thumpin’ Thursday to you! Noot! Noot! Thee’s a new chant that goes on a Busch Stadium, when rookie Lars Nootbar gets a hit, or make a good defensive play… the fans chant, Noot! Noot! When I first heard it on TV, I thought the fans were booing, and then realized that they wouldn’t boo a Cardinals player that was hustling.. Well, there were lots of Noot! Chants yesterday, when he singled in the 10th inning to score the winning run…  Our future Hall of Fame catcher, Yadi Molina, announced a one year extension, so next year will be his farewell tour around the league… As I told you yesterday, I’m heading out of town on Friday, and won’t be back to write on Monday, so the next Pfennig will be next Tuesday…  The beautiful, and great voiced Dusty Springfield greets me this morning with her song: Son of a Preacher Man…

Well… the overnight markets on Tuesday night were leaning toward dollar buying, and as we began yesterday, the dollar was getting bought, the BBDXY, that started the day at 1,151.64, climbed to 1,153.00. but then a funny thing happened on the way to the forum… Durable Good Orders printed, and were negative -,1%, and the traders being traders looked at the number, and decided that they should sell dollars, and sell them they did!  Soon the BBDXY was falling through the 1,151 figure, and ended the day at 1,149.56… With the Dollar Index adding its two cents, falling to 92.87…

The knee jerk reaction to sell dollars yesterday, finally gave way to dollar buying in the overnight markets, as it was revealed that the Durable Goods Orders negative print was dominated by lack of sales of planes…  Take planes out of equation, and Durable Goods would have been positive…

Gold never could find a bid on Wednesday and fell $12.50, to close the day at $1,791.50, and Silver lost a whopping 1-cent on the day to close at $23.96…  Don’t know why Gold was sold on the day, other than 1. Profit taking or 2. Price manipulators…  I bet you don’t have to think too long about which one I would choose…

In the overnight markets last night… Well, as I just said, the dollar selling gave way to dollar buying in the overnight markets. The BBDXY, which closed yesterday at 1,149.58, is trading at 1,151.61 this morning. As I looked over the currencies, the only real slippage is saw in any of them was in the Japanese yen, so it must be a combination of little moves. 

Gold is starting the day down $9.40, so it looks like it could be one “those days” I hope not, but it sure appears to be one, as the selling in the early markets is pretty strong. Silver is down 31-cents this morning, so it appears to me that the price manipulators are going after both today… 

Sometimes these kinds of days just get me in real foul mood, but not today… I’m not going to let it happen that way, for I’m heading out of town tomorrow on a mini-vacation, and nothing is going to get in my way of thinking of having a good time! 

That brings me to this …..”If you purchased $10,000 of stock evenly divided among America’s top five defense contractors on September 18, 2001 — the day President George W. Bush signed the Authorization for Use of Military Force in response to the 9/11 terrorist attacks — and faithfully reinvested all dividends, it would now be worth $97,295. This is a far greater return than was available in the overall stock market over the same period. $10,000 invested in an S&P 500 index fund on September 18, 2001, would now be worth $61,613. That is, defense stocks outperformed the stock market overall by 58 percent during the Afghanistan War. Moreover, given that the top five biggest defense contractors — Boeing, Raytheon, Lockheed Martin, Northrop Grumman, and General Dynamics — are of course part of the S&P 500, the remaining firms had lower returns than the overall S&P returns. These numbers suggest that it is incorrect to conclude that the Taliban’s immediate takeover of Afghanistan upon the U.S.’s departure means that the Afghanistan War was a failure. On the contrary, from the perspective of some of the most powerful people in the U.S., it may have been an extraordinary success. Notably, the boards of directors of all five defense contractors include retired top-level military officers. Several commentators address this dynamic in the 2005 documentary “Why We Fight.” Former CIA contractor and academic Chalmers Johnson states, “I guarantee you, when war becomes that profitable, you’re going to see more of it.”…

Chuck again, I took this from this website: https://theintercept.com/2021/08/16/afghanistan-war-defense-stocks/

And do you know why, in my humble opinion that is, why the U.S. left many military hardware in Afghanistan to be taken over by the Taliban? I figure, that way the defense contractors, can make more military hardware to charge the U.S. for… which means we get to pay for it folks, us taxpayers…  Now doesn’t that just make you a little mad?

OK… onto other things on my mind this morning… As I was going through Twitter yesterday, I came across this from investment guru Pippa Malmgren… “Whatever your view on vaccines, how is it that we managed to come up with a COVID solution in 1 yr that usually takes 15 & why can’t we do that for other metaproblems like cancer, the pension crisis, energy scarcity, poverty etc. Focus = results, right? Or wrong?” – Pippa Malmgren on Twitter

Yes, I totally agree with her… And I’ve said it for 2 years now… As a cancer survivor, so far that is, this is near and dear to my heart, and that’s that! 

So, don’t forget to check in on the markets tomorrow after Cartel Chairman Jerome Powell gives his keynote address virtually I might add, to the masses tuned in… The markets believe or fear that he will use this keynote address to layout the framework of Tapering…  For the record, I don’t believe he will do that tomorrow, instead opting for the next Cartel meeting when he can have more emphasis on what he’s doing… 

But should he surprise Chuck and give the framework tomorrow, you had better watch out, because I don’t know if you recall the first Taper Tantrum when Ben Bernanke mentioned tapering a few years ago, but if you do, you can pretty much believe that it will be that way once again… And then it will be up to the Cartel to decide when they begin to taper, and if the stock market gets jiggy on the downside, he could announce at a later date that Tapering would be moved back, or postponed…

It appears that bond traders are already pushing the yield of the 10-year Treasury note higher, as the yield has gone from 1.22% late last week to 1.37% today… The bond traders fear that Cartel Chairman Powell will be laying out the framework for Tapering, and the bond traders are just getting ready for the trading that will come from another Taper Tantrum! 

The U.S. Data Cupboard yesterday, had the aforementioned Durable Goods Orders for July and they printed negative -.1%… Capital Goods Orders apparently wasn’t ready for Prime Time, and didn’t print…

Today’s Data Cupboard has the usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims, which have been falling each week for a couple of months now… The unemployment benefits that put into place during the pandemic come to an end very soon now, and so it would behoove those that have been sitting on their couch in the AC eating chocolate bon-bons, to start looking for a job, because the Goose that lays the golden eggs, has stopped laying eggs… 

Before we head to the Big Finish today, I wanted to talk about something that apparently got some readers very mad at me…  Last week I wrote about the need for people to get vaccinated… and that what set the people off on me… But they failed to read what I also said, and that is I believe that each and every person has the right to decide what they put in their bodies…  So… basically, if you are one of the people that don’t want to put the vaccine in your body, that’s your right… I never said for people to give up their rights and get vaccinated! So, before firing off mean letters to me, read everything first… please!

For What It’s Worth… Well here’s another report from Russ and Pam Martens from www.Wallstreetonparade.com  When reading this, think about as the next few years go by, just how deep in debt the U.S. will be, and then think about where will the financing come from when the rest of the world is “no mas”?    Anyway this article talks about the CBO’s Congressional Budget Office is talking about some very scary numbers for current debt in the U.S. and it can be found here: The Congressional Budget Office Is Forecasting U.S. Debt Levels Not Seen Since World War II as GDP Forecasts Dim (wallstreetonparade.com)

Or, here’s your snippet: “The most recent Congressional Budget Office (CBO) forecast is projecting government debt levels in the U.S. not seen since World War II. According to a CBO report released on July 21:

“After all the government’s borrowing needs are accounted for, debt held by the public rises from $21.0 trillion at the end of 2020 to $35.8 trillion at the end of 2031 in CBO’s baseline projections. As a percentage of GDP, debt at the end of 2031 stands at 106 percent, about 6 percentage points higher than it was at the end of 2020 and nearly two and a half times its average over the past 50 years.”

As for the federal budget deficit as a share of GDP, things aren’t looking good there either according to CBO forecasts:

“CBO projects a federal budget deficit of $3.0 trillion in 2021 as the economic disruption caused by the 2020–2021 coronavirus pandemic and the legislation enacted in response continue to boost the deficit (which was large by historical standards even before the pandemic). At 13.4 percent of gross domestic product (GDP), the deficit in 2021 would be the second largest since 1945, exceeded only by the 14.9 percent shortfall recorded last year.”

Growing levels of national debt and deficits are never good news but they are particularly troublesome when the rosy forecasts for GDP growth this year have started to dim as a result of the economic hit coming from the upsurge in the Delta variant of COVID-19.

On August 19, Goldman Sachs reduced their GDP estimate for the third quarter from a robust 9 percent to 5.5 percent. Goldman Sachs cited Delta’s impact on reduced consumer spending on “dining, travel, and some other services” as the reason for their sharp cut of 3.5 points from their earlier GDP forecast.

At the same time the U.S. is witnessing a downward trend in economic activity, there is a stark, rising trend in corporate debt levels in the U.S. According to Federal Reserve data, as of January 1, 2021 corporate debt (including debt securities and loans) stood at an historic high of $11.169 trillion. (This excludes debt held by financial institutions.)”

Chuck again… All I’m going to say here about this is, that a friend of mine that’s a doctor, told me once that whenever he asks his patients how much alcohol they consume, he takes whatever the patient tells him and doubles it…. Well, a similar thing can be said about the CBO debt projections, and that whatever they say, I usually about 25-40% more…    Got Gold?

Market Prices 8/26/2010: American Style: A$ .7256,  kiwi .6969, C$ .7926, euro 1.1761, sterling 1.3726, Swiss $ 1.0902, European Style: rand 14.9305, krone 8.8137, SEK 8.7083,  forint 296.60,  zloty 3.8911,  koruna 21.7175, RUB 73.84, yen 110.16, sing 1.3531, HKD 7.7867, INR 75.04, China 6.4748, peso 20.32,  BRL 5.2375, BBDXY 1,151.61, Dollar Index 92.98,  Oil $67.47, 10-year 1.37%, Silver $23.65, Platinum $995.00, Palladium $2,462.00, Copper $4.22, and Gold… $1,782.10

That’s it for today, through to next Tuesday… Man next weekend is Labor Day Weekend! Where did the summer go? Kids here have been back to school since Monday, and the summer is coming to a close… Long time Readers will recall me talking about the Butler Annual Labor Day BBQ, and how much I cooked for it… Well, unfortunately, I had to cancel last year’s BBQ, and as it comes up on the calendar this year, I had to cancel this year’s BBQ too… For fear that I wouldn’t have the strength to deal with everything I do… I guess I’ll have to change the name of it to the Butler sometimes Annual Labor Day BBQ!  Next year, maybe the Covid thing is in our rear view mirrors too…   I’ll still be having the Big Green Egg working overtime that weekend, for any family or friends that want to stop by… I go to see my oncologist this afternoon… The hospital here did a heart check on me while I slept last night… the monitor that resides in my bedroom, contacts my pacemaker, and gets the stored information, and sends it to the cardiologist… I don’t have to go into the office for that!  Pretty cool, eh?  Ok, time to hit send… Credence Clearwater Revival takes us to the finish line today with their song: I Put A Spell On You…  I hope you have a Tub Thumpin’ Thursday today, and please Be Good To Yourself!

Chuck Butler

 

 

The Dollar Selling Has Paused…

August 25, 2021

* Currencies & Metals have small rallies on Tuesday

* But Currencies & Metals get sold in the overnight markets… 

Good  day… And a Wonderful Wednesday to you! Man-o-man, my beloved Cardinals can’t seem to stop stepping on their on toes… I sit there watching them and shaking my head in disbelief that my once proud and ever present team in the playoffs, can’t seem to hit their way out of a wet paper sack… Injuries, which all teams have, have definitely played a part in their demise this year, but I don’t get how other teams, work their next man up, to win, and we can’t…  Oh, well, as the Chicago Cubs fans said for years, “wait till next year”….  I’m heading to SW Missouri, NW Arkansas this weekend to spend a weekend with good friends on Bull Shoals Lake… There’s a picture out there somewhere of me at age 5 holding a hangar of fish that my dad had caught while fishing in Bull Shoals Lake… Joanie? Terri? Do you have that picture?  Oh, well… time to move on… The Marshall Tucker Band greets me this morning with their song: Can’t You See?

Well, the ambush of the dollar on Monday had little follow up that night in the overnight markets, and yesterday, while the dollar slipped more, the intensity of the selling of dollars has waned from Monday, and that has me concerned… OK, I’m not THAT concerned, but a little concerned…  The BBDXY started the day yesterday at 1,151.18 and ended the day at 1,149.79, so there had to be some currencies that were rallying VS the dollar. For what it’s worth, I really couldn’t find them… The euro seems to be a tight trading range since rallying on Monday, and the Petrol Currencies have had muted rallies to go along with the recent run up in the price of Oil…  The old Dollar Index which I still chart in the Market prices roundup, started the day yesterday at 92.96, it’s first dip below 93, in about 10 days, and the Index ended the day at 92.89, so… this index tells us more of what really went on yesterday, and that was there was some dollar selling, but not a lot…

Gold lost $2.50 on the day yesterday. At one point in the day Gold had rallied to $1.810.00, but then profit taking set in and it ended the day down $2.50, at $1,804.00. Silver had a better day than Gold, and gained 24-cents to close the day at $23.97… I’ve not talked about inflation in a while…  It’s still strong here in the U.S., and one of the things keeping inflation at its current level, is the strong dollar… I’ve explained this many times in the past, but what the heck, here we go again…  Robert Rubin back in the 80’s used to remind the markets all the time that “A strong dollar was in the best interest of the U.S.”  He wasn’t saying that to help our manufacturers that sell overseas, he was saying that to remind traders that inflation can’t get into the country, with a strong dollar…  You see, with a strong currency, a country doesn’t import another country’s inflation…

I went through all that to talk about how prices of just about everything are higher than they were at this time last year… And just for fun… I’ll show you some of these price increases. These numbers were as of the end of June….  Year on year price increases… Car Rental +87.7%, Used Cars +45.2%, Gas +45.1%, Hotels +16.9%, Bacon +8.4%, Fruit +7.3%, Fresh Fish +6.4%, and Milk +5.8%…   Now how’s that for an update on inflation?  Crazy to think that inflation is so strong, but the price movement upward for Gold is being held back…

In the overnight markets last night…. the dollar buying returned, as represented by the BBDXY, which closed yesterday at 1,149.79, and is trading at 1,151.64 this morning… Only the Petrol Currencies have held their ground VS the dollar, as the Russian ruble is trading back below 74, and ever since the Norwegian krone rose above 9, it has rallied to trade below that figure…  The Canadian dollar/ loonie isn’t participating in this Petrol Currency rally, as I believe traders are punishing the loonie for the country’s Covid problems… 

More signs of dollar buying last night is shown in the the price of Gold, which has dropped  by $9.20, and Silver is down 12-cents in the early trading today…  Yesterday, as I said above, Gold had rallied to $1,810, and then it closed at its 200-day moving avg. Obviously, the early trading loss this morning has take Gold back below its 200-day moving avg.  Oh well, the price of Gold doesn’t really matter to me, as I’m not looking to sell my Gold! I just like to see it trade at its true value, without manipulation… 

Long time reader, Bob, sent me an article that I want to highlight, it’s about how Russia’s economy has nearly recovered to pre-pandemic levels…  Let’s listen in to what their leader is saying about this report: “The Russian economy is nearing its pre-Covid-19 pandemic level, President Vladimir Putin said on Sunday at a meeting with representatives of the United Russia party.

“Practically, with the exception of some things that specialists should pay attention to, [Russia’s economy] has generally been restored to the pre-crisis level,” Putin stated.

The thing that has Putin concerned though, is the high rate of inflation, which is 6.5% in Russia… So, even a country like Russia has the same problem as the U.S. and that is with inflation so high, their respective central banks need to hike rates, but that could hurt the nascent economic growth of the two countries… I’ve long said that the Russian Central Bank Gov. is the best in the world, and I have faith that she’ll do the right thing, which to me is to raise interest rates…

OK… In recent days, I’ve wanted to talk about something that kept alluding me…  I would sit for a time and try to think about what I wanted to talk about, but it just wouldn’t come to me… Until… I was reading Bill Bonner’s daily diary and he mentioned something that triggered my mind into actually coming up with what I wanted to talk about…  For the record this is what Bill had to say on 8/23: “This new souped-up “stimulus” program will have no better success than the previous ones. More zombified than ever, by fake money and real debt, the economy will slow.

And this “stagflation” will bring more discontent… more spending… and more inflation.”

And now for what I wanted to talk about… And that is how the U.S. keeps coming up with these stimulus plans, like they are on a shelf and they can just take them off the shelf and use them…  Now, I’m going to call on all the long time readers of the Pfennig to confirm this, but back in the 90’s and even into the 2000’s, I used to write about how Japan had issued another Budget adjustment, and stimulus plan for their economy that was mired in a long drought…   And none of them worked! And then remember when I used to use the lyrics by the Vapors, “I’m turning Japanese, yes, I really think so”…  But only instead of the word, “I’m”, would change it to We’re…  And now here we are at least 20 years later, and we, as a country are still following the Japanese to an economy that has no chance of growth…

Oh I hear you saying, but Chuck, the U.S. has a 6% GDP this year….  And to that I will point to the fact that the 6% GDP is like a castle built on sand… One good crashing wave, and the castle is wiped out, just like the 6% GDP…   It’s built on fake money, fake stimulus, fake illusions about our future, and fake banking institutions…. 

And then this headline article that appeared on Bloomberg.com, talked about how the Fed was decrying the wealth gap that they helped perpetuate…  Here’s a snippet from the article: “Federal Reserve officials often decry the unprecedented disparity between the wealthy and poor. But they usually avoid mentioning the direct role they have played in widening these financial disparities over the past few decades.”

That’s our Central Bank,,, drawing attention to something, but not doing a darn thing about it… I was surprised that in the article that the Cartel didn’t say that the wealth gap was “transitory”… HA!

Long time readers know that I’m no fan of our Central Bank…  It is my contention that they should not be in charge of setting interest rates, that the markets be responsible for that.  We would have more markets driven interest rates, and not interest rates that are arbitrarily set by a group of economists that we don’t vote on to sit on the FOMC….  I’m just saying…

So.. this Friday is the day that Cartel Chairman Jerome Powell will speak virtually I might remind you. And in recent days, I’ve read many opinions that think that this is the day that Powell, will lay out the framework of Tapering the Cartel’s bond buying…  I’m still of the opinion that I don’t believe he’ll do that on a virtual network, as it loses its emphasis…   and to add to that, was this Tweet from David Rosenberg…. “FOMC… In discussing the uncertainty and risks associated with the economic outlook, many participants remarked that uncertainty was quite high, with slowing in progress on vaccinations and developments surrounding the Delta variant posing downside risks to the economic outlook.”

Now if that sounds like a unified Central Bank in announcing Tapering, I’m not seeing it… or as the old time saying goes… I’m a monkey’s uncle! 

The U.S. Data Cupboard yesterday, had Existing Home Sales, and for the info on that print I turn to Dave Gonigam of the 5 Minute Forecast: “new home sales — which rose 1% from June to July, more or less as expected. Year over year, that’s down 27.2%; gone is the pandemic buying frenzy that began when 30-year fixed mortgage rates fell below 3% for the first time.”

Today’s Data Cupboard has the Durable & Capital Goods Orders for July… And in the frame of what I talked about yesterday, regarding recent data prints disappointing the markets, I would think that Durable Goods Orders will keep the disappointing prints going… As far as Capital Goods Orders, this data has been changed so much, that I can’t get a reading on what’s going on here…

For What It’s Worth…  Looking through the news stories, like I do every morning, while drinking a cup of coffee, I came across this article that features legendary investor, Jeff Gundlach, and I knew in an instant that this article was a FWIW article, for in it Jeff Gundlach talks about how the U.S. doesn’t care if the U.S. loses the Reserve Currency status for the dollar, and it can be found here: Legendary investor Jeff Gundlach says the US is running its economy like it doesn’t care if the dollar loses its status as the world’s reserve currency | Currency News | Financial and Business News | Markets Insider (businessinsider.com)

Or, here’s your snippet: “Billionaire investor Jeffrey Gundlach told Yahoo Finance in a video interview on Monday that the US is running its economy like it doesn’t care if the dollar loses its global reserve currency status.

The DoubleLine Capital founder and CEO reiterated his long-held view that the dollar is going to go depreciate further versus peers the next few years, blaming the US’s current economic policies for the situation.

“We’re running our economy in a way that is almost like we’re not interested in maintaining global reserve currency status,” Gundlach said.

The investor – who has been nicknamed the “Bond King” from calls he’s made on the US fixed-income market – explained that in the aftermath of the pandemic, the strongest economy “by far” has been China, not the US.

While the US economy rebounded by consumption, a lot of the consumption went straight to China, he said. In fact, Gundlach said China’s economy is growing at such a rapid pace some economists are estimating it will become the largest in the world by as early as 2028.

“China’s made no secret of the fact that they want to be a global player and have at least a seat at the table of global reserve currency status,” he said, adding that China has “made no secret of the fact that they want their military to be dominant, maybe the biggest in the world.”

Combine this with the fact that the US is “growing debt like crazy,” and it’s clear the dollar is headed towards losing its reserve currency status, Gundlach said.

In a July interview, the investor said the dollar is “doomed” in the long term, but it will be stronger in the short-term.”

Chuck again….  Man, Mr. Gundlach sure got that last call. at least the first part, bang on! I’ve said that the U.S. doesn’t value the dollar like it should be. considering its used all over the world… They keep debasing the dollar, by keeping interest rates below inflation rates, and they keep printing more dollars thus rendering the existing stock of dollars, less valuable… 

Market prices 8/25/2021: American Style: A$ .7250,  kiwi .6947,  C$ .7938, euro 1.1738, sterling 1.3718, Swiss 1.0935, European Style: rand 14.9587, krone 8.8496, SEK 8.7087,  forint 296.88,  zloty 3.8941,  koruna 21.7348, RUB 73.87, yen 109.90, sing 1.3542, HKD 7.7842, INR 74.15, China 6.4331, peso 20.24, BRL 5.5352,  BBDXY 1,151.64,  Dollar Index 93.05,  Oil $67.75, 10-year 1.30%, Silver $23.85, Platinum $1,003.00, Palladium $ 2,528.00, Copper $4.23, and Gold… $1,794.80

That’s it for today… It’s a hot one…. Like seven inches from the midday sun… A heat wave has taken over the Midwest, but as I think about this, it IS August, and it IS supposed to be hot! I recall a week when I was a young man where the temp went over 100 every day… And we didn’t have Air Conditioning to stay inside and play video games… In fact, I was a catcher in my early days of playing baseball, and we wore the old wool baseball uniforms… And we played a game during that week where temps went over 100… I remember being just fine, during the game… I would pay good money to watch some young kids do that today without all their whining, and complaining! OK… enough of that! Soft Cell takes us to the finish line today with their song: Tainted Love…  “sometimes, I feel, I’ve got run away, I’ve got to get away, from the pain you drive into the heart of me”…   I hope you have a Wonderful Wednesday, and please Be Good To Yourself!

Chuck Butler

 

 

The Dollar Gets Ambushed Yesterday…

August 24, 2021

*Currencies & metals kick sand in the dollar’s face

* What’s going on at the Cartel?

Good Day, and a Tom Terrific Tuesday to you!  Well, my pre event excitement did not fail me yesterday… You may recall me telling you about an event I was going to with son Andrew last night… It was fabulous!  Well worth the money I paid to attend the event, that’s for sure!  The Cardinals know how to stage an event like last night, it’s all top notch, the way the organization is perceived by the public to be… I’m still a little giddy this morning about it… Chicago greets me this morning with their song from their sappy phase: Hard To Say I’m Sorry…  After the great guitarist and singer, Terry Kath died, Chicago depended on their bass player, Peter Cetera, to write and sing most of their songs, and they took on Cetera’s mantra, of sappy songs… There were some good ones though, and this is one of them.

Well, I told you yesterday that the Good Witch Glinda had told the markets that it safe of come out, and so come out they did! When I left you yesterday morning the BBDXY had fallen overnight from 1,158 to 1,155. And it didn’t stop falling throughout the day yesterday… By the end of the day, the BBDXY was 1,151.91, down over 6 points on the day! And all of the currencies look a bit better this morning, after yesterday’s ambush of the dollar. 

The metals were also on the rally tracks yesterday. Gold traded up to $1,807 at one point in the day before seeing some profit taking to end the day up $16.  And Silver was up 60-cents on the day. Gold’s closing price on the day was  1,806.50, and Silver’s closing price on the day was  $23.72.  Now we need to see if this was a one and done, correction, or does it have legs? And today, is that day…

So what the heck happened? Did Traders finally wake up and smell the coffee? Did they finally see the rot on the U.S.’s vine, the debt they are getting ready to add to the total that is unsustainable already, or did they finally realize they had too many dollars on hand?  It’s probably a combination of all three, along with the stories about the Covid virus…

This from the good folks at FXStreet: “The dollar edged lower against all of its major rivals, as stocks recovered their shine. The coronavirus situation in the US seems to have worsened, which in turn, would mean continued financial support from the US Federal Reserve.”

In the overnight markets…. There really was not much follow up to yesterday’s ambush of the dollar. The overnight markets did see some dollar selling, but it was muted at best… The BBDXY this morning is 1,151.18, so down from its close, but not by the 6 point downward move is saw yesterday… Gold this morning is up 30-cents in the early trading, and Silver is up 9-cents…  So, I would say that the overnight markets didn’t really tell us anything… So we turn our attention to today’s U.S. session to see if there is follow up or if yesterday was a one and done… 

Well… the 3rd time wasn’t a charm for those pundits that continue to go to the well with their calls that the stock market is going to collapse on “X” day… Yesterday, as I reported to you, was that day, and it never got off on the selling side, as stocks were up on the day.  I would think that pretty soon these pundits are going to become the new “Boy that cried wolf”…  And no one will listen to them, and when they cower and put their tails between their legs and like Puff The Magic Dragon, they will slip into their caves…   And that’s when all hell will break loose in stocks…  So, if you’ve procrastinated and failed to update or even put stop losses on your stocks, you got a reprieve for a day, now… What Are You Waiting For?

Regular readers will recall me repeating myself a lot saying that there’s something wrong here in the U.S. and I can’t put my finger on it….   Well, yesterday, in Dave Gonigam’s 5 Minute Forecast, he talked about what we do know is wrong… Let’s listen in: “The most recent spate of U.S. economic data is “missing expectations at the highest pace since the depths of the pandemic,” says the Financial Times.

“Several closely watched US economic measures published in recent weeks have come in well below Wall Street expectations, indicating the powerful economic growth from the depths of the COVID crisis may be losing steam.”

Chuck again… Since I was on vacation, and then an extended stay, I really wasn’t following the Data Cupboard, and it appears from what Dave wrote about, I should have been… So this week’s Durable Goods and Capital Goods Orders, along with Personal Income and Spending will get further scrutinization from the markets…  That might mean more down days for the dollar, at least that’s how I see things playing out with the Data Cupboard…

You know there are many things that get me riled up, but chief among them is the Fed or Cartel which is really a more suitable name for them… The Fed Reserve is a misnomer. They might as well be called:” Larry’s Fly By Night Roundtable of Idiots”…    But I digress….. What I wanted to talk about is this report I read yesterday from Russ & Pam Martens of www.wallstreetonparade.com  In the report the Fed has dropped mentioning the repo loans that the Cartel has been making since last September, to Congress….  Apparently the Cartel doesn’t want Congress to know how weak the banking sector is that they need daily loans from the repo outlet…

I thought that Cartel Chairman Jerome Powell had made it clear that the Cartel would be transparent with their decisions…  I guess not, eh? I find this omission of who got what, to Congress is a point of contention, and Congress needs to grow some intestinal fortitude and call the Cartel out for this omission. 

And that brings me to another group of people that tick me off more than they should… Congress… If the Cartel had the information in their last report to Congress, and then removed it, wouldn’t it behoove Congress to ask, Where did it go? And why isn’t it here? Are you attempting to hide something from us, Mr. Powell?  I find it very interesting that whenever Powell is grilled by Congress that he states that the Fed can only make emergency loans with the approval of the Treasury.  Hmmm… Do you recall him asking for permission to do these repo loans from the Treasury?  It’s all a bunch of bunk folks… fake this fake that, and now the Cartel is leaving out the repo loan information as to who receives what dollars….   I find this to be embarrassing, not as embarrassing as the leaving of Afghanistan, but very embarrassing, our G-7 allies just be laughing out loud at us…

OK… time to go on to something else before I bust another blood vein and cause another hematoma to form! Hey! How about this… Forbes is reporting that Social Security recipients may see an increase of 6.2% this year in the COLA (cost of living adjustments)….  I find that very difficult to believe don’t you? Well, as my good friend Dennis Miller of www.milleronthemoney.com often says… Whenever we get a COLA positive adjustment, we also see the premiums for Medicare increase, thus leaving us right back where we started…  

And then there’s this… In a Business Roundtable’s 2019 “statement on the purpose of a corporation” was hailed as a revolutionary moment for capitalism: 181 CEOs were pledging to run their company for the benefit of all stakeholders, not just shareholders.

Two years later, though, Harvard researchers find that the bosses who signed that document haven’t followed through.

What a crock… These business leaders have no idea what it takes to run a good, profit making, community aware, company…  I’m just saying

The U.S. Data Cupboard yesterday had the ISM Manufacturing Index, and it kept in line with what I was talking about above… The Index was expected to come in at 63.1, but it came in at 61.2, a real disappointing print, even though it’s miles above the 50 level that is the line of demarcation between expansion and contraction…

Today’s Data Cupboard has New Home Sales for July… not a market mover…  So, we’ll move on for these are not the droids we’re looking for..

For What It’s Worth… Ok, I’ve done my  best to highlight each of these cases that involve metals dealers being brought to justice for manipulating metals… Well there was yet another decision to bring traders of JP Morgan to trial for spoofing, which is a way to manipulate metals pricing. And that article can be found here: Ex-JPMorgan metals traders must face racketeering charges: judge | Reuters

Or, here’s your snippet: “ A federal judge in Chicago said four former JPMorgan Chase & Co employees must face charges including racketeering in a case accusing them of manipulating the prices of precious metals futures.

U.S. District Judge Edmond Chang’s ruling on Tuesday paves the way for an Oct. 19 trial in the case, which is the U.S. Department of Justice’s most aggressive attempt so far to police commodities spoofing, a tactic involving placing orders to move prices and quickly cancelling them.

Prosecutors allege former global precious metals desk head Michael Nowak, traders Gregg Smith and Christopher Jordan and salesperson Jeffrey Ruffo manipulated the prices of gold, silver, platinum and palladium between 2008 and 2016.

Attorneys for Jordan and Nowak and a spokesperson for the DOJ declined to comment on Wednesday. Counsel for the other defendants did not immediately reply to requests for comment.

In his ruling, Chang rejected the defendants’ argument that the allegation that they engaged in a single spoofing conspiracy was not enough to support the racketeering charge.

Chang also allowed the other eleven charges to stand, including market manipulation, spoofing, conspiracy, and commodities and wire fraud. He cited other spoofing cases in which judges allowed prosecutors to pursue those charges.”

Chuck again…  as I’ve said before, this spoofing stuff is bad, but it’s not the real meat that hangs on the tenterhooks… That is reserved for the short paper trades… And until the CFTC, decides to get it’s head out of its arse, we will continue to see paper short trades dominate price manipulation… But racketeering charges? That’s harsh folks, and I say they should throw the legal book at these guys, and send them to jail! 

Market prices 8/24/2021: American Style: A$ 7245,  kiwi .6947,  C$ .7920, euro 1.1743, sterling 1.3721, Swiss $1.0965, European Style: rand 15.0638, krone 8.8512, SEK 8.6932,  forint 297.63,  zloty 3.8965,  koruna 21.7373, RUB 74.08, yen 109.65, sing 1.3558 HKD 7.7894, INR 74.05, China 6.48.33, peso 20.29, BRL 5.3792, BBDXY 1,151.18, Dollar Index 92.69,  Oil $66.59, 10-year 1.26%, Silver $23.81, Platinum $1,021.00, Palladium $2,541.00, Copper $4.22, and Gold… $1,806.80

That’s it for today… I still can’t say enough about the event I attended last night… I was lucky to have seen both Tim McCarver and Ted Simmons play in the Cardinals organization in the prime of their careers, and brother were they ever ball players! There was a lot of walking involved throughout the stadium last night, that had me so worn out when I got home that I immediately took my Chemo and other medicines and went to bed! I was plum tuckered out! I did get to shake Ted Simmons’ hand and tell him who I was, and where he might remember me from, and he smiled at me and said, “yes, look at us, we all grow up”…  My former colleague, Tim Smith, which also happens to my metals guru, recently obtained for me a Ted Simmons Bobble head for my bar…  I’m hoping I bounce back today from all that walking last night, but so far, I feel like I’m really dragging the line… And so… Mitch Ryder and the Detroit Wheels take us to the finish line today with their song: Devil With The Blue Dress…  If Mitch Ryder can’t get me going, then it’s going to be a long day… I hope you have a Tom Terrific Tuesday, and please Be Good to Yourself!

Chuck Butler

 

 

 

Currencies & Metals Rally Overnight!

August 23, 2021

* The Jackson Hole Fed Boondoggle will be virtual… 

* We have to be prepared for a future with more black swan events.

Good day… And a Marvelous Monday to you! It’s been a month since I last greeted you with a Marvelous Monday greeting! I’m still experiencing some hang on problems from the pneumonia I had. The doc said that it’s normal, and not to worry about it… I had a chest x-ray last week, and my lungs were clear so that puts my mind at ease…  My beloved Cardinals thought that they had figured out their hitting problems… And lo and behold the last place Pirates come to town and beat them 2 out of 3… Thank goodness that we have Adam Wainwright pitching every 5 days! I cooked up some yummy pork tenderloins in the Big Green Egg yesterday, thinking that the kids would be coming by… I was wrong about that, and now I have more port tenderloin than you can shake a stick at! UGH! I guess it’s a good thing that it can be frozen…. Steely Dan greets me this morning with their song: Deacon Blues…

Another day on Friday, brought about more dollar buying, and the green/peachback is running roughshod over all the currencies, save one…. The Swiss franc seems to be holding its ground Steady Eddie… The euro fell through the 1.17 handle faster than a speeding locomotive… And once again, I sit here scratching by bald head and wondering what this is all about? Day after day, traders buy dollars and run the BBDX (dollar index) higher and higher… When I left you last Thursday the BBDXY was 1,155.00, and when the dust settled on Friday afternoon, and the books were closed until the Asian markets picked them on Sunday night, the BBDXY stood at 1,158.32…  So, it’s a batten down the hatches time once again, and only come out if you see a currency at a price that entices you to buy it…

Gold was down $7 on Thursday and up 30-cents on Friday to close the week at $1,781.70, and Silver just can’t seem to find a bid these day, as it was down on Thursday 22-cents, and down again on Friday 21-cents to close the week at $23.12…  There has to be a price here that gets you a warm and fuzzy about buying… I’m not sure what it is, that’s your bag, but don’t miss the buying opportunity, for when these two metals turn around, I think it will not be a back and forth trading pattern… I’m thinking that it will be a moon shot trading move…  I’m just saying

In the overnight markets…. in my favorite movie of all time, The Wizard of Oz, there was a scene where the Good Witch Glinda arrived in Munchkin land and told the Munchkins who were hiding from the Wicked Witch of The West,  to come out, come out, it’s Ok… Then turns to the Wicked Witch of the West and says, “You have no power here! Begone, before somebody drops a house on you, too!”  OK, what am I trying to get to here from that little trip down the yellow brick road? 

In the overnight markets the Good Witch, Glinda told the currencies and metals that it was ok to come out, it was all clear….   There was a complete reversal of the recent trading in the currencies and metals last night folks, and maybe it has to do with the calls for a “Black Monday” today, (more on that in a minute) but I’m telling you this…  The dollar was way overbought, and there had to be some correction…  So, the BBDXY this morning is back to 1,155, the euro is back above 1.17, and Silver is up 47-cents!   Gold is up $11.70 in the early trading and even the price of Oil is up $1.63 to 63.92…   

I was doing some thinking about the fear that traders have regarding the Cartel, tapering…  And then a news item flashed across my screen and it said that, “The Jackson Hole, Wyoming Conference would be held virtual this year”…   Now, let’s take a step back and talk about the Jackson Hole boondoggle that’s held each year at this time… It was here that St. Louis Fed President, James Bullard, announced that another round of QE was being implemented…  There have been many main speeches by the likes of Greenspan, Bernanke, etal… through the years, and this year, Jerome Powell, Cartel Chairman, will have the honors…    OK, now back to the fear of tapering…  Recall last Thursday I made the case from my point of view that the Fed would not begin to taper this year, due to the problems that the COVID virus is causing here in the U.S.  

Many observers thought that if there was a Jackson Hole meeting and people attended in person, that Powell would use this opportunity to lay out the framework for tapering…  And then begin implementation in November…  But now that the meeting is virtual, you kind of lose the emphasis and the weight of a discussion.. .And with that I’m of the opinion that Powell, will refrain from laying out the framework of Tapering, and instead choose to do that after the September FOMC meeting, which would delay the implementation of tapering.   And even IF the Cartel further delays the implementation of Tapering, it’s still important that they lay the framework for it out for everyone to see, so that there are no surprises…  

You’ve heard the old saying that “the 3rd time is a charm”, right? The reason I bring this up is once again there are calls out there that another “Black Monday” is in the cards… This marks the 3rd time in this calendar year that a call like that has been made….  Sure, I agree that stocks are selling at astronomical values and should be brought back to earth… But I have a problem with the people that believe they are correct and the bringing back to earth will being on “X day”….  Either way, it only reminds an investor to make certain that they have their stop losses in place…  

Now, so how was that for a public service announcement?  HA!

Crazy times we live in folks… I had a visit from my oldest friend in the world on Friday. We hadn’t seen each other in over two years! We grew up together, went to high school together (he didn’t go much!) And then he was my best man when Kathy and I married in 1976… We didn’t spend / waste time talking about the goings on in the U.S. But, he did say, “I really don’t know what’s going to happen but I feel like there’s something big about to happen”…  To which, I said, “I agree, and so do most people that have at least half a brain”…

I wanted to mention something before we head to data and the Big Finish, and that is there was a report on zerohedge.com that a company named Palantir recently bought $50 Million in Gold Bars… Their leader had this to say: “Shyam Sankar, the COO of Palantir, “you have to be prepared for a future with more black swan events.”

Ahhh…. Those Black Swan events…  That’s what me and my good friend were talking about on Friday!

The U.S. Data Cupboard didn’t have much for us on Friday, in fact the only thing showing up the docket was a Fed Head Robert Kaplan speech… This week starts out slow with some housing data, but as the week goes on we’ll see the latest color of Durable Goods an Capital Goods… They have a new name for Capital Goods…. It’s… Drum roll please: Nondefense capital goods orders, excluding aircraft, or for those that like shortened names it’s NCGOEA… Now that’s a mouthful! 

On Friday this week we’ll see Personal Income and Spending for July… Old and stale data, but you can image if you will that it takes a lot of time to massage, and cook the books so they say what the Gov’t wants them to say, right?

For What It’s Worth…. I ran some numbers on the Afghanistan War, and I decided not to publish them because they are just awful and I don’t want to in any way, shape or form, throw cold water on the great American soldiers who fought the war…   So, I’ll leave that up to Bill Bonner, who always can set the story straight… I’ll tell you this though, my numbers are way worse than they ones he quotes, so he has that going for him….  Anyway, here’s Bill Bonner on Afghanistan, and it can be found here: The Afghan Adventure and Other Lies From America’s Elite | Rogue Economics

Or, here’s your snippet: “The Afghan Adventure and Other Lies From America’s Elite — Bill Bonner

“The Afghan army wasn’t real. The Afghan Civil Authority was never real. They never collected taxes. There were no courts outside of police robbing people. None of it ever existed… it was just a big jobs program funded by American money, and the moment it looked like the money would go away, everyone went home.” – Former U.S. soldier Graham Platner, interviewed by The Jerusalem Post

What a jolly, schadenfreudian week.

The American elite have had their noses rubbed in their most precious delusions and pretensions.

They spent $2.2 trillion, equal to $55,000 for every person in the nation, building a modern, democratic Afghanistan (and coincidentally, enriching themselves).

And now, instead of receiving polite “thank you” notes, they are chased from the country in appalling scenes of disorganization and incompetence.

And this was not just the “military-industrial complex” that president Dwight D. Eisenhower warned against.

If this was a “ship of fools,” the universities, think-tanks, media, liberals, conservatives… Republicans as well as Democrats… do-gooders and world improvers – all were in the first-class cabins.

They imagined that they were bringing the indisputable virtues of the American way of life – with its unlimited fake-dollar spending, Prozac, and transgender bathrooms – to the ancient lands south of the Hindu Kush.

And it was all a fraud, marked by lies and deceit over 20 years.

Meanwhile, the rest of the nation begins to wonder. If the elite could be so wrong for so long about that…

What else are they wrong about? And when will the next appalling collapse occur?

Chuck again… You tell ‘em Bill! 

Market Prices 8/23/2021: American Style: A$ .7182,  kiwi .6870,  C$ .7860, euro 1.1722, sterling 1.3680, Swiss $1.0908, European Style: rand 15.1887, krone 8.9484, SEK 8.7469,  forint 298.60,  zloty 3.9091,  koruna 21.7788, RUB 74.23, yen 110.09, sing 1.3584, HKD 7.7918, INR 74.08, China 6.4955, peso 20.31, BRL 5.3792,  BBDXY 1,155.30, Dollar Index 93.27,  Oil $63.92, 10-year 1.27%, Silver  $23.59, Platinum $1,027.00, Palladium $2,410.00, Copper $4.10, and Gold… $1,793.40

That’s it for today… Well, I hope I’m feeing strong enough for an event tonight that I’m very excited about attending… Son Andrew and I will be in the audience when Cardinals greats: Tim McCarver and Ted Simmons will be the main speakers…  Ted Simmons is my all-time fave Cardinals player, and I worked and showed him the ropes of Bond Clearing back in 1982! You can only imagine how tickled I was to be working side by side with my all-time fave Cardinal! Now if I can only get close enough to say hi to him and see if he remembers me…  On last Friday, I already told you that my friend Mike Karvas stopped by and we sat out front in the driveway talking. The another good friend Gary/ Gus Schuette stopped by, and then he was followed up by a visit from Ty Keough and Jack Stapleton!  I think everyone wanted to see if I were back to being Chuck, or some beaten down old man… They didn’t say that, but I know… It’s supposed to get real toasty here this week temperature wise, so my daily reading outside will have to be early in the day, before it gets too hot… And with that… I’m being treated this morning with King Crimson’s song: In The Court of the Crimson King… A classic rock song if there ever was one! It’s about 17 minutes long, so it will still be playing after I hit send today! I hope you  have a Marvelous Monday, and please Be Good To Yourself!

Chuck Butler

 

Traders Fear A Fed Tapering…

August 19, 2021

* The dollar continues to get bought… 

* Why on earth are the metals getting sold like funnel cakes at a State Fair?

Good Day… And Tub Thumpin’ Thursday to you! I’m going to leave all the Tub Thumpin’ to you dear readers, for I’m still working though weakness and foggy brain…  I want to take a minute here to tell you about a dear reader, Jim M., that sent me a copy of a letter from the Pan Mass Challenge, that supports the Dana-Farber Cancer Institute. The letter acknowledged that Jim W. had made a donation in the name of Chuck Butler & Dennis Miller…  Talk about being blown away!  OK… now on to other things… Thanks for all the welcome back notes I received on Tuesday, I truly appreciate each and every one of them!  It’s all me today, folks… no guest writer… so, we’ll see just how long I can last this morning…. Supertramp greets me this morning with one of my fave songs from them: From Now On….  Not exactly on your hit parade of songs, but… I love it!

Well… Just about every day, the dollar gets stronger…  There are so many reasons for that not to be happening, but… When an asset is in a strong trend, there’s no amount of bad things that can bring it back to earth… And so it is with the dollar right now.  When I left to go on “vacation”… The BBDXY (Dollar Index) was 1,143….  And yesterday it closed at 1,151.43, So, just from that you can tell that the dollar has been on a rampage…  

And yesterday was no different… Even stocks got sold yesterday, as the markets are beginning to show their fear of the Cartel, I mean the Fed, wanting to taper their bond buying…  St. Louis Cartel President, James Bullard said in a recent interview that he believed that all stimulus should be ceased…  I find this kind of talk to be B.S. in that, what? You’re telling me that the Cartel will begin to pull away the punch bowl while the Delta variant spreads and causes major economic problems once again? 

I’ve never given the Cartel and credit for having gray matter, but… I think they see the writing on the wall here folks… So, everyone just calm down, please! And stop buying Treasuries and dollars!  The 10-year Treasury’s yield is down to 1.22%, and the guy on TV that claims to be the mortgage expert says he’s still doing home loans “in the 2’s”…   And that’s what’s fueling the current housing boom, folks… But I digress here, time to move on… 

On Tuesday this week I reported, in error, that Retail Sales were negative .3%, when they actually were negative -1.1%…  But then Industrial Production was up 1%… So, where’s the disconnect? I believe from what I’ve read about this, is that most economists have no idea what’s going on here…  And while I don’t like to think of myself in with “most economists”, I have to say that this is a head scratcher for me too… I don’t recall the Industrial Production number being massaged, cooked, and manipulated in the past, but this sure looks to me to be the case…

But even having Retail Sales in July go so negative, didn’t change the direction of the dollar…  I came across something that the great economist, David Rosenberg, said on Twitter yesterday regarding the negative Retail Sales figure, so let’s listen in to what Mr. Rosenberg had to say on Twitter: “So the same month that the BLS tells us the US economy managed to generate 943k net new jobs we have the consumer cutting back 1.1% on retail sales activity. And almost the exact same thing happened in June. Imagine what happens when employment really starts to cool off!” – David Rosenberg on Twitter

So, I guess I should move on from here, eh?  The July numbers are water under the bridge, so to speak, so I’ll leave them there, and move on… 

Gold was able to eke out a $2.00 gain yesterday, but Silver lost 17-cents…  I was thinking yesterday, in between bouts of fogginess, that back in the year 2000, Gold was not looked at as a potential mover and shaker that it would become in that decade…  There was a lot of sideway movement in Gold at that time, and then suddenly, the sideway movement went away and brought on a rally to talk to home about.  You know me, I’ve always said that while history may not repeat itself, it sure does come to doing so, and that’s my belief with Gold right now…

Rich Checken says to watch the money supply number…  And that’s a good piece of advice, for I’ve always maintained that Money Supply equals inflation….  I used to have long arguments with a professor of economics at St. Louis University about that… She was opposed to that view, but… I think if you go back in time during periods of inflation you will find that Money Supply growth was rapid… I’m just saying…  

And if Money Supply is strong, then inflation is rising, and if inflation is rising, then Gold should be rising in price too…  You know, the shin bone is connected to the ankle bone, etc.   So, my suggestion to you, dear reader, is this… If you are fully allocated in your diversified investment portfolio with Gold (& Silver) then you should really just sit back and wait for the rise…   But… if you are not fully allocated, then you should take this buying opportunity in Gold and run with it…   Again, I’m just saying…

There are so many things going on in the U.S. these days, it’s difficult to keep on top of them all… The withdrawal of Saigon, I mean Afghanistan, is bad enough, but the Covid  Delta virus continues to be a real problem for people…  I have to say that I’ll never know the real truth, but…. In my heart of hearts I truly believe that being vaccinated, kept me from being on a ventilator and probably dying…  It did what it was supposed to do, and while I understand completely that every citizen of the U.S. has the right to decide what goes in their body, I would really like for more people to step up to the plate and get vaccinated…  So, we, as a country can put this behind us, and get back to being social humans, that go out, and celebrate things….  

OK… so those many things going on sure have me thinking that there’s something BIG going to happen soon… I don’t know what that BIG thing is at this point, but…. There’s just no way we, as a country, can keep taking hits, and not have something BIG happen…   Of course I also don’t know which way that would take the dollar… If I were a trader, I would sell dollars faster than you can shake a stick… But I’m no longer a trader, or even employed by anyone, so what I would do shouldn’t hold any water…

On a sidebar, I have to tell you that I’m having a bit of a problem with falling lately… I’ve got so many band aids on my arms where I’ve experienced trauma an bleeding after falling…  I want to believe that this is just a product of my brain fog…  And leave it at that… Kathy wants me to get around using a walker, so that I won’t fall… But…. I just can’t get my arms around the need to walk with a walker, at my age, and physical being!  My PCP told me to slow down… Geez, I thought, he went to Medical school for that? HA!  

OK… In the overnight markets last night… There was more dollar buying, folks… This is really getting into an overbought situation for the dollar, but that’s not stopping traders from loading up on dollars right now… The BBDXY, which closed yesterday at 1,151.43, has climbed higher overnight, and this morning is trading at 1,155.00…  The euro has fallen below 1.17, the Norwegian krone has fallen trough the 8 figure and is trading this morning with a 9 handle… When I got back in town I checked the currencies and the Aussie dollar (A$) was trading over 93-cents… Well, this morning the A$ has a 71-cent handle…  

And while Gold is only down a buck to two this morning in the early trading, the rot on the Palladium and Platinum’s vine is really getting exposed today… Palladium is down $32 and Platinum is down $71 in the early trading… Silver is down another 16-cents…  Not that one can figure out why these metals are getting sold, other than price manipulation… 

I really do believe that traders need to stop and think about what they are doing here… The tapering just isn’t going to happen as long as we have the Delta variant spreading and causing problems…  I just can’t see that going any other way… 

The U.S. Data Cupboard today has very little in terms of data for us to see… The leading Indicators Index will print, along with the usual fare of a Tub Thumpin’ Thursday, Weekly Initial Jobless Claims… But beyond that, there’s very little today and tomorrow, in the data cupboard… So, we’ll go into the weekend still having that gnawing feeling that something just isn’t right here, and continue wondering when the shoe will drop..

For What It’s Worth…  OK… I’m running out of steam here, so I went to a trusted source of info, the Lew Rockwell site, and lo and behold he has a great article on how Nixon and the Rockefellers teamed up to destroy the dollar… Sounds like a good FWIW article, doesn’t it? Well, it can be found here: How Nixon and the Rockefellers Teamed Up To Destroy the Dollar – LewRockwell

Or, here’s your snippet: “August 15 marks a special date in American history: it commemorates the fiftieth anniversary of President Richard Nixon’s suspension of Bretton Woods. With this decision, the United States stopped redeeming foreign governments’ and banks’ dollars for gold. Consequently, the world economy transitioned to unconstrained central bank discretionary monetary policy, an unprecedented era in monetary affairs.

The traditional justification for such a momentous decision utilizes highfalutin rhetoric and appeals to the public interest: the gold constraint restricted the ability of wise economic planners to fine-tune the economy. However, as I document in Cronyism: Liberty versus Power in Early America, 1607–1849 (forthcoming, Mises Institute, October 2021), the actual reasons for government policies are due to self-interested politicians rewarding themselves and favored business interests at the expense of the public. Bretton Woods is no exception: Nixon suspended gold convertibility to enhance his 1972 reelection chances and benefit the Rockefeller-dominated Chase Manhattan Bank and other expansionary banking interests at the cost of higher inflation. When it comes to government, privileged interests always come before the public.

Nixon is one of America’s most notorious presidents because of his resignation following the Watergate scandal. This infamous attempt to steal the 1972 election is not the only aberration in Nixon’s career; all his life he was paranoid about elections and wanted to win at all costs. The former vice president was convinced that Federal Reserve contractionary monetary policy denied him the 1960 presidential election against John F. Kennedy. Nixon also insisted that Fed restrictionism contributed to Republican setbacks in the 1970 midterms. He was so concerned about elections that after assuming office in 1969 he candidly told his White House advisers that “political considerations” will often override the “economic standpoint.”1 At the top of his priorities was ensuring victory in 1972. To accomplish this, Nixon wanted the Fed to provide “a rate of monetary expansion sufficient to move the economy up on the desired path.”2

Major banks also supported cheap credit. They maintained close links with the administration, particularly the Chase Manhattan Bank, which was dominated by the wealthy Rockefeller family and had the most assets ($31.7 billion) out of any financial institution in 1968. Although Nixon ran against New York governor Nelson Rockefeller in 1968, he cozied up with Rockefeller interests after becoming president. He offered Nelson’s brother David, the chairman of Chase’s board of directors, the secretary of the Treasury position multiple times. Although David declined, the job went to David M. Kennedy, a banker recommended by the Chase board. Under secretary of the Treasury for monetary affairs went to Paul A. Volcker, a former vice president of Chase. Rockefeller men also commanded the State Department, which played a role in international monetary affairs.”

Chuck again…  if you’re like me, no wait, no one wants to be like me, but if you like to read people’s thoughts that don’t hold back punches… Then Lew Rockwell is your guy… 

Market prices 8/19/2021: American Style: A$ .7164,  kiwi .6854,  C$ .7845, euro 1.1698, sterling 1.3654, Swiss $1.0902, European Style: rand 15.1665, krone 9.0152, SEK 8.7865,  forint 300.61,  zloty 3.9143,  koruna 21.7886, RUB 73.63, yen 109.67, sing 1.3629, HKD 7.7905, INR 74.27, China 6.4800, peso 20.15, BRL 5.3175, BBDXY 1,155.00, Dollar Index 93.36,  Oil $63.15, 10-year 1.22%, Silver $23.40, Platinum $970.00, Palladium $2,434.00, Copper $4.06, and Gold… $1,788.40

That’s it for today and tomorrow…  Tomorrow is my darling daughter Dawn’s Birthday.. She’ll be… no wait! I don’t believe your daughter would want people to know her age, Chuck!  All I can say is that she sure doesn’t look her age, she has remained small in size, and can still light up a room with her smile…  So, Happy Birthday Dawnie!  When Dawn was a toddler, I used to call her Boo Boo…  And her uncle after all these years still calls her “the Boo”…  Well, I got through the letter without any problems! The brain fog seems to have lifted for now, and for that I’m quite grateful!  The J. Geils Band takes us to the finish line today with their song: Must of Got Lost…  I don’t think I’ve ever told you how much I like the music of The J. Geils Band… Well now I have!  I hope you have a Tub Thumpin’ Thursday, and please Be Good To Yourself!

Chuck Butler

 

Chuck’s Back!

August 17, 2021

* Chuck talks about the brazen takedown of Gold… 

* And Chuck has a special Treat for us today… a guest commentary! 

Good Day… And a Tom Terrific Tuesday to you!  Well, my friends, and dear readers, it has been quite an ordeal for me to get back into the saddle and write to you once again…  In 2010, I was near my demise, and afterward, my oncologist told me that I had defeated death… Well, I had to recall my inner strength, and call on the Good Lord once again, as I had to defeat death once again…  Seems that getting vaccinated for both Covid, and pneumonia wasn’t good enough for someone with a compromised immune system like mine… Let’s just say… I learned the hard way… But, here I am, still kicking, and screaming about stuff, just not as loud as I used to…  I’m still very weak, but getting stronger each day, and just not of the frame of mind to get in to markets right now…

So….  Besides the dastardly, overt, brazen, take down of Gold & Silver over a week ago, I rarely checked what was going on while in an isolation hospital room for over 6 days, during my “vacation”…  I found this take down to be something to behold… The price manipulators were basically saying, “We don’t have the metals to deliver on these short contracts, so we’re going to drive the price down, and there’s nothing you can do about it, so that we can cover the short contracts at a profit, and move on, nenernernerner”….

Sunday night I arrived home to my little house by the river, and saw an email that had the TV segment from 1971 (50 years ago) when then President Richard Nixon interrupted Bonanza to announce that he was removing the Gold backing from the dollar… As I’ve always reminded you, this removal was supposed to be only “temporary”…   What the removal did serve was the ability of the U.S. to run up debts to today’s near $30 Trillion…   The Gold backing was like an anchor, if you will, that kept mindless deficit spending in check, and kept inflation low, and for the most part, made the dollar “worthy”….    But all that was taken away, by Nixon….  Of course he just happened to be the man in charge that had to deal with all of LBJ’s “great society” and guns and butter deficits on Vietnam… 

Nixon could have NOT removed the Gold backing, and instead announced debt reduction plans… But he took the easier of the two roads, that has led us to near ruins, fiscally…

And that’s all I have to say about that!

The Currencies and metals have done their best to recover from the brazen take down of a week ago, and so it was that while Chuck was away, the currencies and metals did not rally, as you usually do in his absence.    I’ll be getting back into the normal stuff I talk about some time soon, but for now, I’m still just happy to be here, and have a fog in my brain…   So… I did what I always used to do when ever I had a problem with writing… I asked my good friend, and former boss, Frank Trotter to lend a hand, and Frank being the friend he is, graciously accepted…   And so the rest of the Pfennig today is a piece that Frank wrote for me for this letter today…  I’m as excited as a young school girl that he accepted my invitation, and with no further ado… here’s Frank!

Edwards, Colorado – Heees baaack – well, not so fast.  Like early August football practice, the JV and C teams show up first and this year is no exception.  Chuck is sitting it out for a couple more days – and he can explain that later but here’s a big hint – suffice to say without a vaccine he probably would not be stepping back in.  So, for today you are stuck with me.  My playlist is rolling “I woke up in a car” by Something Corporate – look it up and turn it up loud.

I’m not going to focus on the current goings on in congress or the economy right now.  Chuck is better at that anyway.  All I’ll say is I don’t recognize the world today and I don’t get the math and arithmetic that either party has used for the past 5-years.  Nuff of that.

A few months back Chuck mentioned toll roads in the midst of one of his musings in the Daily Pfennig.  The next day I got into the car to roll downhill 7,000 feet on one of my Colorado to Saint Louis commutes.  We make the 14-hour drive one way or the other 4-8 times a year and between podcasts and music there are long stretches where I just need to keep it on the road and there is plenty of time and space to think.

It’s a common topic in my libertarian crowd to say that all roads should be toll roads – with construction / maintenance / improvements paid for exclusively by users.  It is without question a wonderful principal.  Mostly East Coast and some plains state residents are familiar with a version of this, although as usual once a good idea is proposed, by the time it’s implemented it’s far different than the principal.  As I passed through the first 8-miles of Interstate Highway opened in 1956 in Kansas I decided to look a little further into how this could happen on a much larger scale than we have today.

First up, and many of you can probably relate to this, our little subdivision consists of 8 homes.  We maintain the road and while there is no toll and we don’t restrict access it’s definitely paid for by the homeowners.  Even within that small sample size and level of complexity it’s often hard to reach decisions.  Should we do an overlay this year or just seal it?  Lot 5’s lawn company always parks just off the road breaking down the side – should they be charged more?  Moving up first to a city, then a county, then state and national levels increases both the complexity and rent seeking behavior massively.

Almost exactly 100 years ago – in 1919 – a group of military vehicles including what was then a massive tow truck left Washington DC with a young Capt. Dwight D Eisenhauer on board to drive across the USA.  Recall at that time very few cars existed, around 7-million, and most of those were in use in rural areas and by commercial operators.  The caravan dawdled at times to promote the auto and oil industry and show off the military after World War I, but still it took 62-days to drive across the USA due to extremely poor road conditions and mechanical failures of equipment.  In contrast in June 2014 and individual biked across the USA in just over 14-days.

Combine Eisenhauer’s experience in 1919 with his observations about the autobahn in WWII Germany and we get the US Interstate system – shockingly built entirely during my lifetime with a little room to spare.  Eisenhauer’s plan originally envisioned toll roads, but the final legislation did not allow that to occur.  The final plan promoted by the auto and oil industry, was to provide free (unless one counts taxes of course) driving access to the county, a goal that has certainly been accomplished.  All of us do benefit from this system, and I do appreciate how easy it is to get around the country.  In 2019 dollars it is claimed that the total cost to build the Interstate System was about $550-billion, although it is likely much higher if fully costed.

So how do we pay for this today and what would a toll road system look like? 

All Interstates are currently owned by the state through which they pass, although they are required to meet federal standards.  It turns out that around 70% of the construction and maintenance of the system is paid for by user fees at the national, state, and local level.  Mostly these are fuel taxes – at the Federal level these are currently $0.184 / gallon for gas and $0.244 / gallon for diesel, with state fuel taxes running on average $0.2915 with a high of $0.586 in Pennsylvania and a low of $0.0895 in Alaska (of course).  The rest come from general funds or other special taxes and bond issues (which eventually need taxes to be paid off).

So, we kind-of sort-of have a user fee system in place already without many toll’s involved.  No doubt as with any government sponsored program there are murky corners where money goes astray and is wasted – as a micro example I keep looking for the manufacturer of the mileage signs that now are spaced at 0.1 mile to invest in the crony political scam – but I digress.

Flipping the whole system to tolls right now seems far from the political objective of either party.  After all it’s their job, both sides, to collect campaign contributions and speaking engagements not make things right.  And of course, the average person in the average car doesn’t realize that they just paid around fifty-cents for that last 30-miles at the gas pump versus a stop at the toll booth.  Somewhat hidden fees are better PR.

One of the most intriguing developments recently is value priced toll express lanes that vary the charge with traffic volume.  Complaints that those with less financial resources can’t afford it are real, but they seem to be the right answer for alleviating traffic jams in dense areas.  Over time this could be expanded to heavily used parts of the Interstate System leaving the great plains to remain fuel funded.

Ultimately the complete toll solution would require selling the Interstates as-is to private operators.  This could be done with a list of standard requirements or allow for the operator to compete for business based on quality and convenience of the road.  Both approaches are fraught with potential problems but since they aren’t happening soon, we can take a rest on that evaluation.

I’ll sign off today somewhat more relaxed that user-fees do mostly pay for our Interstate System, but routed through a labyrinth of national, state, and local governments.  Out here in our neighborhood where I-70 is closed due to mudslides after last year’s big fire in Glenwood Canyon, there’s a big debate about improving and paving some of the back country roads as workarounds.  Like our neighborhood association there is plenty of controversy to come.  Flip on “Holiday” from the “Bullet in a Bible Album” by Green Day as you pen your comments, keep it up loud.

Onward and upward,

Frank Trotter

Pseudo-retired

Chuck again…  I’ll leave you today with the market prices roundup, some data, and a couple of other notes that have crossed my mind this morning…   

Market Prices 8/17/2021: American Style: A$ .7290, kiwi .6927,  C$ .7928, euro 1.1757, sterling 1.3777, Swiss $1.0963, European Style: rand 14.8186, krone 8.8341, SEK 8.6676, forint 298.58,  zloty 3.8785,  koruna 21. 6545, RUB 73.30, yen 109.47, sing 1.3597, HKD 7.7923, INR 74.20, China 6.4746, peso 19.93, BRL 5.2511, BBDXY 1,148.40, Dollar Index  92.79,  Oil $ 66.99, 10-year 1.24%, Silver $23.86, Platinum $1,026.00, Palladium $2,654.00, Copper $4.19, and Gold… $1,786.40

And the data cupboard yesterday had Retail Sales in July in negative territory at -.3%….   July’s  Jobs numbers blew the forecasts out of the water, but the Bureau of Labor Statistic (BLS) couldn’t keep their hands out of the cookie jar, adding 243,000 jobs out of thin air to the total…  But even taking the 243,000 jobs away from the 943,000 jobs reported still left 700,0000 jobs created in July, and that took the stuffing out of those calling for more stimmy checks…     The U.S. economy is reflating folks…  and that reflating will bring about higher inflation… mark my words on that one!

That’s it for today… And tomorrow, as I have to show up at my PCP early tomorrow morning… But I’ll be back on Thursday, and hopefully, the brain fog has lifted and I don’t have to call on anyone else to help me get through the letter…    My little d, Delaney Grace turned 14 while we were on vacation, and she sang the National Anthem at Roger Dean Stadium before a Palm Beach Redbirds baseball game… I swell up with enormous pride when she sings the National Anthem…   Darling daughter, Dawn, will be celebrating her birthday this weekend.  And in my time in the solation room, I forgot that one of my best friends in the world, celebrated his birthday too… So, happy belated birthday Mike Karvas!  The Allman Brothers take us to the finish line today with their song: Dreams….   I hope you have a Tom Terrific Tuesday, and please Be Good To Yourself!

Chuck Butler

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